Sunstein Wins Business Plaudits, Activist Brickbats on Exit

White House Regulations Chief Sunstein Returning to Harvard Post
Cass Sunstein is administrator of the Office of Information and Regulatory Affairs, part of the White House Office of Management and Budget responsible for analyzing whether U.S. regulations are worth their cost. Source: Harvard Law School via Bloomberg

Cass Sunstein, the chief regulator for President Barack Obama, said today he will resign, leaving behind a record criticized by both political opponents and White House allies.

Sunstein, 57, will leave the White House Office of Information and Regulatory Affairs, which oversees federal rules, later this month and return to Harvard Law School.

At the federal agency, Sunstein pushed agencies to weed out unnecessary or outdated regulations and ordered them to consider the cumulative financial burdens of rulemaking when crafting new directives.

“Cass has shown that it is possible to support economic growth without sacrificing health, safety and the environment,” Obama said in a statement today. “With these reforms and his tenacious promotion of cost-benefit analysis, his efforts will benefit Americans for years to come.”

Rules during the first 32 months of the Obama administration cost $19.9 billion and delivered $91 billion in net benefits, according to the Office of Management and Budget, the parent agency of OIRA.

Sunstein left Harvard in 2009 to join the Obama administration. Before Harvard, Sunstein taught at the University of Chicago Law School, where Obama also served on the faculty. He is married to Samantha Power, a special assistant to Obama and senior director at the National Security Council.

Harvard Job

At Harvard, Sunstein will return to his position as the Felix Frankfurter professor of law and direct the new Program on Behavioral Economics and Public Policy.

He will be replaced on an interim basis by Boris Bershteyn, the general counsel of OMB and a former White House lawyer with responsibilities for regulatory, economic and environmental policy issues. Bershteyn was a law clerk to former U.S. Supreme Court Justice David Souter.

John Graham, who ran OIRA in George W. Bush’s first term, said Sunstein was an able administrator.

“He was a strong force for creative policy solutions in a political environment that was highly polarized,” Graham said in an e-mailed statement.

Sunstein also was hailed by the U.S. Chamber of Commerce, the nation’s largest business lobbying group, and the Business Roundtable, a Washington-based group of business executives.

Good Relations

“The Chamber has enjoyed a good working relationship with Cass Sunstein and we wish him well in his return to Harvard Law,” Bruce Josten, the Chamber’s executive vice president for government affairs, said in an e-mailed statement.

“Cass Sunstein will be missed,” said John Engler, the former Michigan Republican governor who is Business Roundtable president. “Cass accepted the input of business, sought balance and understood that regulations do have costs. We hope his replacement will strike the same tone.”

Although business groups offered praise after the departure was announced, the OIRA chief’s tenure was shadowed by Republican criticism that the Obama administration overregulates business.

Mitt Romney, the presumptive Republican presidential nominee, has run campaign ads promising that on “Day 1” in the White House, he will begin “repealing jobs-killing regulations that are costing the economy billions.”

‘Enormously Destructive’

Environmental and safety advocates said today Sunstein was overly deferential to business interests and less effective in strengthening consumer protections.

“Cass Sunstein was the best-qualified, best-connected administrator OIRA ever had and he was enormously destructive of health and safety agencies,” said Rena Steinzor, the president of the Center for Progressive Reform, a Washington-based group that examines regulations. “The message that he has been advancing has been completely discordant with the rest of the president’s message.”

Steinzor said the postponement of a plan to cut ozone emissions until 2013 was a key example of OIRA’s failure to deliver strong regulation. The cost of that rule was estimated to be $19 billion to $90 billion, according to estimates from the Environmental Protection Agency.

In addition to the smog restrictions, the Obama administration has postponed a $2.7 billion rule to require rear-view cameras on cars and light trucks until the end of the year and slowed regulations to curb sulfur emissions in passenger vehicles. A set of rules for the most comprehensive overhaul of food safety in decades also are months behind schedule.

‘Held Hostage’

Bill Marler, a Seattle attorney who represents food-poisioning victims, said that he hoped that with Sunstein gone, food-safety rules “that have been held hostage at OMB will be released for public comment and implementation.”

Amit Narang, regulatory policy advocate at Public Citizen, a consumer-advocacy group in Washington, said Sunstein spent too much time tinkering with existing rules and not enough on updating food, consumer-product and workplace-safety standards.

“With Cass Sunstein’s departure, the administration should take this opportunity to shift gears from their focus on ‘lookback’ reviews,” Narang said in an e-mail.

A Public Citizen report released in June found that of 159 safety and public health rules under consideration with statutory deadlines, 125 weren’t issued on time.

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