Los Angeles Personal Injury Lawyer - deregulation

NYT: Bush Aides Hurry to Pass Contentious Labor Department Rule

Paul Kiesel — Tue, 02 Dec 2008 14:25:06 GMT

President Bush has said that he wants to work with President-elect Obama to make the transition process as smooth as possible. Logically, this makes sense for the greater good of the country, regardless of political ideology: We are in the middle of two wars, an economy that is in a recession, record foreclosure levels, levels of unemployment that haven't been seen in almost 20 years, and an anticipated turbulent first half to 2009.

Contrary to President Bush's words, his actions over the last few weeks do not signal a smooth transfer of power.

Below is an article from yesterday's New York Times that displays how Bush is doing his best to leave his imprint on the presidency for months if not years after he's left office (i.e. Bush is pushing through a ruling that will make it more difficult for women to get contraceptives. The loosening of restrictions makes it easier for health care workers to conscientiously object to filling birth control prescriptions), and the difficulty the Obama administration will have reversing new "midnight hour" regulations.

From The New York Times:

WASHINGTON — The Labor Department is racing to complete a new rule, strenuously opposed by President-elect Barack Obama, that would make it much harder for the government to regulate toxic substances and hazardous chemicals to which workers are exposed on the job.

The rule, which has strong support from business groups, says that in assessing the risk from a particular substance, federal agencies should gather and analyze “industry-by-industry evidence” of employees’ exposure to it during their working lives. The proposal would, in many cases, add a step to the lengthy process of developing standards to protect workers’ health.

Public health officials and labor unions said the rule would delay needed protections for workers, resulting in additional deaths and illnesses.

With the economy tumbling and American troops fighting in Iraq and Afghanistan, President Bush has promised to cooperate with Mr. Obama to make the transition “as smooth as possible.” But that has not stopped his administration from trying, in its final days, to cement in place a diverse array of new regulations.

The Labor Department proposal is one of about 20 highly contentious rules the Bush administration is planning to issue in its final weeks. The rules deal with issues as diverse as abortion, auto safety and the environment.

One rule would make it easier to build power plants near national parks and wilderness areas. Another would reduce the role of federal wildlife scientists in deciding whether dams, highways and other projects pose a threat to endangered species.

Mr. Obama and his advisers have already signaled their wariness of last-minute efforts by the Bush administration to embed its policies into the Code of Federal Regulations, a collection of rules having the force of law. The advisers have also said that Mr. Obama plans to look at a number of executive orders issued by Mr. Bush.

A new president can unilaterally reverse executive orders issued by his predecessors, as Mr. Bush and President Bill Clinton did in selected cases. But it is much more difficult for a new president to revoke or alter final regulations put in place by a predecessor. A new administration must solicit public comment and supply “a reasoned analysis” for such changes, as if it were issuing a new rule, the Supreme Court has said.

As a senator and a presidential candidate, Mr. Obama sharply criticized the regulation of workplace hazards by the Bush administration.

In September, Mr. Obama and four other senators introduced a bill that would prohibit the Labor Department from issuing the rule it is now rushing to complete. He also signed a letter urging the department to scrap the proposal, saying it would “create serious obstacles to protecting workers from health hazards on the job.”

Administration officials said such concerns were based on a misunderstanding of the proposal.

“This proposal does not affect the substance or methodology of risk assessments, and it does not weaken any health standard,” said Leon R. Sequeira, the assistant secretary of labor for policy. The proposal, Mr. Sequeira said, would allow the department to “cast a wide net for the best available data before proposing a health standard.”

The Labor Department regulates occupational health hazards posed by a wide variety of substances like asbestos, benzene, cotton dust, formaldehyde, lead, vinyl chloride and blood-borne pathogens, including the virus that causes AIDS.

The department is constantly considering whether to take steps to protect workers against hazardous substances. Currently, it is assessing substances like silica, beryllium and diacetyl, a chemical that adds the buttery flavor to some types of microwave popcorn.

The proposal applies to two agencies in the Labor Department, the Occupational Safety and Health Administration and the Mine Safety and Health Administration.

Under the proposal, they would have to publish “advance notice of proposed rule-making,” soliciting public comment on studies, scientific information and data to be used in drafting a new rule. In some cases, OSHA has done that, but it is not required to do so.

The Bush administration and business groups said the rule would codify “best practices,” ensuring that health standards were based on the best available data and scientific information.

Randel K. Johnson, a vice president of the United States Chamber of Commerce, said his group “unequivocally supports” the proposal because it would give the public a better opportunity to comment on the science and data used by the government.

After a regulation is drafted and formally proposed, Mr. Johnson said, it is “all but impossible” to get OSHA to make significant changes.

“Risk assessment drives the entire process of regulation,” he said, and “courts almost always defer” to the agency’s assessments.

But critics say the additional step does nothing to protect workers.

“This rule is being pushed through by an administration that, for the last seven and a half years, has failed to set any new OSHA health rules to protect workers, except for one issued pursuant to a court order,” said Margaret M. Seminario, director of occupational safety and health for the A.F.L.-C.I.O.

Now, Ms. Seminario said, “the administration is rushing to lock in place requirements that would make it more difficult for the next administration to protect workers.”

She said the proposal could add two years to a rule-making process that often took eight years or more.

Representative George Miller, a California Democrat who is chairman of the House Committee on Education and Labor, said the proposal would “weaken future workplace safety regulations and slow their adoption.”

The proposal says that risk assessments should include industry-by-industry data on exposure to workplace substances. Administration officials acknowledged that such data did not always exist.

In their letter, Mr. Obama and other lawmakers said the Labor Department, instead of tinkering with risk-assessment procedures, should issue standards to protect workers against known hazards like silica and beryllium. The government has been working on a silica standard since 1997 and has listed it as a priority since 2002.

The timing of the proposal appears to violate a memorandum issued in early May by Joshua B. Bolten, the White House chief of staff.

“Except in extraordinary circumstances,” Mr. Bolten wrote, “regulations to be finalized in this administration should be proposed no later than June 1, 2008, and final regulations should be issued no later than Nov. 1, 2008.”

The Labor Department has not cited any extraordinary circumstances for its proposal, which was published in the Federal Register on Aug. 29. Administration officials confirmed last week that the proposal was still on their regulatory agenda.

The Labor Department said the proposal affected “only internal agency procedures” for developing health standards. It cited one source of authority for the proposal: a general “housekeeping statute” that allows the head of a department to prescribe rules for the performance of its business.

The statute is derived from a law passed in 1789 to help George Washington get the government up and running.

The Labor Department rule is among many that federal agencies are poised to issue before Mr. Bush turns over the White House to Mr. Obama.

One rule would allow coal companies to dump rock and dirt from mountaintop mining operations into nearby streams and valleys. Another, issued last week by the Health and Human Services Department, gives states sweeping authority to charge higher co-payments for doctor’s visits, hospital care and prescription drugs provided to low-income people under Medicaid. The department is working on another rule to protect health care workers who refuse to perform abortions or other procedures on religious or moral grounds.

Originally posted at InjuryBoard by Paul Kiesel

The New Yorker: Bush's Midnight Hour of Deregulation

Paul Kiesel — Mon, 17 Nov 2008 20:35:46 GMT

Below is an article from this week's New Yorker on President Bush's last-minute push to pass everything he has can in the final days of his presidency, between now and January 20, 2009, which is known as the "Midnight Hour." Per Bush's agenda, it should be known as "Midnight Deregulation." The former term is eponymous with what John Adams did in the final hours of his presidency (literally), appointing several judges before his successor, Thomas Jefferson, assumed the role of president the following day.

Bush's midnight hour, based on his proposed changes to consumer protection laws and environmental laws, promises to be a very dark time and one that will rollover into the Obama Administration.

The New Yorker, November 24, 2008

When President Jimmy Carter lost his bid for reëlection, in November, 1980, he had lots of unfinished business that he did not intend to leave that way. Carter’s Administration spent the next several weeks generating regulations at an unprecedented rate, until, in its last month in office, it published more than ten thousand pages of new rules. These rules, which, like most issued by federal agencies, needed no congressional approval, touched on everything from crash tests for cars to access to medical records, and a phrase was coined to describe them. They became known as “midnight regulations,” after the “midnight judges” appointed by John Adams in the final hours of his Presidency.

Since Jimmy Carter, every President has complained about midnight regulations and, four or eight years later, every President has issued them. On a percentage basis, George Bush senior holds the record: his Administration issued a greater proportion of its rules during the midnight period—generally defined as the last three months in office—than any other President’s. In absolute terms, though, Bill Clinton takes the gold: his Administration, during its midnight phase, published more than twenty-six thousand pages’ worth of rules in the Federal Register. (According to the National Journal, by the time Clinton left office “the journalists who cover the White House had thrown up their hands at the prospect of keeping up.”) President George W. Bush used the timing of these regulations as a rationale for suspending many of them. “I told people pretty plainly that I was going to review all the last-minute decisions that my predecessor had made, and that is exactly what we’re doing,” he declared.

Now, of course, Bush has entered into his own midnight period, and it promises to be a dark time indeed. Among the many new regulations—or, rather, deregulations—the Administration has proposed are rules that would: make it harder for the government to limit workers’ exposure to toxins, eliminate environmental review from decisions affecting fisheries, and ease restrictions on companies that blow up mountains to get at the coal underneath them. Other midnight regulations in the works include rules to allow “factory farms” to ignore the Clean Water Act, rules making it tougher for employees to take family or medical leave, and rules that would effectively gut the Endangered Species Act. Most regulations are subject to public input; such is the sense of urgency that the Administration has brought to the task of despoliation that the Interior Department completed its “review” of two hundred thousand public comments on the endangered-species rules in just four days, a feat that, one congressional aide calculated, required each staff member involved to read through comments at the rate of seven per minute. “So little time, so much damage” is how the Times recently put it.

Why do Presidents wait till the last moment to push through changes they’ve had the power to impose all along? Legal scholars have advanced a variety of explanations; these range from megalomania (each Administration tries to extend its influence into the next) to simple distraction (federal agencies, like ninth graders, have a hard time focussing until they’re up against a deadline). Under the best of circumstances, experts point out, rule-making is a laborious process; many of the regulations published toward the end of the Clinton Administration—such as a rule limiting the amount of arsenic allowed in public drinking water—had been the subject of years’ worth of hearings and scientific review.

But none of these explanations is adequate to the current situation. What distinguishes this Administration in its final days—as in its earlier ones—is the purity of its cynicism. White House officials haven’t even bothered to argue that these new rules are in the public interest. Such a claim would, in any event, be impossible to defend, as just about every midnight regulation being proposed is, evidently, a gift to a favored industry.

Consider, for example, the case of New Source Review. Utility companies have always hated this provision of the Clean Air Act, which requires them to install up-to-date pollution controls when they build new plants or renovate old ones. A new rule being circulated would take a trick that the power company Duke Energy dreamed up for circumventing New Source Review and turn it into law. According to the Administration’s own estimates, this new anti-rule would allow an additional seventy million tons of CO₂ to be released into the atmosphere each year. “If you thought the first hundred days of the Bush Administration were bad, just wait and see what the last hundred could bring,” Representative Edward Markey, of Massachusetts, has warned.

Democratic leaders in the House and the Senate have already indicated that they will try to rescind the most egregious of Bush’s midnight regulations. There are a few ways to do this, all of them difficult. Under an obscure law passed in 1996, Congress has the power to revoke recently imposed rules. That law, though, has been used successfully only once. (President Bush, for all his grumbling—and despite Republican control of Congress for much of his tenure—ended up implementing more than three-quarters of the midnight rules that Clinton had left him, including the one on arsenic, just as they were written.) Alternatively, once in office, Barack Obama could ask his agencies to go through the rule-making process all over again. But, by the time that was finished, a good deal of the damage might already have been done. Once a power plant has been rebuilt, it can’t readily be unrebuilt.

The Bush Administration, probably as a result of its own experience, is now trying to craft rules that are as difficult as possible to reverse. Generally speaking, major federal regulations go into effect sixty days after they are published. On November 20th, it will be sixty days before Bush leaves office. Over at the Federal Register, it’s going to be a busy week.

Originally posted at InjuryBoard by Paul Kiesel

The Subprime Mess and Phil Gramm: An Experiment in Deregulation

Paul Kiesel — Tue, 24 Jun 2008 16:12:58 GMT

In 1933, a few years following the stock market crash, Congress passes the Glass-Steagall Act, in hopes that regulating banks will help prevent market instability, particularly amongst Wall Street banks. The purpose of the act is to separate commercial banks that focus on consumers from investment banks, which deal with speculative trading and mergers.

The Glass-Steagall Act provided the proper oversight and entity separation that would prohibit banks and other financial companies from merging into giant trusts (conflict of interests) -- giant trusts or corporations being more powerful, naturally, and having the seemingly limitless capital to lobby their corporate interests, however, with a very myopic scope (particularly when it comes to factoring in potential losses -- most banks, as seen in contemporary times, chose not to anticipate losses in the mortgage market; they presumed home prices would continue to appreciate).

In 1999, former Senator Phil Gramm (who is, incidentally, Senator John McCain's economic adviser and cochairs his presidential campaign) set out to completely gut the Glass-Steagall Act, and did so successfully, replacing most of its components with the new Gramm-Leach-Bliley Act: allowing commercial banks, investment banks, and insurers to merge (which would have violated antitrust laws under Glass-Steagall). Sen. Gramm was the driving force behind the Gramm-Leach-Bliley Act, as he had received over $4.6 million from the FIRE sector (Finance, Insurance and Real Estate donations) over the previous decade, and once the Act passed, an influx of "megamergers" took place among banks and insurance and securities companies, as if they had been eagerly awaiting the passage of Gramm's Act. Everything in between Glass-Steagall and Gramm-Leach-Bliley (i.e. Savings and Loan crisis/bust) was, in large part, the incubation period for what would take place over the nine years that would follow the passage of Gramm's Act: an experiment in deregulation.

Shortly after George W. Bush was elected president, Congress and President Clinton were trying to pass a $384 billion omnibus spending bill, and while the debates swirled around the passage of this bill, Senator Phil Gramm clandestinely slipped a 262-page amendment into the omnibus appropriations bill titled: Commodity Futures Modernization Act. It is likely that few senators read this bill, if any. The essence of the act was the deregulation of derivatives trading (financial instruments whose value changes in response to the changes in underlying variables; the main use of derivatives is to reduce risk for one party). The legislation contained a provision -- lobbied for by Enron, a major campaign contributor to Gramm -- that exempted energy trading from regulatory oversight. Basically, it gave way to the Enron debacle and ushered in the new era of unregulated securities. Interestingly enough, Gramm's wife, Wendy, had been part of the Enron board, and her salary and stock income brought in between $900,000 and $1.8 million to the Gramm household, prior to the passage of the Commodity Futures Modernization Act.

In 2003, Gramm left the Senate to join UBS, which had acquired investment house PaineWebber due to his deregulation bill. At UBS, Gramm lobbied Congress, the Fed and the Treasury Department. During Gramm's tenor at UBS and as a lobbyist, Congress passed the Responsible Lending Act, billed as an anti-predatory-lending measure, but was called the "Loan Shark Protection Act" by consumer advocates, as it was designed to preempt stronger state laws against anti-predatory lending. The Fed largely ignored the underlying and growing problems within the subprime mortgage/housing markets, as Bernanke famously acknowledged the housing market in April, 2007 as, "[showing] signs of softening," but said that a "sharp slowdown," is unlikely. Then, according to Mother Jones magazine, Henry Paulson became the Treasury Secretary in July, 2007, when, "In 2005, [at] Goldman [he] securitized $68 billion in residential mortgages and $23 billion in 'other assets' primarily related to CDOs," (Mother Jones, August, 2008). With such self-interest, and a lack of the nation's interest, we can see how this subprime mess was allowed to escalate to such great proportions.

Some justice was served, however, this spring, as UBS became one of the subprime debacle's biggest losers, having to write down $37 billion -- the same amount as their previous four years of profits combined. UBS also made the public aware that two-thirds of its losses were due to reckless investing in collateralized debt obligations (CDOs).

Now, Gramm has a second chance of extending his out-of-touch and ill-performing policies, as Senator John McCain appointed Gramm to be his "economic expert" and cochair of his presidential campaign, last year. Also, it is likely that if Senator McCain were to win in November, Gramm would be our next Treasury Secretary, which means more of the same deregulatory mess and the continuation of failed and insidious economic policies.

Originally posted at InjuryBoard by Paul Kiesel