John Graham set to breathe new life into OIRA

Published May 1, 2001

By tapping Harvard University’s John B. Graham to review the thousands of regulations issued by federal agencies annually, the Bush administration has signaled its commitment to make regulators more accountable to the public they serve.

Graham, 44, is director of the Harvard Center for Risk Analysis. He has been a strong advocate of subjecting measures aimed at protecting public health and safety to an assortment of innovative analytical tools.

The Bush administration has asked Graham to head the Office of Information and Regulatory Affairs (OIRA) in the Office of Management & Budget (OMB). There, Graham and his staff will review the regulatory proposals of some 50 federal agencies. If OIRA finds a rule or regulation wanting, it notifies the agency in question of its decision. If the agency head refuses to modify the rule, the final word rests with the President, who has historically sided with OIRA.

With his insistence that government carefully weigh the costs, benefits, and risks of its policies, Graham will play a major role in recasting regulatory priorities. His tool box includes risk trade-off analysis (sometimes called risk-risk analysis or risk-benefit analysis), which he argues is often easier than cost-benefit analysis because the units of measurement are physical rather than monetary quantities. For example, the units used in risk trade-off analysis might include the net number of lives saved, years saved, quality-adjusted life years saved, or even the net change in the amount of pollution emitted into the environment.

By pointing out that public health regulations can have unintended consequences that can do more harm than good, Graham has not endeared himself to advocates of the traditional command-and-control regulatory state.

Indeed, opposition to Graham from environmental groups has been fierce. “The appointment of John Graham at OMB would be a nightmare for anyone who cares about children’s health and the environment,” comments Linda Greer, a senior scientist with the Natural Resources Defense Council (NRDC). According to the NRDC, having the Harvard professor at OMB would be a polluter’s “dream come true.”

The NRDC’s reference to children is ironic in light of Graham’s pioneering research into the safety of airbags in automobiles. After examining the data on deaths and injuries caused by passenger-side airbags, Graham told the National Transportation Safety Board (NTSB) in 1997 that he was “stunned and appalled by the harm they have inflicted upon young children.”

“They appear to kill more children than they save,” Graham added, “with the best estimate being a net 33 percent increase in death risk to children.” Once a strong supporter of passenger-side airbags, Graham told the NTSB that, “We should be mature enough to re-examine what we have done and work hard to clean up the mess we have made.”

While Graham may have his detractors among environmental groups, he also has plenty of supporters elsewhere.

“While special interests of all sorts may be alarmed that this principled approach to regulatory policy may reveal the ineffectiveness of their pet programs, Americans should be pleased that, with Graham at OIRA’s helm, new regulatory actions will be targeted to achieve the greatest health, safety, and environmental benefits with the most efficient use of finite resources,” notes Susan Dudley, senior research fellow with the Mercatus Center at George Mason University.

“He is well-versed and knowledgeable about the importance of analyzing risks and the risks of regulations,” says Wendy Gramm, who headed OIRA in the Reagan administration. Gramm, who now serves as distinguished senior fellow at the Mercatus Center, added that Graham will help the nation get the “most from the regulatory dollar.”

Angela Logomasini, director of risk and environmental policy at the Competitive Enterprise Institute, notes Graham has “demonstrated how misguided government regulations can have the perverse effect of increasing risk.”

Two recent examples underscore Logomasini’s point. In December 1998, EPA overruled the recommendations of its own scientists and proposed a zero standard for chloroform in drinking water. EPA’s decision would have forced water system operators to devote precious resources to combat the minuscule risks posed by trace elements of chloroform and other disinfectant byproducts. The inevitable result of the water purification process, chloroform and other disinfectant byproducts cannot be brought to a zero level in any event.

In March 2000, the U.S. Court of Appeals for the District of Columbia overturned EPA’s action, scolding the agency for failing to use “the best available science.” Had the Clinton administration’s OIRA paid closer attention to the inevitable trade-offs that risk assessments entail, EPA’s chloroform proposal would have hit a brick wall, and needless litigation would not have taken place.

Graham has been critical of another policy that involved misuse of science at EPA. By failing to heed the warnings of its own scientists, EPA administered a Congressionally mandated program that saw the gasoline additive MTBE contaminate drinking systems across the country.

Noting that the risks of the rule were not considered carefully, Graham has argued that, “Asking Congress and EPA to perform risk-benefit analysis is equivalent to asking adherence to the Hippocratic oath in medicine.”

With Graham at the helm, things are clearly about to change at OIRA.

Bonner R. Cohen is a senior fellow at the Lexington Institute in Arlington, Virginia.