Cass Sunstein, the Obama administration’s “regulatory czar,” gave a speech at the Brookings Institution this afternoon. Regular readers are probably familiar with most of its content — the open government directive, OMB’s dashboards for transparency and IT projects. But Sunstein made a couple of interesting points on the limits of open government initiatives.
Rahm Emanuel issued a memo this afternoon freezing all government regulation, according to a press release from the White House.
The memo tells agency heads not to submit any new regulations (proposed or final) until they can be reviewed by a Cabinet official appointed by President Obama. It also orders agencies to withdraw any regulations not yet published in the Federal Register.
And it advises them to delay implementing any final regulations that have not yet taken effect â€” an effort to delay the dozens of Bush-era “midnight regulations.”
This is not unprecedented: Former White House chief of staff Andrew Card issued a similar memo when President Bush took office in 2001.
More details tomorrow as we follow up on this.
12:27 PM: Obama pledged more “transparency and accountability” for the government’s rescue efforts under his administration.
12:18 PM: Obama called on the next Congress to put together an economic stimulus plan in January; he also promised to unveil proposals from his economic team in the next few weeks. Obama also acknowledged that any government stimulus plan could require cuts to other government programs:
We’ll have to scour our federal budget, line by line, and make meaningful cuts and sacrifices.
12:10 PM: Not that it was much of a secret, but now it’s official. The president-elect just finished his speech at a press conference at the Chicago Hilton. His picks:
- New York Federal Reserve president Timothy Geithner will be his pick for Treasury secretary;
- Harvard professor and former Clinton Treasury secretary Lawrence Summers will head the National Economic Council;
- Christina Romer will chair the Council of Economic Advisers;
- Melody Barnes will direct the Domestic Policy Council.
The new Treasury secretary will have two big tasks: First, adding some transparency to the government’s trillions of dollars worth of bailouts, which have been kept very secretive by current Treasury secretary Henry Paulson; and second, reforming the nation’s failed financial regulators.
The Congressional Research Service has an interesting report out (pdf) on the presidential transition.
CRS found that the president’s “lame duck” status between Election Day and Inauguration Day leads to all kinds of interestingly named activities, everything from “midnight rulemaking” to “burrowing in.”
We’ll have a longer look at “midnight rulemaking” in next week’s Federal Times, which comes out on Nov. 3. Basically, though, agency heads push through all kinds of last-minute regulations. November-January is usually a quiet time for regulatory agencies, but their output doubles during a transition year â€” and many of the regulations are approved without proper oversight.
CRS is also worried about records retention, which has been a recurring problem during this administration.
The whole report is worth a look.
The Washington Post reported today that three federal agencies â€” the Securities and Exchange Commission, the Commodity Futures Trading Commission, and the New York branch of the Fed â€” are “vying for control” of the $53 trillion market in “credit-default swaps,” contracts that insure financial institutions who make risky investments.
It’s an interesting look inside the infighting that plagues financial regulators. A horde of agencies oversees the financial world:Â the SEC, CFTC, two agencies to regulate banks, the Fed, the Federal Housing Finance Agency, the Treasury Department…
In the era of deregulation (now ending), that was fine. But our fragmented regulators are starting to become an issue. I’ve talked with several economists this week who say the current system doesn’t make sense: too many agencies, not enough coordination.
And on Capitol Hill today, at a hearing of the House Financial Services committee, former Congressional Budget office director Alice Rivlin said “the number of regulators should be less than it is now.”
There’s a precedent: The British consolidated their regulators into a single Financial Services Authority ten years ago. It hasn’t exactly been a successful regulator â€” the British government’s Â£50 billion bank bailout is proofÂ â€” but that’s true in any industrialized country.
There’s precedent at home, too. Earlier this year, the Treasury Department proposed a merger between the SEC and CFTC.
So expect consolidation to be an issue when the next Congress takes up new financial regulations. Agencies are already trying to protect their programs, but it seems inevitable that at least some functions will be merged.
Election Day is still two weeks away, but the next president already has good-government groups lining up to offer advice.
The latest is the Project on Government Oversight, which today issued a set of recommendations for the next president. Many of them are obvious good-government suggestions, but many also come at opportune times.
POGO points out, for example, that the government’s oversight and regulatory role has been “decimated” in recent years. Given the recent scandals at the Minerals Management Service, the Federal Aviation Administration and the Food and Drug Administration, that’s not an overstatement.
There’s also a call for inspectors general to have more independence from their agency heads. The IG bill passed by Congress (pdf) earlier this month is a promising start; it gives IGs a stronger voice in requesting their budget, and makes them harder to remove from office.
The group also called on the next president to “strengthen federal employee whistleblower protections.” Given POGO’s longstanding criticism of Special Counsel Scott Bloch, that’s probably a call for the next president to quickly appoint a replacement.
The FDA announced this week that it will start opening foreign offices – first in China and India, and eventually in Latin America, Europe and the Middle East.
It’s a promising step for the agency, which is simply terrible at inspecting foreign plants: Less than 30 percent of foreign drug plants, for example, are checked on schedule. So the FDA deserves a lot of credit for starting the program and investing $30 million to open those offices.
But the announcement leaves some unanswered questions. In the United States, FDA inspectors can walk into any food or drug plant, unannounced, and conduct an inspection. Will they have the same access in countries like China and India, which don’t have a strong regulatory culture? It’s doubtful.
Certainly this is an improvement over the current system: The FDA has to fly personnel into each country for inspections, which are often announced weeks in advance. It’s not perfect, though, and it will require strong cooperation from the host countries. (FDA sources say China and India are receptive to the agency’s efforts.)