POLITICS and GOVERNMENT
George Shultz and the History of Centralized Rulemaking
Many have eulogized George Shultz — who died this weekend at age 100 — as a voice of moderation and diplomacy, a careful stateman who checked more extreme views in the Reagan White House. He surely was those things and had a distinguished career that spanned several wars and numerous presidents.
But it’s Shultz’s less well-known role in the decidedly immoderate federal move to centralize rulemaking review that is also important to reflect on today. That is because of the Biden administration’s recent move to upend and modernize regulatory review.
On January 20th, President Biden issued a memorandum to:
“ensure that the review process promotes policies that reflect new developments in scientific and economic understanding, fully accounts for regulatory benefits that are difficult or impossible to quantify, and does not have harmful anti-regulatory or deregulatory effects”
including an effort to “promote public health and safety, economic growth, social welfare, racial justice, environmental stewardship, human dignity, equity, and the interests of future generations.”
This is a significant move to redirect a federal practice that can be traced to George Shultz.
Though it has become commonplace to track the centralization of regulatory review in the Office of Information and Regulatory Review (OIRA) and imposition of a strict cost-analysis standard on new regulations to the Reagan administration, those who were around at the time say it happened much earlier.
Jim Tozzi — who was central to the formation of OIRA and later directed the office — wrote a telling history of these issues in 2011 for the Administrative Law Review. In Tozzi’s estimation, this new and radical direction in federal rulemaking goes back — not to 1980 — but to the final days of the Johnson administration and an important letter written by George Shultz during Nixon’s presidency.
Recall, it was President Nixon who signed the National Environmental Protection Act (NEPA), a major boost in federal protection of the environment from…