A confirmation fight is brewing over President Bush’s pick to head the regulatory policy office at the Office of Management and Budget.

Nearly 10 months after the last regulatory chief announced he would be leaving, Bush on July 31 nominated academic Susan Dudley to head OMB’s Office of Information and Regulatory Affairs. The office reviews costs and benefits of major rules proposed by agencies before they can proceed.

 

Dudley’s colleagues and supporters praise her as dispassionate, thoughtful and principled in her academic efforts to study the costs and benefits of regulations. But environmental and public interest groups have labeled her an anti-regulatory extremist.

Public Citizen President Joan Claybrook said Dudley, who directs the conservative Regulatory Studies Program of the Mercatus Center at George Mason University in Fairfax, Va., is unfit to oversee regulatory policy.

“Throughout her career, Dudley has consistently fought against government safeguards and advocated a radical, hands-off approach to regulating corporations,” she said.

 

Dudley would replace John Graham, who left in February after almost five years in the position. “She promises to be 10 times worse than Graham,” said Robert Shull, who directs regulatory policy for OMB Watch, a Washington nonprofit that advocates stricter regulations.

 

He said he was poring over her writings in anticipation of a confirmation battle. “We are really concerned.’’

But other regulatory watchdogs said concern was not warranted. Jim Tozzi, who heads the Center for Regulatory Effectiveness, said Dudley’s writings as an economist were designed to provoke debate.

 

“When you become a federal official, what guides you are the statutes you have to implement, not your personal opinion. She’s really well-qualified for the post,” said Tozzi, who served as deputy administrator of OMB until 1983. The Center for Regulatory Effectiveness is a Washington-based group that scrutinizes agencies’ compliance with laws such as the Data Quality Act, which requires agencies to use correct and reliable information when crafting regulations.

 

A former career federal employee, Dudley worked as an economist at the Environmental Protection Agency and as an economist adviser at the Commodity Futures Trading Commission. She also has firsthand experience in the Office of Information and Regulatory Affairs (OIRA), having served there from 1985 to 1989 and being promoted to deputy chief of the natural resources branch in 1987. She received an OMB special performance award in 1988. Dudley is known from her Mercatus work for evaluating the costs and benefits of regulations on individuals and companies, with a special focus on hidden and unintended costs. A self-proclaimed “free-market environmentalist,” Dudley drives a hybrid car.

 

Steven Aitken has been acting administrator since June. Though OIRA has only a few dozen staffers, its management is scrutinized by special interest groups. Some liberal policy groups lobby for strict environmental, health and safety regulations. Because of the high compliance costs of regulation, businesses fight for fewer regulations or for regulations to be written to help them gain competitive advantage in the marketplace.

Dudley’s name is already well known to agency regulators. The Mercatus Center analyzes regulations while they are being written, suggesting changes that will minimize the cost to individuals and businesses complying with a regulation.

 

One EPA regulator said that when he and his colleagues know that Mercatus is looking at a regulation, they pay special attention to the costs of compliance.

 

“To some extent it’s something we should do already, but it does make writing the regulation more difficult,” said the regulator, who asked to remain anonymous.

 

Because of Dudley’s analysis of regulations’ impact on the public, Sen. Joseph Lieberman, D-Conn., promised the nomination would receive his “most stringent scrutiny.” He said Dudley’s questioning of the economic justification of regulations might conflict with OIRA’s role reviewing regulations.

 

OIRA’s “protective role, especially when applied to the environment or the health and safety of consumers and workers, is worthy of a vigorous defense,” Lieberman said.

 

Nobel prize-winning economist Vernon Smith wrote a letter to Lieberman and Sen. Susan Collins, R-Maine, chairman of the Homeland Security and Governmental Affairs Committee, praising Dudley’s qualifications.

 

“She approaches public policy questions in a principled and objective manner, with no goal other than to understand and pursue the public interest,” he wrote in the July 31 letter.

 

Regulatory advocates said Dudley’s prolific writing should give them ammunition to fight her nomination. But economist Bruce Yandle said senators considering her nomination should keep in mind the inherent controversy that comes with the job.

 

“The person heading OIRA sits in a hot seat, generally disappointing special interest groups on all sides of a regulatory debate,” he said.

The nomination came after months of rumors about who would replace Graham in the small but powerful shop. If confirmed immediately, she would have only two years to shape regulatory policy. Some observers said there’s a tendency for any White House to resist rocking the boat in the years leading up to a general election.

 

But Shull said Dudley could affect some pending regulations, including Mine Safety and Health Administration rules written in the aftermath of the Sago Mine disaster that killed 13 miners in January.

 

“She could do a lot of damage in a really short period of time. Not just with big, broad-stroke policy documents but also with individual regulations in the pipeline,” he said.

 

E-mail: mziegler@federaltimes.com