Progressive Washington has been buzzing with news that Harvard Professor Cass Sunstein has told friends that he’s “in line for a White House job.” To progressives, the possibility of Sunstein back in any capacity at the center of power triggers bitter memories.
In 2009, Sunstein became head of the Office of Information and Regulatory Affairs (OIRA), a part of the Office of Management and Budget that plays a pivotal role in approving or rejecting agency regulations. The position was Sunstein’s dream job, to be a pilot in what he termed “the cockpit of the regulatory state.”
His appointment was a bitter disappointment for progressives, who had pinned high reform hopes on President Barack Obama.
“It felt like such a betrayal,” says James Goodwin, senior policy analyst for the regulatory think tank the Center for Progressive Reform (CPR). He recalls a “stirring speech” by candidate Obama defending the role of government to protect people. “It was the most beautiful defense of regulation I’ve ever heard from a politician.”
Nevertheless, back then, progressives didn’t put up much of a fuss. “The idea of personnel as policy I don’t think had really sunk into the progressive community like it does today,” he says.
To be sure, in 2009, CPR issued a statement that predicted “trouble ahead for the ‘regulatory czar.’”
CPR scholars were keenly aware of OIRA’s power, and Sunstein’s academic record and his books extolling behavioral economics. What they knew about him was disturbing. Sunstein was a big fan of cost-benefit analysis for regulations, even though it was easy for corporations to claim—and often exaggerate—the costs of implementing new rules; but placing a dollar value on the benefits to the public—saving lives and avoiding human suffering—was far more difficult to do.
Unless Sunstein “turns over a new leaf,” he could “create a regulatory fiefdom in the White House that will deal with needed regulations in very much the same way the Bush Administration did,” the scholars wrote.
Sunstein’s record at OIRA
As it turned out, things were even worse than CPR predicted. Sunstein would later brag that in the first four years of the Obama administration, OIRA approved fewer rules than the administrations of not only George W. and George H. W. Bush, but also Clinton and Reagan.
On Sunstein’s watch:
OIRA publicly rejected an EPA rule to reduce ozone pollution, reportedly after business interests complained to Obama Chief of Staff William Daley, and because Sunstein deemed the costs of protecting the public from a toxic air pollutant were not outweighed by the benefits.
A rule to require automakers to install rear-view cameras to prevent drivers from accidentally running over small children, the elderly or handicapped people was delayed more than seven years, largely because OIRA economists thought the cost of installing the cameras—the industry claimed it would exceed $200 per car—did not justify saving the lives of hundreds of the most vulnerable Americans a year, or preventing the tremendous guilt and grief of parents who run over their own children. Sunstein was reportedly sympathetic, but apparently unwilling to order his staff to veer from their strict adherence to cost-benefit calculations.
A coal ash rule, designed to protect people from toxic discharges that endanger health and drinking water, was delayed and gutted by OIRA, raising questions about whether an OIRA-approved rule could even prevent the coal ash spills that had devastated communities near mining operations.
So it’s understandable that even a suggestion that Sunstein could have any role in the Biden administration would trigger a powerful backlash. “Each of those regulations he blocked or delayed was just like another stab in the back of the progressive community,” Goodwin says.
This time, progressive are ready
This time around, however, progressive advocates have been ready. On January 29, writing in the American Prospect, Sunstein critic Robert Kuttner warned that Sunstein was telling friends that he was “in line for a White House job.” Sunstein’s wife, Samantha Power, had been nominated to head the U.S. Agency for International Development, so it appeared Sunstein was jockeying for his own berth in D.C.
The same day Kuttner’s news was published, the Revolving Door Project (RDP) lobbed a warning shot.
Headlined “Progressives Vehemently Object to Cass Sunstein’s Plans to Return to Government,” the statement left no doubt about its views on the former OIRA administrator.
“The Obama administration’s disappointing legacy on protections for workers, families and the environment is a testament to the disastrous influence that Cass Sunstein had as OIRA administrator,” said CPR’s Goodwin. “If President Biden is going to make good on his early promises to address racial injustice, economic inequality, climate change and the COVID pandemic... he cannot afford to make the same mistake by giving Sunstein a prominent position in his administration.”
“We were worried, we raised the alarm,” RDP Executive Director Jeff Hauser says of his group’s quick action.
OIRA on his mind
Neither Goodwin nor Hauser believes that Sunstein has much of a chance of getting his old job back. Goodwin says that progressives have been communicating their views about OIRA since last August, making sure the incoming administration would know their priorities. Progressives shy away from advocating for certain people, he says, but have communicated what qualities a good candidate for a position should have. And they were clear about the candidates they disapproved of. “We feel like we’ve been heard.”
They point to the strong progressive staffers Biden has already appointed to OIRA: Sharon Block as associate administrator and K. Sabeel Rahman as senior counselor. Block held jobs at the Department of Labor under Obama, and has been involved in a progressive policy initiative at Harvard examining how labor law can strengthen worker rights. Rahman was president of the progressive think tank Demos. “Biden is moving positively on OIRA,” Hauser says.
But it’s not clear that Sunstein believes he has no path back to OIRA. A reading of Sunstein’s Bloomberg columns over the past several months appears to demonstrate how much he wants to be back in the game, and how badly he wants to show Biden he’d be a team player.
Sunstein even praised a Biden memo that progressives read as a full-throated commitment to regulation as a positive good (and a refutation of Sunstein’s philosophy.)
Sunstein perceived in the memo’s brief acknowledgment of a previous Obama executive order that his ideas on cost-benefit analysis and avoiding overly burdensome regulations still held sway at the White House.
The Biden memo’s brief reference to a 2011 Obama executive order on regulation could be read as a “throwaway line,” Goodwin says. But if Biden intends to follow the “troubling principles” in that Obama order about minimizing the cost of regulations, and regulations being “based on correcting market failures,” that will stop regulatory reform efforts in their tracks, he says.
Whether Biden delivers on his commitment to protective regulations depends on its implementation. “The devil will be in the details of [the memo’s] implementation,” Goodwin says.
Despite that anxiety, Goodwin and Hauser both think the days of Sunstein’s views extolling minimal rules and preferring “nudges” instead of enforceable mandates to achieve good corporate behavior are at an end.
His “views on regulatory philosophy are kind of like the bellbottoms of Washington, D.C.,” Goodwin says. “Like, it’s a fad that’s gone. And maybe we even look back and say, ‘Why did we even do that?’ Establishment Democrats don’t buy into his philosophy, and progressives don’t,” he says. Conservatives don’t understand him, he adds.
Friends in the White House
But the White House is a big place, with lots of jobs, Hauser says. “The fact that his wife got an important job is apparently allowing him to access the minority of people within the administration who still think highly of him to try to get him consideration for a White House position that would not require Senate confirmation.”
RDP primarily raised the alarm on Sunstein because of the damage he might do in the White House even in an advisory capacity. Sunstein, a prolific author, “is wrong on practically everything he’s touched,” Hauser says.
And there are reasons to worry. Kuttner reported on February 1 that Sunstein’s protégé, Jessica Hertz, managed to segue from her job in the Obama administration as a deputy counsel to Biden to a high-ranking position at Facebook and then to the Biden transition team, overseeing ethics considerations. Now, she’s been named Biden’s staff secretary, where she controls what documents land on his desk.
Hauser thinks one area where Sunstein could do harm concerns Big Tech. He fears that Sunstein would support “complex regulatory structures developed by agencies yet to be built,” rather than the more direct action of breaking up tech giants like Amazon, Facebook or Google, which have become big by a “series of acquisitions” and are too powerful to regulate at their current size. Breaking up the companies is the only way to make them “small enough” to regulate, he says.
That’s a “cleaner” solution to the dominance of Big Tech, he says. “That’s the exact opposite of the type of recommendation that Cass Sunstein makes, which is always about a complex series of modest nudges to try to create the least backlash by corporate America.”
