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The Future of Government

Cass R. Sunstein

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eBook - ePub


The Future of Government

Cass R. Sunstein

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Simpler government arrived four years ago. It helped put money in your pocket. It saved hours of your time. It improved your children's diet, lengthened your life span, and benefited businesses large and small. It did so by issuing fewer regulations, by insisting on smarter regulations, and by eliminating or improving old regulations. Cass R. Sunstein, as administrator of the most powerful White House office you've never heard of, oversaw it and explains how it works, why government will never be the same again (thank goodness), and what must happen in the future. Cutting-edge research in behavioral economics has influenced business and politics. Long at the forefront of that research, Sunstein, for three years President Obama's "regulatory czar" heading the White House Office of Information and Regulatory Affairs, oversaw a far-reaching restructuring of America's regulatory state. In this highly anticipated book, Sunstein pulls back the curtain to show what was done, why Americans are better off as a result, and what the future has in store. The evidence is all around you, and more is coming soon. Simplified mortgages and student loan applications. Scorecards for colleges and universities. Improved labeling of food and energy-efficient appliances and cars. Calories printed on chain restaurant menus. Healthier food in public schools. Backed by historic executive orders ensuring transparency and accountability, simpler government can be found in new initiatives that save money and time, improve health, and lengthen lives. Simpler: The Future of Government will transform what you think government can and should accomplish.

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In a difficult economic period, what is the proper role of government? How should public officials proceed when they seek to stabilize the financial system, reduce air pollution, protect consumers and investors, safeguard national security, reform health care, and increase energy independence? Might creative approaches put money in people’s pockets, and maybe even save lives, without squelching innovation and competitiveness? Is it possible to protect public safety and health while promoting economic growth and increasing employment? Will it help if government is open and transparent and tells the public what it knows and what it does not know?
These questions have produced a lot of debate over the past half-century. The debates are most prominent during elections and amid protest movements, but they occur every day. They can be found in corporate boardrooms, Washington think tanks, universities, and high schools, and over family dinners. For nearly three decades, I spent much of my professional life writing about them, mostly in obscure, technical publications in academic journals with such enticing names as Journal of Risk and Uncertainty, Environmental and Resource Economics, Philosophy and Public Affairs, and Journal of Political Philosophy.
One of my major claims has been that we need to go beyond sterile, tired, and rhetorical debates about “more” or “less” government and focus instead on identifying the best tools and on learning, with close attention to evidence, what really works. Nudges are especially promising in this regard. (In government, I saw the immense importance of selecting good tools but also learned that however sterile, tired, and rhetorical, the “more” or “less” debates continue to matter. They have a lot of life left. They might be immortal. They might be vampires. Possibly zombies.)
Along with many others, I have also focused on the importance of considering both costs and benefits. Following President Reagan, who was largely responsible for making cost-benefit analysis a regular feature of American government, I have contended that regulators need to focus on net benefits, that is, benefits minus costs. If an energy efficiency rule costs $50 million but has benefits of $150 million, it is probably a good idea, at least if we can trust those numbers. I have urged that a disciplined analysis of costs and benefits is indispensable to deciding what to do, and as a nudge to move public officials in the right directions.
Suppose that we are deciding whether to require trucking companies to install new safety equipment, airlines to give more rest time to pilots, farmers to reduce the risks of food safety problems, or power plants to impose new pollution controls. These decisions should not be resolved by focusing on a specific accident or incident that occurred two months earlier, or the supposed need for precaution, or the concerns and complaints of well-organized private groups, or the fear that if something bad happens in the next months, there will be hell to pay. Instead of exploring these less than productive issues, I suggested that we should try to catalogue the costs and benefits of alternative courses of action and choose the approach that would do the most good and the least harm.
One of my central points was that cost-benefit analysis and democratic self-government are mutually supporting. Openness about costs and benefits can inform democratic decisions. Without a clear sense of the likely consequences, sensible choices become far more difficult, even impossible. Indeed, efforts to catalogue costs and benefits, and to disclose that catalogue to officials and the public, are themselves a kind of choice architecture—choice architecture for choice architects—and they can greatly improve public decisions. And if a rule or requirement is too confusing or complex, people are likely to complain. In that way, public scrutiny can be a great friend of sense rather than nonsense, and of simplicity rather than obfuscation.

Knocking on Doors

In January 2008, I found myself alongside Obama’s advisers Austan Goolsbee and Samantha Power, knocking on doors on a cold night in Des Moines, Iowa, for Senator Barack Obama. Needless to say, many people were knocking on doors in Iowa that month. Some besieged Iowans were less than receptive. They had to answer a lot of doorbells. A grim-faced older woman threatened to slam the door in my face. When I explained that I was there not to see her but instead her voting-age daughter, Ashley, she promptly yelled out to her daughter, “Ashley, will you come slam the door in his face?” (She did.)
Despite the slammed door, Senator Obama won the Iowa primary. After a lot more door-knocking, the Democratic nomination and the presidency were his.
Very soon after Election Day, I had a brief chat with the president-elect, congratulating him on his victory. In early December, Peter Orszag, the incoming director of the Office of Management and Budget, invited me to camp out in Washington to work with the transition. A very large team of people was crammed into a single building with small offices. The team included the president-elect, the vice-president-elect, and soon-to-be Cabinet members and high-level advisers. All of us were keenly aware that the nation was in the midst of the most difficult economic period since the Great Depression. The situation was already quite dire, indeed far worse than most Americans were aware—and we knew that it could soon get a lot worse.
Along with President Clinton’s OIRA administrator, Sally Katzen, and her former special assistant, Michael Fitzpatrick, I focused solely on regulatory policy: How would the Obama administration deal with the legacy of the Bush administration? How could we correct its failures? What should we repeal? What should we keep? What should we add? What new directions would be best? Our little team attempted to answer these questions. We worked on a set of executive orders that, within the first few days of the Obama presidency, would require open government, prompt a rethinking of regulation, and generally help set the stage for much of what would come.
In early December, Peter Orszag told me that the president-elect wanted me to join the administration to direct OIRA. That was an easy offer to accept. I had lunch in the West Wing of the White House with Susan Dudley, President Bush’s OIRA administrator, who said that she had “the best job in Washington.” After she described the issues that she encountered in a given day—homeland security, air pollution, energy, highway safety, civil rights—it was clear that I would be immensely lucky to be able to follow her. In fact it would be the honor of a lifetime.
In light of the fact that the nation was facing a period of acute economic difficulty, I thought that OIRA’s role was likely to be especially important. In December 2008 a full-scale depression did not seem out of the question. Stupid, complex, costly regulations, hurting businesses large and small, might make things a lot worse. But financial reform and health care reform were presidential priorities, and smart regulations could make things better and help to provide safeguards against future catastrophes, economic or otherwise. In many areas, ranging from highway safety and food safety to clean air, new regulations could save a lot of lives. At the time, I believed that a great deal could be done to transform the regulatory state, promoting simplification, adopting nudges, using new, state-of-the-art tools, avoiding unintended side effects, and making evidence and data, rather than sloganeering and dogmatism, the foundation of regulatory policy. In retrospect, those beliefs were right. But there was a lot about OIRA that I didn’t know, and a lot that I thought I knew was just wrong.
With enthusiasm, I agreed to head OIRA. In early January, weeks before the inauguration, the White House announced that the president intended to nominate me. I expected a formal nomination within a few weeks, with confirmation shortly thereafter, so that I could start just about immediately. How naive I was.
Some progressive groups were quite unhappy with the president’s decision, mostly because of my enthusiasm for cost-benefit analysis and my wariness about excessive and costly regulation. Many progressives feared, and said publicly, that I would be an obstacle to necessary safeguards for the public. In a column with a scary title, “How Anti-Regulation Is Obama’s New Regulatory Czar?” Frank O’Donnell, president of Clean Air Watch, said that progressives “would’ve screamed” if a Republican president had selected someone with my views. He insisted that I “shouldn’t get a pass just because [I] was nominated by Obama.”
Moreover, any Democratic nominee for OIRA was bound to run into trouble with Republican senators. Republicans have long seen the OIRA administrator as the only safeguard against expensive, crazy, job-killing regulations. They would inevitably fear that under a Democratic president, this safeguard would be far too weak. (By 2011, the term “job-killing regulations” had become so pervasive in Washington that I wondered whether the word “regulation” had been excised from the English language and replaced with that term.)

The Life Audit

Before my nomination could be sent formally to the Senate, I was subjected to the nightmarish process known as vetting, which entails an extremely careful look, by the White House, at a potential nominee’s background, including speeches, articles, books, personal life, and taxes. Think of this as a Life Audit by a team of people who have a far broader mandate than the Internal Revenue Service. Your whole life is an open book.
Unfortunately for my vetters, I have written countless speeches, well over four hundred articles, and a lot of books. The vetters had to sift through thousands of pages to ensure that I hadn’t said anything that was inexplicable or beyond the pale. I didn’t have copies of most of my speeches (I tend to speak from handwritten notes), and no one could be expected to wade through four hundred articles, so the vetting process was not a lot of fun. Nonetheless, a small, intrepid team did its best. While it found nothing obviously disqualifying, there were plenty of red flags. For example, I had written about animal rights, suggesting that lawyers should be able to represent abused animals to sue for violations of animal cruelty laws. I had also said, in oral remarks captured on video, that sport hunting should be banned. (Ouch. I know, I know, that’s a bad idea. I know. I know.) Without endorsing the idea, I had discussed the possibility of a kind of fairness doctrine for the Internet, calling on politically opposed sites to link to each other. (Ouch again. I hadn’t endorsed the idea, and actually I later repudiated it, but still, a bad one.) I had written about abortion, same-sex marriage, pornography, human cloning, and guns. For those who wanted to make trouble for a presidential nomination, I must have seemed a dream come true.
Going through all this material was grueling and miserable, but the tax issue turned out to be far more difficult. This was so not because of any anticipated problem, but because presidential nominees have to devote a lot of time and effort (and money) to a careful investigation to ensure that there was nothing troublesome from past years, or even decades. Tax issues had derailed a number of potential nominees of both parties, and my tax record was subject to close scrutiny.
Here’s the problem: Over a period of decades the possibility of a tax glitch, or worse, is pretty high. Suppose, for example, that you have been paying taxes since 1980. Even if you’re careful and honest, there’s a chance that at some point, you did something wrong, or at least not quite right. If so, the IRS may well have asked you just to pay up, which isn’t so bad—but you might have badly jeopardized your chances of Senate confirmation.
In my case, things looked essentially fine. But I didn’t remember everything, and my tax accountant, then in his early eighties, faced a barrage of questioning from the White House, sometimes about tax decisions made more than a decade ago. As the scrutiny intensified, I started to worry, every day, that some notice would arrive from the IRS, destroying my prospects and embarrassing me publicly. As it happened, I was a bit late in making a payment to the District of Columbia for unemployment compensation for my son’s nanny—fortunately, not a catastrophe.
Somehow I survived the scrutiny. I was finally nominated in late April.

The Most Dangerous Man in America

The vetting turned out to be just the start of the process. Like many presidential nominees, and indeed like many people in the public eye (even if briefly), I learned to live with a simple fact of life: In the modern era, whatever might be thought will be said.
Some progressive groups continued to be skeptical or actively hostile. For them, OIRA was not merely an obstacle but evil, a villain, the place where indispensable public protections went to die. They hoped for a fundamental transformation of its role, in which OIRA would let the Environmental Protection Agency and other Cabinet departments do as they wished and no longer carefully scrutinize health, safety, and environmental rules. That kind of transformation, they knew, was not something that I was likely to endorse. They expressed acute disappointment that the president had chosen someone who favored cost-benefit analysis and who promoted modest, low-cost approaches to regulation. As it turned out, nudges weren’t wildly popular on the left, which often prefers firm mandates. (By the way, there is unquestionably a place for such mandates, as we will see.)
But the most serious problems emerged on the right. It was widely reported that I was a radical animal rights activist who would seek to ban hunting, forbid meat eating, ban conspiracy theories, outlaw marriage, eliminate free speech, and steal human organs. (Organ stealing, it turned out, is not entirely irrelevant to nudging. Really. I might discuss that later.) Some conservatives began to characterize me as an extremist, a socialist, a Marxist, a Trotskyite, a police state fascist, and some kind of Rothschild Zionist (I confess I have no idea what that is). Wild rumors spread about what I thought and planned to do—an irony, or perhaps destiny’s joke, in light of the fact that I had finished a book on the topic of false rumors, and how they spread, just a few months before.1
Animals and animal rights turned out to be a major issue (though they occupied a very small fraction of my time and focus when I was an academic). As early as January 15, the Consumer Federation of America wrote that I had “a secret aim to push a radical animal-rights agenda in the White House.” In its account, “Sunstein supports outlawing sport hunting, giving animals the legal right to file lawsuits, and using government regulations to phase out meat consumption. . . . Sunstein’s work could spell the end of animal agriculture, retail sales of meat and dairy foods, hunting and fishing, biomedical research, pet ownership, zoos and aquariums, traveling circuses, and countless other things Americans take for granted.” OMG (as they say).
There was much more. Fifteen conservation and sportsmen organizations sent a group letter to the Senate, asking it to block my nomination. The National Wild Turkey Federation appeared to see my defeat as a particularly high priority. The US Sportsmen’s Alliance described me as a “rabid animal rightsist.” The Sportsmen’s Alliance emphasized the need for sportsmen “to ‘take up their arms’ ” in order “to block this ‘Czar,’ ” who would otherwise “be given the power to impose these views on all of us and destroy our collective heritage.” On national television, former Governor Mike Huckabee invited me to south Arkansas, during the opening day of deer season, to see the “reaction” that I “would not enjoy” in light of my proposal to ban hunting. A representative headline from a blog post: “Regulatory ‘Czar’ Sunstein Defends Stealing Organs from Hopeless Patients.” Another described me as a “Murderous Nutcase.”
Fearing that I would insist on turning everyone in America into a vegetarian (though I am not one), the influential American Farm Bureau expressed its strong concerns to Congress. A public letter laid out the case against me. As I read it, my heart sank. Opposition from the Bureau is no light matter, and it could get a lot of attention in the US Senate. To address the Bureau’s concerns, I met with members twice. They were earnest, decent, unfailingly courteous, informed, substantive, mildly suspicious, and nervous. Would I really try to stop people from eating meat? Would I impose all sorts of new restrictions on the beef industry? (Would my motto be “Put Cows First”?) Under the circumstances, I know, and knew, that these were natural questions for them to ask, but I had no interest in doing anything of the sort. In any case, the OIRA administrator must follow the law and the will of the president, and even if he were inclined to move in such directions, he would have no authority to do so. One of my main goals was to ensure that our regulatory system was compatible with the economic recovery, which would entail careful scrutiny of expensive new rules, including rules that would burden farmers, and serious efforts to reduce costs. The Bureau listened carefully and eventually supported my confirmation.
Notwithstanding that development, the die was cast. This would be an ugly and highly contentious process. Early on, I learned that a Republican senator had placed a hold on my confirmation; this hold was the equivalent of a filibuster, meaning that I could not get an up-or-down vote. (A single senator is entitled to do that, just by saying so.) The problem was that under Senate rules, we had a hard time identifying the senator—the hold was initially anonymous—and so I had no opportunity to meet with him and address his concerns.
After a few weeks, we were able to find out that Senator Pat Roberts of Kansas was responsible for the hold. Finally, he agreed to meet with me. He began the discussion by saying (knowingly and with a twinkle in his eye) that what we needed at OIRA was someone who believed in cost-benefit analysis. He was generous, funny, and kind. He said that he thought I was a good choice and would do a good job, but that of course he would vote against me. He asked me some questions about agriculture and farming, and in response to my answers he agreed to lift the hold. Maybe we were ready for a vote.
But a second hold immediately emerged. Here again we had a hard time identifying the senator who was responsible. It turned out to be Georgia’s Saxby Chambliss, whose staff initially seemed hostile and angry (apparently because of agriculture issues) and refused to set up a meeting or even to talk seriously about my nomination. After repeated entreaties from the White ...


  1. Cover
  2. Dedication
  3. Epigraph
  4. Introduction: The Cockpit of the Regulatory State
  5. Chapter 1: The Most Dangerous Man in America
  6. Chapter 2: Don’t Blink
  7. Chapter 3: Human Error
  8. Chapter 4: Plate, Not Pyramid
  9. Chapter 5: Automatic for the People
  10. Chapter 6: Invisible Gorillas and Human Herds
  11. Chapter 7: Regulatory Moneyball
  12. Chapter 8: Eliminating Red Tape
  13. Chapter 9: The Nanny State?
  14. Chapter 10: Simplifying Choice Architecture
  15. Epilogue: The Three Most Important Things I Learned
  16. Appendix
  17. Acknowledgments
  18. About Cass R. Sunstein
  19. Notes
  20. Index
  21. Copyright