2 action. Inevitably, those resources would be diverted away from responding to those events which are most deserving of Federal (as opposed to State or local) response, thus resulting in less aggregate protection of public health and the environment." OMB Recycling standards that are not risk-based may lead to less recycling and more risks to human health and the environment. This point was discussed in a recent draft EPA hazardous waste recycling rule that OMB returned on October 22, 1991. For example, EPA devised a process-oriented rather than risk-based test to determine "legitimate" uses of recycled materials. noted that "this policy could cause a perverse result if EPA designates a recycled product as a hazardous waste that actually results in lower aggregate health risk than an unregulated, 'virgin' material." OMB stated its concern that EPA's own rule would permit a firm to "make and sell concrete aggregate from mine tailings and other excavated material which contain the same or higher levels of" minerals that had been recycled. The return letter also showed that EPA's rule might stymie the innovation of new reclamation techniques that could better reduce overall human health risk than would the proposed regulation. Another EPA rule, designed to increase the recycling and decrease the environmental risks of used oil, failed to assess the net risk of the regulatory proposal. On January 7, 1992, OMB filed comments on a "supplemental notice of proposed rulemaking" related to used lubricating oil. While this regulation was designed to lessen environmental damage from used motor oil, OMB's analysis showed that the proposal could divert a substantial amount of oil that currently is recycled to alternative uses and disposal methods such as illegal dumping and burning. Therefore, OMB asked EPA to "carefully assess the environmental consequences of alternative regulatory actions to determine whether (and to what extent) the regulatory alternatives under consideration would contribute to environmental damage." Regulation of asbestos is a clear illustration of the inherent risk-risk tradeoffs that may arise from new rules. After learning that EPA was planning to ban five uses of asbestos under section 9 of the Toxic Substances Control Act (TSCA), OMB commented on the agency's action on March 27, 1985. In that letter, OMB criticized EPA's failure "to include in its analysis possible risk associated with asbestos substitutes." Banning asbestos would require the use of substitutes that could present two major health risks to humans, risks that might well outweigh those that the EPA regulation sought to eliminate. First, the 1 Much of the human health risk that EPA sought to eliminate had already been addressed in an OSHA rulemaking to lower workplace exposure to asbestos. 3 nonasbestiform fibers that would commonly replace asbestos were suspected human carcinogens. Second, "other risks, potentially quite serious, could arise if asbestos substitutes turn out to be less effective than asbestos in some critical applications. EPA provided no data, for example, to demonstrate that banning asbestos in automobile brakes will not cause an increase in automobile accidents." To support its request for better riskrisk analysis, OMB quoted a letter from the chief of the Environmental Affairs Group at the Centers for Disease Control (CDC) to EPA: "Even a small amount of erratic brake performance [due to asbestos substitutes in brakes] could easily outweigh the potential morbidity and mortality saved by reducing ambient air asbestos by .23 to 1.3 percent. Much of this decrease could be gained by adequate work practices during mechanical servicing of brakes [rather than prohibition]." Six years later, the Court of Appeals for the Fifth Circuit echoed OMB's concern that EPA's ban of certain asbestos uses could create more risk than it eliminates.2 Pointing to EPA's disregard for analysis of these counterbalancing risks, the court overturned portions of EPA's rule: "Despite this credible record evidence, by a study "As with friction products, the EPA refused to assess the risks of substitutes to asbestos pipe [primarily PVC and ductile iron pipe]... The EPA, in these separate proceeding, has estimated the cancer risk from PVC plants to be as high as twenty deaths per year, a death rate that stringent controls might be able to reduce to one per year, [note omitted] far in excess of the fractions of a life that the asbestos pipe ban may save each year, by the EPA's own calculations. Considering that the EPA concedes that there is not evidence showing that ingested, as opposed to inhaled, asbestos is a health risk, while the EPA's own 2 Corrosion Proof Fittings, et al., v. EPA. 947 F.2d 1201 (5th Cir. 1991). 3 Ibid., pp. 1225-1226. studies show that ingested vinyl chloride is a significant cancer risk that could cause up to 260 cancer deaths over the next thirteen years, [note omitted], the EPA's failure to consider the risks of substitute products in the asbestos pipe area is particularly troublesome."4 The Department of Housing and Urban Development Regulations that make enforcement more difficult and costly can aggravate rather than lessen risks. For example, OMB found that a proposed rule from the Department of Housing and Urban Development (HUD) entitled "Community Development Block Grant Funded Code Enforcement" might unintentionally lessen safety in some Federally housing projects. OMB stated that the rule might result in "reduced code enforcement activities... [which] ensure that homes are safe and sanitary." Therefore, because HUD had not "considered the potential adverse consequences of the proposed rule," OMB returned the proposal for HUD's reconsideration on October 3, 1991. After agreeing to explore the possible adverse consequences of this rule, HUD published the proposal on February 3, 1992 (57 FR 3970). The Department of Health and Human Services Regulations intended to improve the quality of health care services can actually decrease it. This possibility led OMB to file comments in response to a proposed rule published on May 21, 1990 by the Department of Health and Human Services (HHS) entitled "Regulations Implementing the Clinical Laboratory Improvement Amendments of 1988 (CLIA 88)" stating that HHS should improve its analysis prior to submitting a final rule to OMB. OMB noted that "there are risk-risk trade offs in the pursuit of quality" which deserved due consideration. OMB expressed concern that the rules might increase medical costs to such an extent that access to medical care might be reduced. OMB directed HHS to comments from some physicians that testing costs might rise to such extent that rural facilities could close and force patients "to travel 200 to 300 miles to the nearest lab for testing. At best, the additional cost and possible closures will result in delays in diagnosis and treatment, or in worst cases, not being treated at all." Still another potential risk of the regulation was that increased testing costs and decreased test availability could harm government efforts to solve other public heath problems: "Direct cost implications are complicated by other considerations such as delays in criminal prosecution of drug 4 Ibid., pp. 1226-1227. 5 55 FR 20896 5 traffickers and drunk drivers and decreased access to preventive services to the poor." The Department of Agriculture Regulations designed to set standards for research with laboratory animals may reduce compliance with other animal welfare procedures. In this vein, OMB wrote to the Secretary of Agriculture on October 18, 1988 regarding animal welfare regulations proposed by the Animal and Plant Health Inspection Service (APHIS). These rules were to establish new standards for the handling and care of laboratory animals, used in pharmaceutical and cancer research. This letter confirmed earlier OMB guidance that APHIS must "quantify the indirect opportunity costs of the draft regulations." OMB indicated that in seeking to improve drug testing procedures, the regulations might actually impede such research unnecessarily. In designing the regulations, APHIS did not measure the amount of decreased research and compliance monitoring that might result. As scarce research monies were shifted to comply with the proposed regulations, other efforts to ensure humane conditions for test animals might suffer. The Committee on Governmental Affairs has long been concerned with the processes by which Federal agencies promulgate regulations. Most recently we considered regulatory policy issues in the context of our oversight of the Paperwork Reduction Act and OMB's Office of Information and Regulatory Affairs (OIRA). Indeed, as you know, barely six months ago we worked very hard with the Administration to reach an agreement on reauthorization of the Paperwork Reduction Act, OIRA, and its regulatory review powers. Now it seems that a new regulatory review process is being developed that is not in harmony with the understanding we thought we had with the Administration. We are, of course, speaking about the regulatory review activities of the Council on Competitiveness, which you chair. Most simply put, it appears that this process is adding a new politically charged layer of review to the already existing OIRA regulatory review process. To date our information about the Council has come from press releases from your office and press reports about the Council's role in specific rulemaking decisions. As you can imagine, these statements and reports leave a number of questions unanswered. So that we may understand the purposes and functions of the Council in this area, we would appreciate answers to the following questions. 1. What specific role does the Council play in reviewing agency regulatory activities? Through what specific legal authority and through which executive orders or directives does the Council perform those functions? |