Petroleum refiners have used tetraethyl lead since 1923 as an additive to boost the octane rating of gasoline and reduce “knocking.” By the mid-1970s, approximately 90 percent of all gasoline manufactured in the United States contained tetraethyl lead. Although large gasoline refiners produced most leaded gasoline, a number of smaller companies refined leaded gasoline and supplied tetraethyl lead to large refineries.

Unfortunately, lead can be extremely toxic, especially to children, in high concentrations. At very high blood concentration levels of approximately 120 micrograms of lead per deciliter of blood (μg/dl), lead can cause severe and irreversible brain damage. Children with blood lead levels of over 80 to 100 μg/dl can suffer permanent cognitive impairment. Lead can also have reproductive effects on both men and women. At much lower blood levels of approximately 40 μg/dl, lead can impair the synthesis of hemoglobin and cause anemia.

Lead is ubiquitous in the human environment. It is present in food, water, air, soil, dustfall, paint, and other materials with which humans come into contact. Human exposure to lead can come from a variety of sources, including ingestion of food grown in leadcontaminated soils, ingestion of lead-based paint, inhalation of airborne lead, and ingestion of dust contaminated with airborne lead, the latter route being common among infants with pica, an affliction which causes them to eat dust and dirt. A major source of human exposure to lead is airborne lead, and approximately 90 percent of airborne lead comes from automobiles.

Regulatory background

Congress enacted Section 211 of the Clean Air Act specifically to empower EPA to regulate fuel additives like tetraethyl lead.

Although agencies were never free to disregard the impact of their rules on regulatees and the public, formal requirements that agencies prepare documents detailing those impacts have existed for about two decades. The idea probably originated with the National Environmental Policy Act of 1969 (NEPA). NEPA's real bite was in its requirement that agencies prepare an Environmental Impact Statement (EIS) for every proposal for legislation or other major federal action significantly affecting the quality of the human environment. The EIS was required to describe: (1) the environmental impact of the proposed action; (2) any unavoidable adverse environmental effects; (3) alternatives to the proposed action; (4) the relationship between local short-term uses of environmental resources and the maintenance and enhancement of long-term productivity; and (5) any irreversible and irretrievable commitments of resources. Although agencies initially regarded NEPA as a wasteful impediment to the attainment of their programmatic goals, the courts demanded strict adherence to NEPA's analytical requirements, and the agencies soon began to hire employees with expertise in environmental impact analysis.

As the agencies began to write NEPA into their standard operating procedures, observers noted that compliance with NEPA's analytical requirements did not ensure that agency action comported with NEPA's substantive goals. Indeed, cynics suggested that agency staff often drafted lengthy EISs in excruciating detail to ensure that busy decisionmakers would not read them and therefore would not be influenced by them. Perhaps the most cogent criticism of the environmental impact assessment process was that it presumed an unrealistic decisionmaking process “characterized by abstract rationality and focused on a single responsible decision-maker who, even if he did exist, could hardly be expected to undertake the investigation of alternatives that the Act requires.” …

The Environmental Protection Agency has adopted an intermediate decisionmaking structure that incorporates many of the advantages of both the team and adversarial models and eliminates many of the disadvantages. EPA's Administrator or the Deputy Administrator designates twenty to thirty rules per year for a special “Options Selection-Rejection process.” These rules are reviewed on a quarterly basis by the Deputy Administrator and other upper-level decisionmakers. The lower-level decisionmaking process for these special rules adheres to the team model, except that at crucial junctures an Options Review meeting of very high-level agency officials and team members is held to choose which regulatory options the agency will actively pursue throughout the remainder of the rulemaking process.

EPA's organizational structure

The Environmental Protection Agency (EPA) is responsible for administering eight important environmental statutes and portions of several other laws. EPA regulations can cut across several industries and can have profound impacts on whole sectors of the economy. It is consequently one of the most prolific producers of regulatory analysis documents. The agency is run by an Administrator, a Deputy Administrator, two Associate Administrators, and nine Assistant Administrators, four of whom bear responsibility for implementing the agency's regulatory programs.

The Office of Policy, Planning and Evaluation

The Office of Policy, Planning and Evaluation (the “policy office”) performs a centralized regulatory analysis review function for the agency and manages the agency decisionmaking process to ensure that agency actions remain on schedule and reflect upper-level policy input. Two of its three suboffices–the Office of Policy Analysis and the Office of Standards and Regulations–play a large role in the day-to-day rulemaking process.

Modern food processing technology has passed the corner butcher by. The human butcher, however careful, inevitably leaves some edible tissue on the bone. Mechanical processes can break up the parts of the carcass remaining after hand deboning, grind them up, and force them at very high pressure through a small aperture to produce a pasty product that can be used in meat spreads, lunchmeat, and sausages. While this process maximizes the amount of edible tissue, it is impossible to keep very fine bone particles out of the final product. Mechanically separated meat (MSM) also differs from hand deboned meat in that it has a highly comminuted spreadable consistency, contains bone marrow and other minerals not common to hand deboned meat, and contains more fat and less protein than hand separated meat. Because MSM can be substituted for hand deboned meat in many products, without detection by most consumers, marketing MSM as “meat” or “meat product” might run afoul of consumer expectations.

Although the consumer protection aspect of MSM might by itself justify regulatory intervention, MSM also raises a health concern. The additional calcium in MSM due to pulverized bone can be quite harmful to a small population of “calcium hyperabsorbers” who take up calcium at a much higher rate than the normal population. Because this sensitive subpopulation must monitor the calcium content of food very carefully, regulatory intervention may be necessary to limit the amount of calcium in food containing MSM or to ensure that calcium hyperabsorbers can easily avoid such products. Finally, MSM's slightly higher fluoride content poses some risk of contributing to mottled teeth in children.

The foregoing analysis of the five most prominent models for structuring regulatory analysis into the decisionmaking process suggests that no single model is best for all regulatory programs. Different agencies have different degrees of discretion; different programs have different levels of complexity; different agency heads have different management styles; and the likelihood of attracting highquality technical and analytical personnel varies from agency to agency. Hence, rather than attempting to prescribe a single “best” approach to incorporating regulatory analysis, this chapter will focus upon the considerations that might guide a particular agency toward one or another of the available models.

The hierarchical model is well suited for agencies that regulate according to statutes that articulate clear policy goals and provide very little agency discretion. It is probably best adapted to agencies engaged primarily in “economic” regulation where costs and benefits analyses demand the same kind of expertise and can easily be reduced to the same units. The hierarchical model will not be as useful for agencies engaged primarily in social regulation, where gathering information on costs and benefits might require an entirely different mix of training and skills. This may explain why the Food Safety and Inspection Service in USDA, which is one of the few agencies in that department with large consumer protection responsibilities, appears to be evolving away from the hierarchical model that characterizes most of the other agencies in the department.

Because the hierarchical model lacks a designated institutional skeptic, it will function best in a standardized regulatory context in which there are few realistic options and there can be little dispute over the validity of the available information.

A second model of the regulatory analysis process casts the regulatory analyst in the role of outside advisor. In this model, the agency devotes a separate office at least in part to regulatory analysis, but it has no formal role in the decisionmaking process. It lacks institutional power, because it is not necessarily included in subordinate decisionmaking entities and because it does not have “sign-off” authority. The office is usually called in to provide information and analysis for large or controversial rulemaking efforts. Under this model, the regulatory analysis office speaks only when spoken to.

The outside advisor model in the Animal and Plant Health Inspection Service

The Animal and Plant Health Inspection Service (APHIS), one of the regulatory agencies in the highly decentralized USDA, is responsible for protecting domestic plants and animals from pestilence and disease. The quarantine statutes that it administers date back to the late nineteenth century. Under the more recent Federal Plant Pest Act, APHIS issues permits for the import and transport within the United States of plant pests and plants containing plant pests. In addition, APHIS licenses veterinary biological products, such as animal vaccines, to ensure that they meet agency standards for purity, safety and efficacy.

APHIS has two program offices: the Plant Protection and Quarantine Office and the Veterinary Services Office. The former deals with plant protection; the latter is responsible for animal protection. The agency's four regulatory analysts are lodged in the Policy Analysis and Program Evaluation Staff (the Policy Analysis Staff).

Because institutions lack a centralized nervous system steered by a single brain, institutional decisionmaking tends to be very different from individual decisionmaking. Most regulatory decisions are the products of numerous encounters between the various institutional entities that have roles to play in the decisionmaking process, and they therefore represent a synthesis of many views. A requirement that agencies prepare regulatory analysis documents does not by itself ensure that comprehensive analytical rationality will play a role in regulatory decisionmaking. Bulky analytical documents can be ignored by subordinate decisionmaking units, and upper-level decisionmakers in most agencies simply do not have time to absorb the contents of lengthy regulatory analysis documents. The documents themselves are likely to affect agency decisionmaking only to a very modest degree.

Yet, regulatory analysis requirements can influence agency decisionmaking in a more subtle fashion. Once the agency establishes a regulatory analysis office with an institutional stake in comprehensive analytical thinking, agency decisionmakers can adjust how that kind of thinking affects agency decisions by structuring the decisionmaking process to give that office greater or lesser prominence. Hence, to discover the real role that analysis plays in an agency, one must focus attention on the role of the regulatory analyst, rather than on the document that the analyst prepares. The role that the analyst plays will, to a very large extent, determine the degree to which analysis affects regulatory agency decisionmaking.

Chapter 11 describes several roles that regulatory analysts can play in the regulatory decisionmaking process and examines some of the advantages and disadvantages of each of those roles.

One response to the inevitable clash between techno-bureaucratic rationality and comprehensive analytical rationality is to capture the rivalry in an adversarial decisionmaking model. Under this model, each office is responsible for assembling its own information and analyses and for critiquing the information and analyses of the other office. Disagreements over facts, assumptions, inferences and policies are aired in an adversarial fashion, either by memoranda or orally, before the ultimate agency decisionmakers. The National Highway Traffic Safety Administration (NHTSA) in The Department of Transportation (DOT) has adopted a fairly pure version of this adversarial model. Two large offices within NHTSA – the Office of Rulemaking and the Office of Plans and Programs – play large roles in the internal rule development process. The agency leadership has made a conscious effort to play the two offices against each other until fairly late stages of the internal decision making process. Once the head of the agency has decided a question, however, all agency employees are expected to fall in line and provide support for the final decision.

The adversarial model in the National Highway Traffic Safety Administration

NHTSA was established in 1966 to establish safety standards for motor vehicles. The agency was later folded into DOT and was given responsibility for reducing the economic costs of automobile accidents and for promoting fuel conservation. The Office of Vehicle Safety Standards does the vast bulk of the agency's rulemaking work. It is made up of twenty-six Rulemaking Program Directors who prepare the Rulemaking Support Papers that provide the technical basis for the rules that the agency promulgates.

The history of the American political economy in the twentieth century is one of reform and reaction. During each wave of reform, an outraged public demanded legislation to cure past abuses. Sometimes Congress enacted direct legislation, such as antitrust laws, civil rights laws, and antiracketeering laws, that empowered courts to enforce vaguely articulated norms through private litigation. More often, Congress created regulatory agencies, which were supposed to be repositories of “neutral” expertise in public administration and other “scientific” disciplines, and charged them with advancing the “public interest.”

One of the brightest stars in the firmament of the Progressive Era legislation was the Federal Trade Commission, the protector of consumers and small businesses from monopolistic and unfair trade practices. Other agencies of the Progressive Era included the Interstate Commerce Commission, the first modern independent federal agency, the Food and Drug Administration, and the precursors of the Food Safety and Inspection Service in the Department of Agriculture. The New Deal reforms produced the Securities and Exchange Commission, the National Labor Relations Board, the Agricultural Marketing Service, the Agricultural Stabilization and Conservation Service, and the National Recovery Administration, the most ambitious and shortest-lived agency of them all. Most recently, the consumer and environmental movement of the late 1960s and early 1970s brought us the Occupational Safety and Health Administration, the Consumer Product Safety Commission, a rejuvenated Federal Trade Commission (the old one had grown quite moribund), and (another very ambitious creation) the Environmental Protection Agency.

The description in Chapter 8 of the virtues of regulatory analysis presents an ideal view of comprehensive analytical rationality. As might be expected, the ideal suffers considerably in the real world where values conflict, the available information is never adequate, and quantitative techniques encounter huge uncertainties. Many students of government urge instead more realistic notions of “bounded rationality”. Because analysis is expensive and information-intensive, decisionmakers, in this view, can only muddle through by exploring a very limited range of options, relying heavily upon intuition and “back-of-the-envelope” predictions, and hoping for rapid feedback to meet limited short-term goals. Critics maintain that politics is inseparable from bureaucratic decisionmaking, and purely instrumental techniques deprive it of an important democratic dimension. One prominent student of the bureaucratic process has observed:

Regulatory analysts react very negatively to such suggestions, arguing that an informed decision is always better than one made in ignorance. They argue that analysis enhances democratic accountability by forcing agencies to make explicit value choices. Yet, as a purely descriptive matter, the muddling through model often appears to fit the decisionmaking process better than the comprehensive analytical rationality paradigm.

The two primary sources of regulatory analysis requirements for federal agencies – the Regulatory Flexibility Act (RFA) and the Executive Orders – have envisioned a very modest role for regulatory analysis in judicial review of rulemaking. Both the act and the Executive Orders specifically preclude judicial review of an agency's failure to prepare a regulatory analysis document. Thus, the regulatory analysis requirement varies significantly from the environmental impact statement requirement, which spawned a decade's litigation over threshold questions.

When an agency does prepare a regulatory analysis document, its failure to comply with the criteria specified in the statute and the Executive Orders is likewise not subject to judicial review. In Small Refiners Lead Phase-Down Task Force v. EPA, the case in which the lead phasedown rulemaking described in Chapter 3 was reviewed, the court held that although the contents of the RFA could properly be scrutinized by a reviewing court as part of its substantive review function, the failure of an RFA to meet all of the statute's content requirements was not properly subject to judicial review. The court acknowledged that “in an appropriate case” a reviewing court could strike down an agency rule because of a defect in the RFA, but such a case would exist only when the defect in the reviewing court's analysis of the reasonableness of the underlying rule. Assuming that the Regulatory Impact Analysis (RIA), like the RFA, can be useful to the courts' substantive review function, this chapter will explore how the courts can put regulatory analysis documents to their best use.