by Nina Hart
Notice and Comment
Blogger Nina Hart recently had the opportunity to interview Sally Katzen, the
former head of the Office of Information & Regulatory Affairs (OIRA) during
the Clinton Administration. Below she
shares insight on her administrative law experience and lessons in leadership.
An Unexpected Path
Sally Katzen says
that her path to law school began unexpectedly.
“I wanted to be a math major at Smith College,” she recounts, but the
College refused to give her credit for her AP Calculus class. “I was bored, so I went casting about for other
things.” She settled on Government 101,
and liked her professor so much that she enrolled in his Constitutional Law
course. Even with this burgeoning
interest in the law, Katzen recounts that the details of why she decided on law
school are a bit fuzzy. “My senior year
in college, on my 21st birthday, President Kennedy was assassinated, and
apparently over the weekend I applied to law schools.”
Katzen graduated
from the University of Michigan Law School, and spent one year clerking for Judge
J. Skelly Wright of the U.S. Court of Appeals for the District of Columbia
Circuit. After that year, she went to
work for what was then the small firm of Wilmer Cutler & Pickering. Here, she began developing an expertise in
both economics and administrative law.
“The firm did a lot of communications law, and I was fortunate to spend
a lot of time representing CBS and the Communications Satellite Corporation,”
Katzen says. “I drafted comments and
participated in hearings at the FCC.”
After working on a
number of cases before the FCC, Katzen branched out to appear before other
agencies as well, such as the Civil Aeronautics Board and the Interstate
Commerce Commission. “After a series of
adventures [before the FCC],” Katzen notes, “it was relatively easy to work on
matters before other agencies”; their procedures are very similar, so it was
simply a matter of learning new subject matter.
One of the most prominent cases she worked on was United States v. Allegheny-Ludlum Steel, which was the companion to
the well-known case United States v.
Florida East Coast Railway Co.
During this period
Katzen gained her reputation as an administrative law expert, which led Alfred
Kahn, Chairman of the Council of Wage & Price Stability, to offer Katzen
the position of General Counsel for the Office.
As Katzen describes it, her function “was to administer a program run by
economists,” which led her to “learn an enormous amount about incomes policy in
a very short period of time.”
It was in this
position that Katzen first came into contact with the ABA Section of
Administrative Law & Regulatory Practice.
After the Council of Wage & Price Stability released its draft
procedures for the program, Katzen learned that the Section’s Executive Council
was going to vote on a resolution condemning the procedures. “I took this personally because I had drafted
the procedures.” So, Katzen requested
and was granted an opportunity to defend her program before the Executive
Council. Recalling the meeting, Katzen
said that she was “very impressed” with the questions and engagement of the
Council. Her presentation must have
impressed the Council as well—after leaving the Carter Administration, Katzen
was asked to join the Executive Council, and served as both an Officer and
Chair.
During the 1980s,
after Katzen had returned as a partner to Wilmer, OIRA’s visibility and
political salience grew. In fact, the
Office’s activities became an issue during the 1992 presidential campaign after
congressional leaders threatened to defund the agency for lack of transparency
and allegedly favoring business interests.
Katzen served as a surrogate for the Clinton campaign on the issue, and,
after being asked if she would like to serve in the Administration, jumped at
the chance to lead OIRA.
Lessons in
Leadership
“I believe in
OIRA,” says Katzen. “If OIRA did not exist,
any sensible president, Republican or Democrat, would have to invent it.”
Katzen’s view stems
from the basic reality that regulations often have unanticipated consequences. OIRA can mitigate those consequences and
promote sensible regulation through two means.
First, agencies are required by Executive Order to perform cost-benefit
analyses (CBA) for certain regulations, and OIRA reviews agency compliance with
this requirement. Second, OIRA facilitates
the interagency review process, which occurs when OIRA receives draft regulations
and distributes them to all other interested agencies. This multi-agency review simply “makes sense
when you have a single president responsible for the whole Administration,” Katzen
says. Moreover, this interagency review
“is essential today when no problem is one-dimensional.” Describing this regulatory spillover, Katzen remarked,
“I remember chairing lots of meetings where someone said, ‘It’s not that you’re
invading our turf, but this is going to have an effect on our programs.’ Labor or Treasury might say, ‘before you do
this, you have to understand the implications of this for the workforce or for
the industry.’ Another agency might say ‘we’re attacking the same problem but
doing it in a different way; shouldn’t we try to coordinate?’”
Despite the
benefits associated with OIRA review, Katzen says there are challenges. First and foremost, the agencies lack sufficient
resources, which impairs their ability to carry out their statutory
mandates. Katzen attributes this largely
to the current political climate and lack of understanding that the public has
for what the agencies actually do. “We
have run from government, at least the federal government,” Katzen says. In polls, the public responds favorably to reducing
the size of government, but when asked about whether individual programs ought
to be cut, the resounding response is, “no.”
There is a strong sentiment against government-managed health care, but
seniors love their Medicare; people are often put off by government providing
benefits, but farmers love their crop insurance and hurricane victims love
their loans or grants; people don’t want the federal government in their businesses,
but they invariably support food labeling, FDA testing before a drug goes on
the market, and USDA meat inspections. And
even those people who acknowledge support for some or many government programs
often do not translate that to respect for the people who are working in
government. Rather than appreciate the
dedication and public service of the government employees, the public focuses
on “bureaucrat bashing.” “Bureaucrat has
become a bad word,” Katzen says. “I
think it should be taken off the books.”
A second shortcoming
of the current system is that centralized review does not extend to independent
regulatory commissions (IRCs). Katzen
said that although she initially supported this distinction between executive
agencies and IRCs, “In retrospect, I think it was the wrong decision. There are aspects of IRCs that are very
different from executive branch agencies, and I respect those. But when they do rulemaking they are doing
the same kind of processes.” Undertaking
adequate CBA for rulemaking is a discipline that the agencies subject to OIRA
review have learned over time. However, the
IRCs have not been forced to learn, and also may not have the incentive to do
so. As Katzen says, “they too are
strapped for resources and do not have unlimited funds, so if they don’t have
to undertake CBA, they won’t. As a
result, I think the work product suffers,
but it may or may not be because they don’t have the capacity; they may just
not have the will.”
Apart from these systemic
challenges, ensuring efficient and sensible regulation will depend, to an
extent, on the relationships that exist between OIRA and the agencies. As Katzen noted, “At any moment of time, the relationships
can be very different.” This is because good
relationships depend on good communication, which in turn depends on the
personalities involved. Thus, for
Katzen, approaching agencies with a collaborative mindset and openness is important. Katzen explained, “It’s the agencies that read
the comments and deal with the stakeholders every day. And here comes these people at OIRA who don’t
have that background, who are suggesting changes and appear to be second-guessing.” Due to this potential for resentment, “how
those views are communicated and when can make a big difference.”
Thus, there are two
ways for an OIRA Administrator to approach the agencies. One way, is to say, “This is the right way;
take it or leave it.” As Katzen noted, this
attitude prevailed during the Reagan-Bush years. “When I first arrived [at OIRA] I heard a
great deal about the tension, suspicion and hostility that existed between OIRA
and the agencies.” Katzen rejected this
approach, and, instead, focused on reaching out to the agency heads and their
staffs. As each agency head was
confirmed, Katzen invited him or her to lunch.
In her candid way, she would say, “‘You are going to hear that my staff
or I did something which you will not believe. And it’s not believable because it’s probably not
true. I will hear from my staff that you
or your staff did something unbelievable, and, again, it’s not believable because
it’s also probably not true. So if you
hear something like that, pick up the phone and call me. We are trying to make sure that you can
achieve your objectives in the most efficient and effective way possible; we’re
on your side.’” In addition to reaching
out to the agency heads, Katzen traveled to each agency to speak with the
staff. “I said, ‘this is who I am. I don’t have horns. I admire and respect you. I want to work with you.’” Katzen’s approach took some agency officials
by surprise, but helped facilitate productive communications and productive
relationships.
The ability to
communicate and work well together could yield positive results. Katzen recounted an instance when the FDA wanted
to revamp its regulations on seafood safety.
At the time, the USDA had multiple inspectors in each meat plant, but seafood
plants were visited rarely and only by a single inspector. To rectify the disparity, the FDA came up
with a complicated inspection regime, and presented it to OIRA very early in
the drafting process. Katzen’s staff listened
and then suggested that the FDA consider a performance-based approach, which
became known as the Hazard Analysis & Critical Control Points (HACCP) plan. HACCP requires manufacturers to identify
points at which there are risks or hazards, and present a way to resolve it;
for instance, if something must be frozen, then the temperature must always be
below 30-something degrees. The FDA agreed
to pursue the HACCP approach, and undertook the requisite notice-and-comment
procedures. Katzen concluded, “I
remember the day the final rule was released, the head of the FDA called me to
say, ‘I just saw the headlines on the editorial page of a Seattle newspaper—‘FDA
Issues Sensible Regulations.’ From that
moment on, our relationship with the FDA was different than it had been because
they understood we could be a friend, a helper.”
Preparing the Next
Generation
Katzen spent five
years as Administrator of OIRA. During
the Clinton Administration she also served as Deputy
Assistant to the President for Economic Policy; Deputy Director of the National
Economic Council; and Deputy Director for Management in the Office of
Management and Budget.
Today, Katzen is
passing on her expertise to students at New York University School of Law. In the fall, she co-teaches a clinic with Bob
Bauer in Washington DC. The clinic places
students in government agencies, and focuses on the role that lawyers play in
government as well as how various offices interact with Congress. In the spring, she teaches Legislation &
the Regulatory State, a 1L requirement that introduces students to statutory
interpretation and the workings of the administrative state.
