Reining in the Regulatory State: an Exclusive Interview with Angela Antonelli

Published August 1, 1999

A contributing editor to Environment News, Angela Antonelli served as an analyst and Assistant Branch Chief in the White House Office of Management and Budget’s Office of Information and Regulatory Affairs (OIRA) from 1989 to 1993.

During her time with OMB, Antonelli’s policy responsibilities included the U.S. Departments of Health and Human Services, Labor, Treasury, and Housing and Urban Development. She briefed President George Bush and Vice President Dan Quayle’s Council on Competitiveness on the domestic and international economic effects of new regulations.

Since 1995, Antonelli has been director of the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation, where she oversees the think tank’s research agenda in the budget, tax, regulatory, labor, and environment areas. She has testified several times before Congress on regulatory reform, and her work has been cited in the Washington Post, Roll Call, Business Week, Investor’s Business Daily, the Financial Times (London), and elsewhere.

Antonelli holds a B.A. degree, summa cum laude, in political economy from Cornell University and a Master’s degree in public affairs from Princeton University. She spoke recently with Environment News Contributing Editor Bonner Cohen.

Cohen: The U.S. Court of Appeals for the District of Columbia recently tossed out EPA’s new air quality standards. What is the significance of that ruling?

Antonelli: The good news is that, for now, the court stopped EPA from implementing tighter air quality standards. The bad news is how close EPA came to winning.

A review of the decision highlights how little the court actually had at its disposal to stop the new standards. We have Congress to thank for that. While EPA’s red light is significant, the message to Congress and the public is much more important.

According to the decision, under the non-delegation doctrine, EPA cannot so loosely interpret a statute that it becomes an unconstitutional delegation of legislative power. In other words, EPA was making law rather than implementing it.

The court concluded that EPA did not properly use the authority Congress delegated to it under the Clean Air Act when it set the standards. EPA set limits for both ozone and particulate matter (PM) 2.5 without offering “intelligible principles” to explain why those standards would better protect human health than any other standard EPA could have set.

The court’s application of the non-delegation doctrine may signal the resurrection of a potential new tool for challenging unelected, executive branch regulators. While it is true that the courts can rein in agencies when they go beyond what Congress permits in law, the reality is that increasingly Congress is giving away its authority to unelected federal employees.

In the end, the court made it abundantly clear that legislative loopholes and exemptions matter, particularly when laws designed to hold regulators accountable are full of them.

Cohen: Do you believe the ruling will stand?

Antonelli: The ruling is likely to be appealed all the way to the Supreme Court, so the victory may only be temporary. Keeping this in mind, the public must demand that Congress take a hard look at ways to close the statutory loopholes this decision made obvious. Congress should also take a critical look at the newest round of regulatory accountability legislation, and it needs to exercise vigilance over new initiatives proposed by federal agencies.

Cohen: Will the ruling affect other proposed regulations under the Clean Air Act, such as EPA’s plans to reduce tailpipe emissions from SUVs, minivans, and pickup trucks and cut the sulfur content in gasoline?

Antonelli: EPA finalized the new clean air standards for particulate matter and ozone in July 1997, and a year later delivered a report to Congress concluding that more stringent vehicle standards would be needed to meet the new air quality standards. This May, EPA published in the Federal Register its proposed rules for new tailpipe emissions standards, as well as new gasoline sulfur control requirements. The very next day, the DC Court handed down its decision rejecting the new air quality standards. Since then, EPA rescinded the tighter air quality standards as its justification for the new vehicle standards, and it has issued a new justification based on the old one-hour ozone standard.

At the recent meeting of the Western Governors Association, some governors were critical of EPA because it failed to consult with them as it developed the emission and sulfur rules. The agency held its western regional hearing on the standards on the last day of the Western Governors Association conference, making it difficult for the governors to participate in EPA’s hearing in Denver. Other hearings were held in Philadelphia, Atlanta, and Cleveland during the month of June.

State officials must make sure their position regarding these new standards is heard in Washington. They should not rely solely on their national organizations to represent their concerns. State legislators should communicate directly to their Members of Congress and EPA about these new standards.

According to EPA’s own estimates, reducing sulfur levels will require an investment of $4.7 billion on the part of refineries, on top of $1.5 billion in annual operating costs. Needless to say, these costs will be passed on to consumers in the form of higher gas prices.

Information about EPA’s proposed new rule for tailpipe emissions and sulfur content in gasoline can be found at its Web site at Comments on the rule can be e-mailed into EPA at [email protected].

Cohen: Congress is wrestling with the issue of public access to data produced by scientists who have received taxpayer funds to conduct their research. Why is this issue so important?

Antonelli: Concern has been building for some time that federal regulators are increasingly adjusting scientific outcomes to fit their desired policy outcomes. A 1997 survey of 1,600 EPA scientists found that 75 percent of them believed science was not well-integrated into the agency’s policy mission.

When EPA issued its new air quality standards, Congress was unable to get the underlying data from EPA or the federally funded Harvard scientist who led the study. The frustration with junk science propelled Senator Shelby to demand that if scientists take federal money for research, they must also agree to be held accountable to the public and to Congress for the quality of the work they do and the way the data are used to develop federal policies.

Unfortunately, some Members of Congress want to reverse this law or suspend its implementation and take away the public’s right to know how tax dollars spent on research influence policies that affect their lives.

Giving and then taking away the public’s access to information it funded would be a mistake. It also would be a victory for unelected federal employees and special-interest academic elites who spend billions of federal dollars annually on research that influences policies affecting millions of Americans. Efforts to delay and weaken the Shelby provision are being led by Representatives Walsh (R-New York) and Price (D-North Carolina).

The Shelby provision does not represent a dramatic departure from current data-sharing policies in the academic community. Federal agencies typically require the results of research to be published and data made available within a reasonable period. Researchers make information available according to university norms of good practices and customs, not because of the conditions of a federal grant.

If anything, the access provision simply requires federal grant-awarding agencies to acquire the data paid for by taxpayers. They generally have not done so because, if they do not have the data, they cannot be forced under the Freedom of Information Act to produce it. And if they cannot be required to make data available, then they cannot be scrutinized and held accountable.

The access provision forces the government to play by its own rules. If the federal government can force private institutions to share privately funded research with the public, then it also can provide the public with research funded by tax dollars.

In FY 1998, the federal government spent more than $76 billion on research influencing policies that affect such aspects of American life as health, education, the criminal justice system, and the environment. Broader access to federally funded research will enhance scientific debate and promote new research; create caution among researchers about data of questionable validity; improve the public’s perception of federally funded research; enhance data-gathering and -sharing; and help to define the appropriate roles of private versus public research ventures.

Broader access to federally funded research also will lead to better policy. Instead of relying on the views of a few interest groups, decision-makers can gain insight from the broader public. And proposed policies or regulations will be examined more critically before they are implemented.

Cohen: What are the prospects for regulatory reform in the near future?

Antonelli: Unfortunately, the prospects for real and significant regulatory improvements are small. With the slim congressional majorities in Congress and a presidential election just 18 months away, it is extremely difficult to find areas of consensus. In addition, the President and Congressional Democrats are determined to paint this Congress as “do-nothing.” They have little interest in seeking areas of compromise.

One of the remaining fruitful avenues to pursue for the remainder of the 106th Congress will be efforts to open up the regulatory process to greater public scrutiny and accountability. One way this can be done is by establishing procedures that force regulators to provide more information to Congress and the public. One example of this is reflected in Regulatory Right to Know legislation (H.R. 1074/S. 59), which would require the White House Office of Management and Budget to report annually to Congress on the costs and benefits of rules.

Another way to open up the process is to establish a more effective system of checks and balances between Congress and Executive branch regulators. That could be done by creating a congressional regulatory office of experts. Just as the President and Congress have their own separate budget offices, so too should Congress have an office to balance against the White House’s Office of Information and Regulatory Affairs and the more than 55 federal regulatory agencies and $17 billion annually spent by regulators to write rules.

Between April 1996 and April 1999, federal regulators finalized 12,925 rules. Congress did not disapprove a single one! Congress needs to take back control of the regulatory process. Today there is not one single Member of Congress or congressional staff person whose job it is to monitor the $300 billion annual regulatory state.

Too often, regulators make their decisions and it is very difficult for independent organizations, state and local governments, or individual citizens to question how the decisions were made. Regulators do not want us to have access to the data or other information used to make decisions. Moreover, bureaucrats increasingly are making are making value judgments about the needs and priorities of our society. We elected representatives to make those judgments for us and reflect our interests. Unlike the citizens of many European nations, Americans have no desire to turn over all policy decisions affecting our lives to an elite core of professional bureaucrats who will determine our future, our health, and our prosperity.

Cohen: Do you believe Congress adequately oversees regulatory agencies?

Antonelli: Unfortunately, since 1994, the Republican-led Congress has done a poor job of overseeing agencies and how the federal budget is spent and regulatory policy is developed. Until recently, they seemed almost genuinely unable to understand how to do it. They also seemed unable to grasp the fact that Congress determines whether agencies exist, and what their missions and budgets will be–not the other way around.

Slowly, the majority in Congress has learned that oversight is their responsibility, and they have begun to understand that the public expects them to know how their hard-earned tax dollars are being spent. When Congress does do oversight effectively, as was true with the IRS hearings in 1998, then it is much easier to make the case for change and to show what change needs to be made.

Cohen: In addition to the recent court decision on ozone and PM, federal judges in recent years have struck down other rules, notably in the area of wetlands regulation, that they found to be in conflict with congressional intent. Aren’t we seeing regulatory reform, compliments of the courts?

Antonelli: In the face of Congress’ inability to hold regulators accountable and improve the regulatory system, businesses, individuals, states, and localities have increasingly turned to the courts to seek relief from government’s heavy hand. Unfortunately, Congress has been too willing to let poorly conceived regulations take effect and simply rely on the courts to ultimately determine whether agencies have abused their authority.

Americans are increasingly having to pay a litigation tax to get unelected federal bureaucrats from taking away their freedom or killing their industry. Recent court decisions have indeed offered some measure of relief where Congress has failed, but the relief is selective and discriminates based on who can afford to pay to fight in court.

At the same time, what little relief we have seen continues to be in jeopardy if current trends are not reversed. Congress continues to boost the budgets of these regulatory agencies and empowers them with resources to fight average Americans and small and large businesses in court. And, making the situation worse, as we saw in the recent court decision on EPA’s new air quality standards, Congress often passes laws that give so much authority to the regulators that the courts may not be able to offer much relief to those who seek it.

Cohen: As you know, an ambitious effort to trim back the regulatory state failed in 1995, in part because proponents failed to educate the public on the need for reform. Do you believe that lawmakers and people in the policy community better understand this problem today?

Antonelli: I think modest progress has been made. The problem initially was that a new Republican majority in Congress simply forgot that you cannot change the world overnight. The biggest challenge for policymakers who seek to improve the regulatory system is to have the courage of their ideas and their convictions and remain committed to a long-term plan for change. This means that in the face of special interests, and extremist environmental and consumer groups, you persist in recommending ways to change and improve regulatory priorities and spending.

The fact that the United States has the strongest economy and cleanest environment in the world is not an accident. The two go hand in hand. And although significant progress has been made, there is still work to be done. To suggest that the way we solved problems 30 years ago is the same way we need to solve problems today is just wrong.

Some of the laws have simply not worked at all. After 30 years of the Endangered Species Act, we have made little or no progress in reclaiming endangered species. All that has been accomplished is the confiscation of private property often to the detriment of the environment.

After 30 years and more than $5 billion spent on the Clean Water Act, we still do not even have a database for telling us the condition of our nation’s waters. After 20 years of the Superfund program, it takes decades and hundreds of millions of dollars to clean up a single site and most of the money goes into the pockets of attorneys who spend years litigating the cleanup. Something is wrong.

Cohen: Unemployment is at its lowest level in nearly 30 years. The U.S. economy continues to create jobs in a way that is the envy of the world. People are flocking to the U.S. because of economic opportunities here. Inflation is low, and Wall Street continues to go through the roof. So how can anyone argue that the current regulatory structure is burdensome?

Antonelli: Today’s high-tech revolution is a key driving force of our economic growth. And guess what? It remains largely untouched by the hands of government regulators. I can assure you that if government is given the opportunity to regulate and tax the Internet and control the dissemination of high-technology research and development, we will begin to see the economy quickly cool down.

The strength of our economy today is not in spite of burdensome regulation, but because the government has not yet regulated emerging industries and markets. The challenge is to keep them unregulated.

We are also reaping the benefits of the deregulation of many industries over the past 20 years, such as aviation, railroad, trucking and more recently telecommunications.

Unfortunately, too many lawmakers and policymakers fail to understand that the economic growth we enjoy now is because of this. Consequently, they are too ready to step in and heavily re-regulate these industries whenever even the smallest problem presents itself. Today, more Americans can travel faster and freer than ever before, and they can communicate around the world in an instant. And the government has the ability to bring that rapid progress to a halt through command-and-control regulation.