SOURCE: KF3775 .R474 AUTHOR: Carnegie Commission on Science, Technology, and Go DOCTITLE: Risk and the Environment: Improving Regulatory Decision Making SECTITLE: Risk and the Environment: Improving Regulatory Decision Making DATE: 1993 SUBJECT: environmental regulations environmental law United States administrative law decision making PUBLISHER: Carnegie Commission on Science, Technology, and Government DOCTYPE: Book TITLEID: ISBN_ISSN: 1881054136 Text: RISK AND THE ENVIRONMENT: IMPROVING REGULATORY DECISION MAKING June 1993 CONTENTS FOREWORD PREFACE ACKNOWLEDGMENTS 1.0 EXECUTIVE SUMMARY 1.1 The Need for Innovation 1.2 Findings and Recommendations 2.0 INTRODUCTION 2.1 Strengthened Decision Making for a New and Changing Agenda 2.2 Broad Context 2.3 Specific Context 2.4 Scope of the Report 3.0 THE EXECUTIVE OFFICE OF THE PRESIDENT: POLICY FORMULATION AND REGULATORY REVIEW 3.1 Roles of CEQ, OSTP, and OMB 3.2 Essential Capabilities of the Executive Office of the President 3.3 A New Configuration 3.4 Executive Office Regulatory Review 3.5 Conclusion 4.0 CONGRESSIONAL, EXECUTIVE, AND JUDICIAL INTERACTIONS 4.1 The Constitutional Backdrop to Interbranch Interactions 4.2 Statutory Interpretation, Statutory Specificity, and Interbranch Relations 4.3 Promoting Interbranch Communication 4.4 Conclusion 5.0 INTERAGENCY COORDINATION 5.1 Past Experience: The Regulatory Agencies 5.2 Past Experience: The Executive Office 5.3 Lessons Learned 5.4 Strengthening Interagency Coordination 6.0 SCIENCE, RISK, AND REGULATORY DECISION MAKING 6.1 Relative Risk Analysis 6.2 Science Advice 6.3 Personnel 7.0 LONG-RANGE GOALS AND STRATEGIES FOR REGULATORY PROGRAMS 7.1 Roles of Congress and the Executive 7.2 Agency Experience in Setting Goals 7.3 Fostering Long-Term Thinking 7.4 Conclusion 8.0 RULEMAKING PROCEDURES 8.1 Rulemaking Ossification: Causes and Effects 8.2 Suggestions for Solution 8.3 Conclusion 9.0 ROLE OF NONGOVERNMENTAL ORGANIZATIONS 9.1 Contributions to Policymaking 9.2 Strengthening NGO-Government Links 9.3 Future Needs and Opportunities 10.0 CONCLUSION 11.0 APPENDIXES 11.1 Appendix A: Papers Prepared for the Task Force 11.2 Appendix B: Biographies of Members of the Task Force 12.0 NOTES AND REFERENCES 13.0 MEMBERS OF THE CARNEGIE COMMISSION ON SCIENCE, TECHNOLOGY, AND GOVERNMENT 14.0 MEMBERS OF THE ADVISORY COUNCIL, CARNEGIE COMMISSION ON SCIENCE, TECHNOLOGY, AND GOVERNMENT 15.0 TASK FORCE ON SCIENCE AND TECHNOLOGY IN JUDICIAL AND REGULATORY DECISION MAKING FOREWORD In the 23 years since Earth Day 1970, public concern has grown about government's ability to protect human health and the environment. Dioxin, Alar, food additives, second-hand smoke in the workplace (and elsewhere), lead, cellular telephones, and greenhouse gases are but a handful of the potential risk sources that have found a place in the public mind. Perceptions of danger -- and attention spans -- fluctuate as new science and new public relations efforts come to the fore. At the same time, concern about the cost of environmental and risk-related regulation has also risen. Use of certain economic tools is probably the most concrete and persistent legacy of governmental attempts rationally to accommodate our desire for maximal safety at minimal cost. Cost-benefit analysis now permeates regulatory practice, and economic incentives focusing on total costs are gaining favor over "command and control" regulation. Indeed, the chief executive officer of a major chemical company recently called upon industry to take the bold step of incorporating the full social costs of chemicals into their market price. Economic tools such as cost-benefit analysis are not magic bullets, however. Some regulatory benefits -- protection of endangered species, for example -- resist sensible quantification. How to evaluate the "costs" can also be problematic. Job losses caused by regulation in one segment of industry may be compensated for with creation of new jobs in another. For example, the sharp growth many observers expect in the nascent environmental technology industry as a result of increased regulation may outweigh any negative effects of regulation. Because of this unpredictability, superficial cost-benefit analyses may mislead decision makers. Like economic analysis, the scientific basis for regulation is riddled with uncertainties, and like economic analysis, even at its best science fails to answer most of the hard questions in regulation. This report wisely acknowledges science's limitations in regulatory decision making, even as it reaffirms its importance. The report provides a menu of ideas for renovating the federal government's infrastructure for "environmental and risk-related regulation," or that regulation done by the Environmental Protection Agency (EPA), the Food and Drug Administration (FDA), the Occupational Safety and Health Administration (OSHA), and the Consumer Product Safety Commission (CPSC). Each of these ideas by itself could bring significant improvement if implemented. Taken as a whole, however, the ideas present a uniquely comprehensive and integrative institutional vision for regulation. We believe it is a vision of a more effective and efficient regulatory system. Although the report addresses the full sweep of environmental and risk- related regulation, it frequently zeroes in first on the experiences of EPA, whose budget is by far the largest of the four environmental and risk- related agencies, using that agency as a case study from which conclusions can be generalized. Second in relative emphasis is FDA, an agency that existed for more than 60 years before the first of the others was created. The report frankly criticizes certain past practices and arrangements, but displays no bias for or against stringent regulation. This is perhaps best exemplified in the report's unfavorable evaluation of regulatory review by the Executive Office of the President as conducted in recent years. The report recommends that case-by-case review be deemphasized in favor of broad forward-looking guidance by the Executive Office. Such a change would take account of the Executive Office's unique institutional position to examine issues that cut across all federal departments and agencies. It would increase efficiency, allowing a President to obtain greater environmental protection for the same cost as the old system, or less cost for the same amount of environmental protection. We commend the Task Force's Chair, Helene L. Kaplan, the Chair of its Regulatory Subgroup, Douglas M. Costle, and the entire Task Force for the painstaking care they took over the past three years in producing this balanced, realistic, and very promising document. We urge the public and officials of all three branches of the federal government to consider it carefully. William T. Golden, Co-Chair Joshua Lederberg, Co-Chair PREFACE This report of the Carnegie Commission on Science, Technology, and Government was prepared by the Regulatory Subgroup of the Task Force on Science and Technology in Judicial and Regulatory Decision Making, in collaboration with the full Task Force. It was endorsed by the full Task Force at its meeting on October 16, 1992, and was approved by the Commission on November 30, 1992. Members of the Task Force on Science and Technology in Judicial and Regulatory Decision Making were Helene L. Kaplan Chair Douglas M. Costle Regulatory Subgroup Chair Alvin L. Alm[*] Richard E. Ayres[*] Sheila L. Birnbaum Stephen G. Breyer[*] Harry L. Carrico Theodore Cooper[*] E. Donald Elliott[*] Kenneth Feinberg Robert W. Kastenmeier Donald Kennedy[*] Francis McGovern Richard A. Merrill[*] Richard Meserve Gilbert S. Omenn[*] Joseph G. Perpich[*] Paul D. Rheingold Maurice Rosenberg Oscar M. Ruebhausen Pamela Ann Rymer Irving S. Shapiro[*] William K. Slate, II Patricia M. Wald[*] Jack B. Weinstein The Task Force held its first meeting in November 1989. The Task Force's Regulatory Subgroup first met in March 1990. Staff to the Regulatory Subgroup were Jonathan Bender Program Associate Christina E. Halvorson Program Assistant Mark Schaefer Senior Staff Associate Thereafter, the Task Force and the Subgroup met several times each year, and participated in numerous teleconferences. Deliberations were aided by a series of papers prepared by consultants and staff. The Task Force developed its recommendation on an Office of Environmental Quality in collaboration with two other Commission task forces, those on Environment and Energy and on the Organization of Federal Environmental R&D Programs. Throughout its work, the Task Force sought to enlist advice and information from experts outside its ranks. A cross-section of practitioners and scholars shared their thoughts with us in letters, telephone conversations, and meetings. After the 1992 presidential election, Task Force members met with several transition officials, some of whom have since joined the new Administration, to discuss the Task Force's recommendations. The Task Force will sponsor a number of activities to follow up its examination of regulatory decision making. Among these is a pilot project in which top officials from all three branches of the federal government will gather for an informal colloquy on risk management. We note, finally, that events have to a degree overtaken the release of our report. At the time of this writing, the Clinton Administration has elected to eliminate the Council on Environmental Quality, in favor of an Office of Environmental Policy headed by a Deputy Assistant to the President. Moreover, press accounts [1] suggest that the Administration intends to implement significant reforms in the Office of Management and Budget's regulatory review program. Although the Office of Environmental Policy falls short of the level and strength that we recommend, both of these changes appear otherwise to be consistent with recommendations made in Chapter 3.0 of this report, and we are pleased that the new Administration has given early attention to the role of the Executive Office in regulation. Endnote [*] Member of Regulatory Subgroup ACKNOWLEDGMENTS We thank David Beckler and Stephen Gallagher, staff to the Task Force, for their contributions to our work. The Subgroup is grateful to Richard N. L. Andrews, Adam Finkel, Sheila Jasanoff, John Moore, Thomas O. McGarity, Charles W. Powers, Sidney Shapiro, Bruce L. R. Smith, and Arthur Upton for their thoughtful advice as consultants to the Subgroup and the Task Force. We thank Joan Z. Bernstein, David Doniger, Peter Hutt, Richard Stewart, and Michael Taylor for participating in a dialogue on the rulemaking process. We are grateful to Robert Barnard, Donald G. Barnes, Harvey Brooks, Gary Bryner, Douglas Ginsburg, Fred Hoerger, Christopher Kirtz, Franklin Mirer, Alan Morrison, Richard Pierce, Peter Strauss, Myron F. Uman, James D. Wilson, and Frank Young for providing the Subgroup with valuable information and advice. Finally, we wish to thank Bonnie P. Bisol for assisting in the release of the report, A. Bryce Hoflund and Simone Mechaly for assisting in production of the report, and Jesse H. Ausubel and David Z. Robinson for providing suggestions throughout the study. As this report went to press, the Task Force learned the sad news of the death of their colleague Theodore Cooper. Dr. Cooper was an active and thoughtful contributor to this report; his counsel and encouragement were greatly appreciated. 1.0 EXECUTIVE SUMMARY 1.1 The Need For Innovation The nation's environmental and risk-related regulatory agenda[*] has changed dramatically over the past twenty years, and it will undoubtedly continue to evolve in the decades ahead. Since the establishment of the Environmental Protection Agency (EPA), the Occupational Safety and Health Administration (OSHA), and the Consumer Product Safety Commission (CPSC) in the early 1970s, the cost and complexity of federal programs have increased as environmental and risk-related problems have become less amenable to straightforward solutions. In response to public demands for cleaner environments, healthier workplaces, and safer food and commercial products, policymakers are striving to develop innovative solutions to increasingly subtle and intractable problems. We stand at a crossroads in environmental and risk-related regulatory policy, facing critical organizational and procedural questions about the future at a time of large budget deficits and escalating demands on the regulatory system. In order to address the challenges of the present and to anticipate and ameliorate the problems of the future, the nation must develop a more comprehensive and integrative decision-making infrastructure while maintaining the flexibility to adapt to the new challenges of the next century. Our report focuses on the interactions of science, technology, organizational dynamics, and law in environmental and risk- related regulatory policy and attempts to identify potential reforms. (See "roadmap" to the report.) 1.2 Findings And Recommendations Executive Office of the President: Policy Formulation and Regulatory Review - The Executive Office of the President should expand its capacity to formulate broad environmental and risk-related policies and should better integrate these policies with other national goals. Federal policies to address environmental, health, and safety hazards are often inconsistent and fragmented. The need to develop comprehensive environmental and risk-related regulatory programs and to integrate them with the nation's economic, energy, and national security goals is paramount. As the only entity in the federal government with a view of the whole regulatory landscape, the Executive Office of the President (EOP) is a logical focus for regulatory reform efforts. In recent years, unnecessarily high tension has existed between White House staff and agency regulators. The EOP has been accused of trying to "micromanage" technical details of rules that experts in regulatory agencies have prepared. Since the early 1970s, environmental and risk-related policymaking in the Executive Office has been largely reactive and at times, some have charged, obstructive. Policy activities in the White House have mainly focused on the economic impacts of regulatory actions, and the Executive Office has developed relatively few forward-looking initiatives to control threats to public health and the environment. The Executive Office must have the capacity to undertake several fundamental tasks in the environmental, health, and safety policy arena (see Box 4). Of paramount importance is the capacity to identify and analyze issues of "presidential" significance; to develop integrated policies consistent with statutory mandates; to communicate these policies to responsible agencies, states, the public, and industry; and to monitor policy implementation. In developing environmental and risk-reduction policies, the Executive Office should rely on the analytical capabilities of departments and agencies whenever possible. It should help the President to define the broad contours of the Administration's environmental and risk-related policy, but must take care to leave implementation details and day-to-day regulatory decisions to the regulatory agencies. - A focal point should be created in the Executive Office of the President for developing environmental and risk-related policy in the context of other national policy goals (particularly economic) and for helping federal departments and agencies to integrate sustainable development and risk reduction objectives into their activities. By strengthening the existing Office of Environmental Quality (OEQ) and redefining its mission, this can be achieved without new legislation. (On February 8, 1993, the White House announced its intention to abolish CEQ, and to replace it with an "Office of Environmental Policy." The new Office is to be staffed at approximately one-third the level of CEQ. It will be headed by a Deputy Assistant to the President.) - The Executive Office's analytical and policymaking processes should complement and not supersede the capabilities in departments and agencies. - Cabinet-level working groups should be established to formulate and oversee the implementation of federal policies for environmental protection and risk reduction that cut across departmental boundaries. Standing groups should be created to address persistent concerns, such as the relationships among energy, environment, and the economy. Ad hoc groups should be created to address challenges that can be resolved over a limited period of time. - The Office of Science and Technology Policy (OSTP) should play a leading role in developing environmental and risk-related policies by becoming more directly involved in policy decisions involving scientific and regulatory issues, promoting consistency in the scientific aspects of risk-based decisions, and ensuring that federal R&D programs are directed to the missions of the environmental and risk-related agencies. OSTP's work in these areas should be conducted in close cooperation with the Office of Environmental Quality. - Executive Office review of regulatory decisions made by the presidentially appointed administrators of federal agencies should consist primarily of an examination of the extent to which decisions are consistent with statutory mandates and broad Administration policies. Within broad statutory constraints, the approach a President takes to governing is largely a personal choice. Therefore, we do not recommend a precise mechanism for overseeing the activities of federal regulatory agencies. Nonetheless, general principles of good government should guide the executive review process in whatever form it takes. The President should select appointees with whom a relationship of mutual trust can be established, and the President should be able to rely on the judgment of these appointees in implementing policies. If dissatisfied with the actions or progress of federal agencies, the President should either work with Congress to modify their legislative mandates or make changes in agency management. The Executive Office should not second-guess agency interpretations of statutes. It should appraise its capabilities realistically and should not review complex scientific or technical issues where it lacks the necessary expertise. The Executive Office should have a minimum of regulatory review points, and the review process should be clearly described. Except for communication directly related to presidential deliberation, the executive oversight process should be open to public scrutiny. Economic analyses should take place chiefly at the agency level in the context of clearly stated procedural guidelines developed by the Executive Office. Congressional, Executive, and Judicial Interactions - Mechanisms should be devised to promote informal communication among the branches of government with respect to environmental and risk-related issues. Congressional-Executive gridlock and other interbranch conflicts have impeded effective policymaking at times in the past. Although politically divided government has often contributed to this friction, interactions between Congress, the Executive, and the Judiciary can be contentious regardless of partisan differences. Increased informal communication among the branches could help alleviate some of this conflict. We propose two models designed to increase communication and foster better understanding among the branches. - A forum should be created in which Members of Congress, executive branch officials, and judges can meet informally to discuss broad issues raised by the interaction of science and policy in environmental and risk-related regulation. - Informal working groups at both the principal and staff levels should be organized more frequently to foster communication between the executive and legislative branches in developing and implementing environmental policy. Interagency Coordination - Mechanisms are needed to improve consistency in federal regulatory decision making and to facilitate interagency cooperation. One approach to meeting these needs is to establish a Regulatory Coordinating Committee comprised of the administrators of the environmental and risk-related regulatory agencies and representatives of the Executive Office of the President. The environmental and risk-related regulatory agencies have mandates that overlap in some areas and leave gaps in others. To ensure that agencies do not duplicate their efforts to reduce some risks while not attending to other hazards, a Regulatory Coordinating Committee should identify problems that necessitate or would benefit from the involvement of multiple agencies. Agency staff members should seek to build consensus on means for coordinating their efforts, and agency heads should review coordination issues that staff members cannot resolve. The committee should - Examine the relative risks posed by problems or categories of substances and attempt to identify problems that need additional attention; ensure that major risks that cross agency jurisdictions are addressed and that sufficient data are developed to rank them appropriately; and see that relative risk rankings are updated regularly as more information becomes available (relative risk analysis is discussed in more detail in the next section). - Develop and articulate a coordinated federal response to high- priority cross-cutting problems and set common risk reduction goals and strategies across agencies for these problems. - Develop methodologies and guidelines for risk assessment and risk management and promote the exchange of information among regulatory agencies. In areas where fully consistent approaches are found not to be appropriate, committee publications should explain why this is so and clearly describe the different approaches used by each agency. All committee publications should be readily available. - Identify research needs and determine the proper roles of individual agencies in meeting those needs, with agencies utilizing the research strengths of other agencies to the extent possible. Science, Risk, and Regulatory Decision Making - Agencies should place problems in broad risk categories and develop strategies to address risks of high priority. To do this, each regulatory agency addressing environmental and risk-related issues should develop a broad-based risk inventory. The agencies should use the inventories' output to help develop multidimensional risk rankings. The agencies should experiment with methods to integrate societal values into relative risk analyses where statutes do not supply all the value judgments necessary to rank risks. Agencies should repeat relative risk analysis initiatives periodically, readjusting the process at each iteration in light of lessons learned, new information, and progress in addressing high-priority risks. Setting priorities is the fundamental problem in regulatory decision making at the agency level, as at the presidential and interagency level. Comparing and ranking individual risks, families of risks, and risk reduction opportunities present great challenges for science-based regulatory agencies. The public, the media, industry, the Executive Office of the President, legislators, and the courts all exert pressure on these agencies, and their decisions often appear equal to the vector sum of these forces. While our regulatory agencies should be responsive to government institutions and the public, setting priorities on a "chemical of the month" basis may result in overregulation of some hazards, underregulation of others, and decreased agency credibility. We see relative risk analysis as a promising way to promote scientifically sound decision making about risk. Nevertheless, we recognize that the technique is still in its infancy. To enhance the accuracy and credibility of the process, two components of relative risk analysis must be strengthened: scientific data must be better collected, organized, and evaluated, and more attention must be devoted to integrating societal values into the process. - We recommend that other agencies working to reduce risk conduct relative risk analyses of the type done by EPA in Unfinished Business and Reducing Risks and that both EPA and these agencies periodically update their findings and methodologies. - We recommend that each agency develop a risk data inventory that reflects the agency's mission and that agencies coordinate their efforts to facilitate exchange of information and interagency comparability of risk rankings. - Congress and regulatory agencies should consider modifying provisions and practices directed at protection of confidential business information in order to produce a better balance between industry's need for proprietary secrecy and the need for efficient use of environmental, health, and safety data by governmental agencies, the scientific community, and the public. - Regulatory agencies should report a range of risk estimates when assessing risk and communicating it to the public. - Agencies should experiment with different mechanisms for integrating societal values into the process of setting risk- based regulatory priorities. - Regulatory agencies should critically evaluate and take deliberate steps to improve their internal scientific capabilities and their means of integrating scientific and technological considerations into agency decision-making processes. The Environmental Protection Agency recently convened a group of distinguished nongovernmental experts to examine its internal scientific capabilities and recommend approaches to improving the Office of Research and Development and its intramural laboratories. This analysis yielded many thoughtful recommendations. We believe that other agencies should undertake similar exercises. - Regulatory agencies should seek advice from other government agencies where appropriate expertise is available. - Individuals with both public policy and scientific expertise should be appointed more frequently to senior positions in regulatory agencies. - The federal government should use its existing personnel authority to create opportunities for selected individuals to rotate in the early years of their careers through environmental and risk-related regulatory agencies, Congress, the Executive Office of the President, and, in some instances, administrative offices of the Judiciary. Regulatory policy results from a dynamic interplay among politics, economics, law, ethics, and the physical and natural sciences. But relatively few scholars or practitioners of regulatory policy have a truly broad view. By providing new opportunities for promising staff members to rotate among the branches, the federal government will develop a highly trained and experienced cadre of individuals with a unique perspective that will eventually prove a valuable asset to the regulatory process. The protection accorded by the civil service system would help insulate these individuals from political influence. Long-Range Goals and Strategies for Regulatory Programs - Regulatory agencies should establish specific long-term research and regulatory objectives and regularly report their progress toward achieving these goals to the President and Congress. Congress and the President should mandate that regulatory agencies justify annual budget and program plans in the context of explicit long-term regulatory goals. Furthermore, Congress should work more closely with federal and state regulatory officials and experts in nongovernmental organizations to devise realistic regulatory goals and deadlines for meeting them. Strategic planning is an essential but exceedingly difficult task for federal regulatory agencies. Congress and the agencies have traditionally been reactive rather than proactive in addressing environmental, health, and safety risks. We encourage Congress and the President to take a longer- range view in devising broad policy mandates and to give regulatory agencies more freedom to conduct internal strategic planning exercises. In setting goals for federal agencies and mandating actions, Congress should match responsibilities with resources to ensure that objectives can be attained. Regulatory agencies should devise work plans and secondary goals to meet these long-term goals and should monitor progress in achieving them. - Regulatory agencies should enhance their long-range planning capabilities by strengthening the linkages between research and regulatory policymaking efforts and by undertaking policy planning exercises in the context of relative risk analyses. The extent of linkages within regulatory agencies between research and development capabilities and the planning efforts of regulatory offices varies considerably. We believe that each regulatory agency should establish an anticipatory research program, closely linked with its regulatory program offices, to identify emerging problems and ways of addressing them. - Regulatory agencies should strengthen their anticipatory research capabilities and establish and maintain effective linkages between these efforts and regulatory planning activities. - Regulatory agencies should undertake long-term planning exercises in the context of the risk-based decision-making processes described in Chapter 6.0 of this report. - Regulatory agencies should sponsor extramural policy studies to expand and enhance agency intramural long-range planning processes. Rulemaking Procedures - Regulatory agencies should experiment actively with the variety of means available under existing authority to reduce rulemaking ossification. Care should be taken with all experiments to preserve adequate opportunities for analysis and public participation. The rulemaking process appears to have "ossified," becoming so time- consuming and expensive that agencies increasingly turn to perfunctory vehicles for promulgating policy, like policy statements, manuals, and regulatory letters. Any solution to the problems of "rulemaking ossification" must balance two sets of factors. Increased public participation and careful analysis of all aspects of a policy is desirable, but can lead to lengthy procedures -- the very length and complexity of which may defeat the desirable ends of rulemaking itself. Although no "perfect" balance exists, providing a range of choices and criteria for making the proper choice would allow agencies to select the appropriate approach for each rule on a case-by-case basis. The drafters of the Administrative Procedure Act intended it to provide agencies with a great deal of flexibility. Although judicial interpretations of the act have yielded a series of procedural requirements that somewhat constrain agency freedom, the zone of discretion remains wide. We present a set of suggestions for using this discretion to de- ossify the rulemaking process. - Regulatory agencies should create a "menu" of procedures, ranging from highly simple to more complex, calling for various degrees of public participation and comment, which may be subject to varying degrees of judicial review, and whose legal status may also vary. Agencies could choose the kind of procedure they believe best fits the type of policy problem at hand from among the menu's options. - Agencies should search for ways to diminish the complex, time- consuming nature of the informal rulemaking process. - Agencies should attempt to negotiate rules where it is possible to do so without prejudicing unrepresented third parties. - Mechanisms should be explored to keep appropriate congressional committees informed of the interpretation made and ambiguities found by courts in the statutes that authorize rulemaking. Such efforts show promise in promoting clarity in the drafting of statutes. One approach is to have nonpartisan analysts periodically apprise relevant committees of statutes or statutory passages that have given rise to divergent interpretations. Another possible method is for committees with jurisdiction over regulatory statutes to devote one or two days per year to informal conferences with representatives of the agencies or the Executive Office of the President for this purpose. - Executive Office officials should communicate less formally, earlier, and more directly with agency officials. The current process -- agencies submitting rules to the Executive Office, followed by EOP review for compliance with presidential policies -- can create an adversarial relationship between the agencies and the White House, sometimes resulting in delay. Increased informal consultation and discussion earlier in the rulemaking process among staff members of agencies and the Executive Office would prove beneficial and would likely lead to faster approval of more effective regulations. Role of Nongovernmental Organizations - The extensive capabilities of nongovernmental organizations (NGOs) should be used more frequently to evaluate the regulatory process, suggest ways to improve existing regulatory strategies, and aid federal agencies in establishing regulatory priorities. Nongovernmental policy research organizations should establish stronger ties with scientists and engineers in universities to bolster their capacities to examine issues pertaining to environmental and health risks. Nongovernmental policy research centers can be particularly effective in convening a diverse group of practitioners and scholars for sustained reflection on problems of organization and decision making in environmental and risk-related regulation. The immense environmental challenges and health risks we face in the future, coupled with existing and anticipated constraints on the federal budget, will necessitate a considerable expansion of activity in the nongovernmental sector. Nongovernmental policy research organizations should establish stronger ties with scientists and engineers in universities to bolster their capacities to examine issues pertaining to environmental and health risks. Endnote [*] We define "environmental and risk-related" regulation as regulation conducted by CPSC, EPA, FDA, and OSHA. The basis for the Task Force's decision to examine the environmental and risk-related subset of regulation, and to focus in particular on EPA and FDA, is discussed on pages 30-33. 2.0 INTRODUCTION One of the most important emerging roles of government in the past 20 years has been the regulation of escalating risks to human and ecological health arising from our ever-growing and ever more complex national and international economies. As awareness of global environmental problems such as global warming has added to existing anxiety about more local toxic threats (or potential threats), such as hazardous waste sites, the environment has moved to public policy's center stage. Closely allied are concerns about risks from toxic substances in still more local environments like the places in which we work, the consumer products we use, and the food we eat. Ambitious legislative mandates and serious resource limitations, coupled with the divided government of the past decade, have combined to place extraordinary burdens on the federal regulatory apparatus we expect to safeguard us from, and teach us about, potential environmental risks. Still, U.S. regulatory programs are considered among the strongest in the world, and we can point to many accomplishments over the past two decades. For example, our system for assuring the safety of foods and drugs ranks among the best in the world, and our laws assuring a safe workplace are among the most comprehensive of any nation. And we have made significant progress in improving the quality of our air, land, and water resources. Yet many goals remain unmet. Federal policies addressing environmental, health, and safety threats are often inconsistent and fragmented. There also is growing concern that our environmental regulatory programs may have placed too much emphasis on cancer-related risks (carcinogens in particular), and too little on non-cancer-related health risks, ecological risks, and the sustainable use of resources. [2] The process of policymaking in this area warrants as much concern as the policies made. Many regulatory practices and arrangements appear ill-suited to coherent policy development and implementation. Priorities tend to be driven by crises rather than proactive deliberation. Regulatory agencies sometimes duplicate each other's efforts or, worse still, work at cross- purposes with each other. Conversely, some important problems do not fall squarely within existing agency jurisdictions and interests. Avoidable friction within and between the branches of the federal government dissipates resources desperately needed for more productive uses. To muddle through the quagmire a little more quickly, agencies often turn to methods for promulgating policy that provide for inadequate analysis and public participation. Expertise within and outside government is often poorly utilized. To be sure, there have been improvements in the federal government's organization and decision-making processes for environmental, health, and safety regulation. Many of these are described in this report. But though much progress has been made, much remains to be accomplished. This report explores some of these decision-making processes and recommends a series of reforms in them. We believe that, if implemented, these recommendations will result in a more efficient, flexible, and forward-looking decision- making infrastructure, one better suited to meeting the challenges of the end of this century and the beginning of the next. 2.1 Strengthened Decision Making For A New And Changing Agenda We focus in this report on regulatory activities of the Environmental Protection Agency (EPA), the Occupational Safety and Health Administration (OSHA), the Consumer Product Safety Commission (CPSC), and the Food and Drug Administration (FDA). Lacking a widely accepted term to describe this subset of the federal regulatory effort, we refer to it here as "environmental and risk-related" regulation. A Crossroads in Policymaking It appears to us that the nation has reached a crossroads in environmental and risk-related policymaking. Techniques to evaluate and control threats to human and ecological health have become more sophisticated as government has worked to answer the public's call for healthier workplaces, safer commercial products, and a cleaner environment. Yet the problems at times seem more intractable. Many of the most obvious opportunities for reducing risks from hazardous substances and problems have already been pursued. The risks that remain tend to be harder to characterize precisely and to reduce. And serious new problems that were unknown or that seemed peripheral ten or twenty years ago -- global climate change, ozone depletion, biodiversity loss, and AIDS, to name but a few -- have come to the fore. Experience suggests that the regulatory agenda will continue to change rapidly. It is a time when new ideas are needed to push forward the frontiers of regulatory decision making. As William Ruckelshaus once noted, "The most interesting moments are those when the idea is on stage, when it engages the public in passionate debate, when people struggle to fit the idea into the existing order, and when, through their efforts, people inevitably change both the existing order and the character of the idea." [3] Fortunately, there is no shortage of good ideas for substantive change. Thoughtful suggestions for policy innovation stream constantly from the nongovernmental sector, industry, and all levels of government. As society begins to move toward embracing the goal of sustainable development [4] in the wake of the 1992 United Nations Conference on Environment and Development in Rio de Janeiro, ideas are generated and refined even more quickly. An abundance of literature has been published in recent years on topics related to sustainability like economic incentives, low-waste/no-waste technology, water resource conservation, and habitat protection. Indeed, a diverse group of influential organizations have issued reports in just the last few months, some calling for dramatic change, on these topics. [5] Our report is intended to complement, rather than supplement, such efforts. We have attempted to develop recommendations that will improve and streamline the federal decision-making process. We offer not policy advice, but ways in which the federal government can better sort through advice and information to develop and implement sound policy for the 1990s and beyond. Issues Deferred Our report covers a broad range of issues. Nonetheless, as is true of any report, much that is relevant could not be addressed. Two issues in particular bear mention. First, many problems in environmental and risk-regulated regulation can be traced at least in part to flaws in substantive laws and in the legislative process itself. Some have recommended that to achieve sensible environmental regulation Congress should enact a single comprehensive act for EPA that would replace the patchwork of statutes it currently administers. More generally, considerable criticism has been directed at Congress's committee structure. Thorough examination of such matters would require several task forces. Our report, therefore, takes the current legal and legislative regime as a given and recommends a series of administrative reforms that will both optimize decision making within the current regime and be adaptable to new ones. It should be noted that the matter of congressional organization is beginning to receive the attention it merits. The Carnegie Commission's Committee on Science, Technology, and Congress will release a report in the fall of 1993 on organizational and procedural reforms in Congress. The Center for Strategic and International Studies' Strengthening of America Commission, chaired by Senators Sam Nunn and Pete V. Domenici, recently issued a report addressing these issues, as has a joint Brookings Institution and American Enterprise Institute effort led by Thomas E. Mann and Norman J. Ornstein. [6] Moreover, the legislature's own recently created Joint Committee on the Organization of Congress will hold a series of hearings throughout 1993 and issue its recommendations by the end of the year. Second, the states play a critical role in environmental and risk-related regulation. In policy areas where Congress has not preempted state regulation, the states often have their own regulatory regime to fill gaps in or to augment federal rules. Moreover, several federal statutes, perhaps most notably the Clean Air Act, require state governments to develop and administer detailed plans for implementing federally developed standards. As with substantive laws and the legislative process, however, a worthwhile examination of the state role in this area fell outside the scope of a report of this size. Another Carnegie Commission task force has addressed the broad issue of science and technology and the states, [7] but more in- depth inquiry into the state role in environmental and risk-related regulation is certainly warranted. 2.2 Broad Context To understand why we focus on this small subset of the vast enterprise of federal regulation, we must glance briefly at the full sweep of federal regulation. Although the report is primarily about noneconomic perspectives on regulation, it is useful to begin with a necessarily oversimplified description of the economic rationale for regulation. Economic Basis for Regulation Commerce in America is governed by markets, as a rule. In theory, when markets operate correctly they should account for hazards or other undesirable attributes of products with lower prices; hazards in jobs, conversely, should be reflected in higher wages. Society would "vote" with its pocketbook on the hazards it wishes to accept. Government intervenes in markets where they do not operate properly. In the real world, a variety of malfunctions can, and frequently do, occur. For instance, the social cost of a product may not be reflected in the business costs (including lost profits) to the firm that produces it, creating what economists call an "externality." The classic example is air pollution. Where, as is often the case, the burden of air pollution falls largely on those who do not purchase the firm's product, the firm will not receive the correct signals from the market. Another example of a market failure is informational asymmetry. Consumers may have no way of knowing that a particular food additive is highly carcinogenic, or even that the food they eat contains the additive. As with an externality, when there is an informational asymmetry, the market does not propagate the message that consumers with knowledge would presumably send -- "stop selling this product, because we will not buy it." [8] Economic Regulation versus Environmental, Health, and Safety Regulation Regulation is intended to correct market failures. Two basic categories of regulation exist, "economic regulation" and "environmental, health, and safety regulation." Federal regulation was initiated in the 19th century to deal with market imperfections whose symptoms were purely economic, such as monopoly. [9] With the creation of the Food and Drug Administration in 1906 the federal government began to regulate certain market failures that resulted in danger to public health from hazardous substances. Economic regulation ballooned in the 1930s and 1940s under President Roosevelt, largely as a response to the Depression. By contrast, regulation to protect environment, health, and safety, grew comparatively slowly during this period and for some decades thereafter. Agencies like the Federal Aviation Administration were organized to prevent catastrophic accidents from certain discrete activities. Relatively little additional attention was paid, however, to more diffuse and chronic threats, such as pollution, until 1970, when EPA was established. In the years immediately following, OSHA [10] was established to protect workers from on-the-job hazards, and CPSC was created to safeguard consumers from potentially harmful products. Environmental and Risk-Related Regulation Conceptually, the mission of the environmental and risk-related agencies, CPSC, EPA, FDA, and OSHA, overlap to a great extent. A large part of what each does is to protect the public from exposure to low levels of (non- nuclear) hazardous substances and problems. To carry out this mission, each of the agencies is vitally concerned with "risk" (see Box 1) and processes attendant to it: risk assessment, risk management, and risk communication (see Box 2). These agencies also draw on the same types of science and technology -- often, in fact, they draw from the same science base and face a series of similar problems that lie at the interface of science, bureaucracy, politics, and law. BOX 1: "Risk": A Multifaceted Term The term "risk" is often given very different meanings at different times and by different speakers. We use "risk" in this report in two different senses. First, when discussing risk assessment of individual substances or problems, we intend risk to mean either the probability that an individual will suffer some adverse consequence as a result of exposure to a pollutant or pollutants or the consequences of such an exposure for an entire population (derived by multiplying the average of the individual probabilities by the number of individuals in question). This sense is normally used in the context of scientific risk assessment. It is the more straightforward use of the term, but even so there may be misunderstanding about what exactly a risk assessment of this kind means (see Boxes 7 and 8.) The other sense in which we use risk can be described as a function of the probability of a harm occurring and the perceived magnitude of that harm. The subjectivity of the latter term frequently produces confusion and conflict. Different people tend to ascribe different magnitudes to the same consequence. For example, some individuals are concerned about a very small -- perhaps one in a million -- chance of developing cancer, while others might see this risk as trivial. It can be seen, in fact, that whether or not one calls the probability one in a million "very small" depends on how one evaluates the magnitude of the consequence at issue. The magnitude, in turn, is frequently determined by several components, and, again, different individuals will tend to value the components of the same harm differently. In evaluating the potential harm of smog, for instance, one person may consider only health effects, while another may also care about esthetic diminution. Moreover, a host of factors extrinsic to the evaluator influence the evaluation of the harm's magnitude, for instance whether or not exposure to the potential harm is voluntary. The use of risk in this sense is explored further in the "Value Integration" subsection of Chapter 6.0. BOX 2: Definitions -- Risk Assessment, Risk Management, Risk Communication - Risk assessment is essentially the process of deciding how dangerous a substance is. The first step in the process of risk assessment is to identify and qualitatively describe the hazard to be assessed. Next, the level of exposure to the hazardous entity is estimated, along with the response of the organisms in question (usually humans, but sometimes, as when evaluating ecosystems, other species) to different dose levels, using the best scientific data available. Finally, the above information is combined to characterize the risk quantitatively. (See Box 7 for more information on risk assessment). - Risk management is the process of deciding what to do about an assessed risk or group of risks. Risk management, unlike risk assessment, explicitly involves consideration of a wide range of legal, economic, political, and sociological factors. - Risk communication is the process by which agencies and individuals discuss risk with one another. Because perceptions of risks often differ widely, risk communication typically requires sensitivity and to the extent possible should involve genuine dialogue. While it is often useful for analytical purposes to think of these functions as distinct processes, they frequently blend together in practice -- see Box 8. * * * * * Significant precedent exists for considering these agencies and the work they do as a whole. The agencies were grouped together from 1977 to 1980 in the Interagency Regulatory Liaison Group, a coordination body. In 1983 the National Research Council published a seminal report on risk assessment (commonly known as "the Redbook") that also focused on these agencies, which it termed the "health and safety" agencies. [11] Although the greatest commonality between the agencies is regulation of health risks posed by discrete substances, we decided against limiting our report to this domain alone. EPA and, to a lesser extent, the other agencies have always directed part of their regulatory activities at "problems" with multiple causes, rather than only at specific substances. Moreover, such problems extend beyond health. Government is paying increasing attention to repairing and preventing ecological degradation. Finally, many of the environmental challenges that government faces today -- worldwide population growth for instance -- transcend the conceptual boundaries of "risk." To take this larger, contemporary perspective into account, we chose the phrase "environmental and risk-related regulation" over simply "risk regulation," or the Redbook's "health and safety agencies." We note that several other agencies are involved in one way or another with environmental and risk-related regulation, including the Department of Energy, the Department of Agriculture, and the Department of Housing and Urban Development. Many of this report's findings and recommendations will be germane to these agencies, even though they are not explicitly directed at them. The Case of the Environment We frequently turn to EPA and environmental problems for case studies from which to develop more broadly applicable lessons. Next in comparative emphasis is FDA. In some instances we focus on EPA or FDA because one of them leads the other agencies in innovation or experience on one or another issue. EPA is funded at a much higher level than the other environmental and risk-related agencies, and FDA was born 64 years before the first of the others was created. At other times the report begins with one of these agencies as a point of departure simply for analytical convenience. 2.3 Specific Context Three characteristics associated with the evolution of environmental and risk-related regulation stand out as critical: increased complexity, increased workload, and resource constraints, and the corresponding need for agencies to set priorities and anticipate problems before they become intractable. Increased Complexity Modern environmental and risk-related regulation can be said to date from the early 1970s, with the birth of EPA, OSHA, and CPSC. Responding to an upsurge of environmental concern and consumer advocacy among its constituents, Congress created these new agencies and has since enacted numerous laws for them to implement and enforce. The newly created responsibilities and redistribution of old duties colonized an institutional landscape on which FDA had stood alone. Great new demands would eventually be placed on science. At first, however, dramatic progress could be made without testing science's ability to deliver. EPA's first Administrator, for instance, directed the agency's efforts at reducing emissions of gross pollutants that posed acknowledged risks to public health and the environment. Little technical insight was required to realize that preventing the passage of raw sewage into rivers would reduce disease and odor and increase fishability and swimmability. One did not have to understand chemistry to know that filtering the thick black smoke pouring out of a smokestack allowed persons living nearby to breathe easier and cough less. Regulation, however, may involve diminishing returns. Progress is rapid at first, but each new incremental gain may be more difficult and more expensive to achieve. As noted earlier in this section, regulators have already taken many of the most accessible steps toward reducing risks from hazardous substances -- yet significant residual risks remain. Today's environmental policymakers must also address problems with diffuse causes and effects that extend far in time and space, like stratospheric ozone depletion and global climate change. And a host of new technologies and technological applications, biotechnology perhaps notable among them, present new challenges for each of the agencies. Many of these problems and processes are only partially understood, and regulatory decisions must frequently be based on limited data and considerable scientific and technological uncertainty. Increased Workload, Resource Constraints Increased complexity has been accompanied by an expanding workload. In many instances, resources have not kept pace. For example, between 1980 and 1985, EPA's staff decreased by approximately 10 percent, [12] even though the agency assumed responsibility for the substantial Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) in 1980; Congress also reauthorized and significantly expanded three other acts in EPA's jurisdiction during this period. [13] At FDA the situation has been similar. For instance, imports of substances under the agency's jurisdiction tripled from 500,000 entries in 1971 to more than 1.5 million in 1990. Between 1985 and 1990, R&D expenditures in the pharmaceutical industry doubled, leading to a sharp upturn in applications for new products submitted to the FDA. In 1989, agency reviewers received 82 percent more applications than in 1980. From 1980 to 1988, FDA was required to implement 21 new laws and amendments, while its overall work force decreased by 11 percent. [14] Need to Set Priorities and Anticipate Problems Expanding responsibilities and increasingly limited resources have compelled agency policymakers to make difficult choices about which risks to regulate first and what standards to set. The need for mechanisms to help policymakers set priorities has been increasingly felt. Risk assessment (see Boxes 7 and 8) has emerged as an increasingly common tool for this purpose. Risk assessments, though often crude and inexact, can be used both to provide a rough estimate of the danger posed by individual substances and to allow rough relative comparisons of risk levels among different hazards. Such procedures can help policymakers determine the severity of problems and provide guidance on where regulatory priorities should lie within a broad universe of diverse risks. Studies such as EPA's landmark 1987 Unfinished Business report have shown that public perceptions of risk do not necessarily correspond with expert assessments. [15] As a result, much attention has focused on ways to improve communication between agency officials and the public in order to prioritize health and environmental hazards more appropriately. In considering organizational frameworks and decision-making processes to develop and implement regulatory strategies, it is important to devise a dynamic policymaking system that can anticipate and respond to the challenges on the horizon as well as those confronting us today. A better capacity to identify emerging or potential problems will enable agencies to prevent environmental degradation and minimize public health threats before they become more difficult, and thus more expensive, to address. For example, the nation now faces a multibillion-dollar remediation effort to remove lead-based paint from homes and lead pipes and fittings from water systems. [16] Yet the toxicity of lead was recognized long before it became a common component of construction materials. [17] The problem we face today could have been minimized and serious health effects avoided, and hundreds of millions of dollars could have been saved, had the nation had a science-based regulatory system in place decades ago that could have anticipated this problem and taken steps to prevent it. As is often the case, the costs of past inaction far exceed the costs of prevention. 2.4 Scope Of The Report Many of our recommendations embody a preference for integrated rather than fragmented decision making and for agency-initiated cooperation rather than coordination mandated by the Executive Office of the President. Another recurring theme in many of these recommendations is that agency administrators and personnel should have primary responsibility for implementing statutory mandates. The Executive Office should provide broad guidance to top agency officials and then rely on these presidentially appointed and Senate-confirmed officials to make well-reasoned, legally sound decisions. At the same time, these agency officials must look beyond the traditional boundaries of their agencies in working to reduce risk. Environmental and health hazards seldom confine themselves to agency jurisdictions. Consequently, regulatory officials must work together to identify and minimize the most serious risks. In the chapters that follow, we trace the institutions and mechanisms through which environmental and risk-related policy is established and implemented, following a "top-down" progression. - In Chapter 3.0, we examine the role of the Executive Office of the President in formulating and reviewing environmental and risk-related policy. We recommend that the Executive Office of the President (EOP) focus on developing broad policy directions and priorities for federal agencies. At the same time, it should avoid micromanaging agency decision making. The EOP should anticipate problems and identify opportunities for policy innovation instead of merely reacting to the actions of federal agencies. - In Chapter 4.0, we analyze interactions among the three branches of government in science-based regulation, arguing that more opportunities should be created and more use made of existing channels for informal interbranch communication in devising strategies to address environmental and health risks. - In Chapter 5.0, we explore interagency coordination and the challenges of devising integrated regulatory strategies. We argue that a new Regulatory Coordinating Committee comprised of the administrators of the various regulatory agencies and representatives of the Executive Office should be created to assure a coordinated and consistent response to high-priority problems. - In Chapter 6.0, we examine three intraagency functions found at the heart of regulatory decision making: relative risk analysis, science advice, and personnel development. We argue that policymakers should make greater use of relative risk analyses, while recognizing that risk-based decisions often involve a high degree of uncertainty. Risk analysis by nature involves value judgments, and agencies must experiment with means of reflecting the informed judgments of the citizenry in relative risk analyses. - In Chapter 7.0 we describe the importance of long-range thinking in regulatory agencies. We call for the agencies to devote more attention to articulating long-range goals and work to match resources with objectives. We also recommend that agencies develop specific milestones and report regularly to the President and Congress on their progress toward these objectives. - In Chapter 8.0 we examine the rulemaking process and suggest that agencies be given more flexibility to select the procedure that best fits the problem at hand from a fixed menu that would include approaches of varying formality. We also discuss ideas for streamlining the informal rulemaking process. - In Chapter 9.0 we discuss the potential that nongovernmental organizations possess for facilitating sound environmental and health regulatory policies. 3.0 THE EXECUTIVE OFFICE OF THE PRESIDENT: POLICY FORMULATION AND REGULATORY REVIEW The Executive Office of the President is a logical focal point for regulatory reform. It is the only entity in the federal government that can take an expansive view of the regulatory landscape -- no congressional committee commands such a sweeping perspective. For this reason presidents have traditionally relied on the Executive Office of the President (the former Bureau of the Budget in particular) to oversee the nation's regulatory apparatus. In recent years many observers have questioned the Executive Office's effectiveness at this task. They perceived an unnecessarily high tension level between White House staff and regulators, with time, energy, and money wasted on internecine warfare. They saw the institutional infrastructure of the Presidency engaged in micromanagement of technical details of rules prepared by expert agencies. And they chafed at the image of a White House that seemed to be able to promote consistency within the Executive Branch only by picking up mistakes its agencies leave behind. In this section we explore the potential of the White House to play a more constructive and proactive role in regulatory policymaking. We stress the need for the President to appoint regulators who share the President's views on regulatory policy. The President must be able to track and understand major rules and should have access to documentation of the impacts of these rules. We believe that the President should use this information to work with Congress to produce better statutes where indicated and to provide broad guidance to presidential appointees in the exercise of their delegated authority. We acknowledge that fragmentation within our democratic government has traditionally served well as a check on arbitrariness and excessive accumulation of power, and we do not seek to centralize regulatory decision making in the Executive Office. Nevertheless, it is clear that the nation's regulatory bureaucracy is too large and the challenges it faces are too great to rely on a fully decentralized framework for decision making. The President must at least be able to define the contours of major environmental and risk-related policy initiatives. He or she cannot do this alone. We begin by describing the major actors within the Executive Office: the Council on Environmental Quality, the Office of Science and Technology Policy, and the Office of Information and Regulatory Affairs within the Office of Management and Budget. The next section explores what we believe are the key responsibilities of the Executive Office. After this, we present a series of organizational reforms. Finally, Executive Office regulatory review is examined in more detail. Case-by-case review has resulted in more controversy than any other Executive Office regulatory policy activity. Although we have mixed views about the utility of case-by- case review, we recognize the legitimacy of a President's wish to engage in this activity, and suggest principles by which it can be carried out more efficiently and effectively. 3.1 Roles Of CEQ, OSTP, And OMB Within the Executive Office of the President, the Council on Environmental Quality (CEQ), the Office of Science and Technology Policy (OSTP), and the Office of Management and Budget (OMB) now have primary responsibility for formulating and overseeing major initiatives in the areas of environmental, health, and safety policy. The Council on Environmental Quality CEQ, established in 1969 under the National Environmental Policy Act (NEPA), was intended to serve as the President's chief advisor on environmental issues. Toward this end, CEQ was directed to survey agency progress in meeting goals for environmental quality set forth in NEPA (see Box 3). Box 3: Key Objectives of the National Environmental Policy Act In order to carry out the policy set forth in this Act, it is the continuing responsibility of the Federal Government to use all practicable means, consistent with other essential considerations of national policy, to improve and coordinate Federal plans, functions, programs, and resources to the end that the Nation may -- - fulfill the responsibilities of each generation as trustee of the environment for succeeding generations; - assure for all Americans safe, healthful, productive, and aesthetically and culturally pleasing surroundings; - attain the widest range of beneficial uses of the environment without degradation, risk to health or safety, or other undesirable and unintended consequences; - preserve important historic, cultural, and natural aspects of our national heritage, and maintain, wherever possible, an environment which supports diversity, and variety of individual choice; - achieve a balance between population and resource use which will permit high standards of living and a wide sharing of life's amenities; and - enhance the quality of renewable resources and approach the maximum attainable recycling of depletable resources. Source: National Environmental Policy Act, Title I, Section 101(b). The Office of Science and Technology Policy The White House Office of Science and Technology Policy (OSTP) provides advice on science and technology policy to the President and serves a variety of policymaking functions. Established in 1976, OSTP is led by a director and four associate directors. The director serves simultaneously as the Assistant to the President for Science and Technology. At present, an OSTP Assistant Director for the Environment has responsibility within the office for most environmental issues. The Federal Coordinating Council for Science, Engineering, and Technology (FCCSET), established with OSTP by the National Science and Technology Policy, Organization, and Priorities Act of 1976, fosters the coordination of the R&D-related activities of federal departments and agencies. FCCSET's influence has varied over the past decade. It is widely credited, for example, for its work in organizing federal global climate change programs. However, OSTP's analytical capabilities are limited, [18] and actions have been taken to expand them in recent years. Recently the Critical Technologies Institute (CTI), a federally funded research and development center, was established to provide support and assistance to OSTP and FCCSET in technology policy development. CTI could play an important role in identifying and promoting the development and diffusion of environmental technologies. The Office of Management and Budget The Office of Management and Budget (OMB) was created in the 1970 reorganization of the Bureau of the Budget. The Bureau was widely respected for its analytical competence and commitment to professionalism within the highly political atmosphere of the White House. Presidents traditionally relied on it to produce sound budgets that coherently implemented presidential priorities. The new OMB was intended to build additional managerial competence into the Bureau to respond to the growing complexity and unwieldiness of the federal government, particularly administrative agencies. Since the early 1970s, OMB has helped to promote the integration of economic considerations into environmental and health regulatory policy. The Office of Information and Regulatory Affairs (OIRA), within OMB, was established by the Paperwork Reduction Act of 1980 to oversee the information-gathering activities of the federal government and to oversee the management of federal regulatory activities. Executive Order 12291, issued in 1981, has strongly influenced OIRA's mission, requiring that all regulatory initiatives include an analysis of costs and benefits and that -- where the law allows -- no action be taken in cases where projected benefits do not exceed costs. [19] OIRA's activities have been the subject of controversy. Critics voice objections to what they see as unnecessary interference in the activities of regulatory agencies, and supporters point to what they see as the Office's positive contributions in ensuring that economic considerations are fully incorporated into federal regulatory policies. (OIRA and its activities are considered in more detail below, in the section on the "History of Executive Office Review" (pages 48-51). Need to Look Ahead With few exceptions, environmental and health policymaking in the Executive Office since the early 1970s has been reactive rather than proactive and has at times been obstructive. Policy actions have largely focused on the economic impacts of individual rules and regulatory initiatives and on preventing the promulgation of regulations that appear too costly. [20] Few initiatives have been taken to control threats to public health and the environment. In part this has been because the office has not been appropriately staffed to develop forward-looking policies and provide guidance to the executive agencies. In part, too, it has been because during the lengthy era of divided government just ended Congress tended to emphasize environmental and health protection in regulatory statutes, while the Executive Branch tended to stress the economic burden of regulation in implementing those statutes. The tensions arising from interbranch relationships and divided government are explored further in Chapter 4.0. We believe that the Executive Office should work to develop coherent environmental and health policy for the President that integrates economic, energy, and related concerns into the early stages of the process. The focus for this activity should be an institutional setting in which both the benefits and the costs of regulatory activities receive attention. Joint consideration of these factors in a forward-looking context will lead to more effective policies than our present system produces. In the remainder of this chapter we first outline the functions and capabilities for science-based regulatory policymaking that we believe should reside in the Executive Office. We next describe a possible configuration for a revitalized Office of Environmental Quality in which integrative policy options can be formulated, and we propose the creation of cabinet-level working groups to set such policies. Finally, we examine the regulatory review function and its implementation in OMB and other parts of the Executive Office. 3.2 Essential Capabilities Of The Executive Office Of The President The organizational structure and operational procedures of the Executive Office of the President (EOP) are, within broad statutory limits, the domain of the President. Since each President operates in the context of a particular set of public mandates and personal objectives, the White House organization must be structured to fit the President's agenda. We list here what we believe are the essential capabilities needed in the Executive Office with regard to environmental and risk-related policymaking and policy oversight (see Box 4). The components of this list should serve as criteria against which to test any proposals to reorganize the Executive Office, including those that follow in this report. Box 4: Essential Capabilities of the Executive Office of the President in Environmental and Risk-Related Policy Formulation and Implementation To be effective, the Executive Office of the President (EOP) must have the capacity to - Identify and analyze issues that require the personal attention of the President - Develop the broad outlines of comprehensive environmental and risk-related regulatory policies that integrate environmental and health concerns into the full range of national policies, particularly economic, energy, and foreign policy - Build legislative programs, with the assistance of departments and agencies, for consideration by Congress, and respond to legislative proposals from Congress - Exchange views on an equal-access basis with interested parties in academia, nongovernmental organizations, the states, and industry in formulating and implementing policy - Understand the significance of the data resulting from research, development, and monitoring programs, and incorporate this information into broad environmental and risk-related policies - Develop global environmental policies in cooperation with other nations, and foster cooperative, international approaches to addressing and preventing the net deterioration of global ecological resources - Communicate these policies effectively to the public, federal departments and agencies, and state governments - Develop, with the assistance of departments and agencies, broad short-range and long-range goals for federal environmental and risk-related programs, and monitor progress in achieving these goals - Facilitate (and eventually bring to closure) the exchange of views among federal agencies in the development of coordinated policy initiatives * * * * * We believe that the Executive Office must have the capacity to undertake several fundamental tasks in the environmental and risk-related policy arena. Of paramount importance is the capacity to identify and analyze issues of "presidential" significance; develop the broad outlines of governmentwide environmental and risk-related policies and monitor their implementation; and build legislative programs. To the extent practicable, the policy development process should be transparent, allowing outside scrutiny of the decision-making process. In developing environmental and risk-reduction policies, the Executive Office should rely, whenever possible, on the analytical capabilities of departments and agencies. It should help the President to define the broad contours of the Administration's environmental and risk-related policy, but must take care to leave implementation details and day-to-day regulatory decisions to the regulatory agencies. Striking the correct balance in this regard can be difficult, and determining when and at what level to intervene in the policymaking and implementation process will always be a central challenge for the Executive Office. The analysis and assessment function, in both the agencies and the EOP, should interact closely with but remain independent from political and policy advocacy. Without such independence, operations will often supplant policymaking, and it is essential that short-term crisis management not crowd out more sustained long-term policy deliberation. 3.3 A New Configuration - The Executive Office of the President should expand its capacity to formulate broad environmental and risk-related policies and should better integrate these policies with other national goals. The need to integrate comprehensive environmental and risk-related policies with economic, energy, national security, and other policies is critical. Lack of such integration has repeatedly left environmental and risk-related regulatory agencies to clean up after the fact the polluting or otherwise risk-creating side effects of actions taken by other agencies and departments. Had policy integration been given a higher priority in the past, it is likely, for instance, that energy policy would have focused much more heavily on efficiency, and market mechanisms might have been employed to achieve environmental goals; agriculture would be less dependent on pesticides and fertilizers; and federal tax laws and regulations would have promoted a wide range of environmental objectives such as development of "low waste/no waste" technology. - A focal point should be created in the Executive Office of the President for developing environmental and risk-related policy in the context of other national policy goals (particularly economic), and for helping federal departments and agencies to integrate sustainable development and risk reduction objectives into their activities. By strengthening the existing Office of Environmental Quality (OEQ) and redefining its mission, this can be achieved without new legislation. (On February 8, 1993, the White House announced its intention to abolish CEQ and to replace it with an "Office of Environmental Policy." The new Office is to be staffed at approximately one-third the level of CEQ. It will be headed by a Deputy Assistant to the President.) Environmental and risk-related policymaking in recent administrations has tended to be fragmented. White House staff appeared for the most part to view regulatory agencies as victims of tunnel vision who were unconcerned about the costs of their activities and needed periodically to be restrained. As a result, the White House actors who were most influential and active in regulatory policymaking were those primarily concerned with cost control -- OIRA and the Competitiveness Council. CEQ in its earliest incarnation was a vital institution; however, in the past decade its effectiveness has waned, in part because recent presidents have made only limited use of the analytical potential of the council (indeed, President Reagan reduced its staff to a skeletal level). As one scholar of the National Environmental Policy Act put it: CEQ was intended to be an important and powerful arm of policy, but the extent of its ability to fulfill its mandate depends upon the receptivity of its principal client, the president. Limited by presidential priorities, CEQ has done what it could. . . . [21] We believe that to make sensible environmental and risk-related policy a President must have access to analysis and advice that integrates his or her simultaneous concerns for protecting human and ecological health and for maximizing economic growth. No adequate locus exists at the time of this writing within the White House for development of such analysis and advice. We suggest adapting OEQ to this task. Established by the Environmental Quality Improvement Act of 1970 shortly after CEQ was created, OEQ was intended to provide staff support to CEQ. [22] Its existing expertise and institutional memory make it an obvious base on which to build a focal point for environmental and risk-related policymaking in the White House. Several fundamental changes are needed to reconfigure OEQ to serve the ends we recommend for it. First, we believe the three-member CEQ has outlived its usefulness and should be abandoned, and its functions assumed by OEQ. The tripartite council approach has not been effective in influencing environmental policy (perhaps in recognition of this, the Bush Administration did not appoint two of the three statutorily permitted members of CEQ). The change we call for is consistent with a recommendation in a 1988 report by many of the nation's major environmental organizations, Blueprint for the Environment; this report called for a reorganization of CEQ "to turn it into a Presidential staff on the environment, headed by a single director who is highly qualified and trusted by the President." [23] A director with rank of Assistant to the President for the Environment should head the OEQ. In this capacity the Director should lead efforts in the Executive Office to develop environmental and risk-related policy options, presenting proposals to the President and the Cabinet for their consideration. The Director should also be responsible for looking across all departments and agencies and identifying ways that federal activities can be directed toward broad environmental and risk reduction objectives identified by the President. Because the Director must broker policymaking at the cabinet level, she or he should be a broad-gauged person of considerable stature, with good access and sole loyalty to the President and Vice President, who does not have an adversarial relationship with either the environmental or business communities. In developing policy proposals, OEQ should work to integrate environmental, energy, and economic considerations. As discussed in a previous Commission report, actions should be taken "to assure the stable and sustained functioning of a high-level mechanism concerned with linking environment, energy, and the economy." [24] The Office should also address the balance between ecological and health risk reduction. OEQ should provide the Executive Office a capability to look ahead, anticipate problems, and develop long-range strategies to respond to cross-cutting challenges that require an integrated federal response. As we have suggested earlier, as things now stand day-to-day "crisis" management too often sidetracks forward-looking deliberation in the White House. OEQ should also work with OSTP and FCCSET to identify major research and development needs, to promote the improvement of risk assessment and risk management procedures, and to coordinate major R&D initiatives. The responsibilities of OEQ and other Executive Office entities cannot be carried out effectively without a strong staff capacity to evaluate issues and define innovative approaches to address them. - The Executive Office's analytical and policymaking processes should complement and not supersede the capabilities in departments and agencies. The White House should develop broad policies that cut across department and agency missions. Its focus should be on integrating major domestic and foreign policy considerations with environmental and risk-related policies. We stress in particular that OEQ's mandate should be limited to defining and periodically updating the outlines of the President's administrationwide environmental and risk-related policy. Neither OEQ nor its director should second-guess individual decisions of agency heads. By virtue of this circumscribed mission and his or her allegiance to no clientele except the President, OEQ's Director should be able to span the different interests of the Cabinet in a way that an EPA Administrator (or Secretary of the Environment) could not. Agencies and departments should be given the freedom to develop policies specific to their missions, as long as they are consistent with the broader policies established by the White House. All departments and agencies have extensive analytical and policy planning capacities. For example, EPA's Office of Policy, Planning, and Evaluation (OPPE) is better equipped to analyze most detailed environmental policy questions than the Executive Office of the President is (or should be, given the crush of other issues the White House faces), just as FDA's Office of Planning and Evaluation is best suited to analyze specific food and drug policy issues. Consequently, individual agencies should be relied upon to develop policies within their missions and to propose broader policies for consideration by the President and the Cabinet. If EPA becomes part of a cabinet-level Department of the Environment, the White House may rely upon a Department of the Environment with an expanded mission to think more expansively than the present EPA about approaches to achieving environmental and risk reduction objectives. Such an evolution in analytical and policymaking capacity could greatly aid the Executive Office in developing broad policies that cut across the missions of departments and agencies. - Cabinet-level working groups should be established to formulate and oversee the implementation of federal policies for environmental protection and risk reduction that cut across departmental boundaries. Standing groups should be created to address persistent concerns, such as the relationships among energy, environment, and the economy. Ad hoc groups should be created to address challenges that can be resolved over a limited period of time. A central challenge in environmental policymaking is integrating the large array of policy considerations that influence the quality of the environment. Policy failures often result from a narrow perspective in planning federal programs. For example, past energy, agriculture, and defense policies have devoted inadequate attention to environmental concerns. At the same time, regulatory policies have suffered from inadequate attention to potential economic incentives that could be used to drive the nation toward environmental objectives. There is relatively little interaction, for example, between the policy-planning units of EPA and the Department of the Interior. Fostering such interactions requires either a mandate from senior agency officials or initiation of relationships at lower levels and their approval by senior officials. Cooperative interactions among agencies with missions that potentially conflict are best initiated at the highest levels of government. For this reason we recommend the establishment of cabinet-level working groups to formulate and oversee the implementation of federal policies for environmental and risk-related regulation that cut across the missions of other agencies and departments. Such working groups could be created by the President or cabinet officers on a permanent or ad hoc basis. We believe, however, that working groups with a defined lifetime are preferable in many respects because they would help focus attention on critical issues and would lead to intensive efforts to develop a consensus on policy directions. More routine meetings of permanent working groups would likely result in a gradual decline in attention on the part of cabinet officials. Coordination among environmental and risk-related agencies is best handled at the agency level, since there is great similarity of interests among these agencies and because the Executive Office has a limited capacity to coordinate agency activities. Interagency coordination is addressed in Chapter 5.0. - The Office of Science and Technology Policy (OSTP) should play a leading role in developing environmental and risk-related policies by becoming more directly involved in policy decisions involving scientific and regulatory issues, promoting consistency in the scientific aspects of risk-based decisions, and ensuring that federal R&D programs are directed to the missions of the environmental and risk-related agencies. OSTP's work in these areas should be conducted in close cooperation with the Office of Environmental Quality. The scientific and technological aspects of regulatory decisions are intertwined with their legal and economic components. Strict division of labor in the Executive Office of the President -- and in departments and agencies -- can be a negative force in policy formulation. For example, it would be highly beneficial if White House offices worked more closely in developing guidelines for evaluating risk and for analyzing the costs and benefits of potential regulatory actions. Too often in the recent past, agencies were required to proceed in the rulemaking process based on assumptions regarding OMB and Competitiveness Council requirements, only to find after completion of the analytical basis for a regulation that some of their initial assumptions were not consistent with the preferences of the Executive Office. Similarly, as we discuss in Chapter 6.0, it would be beneficial if there were greater consistency across agencies in risk assessment and management procedures. 3.4 Executive Office Regulatory Review Probably no function has come to be so closely associated with environmental and health policymaking in the Executive Office as regulatory review. Case-by-case review of agency rules has been the predominant means for imprinting presidential preferences upon regulatory policy. In this section we examine the history of Executive Office review mechanisms and the controversy that has attended them. We conclude with recommendations directed toward improving the utility and credibility of regulatory review. History of Executive Office Review Over the past two decades, presidents have established a series of units within the Executive Office to review major regulations in the context of their impacts on the economy and other policy concerns. President Nixon established "Quality of Life" reviews, which required agencies to submit proposed "significant" rules to the Office of Management and Budget before publication in the Federal Register. OMB in turn circulated rules it received to other agencies for comment. Ultimately, only EPA rules were reviewed, though the process was designed to apply to other agencies as well. OMB served primarily to facilitate communication and build consensus between EPA and other agencies. It performed few independent analyses of proposed rules. The Ford Administration's Council on Wage and Price Stability (CWPS) reviewed proposed regulations for potential impact on inflation. EPA Quality of Life reviews persisted as well. CWPS, though controversial, eventually received congressional support in the form of an amended enabling act authorizing it to participate in rulemaking proceedings and to describe inflationary impacts it believed might accompany particular agency initiatives. The Carter Administration's Regulatory Analysis Review Group (RARG) succeeded CWPS. Created by Executive Order 12044, RARG was made up of representatives from the Council of Economic Advisers, OMB, and major agencies. The group emphasized formal interagency review of cost- effectiveness analyses prepared by agencies rather than inflationary impact assessment. Only rules designated by agencies as major were reviewable, and only a few rules from each agency were reviewed each year. In a few instances disputes were decided by the President. In 1981, President Reagan signed Executive Order 12291, which remains in effect today, directing agencies to assess the costs and benefits of each regulation considered, to ensure that its potential benefits outweigh its potential costs, and to select the regulatory option that maximizes the net benefit to society. Agencies must additionally prepare a formal Regulatory Impact Analysis (RIA) for each "major" rule they wish to issue. [25] As discussed earlier, the Office of Information and Regulatory Affairs in OMB is designated to review regulations and agency analyses to ensure compliance with these requirements. OIRA may prevent an agency from proceeding with a proposed or final rule until it is satisfied that its requirements have been met. In 1985, President Reagan supplemented Executive Order 12291 with Executive Order 12498, requiring agencies to submit to OIRA an annual overview of regulatory policies and objectives and information on all significant regulatory actions contemplated or in process. Proposed agency actions that will likely be controversial, costly, or otherwise politically significant are described in the Regulatory Program of the United States, published annually. Agencies may not proceed with proposed regulatory actions until OIRA clears them; changes in plans require OIRA approval as well. Executive Order 12498's stated purpose is to promote rulemaking that is consistent with the President's program. It is intended to do this by, among other things, making agency heads responsible for the content of regulatory activity from its inception (rather than only in its concluding stages in rulemaking, as Executive Order 12291 does) and by collecting major initiatives in a single document to allow input from other agencies and the public before a notice of proposed rulemaking is published. [26] Review under Executive Orders 12291 and 12498 during the Bush Administration was augmented by sporadic secondary reviews by the Council on Competitiveness, chaired by the Vice President, and by the Office of Counsel to the President. As with OIRA review under the Reagan Administration Executive Orders, these offices could prevent a proposed rule from being issued unless a statute directed otherwise. In contrast to OIRA, however, neither of the latter offices adhered to official review criteria, though informal statements make clear that cost and political feasibility were key considerations. Although the Council on Competitiveness acknowledged a desire to operate out of public view, it assumed an increasingly high profile toward the end of the Bush Administration. [27] Issues Raised Executive Office regulatory review has proven decidedly controversial. Proponents of the review process argue that consistent and otherwise rational decision making can be achieved only by converting the mixed currencies of regulation (such as effects on employment, availability of technological benefits, and average lifespan) to a single metric. In deciding how to translate the effects of a proposed rule into costs and benefits, agencies must face distributional aspects (that is, who wins and who loses) of regulations that might otherwise remain covert. It is argued that there is no slighting of benefits that cannot readily be converted into numbers, since agencies are permitted in their analyses to describe qualitatively any information that cannot be quantified. Moreover, its supporters see Executive Office review as a means to counter bureaucratic "tunnel vision." [28] They believe that only an overarching body without program responsibilities can ensure that decision making by the various agents of the Executive Branch is harmonious and compatible with the President's program. [29] Critics argue that review requirements are intended primarily to impede the rulemaking process and to provide additional channels through which regulated parties can intervene. Concerns are also voiced about the economic analysis that ostensibly lies at the heart of OMB review. It is said that the multiple measurements and tradeoffs inherent in most standard- settings cannot be reduced to a single meaningful net figure. By relying on cost-benefit numbers the OMB process systematically biases decision making against regulatory action, since benefits are generally much harder to quantify than costs and may be significantly discounted in present-value estimations. [30] For instance, detractors argue, studies suggest that exposure to even small concentrations of lead decreases mental capacity and increases behavioral problems in children. [31] Yet because there is not yet a widely accepted method for quantitatively assessing the economic effect of IQ loss or behavioral problems in children, this information cannot be included in a quantitative cost-benefit analysis. Critics conclude that such minimization of the value of benefits, coupled with use of arbitrary modeling assumptions (including discount rates and the value of human life), often leads to poor decisions. We have divergent opinions about the validity of Executive Office review of agency rulemaking. Some of us view Executive Office review of individual rules as an unnecessary additional layer of bureaucracy on an already overburdened system. Rather than enhancing presidential influence over regulation, OIRA and the Vice-President's Council on Competitiveness at best merely interpose White House staff between the Chief Executive and presidentially appointed department and agency heads. Others among us see Executive Office review as essential to facilitating coherent and cost- effective regulation by our sprawling modern bureaucracy. We therefore neither endorse nor challenge the President's need to employ Executive Office regulatory review. However, we assert that as practiced the review process has significant flaws, and we outline below a set of principles for reform. One such suggestion is that proactive and constructive activities of the Office of Environmental Quality could replace much what the Office of Management and Budget has typically done reactively. We believe that the key defects in the regulatory review scheme used in the past were its secrecy and unpredictability. The Executive Office for the most part stood on executive privilege and insisted that its review processes remain opaque. This inaccessibility fueled public distrust of the regulatory system. Confusion existed both within and outside government because the rules and procedures of the policymaking process were often unclear. While industry at one time seemed comfortable with the Executive Office process, some segments became critical of it, frustrated by multiple layers of review without a clear locus of authority. Indeed, in some instances the review process itself might have impeded economic growth: few in business wish to make large capital investments until it is clear that a final regulatory decision has been made. Additionally, industry participation in agency policymaking was undercut because agencies avoided use of rulemaking procedures in order to evade Executive Office review (see Chapter 8.0). Finally, while we believe cost-benefit analysis can contribute to sound policymaking, we do not see value in technical micromanagement by generalists. Frequently the technical details of decisions made by presidentially appointed administrators in conjunction with scientific and technological experts, following extensive public comment, were reviewed de novo by individuals in the Executive Office who had limited expertise. Reviews of this kind were often counterproductive. - Executive Office review of regulatory decisions made by the presidentially appointed administrators of federal agencies should consist primarily of an examination of the extent to which decisions are consistent with statutory mandates and broad Administration policies. Within broad statutory constraints, the approach a President takes to governing is largely a personal choice. Therefore, we do not recommend a precise mechanism for overseeing the activities of federal regulatory agencies. Nonetheless, general principles of good government should guide the executive review process in whatever form it takes. - The President should take care to appoint agency administrators with whom a relationship of mutual trust can be established, and the President should be able to rely on the judgment of these appointed agency administrators in implementing policies. Agency performance should be evaluated in the context of the performance of these appointees. The lines of authority for decision making in the Executive Office should be clearly defined. - If dissatisfied with the actions or progress of federal agencies, the President should work either to modify the statutes under which they operate or to make agency management changes rather than undermine agency efforts to carry out their mandated responsibilities. In reviewing agency decisions, the Executive Office should carefully consider the statutory underpinnings of agency actions, and the bases for its decisions should be clearly articulated. - The Executive Office of the President should be realistic about its capabilities and should not review technical scientific issues unless it has the expertise to do so. Reviewing units in the Executive Office should generally defer to the scientific and technical findings of experts in federal agencies. - There should be a minimum of regulatory review points within the Executive Office, and the review process should be clearly described. Except for communication directly related to presidential deliberation, the executive oversight process should be open to public scrutiny. - Economic analyses should take place chiefly at the agency level in the context of clearly stated procedural guidelines developed by the Executive Office. The substance of economic analyses undertaken by federal agencies should not be modified by the Executive Office without a compelling reason. However, the Executive Office can play an important role in assuring some consistency in agency approaches to economic analysis. 3.5 Conclusion We believe that the President has a potentially excellent array of institutional support in OEQ, OMB, and OSTP with which to build sound environmental and health policy. For too long, however, this support network has remained fragmented, with different facets of environmental and health policy residing predominantly in different offices (concern for the environment in CEQ, cost sensitivity in OMB, scientific competence in OSTP). This arrangement has bred inefficiency and distrust. By linking scientific competence with concerns for both economic impacts and environmental and health quality, we believe that any President, regardless of political inclinations, can build sound policy more efficiently than under the past system. Such integrated policymaking might be supplemented by limited Executive Office regulatory review as described above. We have thus far focused on the complex relationships within the Executive Office, while only alluding to the challenging relationships between the Executive and Congress in setting and implementing regulatory policy. In the next chapter we look more closely at interactions among the three branches of the federal government. 4.0 CONGRESSIONAL, EXECUTIVE, AND JUDICIAL INTERACTIONS The complexity of federal environmental and risk-related policymaking necessitates a range of interactions among the three branches of the federal government. For the most part, these interbranch relations occur in rigid adversarial contexts such as litigation and hearings. Enhancing informal communication among Congress, the Executive, and the Judiciary on environmental and risk-related issues would help each branch develop a better understanding of the responsibilities and capabilities of the other branches and would also help generate understanding of the complex issues themselves. Improved interbranch interactions would enhance the environmental and risk-related policymaking process. 4.1 The Constitutional Backdrop To Interbranch Interactions While the Constitution mandates a separation of powers among the executive, legislative, and judicial branches of the federal government, its provisions presume a certain level of coordination and cooperation among the branches in the development, implementation, and adjudication of public policy. Separation of powers enables Congress, the Executive, and the Judiciary to facilitate or to impede the actions of the other branches through various checks and balances. In the executive branch, presidential vetoes or approvals of legislation, appointments to the Judiciary and Executive, rulemaking, implementation of laws, and use of other discretionary powers affect the legislative and judicial branches. In Congress, authorization, funding, and oversight of executive branch activities; confirmation or rejection of presidentially nominated executive and judicial appointees; and approval, delay, or obstruction of legislation influence the Executive and, to a lesser degree, the Judiciary. Judicial review, including determination of the constitutionality of laws and evaluation of executive branch compliance with them, affects Congress and the Executive. In addition, since the legislative and executive branches often consider past court decisions in developing and reauthorizing laws and promulgating regulations, judicial precedents can influence policy as well. Through these interactions, each branch of the federal government directly or indirectly influences the shape of public policy. The constitutional system of checks and balances creates an inherent tension among the branches of government, and differing priorities in Congress and the Executive can lead to gridlock, regardless of the political affiliations of the parties involved. However, the Framers of the Constitution intended compromise to be the alternative to gridlock, and they envisioned interbranch cooperation as essential to effective policymaking. If one or more parties in a political debate is defiant, compromise becomes unattainable, and gridlock is likely to result. Although interbranch tension is endemic (even leaving aside partisan considerations), divided government, with different parties leading Congress and the Executive, can exacerbate existing interbranch tensions and create further obstacles to policy formation. Risk and Uncertainty in Interbranch Interaction In addition to these institutional factors, the complexity and scientific uncertainty often associated with environmental and risk-related problems can amplify the difficulty Congress and the Executive face in working together to develop policy. Where consensus exists on the magnitude of a problem and a proper approach to solving it, legislators and regulators can act swiftly and effectively to remedy the situation. However, policy is much more difficult to develop and implement where uncertainty exists over the nature of a problem itself, the viability of methods to address it, or the degree to which a problem that is expensive to solve should be alleviated. Case Study in Interbranch Interaction: Rulemaking and Judicial Review Since both the legislative and executive branches interact with the Judiciary through its role as legal interpreter of statutes and regulations, effective relations with the judicial branch are an important element of successful policymaking. Because of the complex technical nature of environmental and risk-related problems, Congress often enacts legislation that defines only the boundaries of its solution, delegating the details to expert agencies. As a practical matter this can result in statutory ambiguity. Sometimes such statutes prove difficult for agencies to interpret. For example, regulatory actions under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), the Toxic Substances Control Act (TSCA), and the Consumer Product Safety Act (CPSA) are based on a standard of "unreasonable risk." [32] The Clean Air Act requires that the Environmental Protection Agency (EPA) set standards with an "adequate margin of safety" to ensure public health. [33] Giving concrete meaning to such terms can prove vexing. For example, what is "unreasonable" or "adequate" in the context of saving human lives? Is one excess death per million "reasonable," or is one in ten thousand, or is zero? Implementing policy requires finding answers to difficult questions like these, which sometimes necessitate tough choices such as trade-offs between costs and lives, often under great uncertainty. In the past, when statutory and regulatory language did not present clear answers to controversial questions, interpretation of congressional intent was often left largely to the judicial branch. In such cases, the courts frequently looked to legislative histories to determine the intent of the legislature. However, the Supreme Court's 1984 decision in Chevron v. Natural Resources Defense Council has to some degree redefined the judicial role in such circumstances. [34] In cases where statutory language is ambiguous, Chevron established a standard of review that counsels deference to the agency interpretation of the law, rather than legislative histories or other accounts of congressional intent, unless the court finds the agency view "unreasonable." Although it shifted a degree of decision-making authority from the Judiciary to the Executive, Chevron has hardly eliminated the Judiciary's role in reviewing agency rulemakings. The 1992 ruling in Corrosion Proof Fittings v. Environmental Protection Agency illustrates that even when regulatory agencies expend significant time and resources in developing regulations, the resulting rules may not survive judicial review. [35] In this case, the Fifth Circuit Court of Appeals reviewed the asbestos ban that EPA developed under the Toxic Substances Control Act. Before EPA promulgated its ban in 1989 on nearly all new products containing asbestos, the agency spent millions of dollars and many years compiling evidence linking asbestos to lung cancer and other diseases. This marked one of the most extensive rulemaking procedures in the agency's history. However, the court overturned the restrictions on the grounds that the agency did not explicitly consider less burdensome alternatives, as the court read TSCA's Section 6 to require. In addition, the court also cited the agency for failing to allow industry comment on revised health benefit estimates and for not fully evaluating the safety of asbestos substitutes. The asbestos decision has provoked considerable debate, and fingers have been pointed in several directions. Regardless of whether the statute, the courts, the agency, or others should be faulted in this case, it is unsettling that that EPA could not satisfy TSCA's requirements for promulgating a single rule after a decade's effort. The case raises numerous questions, including whether the executive branch should encourage Congress to revise this legislation, and under what circumstances the agency should devote such a vast amount of time and resources to a single substance at the expense of many other pressing issues in its jurisdiction. In another 1992 case, American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) v. Occupational Safety and Health Administration (OSHA), [36] the 11th Circuit Court of Appeals remanded OSHA's Air Contaminants Standard, [37] which covered 428 toxic substances. Both industry groups and labor unions had challenged the agency's findings on specific substances and the procedures it used in setting the multisubstance standard. When OSHA promulgated the multisubstance standard in 1989, many hailed it as an innovative approach to dealing with a backlog of unregulated substances that would likely take many years to address on a case-by-case basis. Indeed, before the Air Contaminants Standard, OSHA had issued rules on only 24 substances since the agency's creation in 1971. The court itself acknowledged this consideration, but it determined that the language of the Occupational Safety and Health Act left it no choice in remanding the standard. As in the asbestos case, many criticized the court's ruling as a setback to effective regulation. However, the opinion suggests that a congressional amendment could provide authorization for OSHA to employ such a multistandard approach to regulating toxic substances, pointing to a possible interbranch effort to address the problem of unregulated toxic substances in the workplace. 4.2 Statutory Interpretation, Statutory Specificity, And Interbranch Relations Differences in statutory interpretation can exacerbate interbranch communication difficulties. To return to the TSCA and Clean Air Act examples above, Congress and the Executive may employ different definitions of "unreasonable" or "adequate," resulting in very different policy approaches. The proper degree of statutory specificity is a difficult question. If Congress provides broad mandates and leaves specific program implementation to the agencies, friction may result if congressional expectations regarding implementation are not met. However, the executive branch may have difficulty discerning congressional intent from broad legislative instructions, leaving agencies to define what is "reasonable" or "adequate." In recent years, Congress has often employed a strategy of writing increasingly detailed legislation on environmental and risk-related issues. Since Chevron held that courts would defer to agency decisions, rather than evidence of congressional intent, in the case of disagreements over the proper interpretation of ambiguous legislative mandates, Congress has responded by leaving fewer areas of its environmental and risk-related legislation subject to agency interpretation. Congress has sometimes designed legislation to spur specific agency actions in policy implementation, rather than providing general guidelines and allowing agencies to determine how best to meet those goals. These efforts have often involved including default regulations, or "hammer provisions," which take effect if agencies fail to promulgate rules or take other action as required in the statute by a specified date. The 1990 Clean Air Act Amendments, almost seven times longer than the 1970 amendments, exemplify this apparent tendency toward increasing legislative specificity. [38] Improved interbranch communication could also help alleviate another problem that occurs with some environmental and risk-related legislation -- the ability of agencies to achieve statutory goals within specified timeframes. For example, the Clean Air Act Amendments of 1970 allowed EPA only 90 days to propose six national ambient air quality standards with adequate margins of safety to protect human health. In addition, Congress set a deadline of five years for national attainment of these standards, although evidence at the time of the act's passage suggested that air pollution in cities such as Los Angeles would take 25 years to remedy.[39] Perhaps not surprisingly, more than two decades later, numerous parts of the country remain out of compliance with the act. While some assert that Congress needs to set optimistic forcing deadlines in order to spur agency action, improved communication between the Congress and the executive branch could foster the development of more realistic goals and milestones. Such cooperative interbranch effort could lead to the development of better environmental and risk-related policy and perhaps to faster attainment of jointly agreed-upon goals. 4.3 Promoting Interbranch Communication Improved communication and better understanding among the branches on environmental and risk-related policy would prove beneficial, particularly in view of the high stakes and endemic uncertainty associated with these issues. Off-the-record communication focused on broad environmental and risk-related matters, rather than specific policy outcomes, could help each branch develop realistic expectations about the capabilities and responsibilities of the other branches. - Mechanisms should be devised to promote informal communication among the branches of government with respect to environmental and risk-related issues. Several ongoing efforts designed to foster informal communication among the branches have proven successful. In particular, the Brookings Institution (see Box 5) and the National Health Policy Forum (see Box 6) have developed innovative branch-spanning programs to improve communication and build understanding among the branches. Through informal discussions among members of each branch, these interbranch forums have taken steps toward improving the formulation, implementation, and interpretation of public policy. BOX 5: The Brookings Institution's Administration of Justice Seminars In 1978, the Brookings Institution initiated a program designed to improve communication among the legislative, executive, and judicial branches on issues related to judicial administration. The Administration of Justice seminars include representatives of Congress (House and Senate Judiciary Committee members and chief counsels), the Judiciary (the Chief Justice of the United States is a key participant), and the Department of Justice (including the Attorney General). The meetings provide a forum for informal, off-the-record talks among these high-level participants. Although the structure of the program has evolved since its inception, currently the seminars include a maximum of 60 attendees: 15 from Congress, 15 from the Judiciary, 15 from the Department of Justice, and 15 staff members. The Brookings Institution holds the seminars annually, but the principals attend only in alternating years, with staff members attending on off-years. The seminars include both plenary sessions and small-group discussions over a two-day period for the meetings of principals and in one-day meetings for staff. A 12- to 14-member planning committee meets six times annually to determine the agenda for the program, including discussion topics and speakers. The planning committee makes all of its decisions consensually, and the director of the Brookings program stresses the importance of this decision- making method. Typically, the agenda includes about six major issues, although past seminars have included as many as a dozen. Overall, participants rate the interbranch program as highly successful, and in his 1992 year-end report on the federal judiciary Chief Justice William H. Rehnquist noted that "the Brookings Institution's Seminars on the Administration of Justice . . . have allowed a valuable sharing of perspectives on many of the issues that have made their way into the law."[*] Endnote [*] William H. Rehnquist, "Chief Justice Issues 1992 Year-End Report," The Third Branch 25(1) (January 1993), 1-6. BOX 6: The National Health Policy Forum Since 1972, the National Health Policy Forum (NHPF) has served as a nonpartisan, nonprofit educational institution for health policymakers in Congress, the Executive Office of the President, and the federal agencies, as well as state leaders, academics, and other health specialists from across the nation. The organization is intended to provide federal health policymakers with access to experts in academia, business, labor, consumer groups, the health professions, and other parts of government. As health issues cut across many federal agencies and congressional committees (including such areas as veterans' affairs, agriculture, environment, and science), interbranch and intrabranch communication is an essential element of effective policy. The National Health Policy Forum allows for the exchange of ideas in an off-the-record environment designed to facilitate free discussion among senior-level participants. The Forum was modeled after an education policy program that brought policymakers together with school principals, teachers, and other groups that their legislation directly affected. According to the founder and director of NHPF, that educational forum eventually lost its efficacy as its size increased. Thus, the NHPF director stresses the importance of maintaining a small, relatively "elite" organization in order to attract high-level policymakers, mainly senior congressional staff and agency officials. In addition to Washington-based seminars, the Forum organizes site visits that examine national health issues from a regional perspective; these programs have helped focus attention on health care issues at the state and local levels. In organizing Forum meetings, the NHPF staff seeks to select discussion topics that involve existing or potential interactions between the branches of government, rather than those in which a single agency or group has primary control over policy. The goal of the program is to improve the federal decision-making process on health issues and to devise better policies through increased interbranch coordination and better-informed officials. * * * * * The Brookings Institution hosts an annual meeting designed to improve communication among the three branches on judicial administration issues, and the National Health Policy Forum holds frequent meetings intended to provide national health policymakers in Congress and the Executive with access to experts in a range of health-related fields. Both the Brookings Institution's seminars on the Administration of Justice and the National Health Policy Forum (NHPF) offer important lessons for future interbranch programs regarding both structure and subject matter. Organizers of each forum stress the importance of maintaining a relatively small group of high-level participants (500 for the NHPF, with 10 to 15 individuals at a small-group session and 50 to 100 attendees at a typical large meeting; 60 for the Brookings program). Greater inclusion of lower- level staff members frequently leads to decreased senior-level participation over time, the forum planners note. The off-the-record nature of these programs is another essential element of their success, according to participants. Such a forum allows free exploration of a range of ideas; a more formal setting would likely stifle much of this candid debate. Careful selection of discussion topics is an integral part of the forum planning process. NHPF strives to choose topics that demonstrate the potential for interbranch interaction, and forum organizers prepare substantial issue briefs on each subject under discussion to inform participants who may not have expertise in that particular subject. The Brookings Institution uses a planning committee that meets throughout the year to arrange the annual event and determine topics for consideration. The nature of the group itself that sponsors the discussion influences the success of the outcome as well. Since securing the trust of participants is critical to the program's success, it is important that participants perceive the organizer as an "honest broker." If participants or outsiders see the program as a lobbying effort, organizers may encounter difficulty in generating the active participation of senior officials that is central to a successful program. As an established, independent, respected organization, the Brookings Institution serves as an excellent example of an honest broker. As a nonpartisan health information dissemination program, the National Health Policy Forum has also achieved this independent status. - A forum should be created in which Members of Congress, executive branch officials, and judges can meet informally to discuss broad issues raised by the interaction of science and policy in environmental and risk-related regulation. A forum of this kind would help the branches develop realistic expectations about each other's capabili