The Rule Czar's Balancing Act

David Vladeck, a law professor at Georgetown University who has litigated dozens of worker health and safety cases for Public Citizen and other groups, also voiced concern.

"There is a lot of fear that he is a John Graham in progressive garb," Vladeck said. "But there is a huge difference from looking at something from an academic perspective and as a regulator."

John Graham, who ran the Office of Information and Regulatory Affairs from 2001 to 2006, centralized review of rules in the White House; used financial analysis aggressively; and locked horns continually with liberal-minded public interest groups, particularly on environmental issues.

Graham, now dean of the Indiana University School of Public and Environmental Affairs, said Sunstein is an innovator in applying cost-benefit analysis, taking into account the environment and low-income populations. "He cares deeply for the president's need for leadership in regulatory policy," he said

Sunstein's wrote a book in 1990 called "After the Rights Revolution: Reconceiving the Regulatory State," which talks about the superiority of regulation to free market economics.

Another book, "The Second Bill of Rights: FDR's Unfinished Revolution and Why We Need it More Than Ever," may explain another connection to Obama. The title is a reprise of Roosevelt's call for government to provide economic security, a theme that runs through the president-elect's remarks on the U.S. economy.

Obama will have several ways to undo so-called midnight rules issued by the Bush White House, including freezing those in the pipeline, quickly issuing interim or new rules to override the Bush products, and putting a moratorium on rules -- as Bush did when President Clinton left office.

In addition, Congress can block funding to enforce rules or dust off a congressional review law to kill them.

"This is an intellectual giant," Gary Bass, head of OMB Watch, said of Sunstein. "I want to give him an opportunity to hear his viewpoints."

Bass said the litmus test will be whether Sunstein can reconcile what he has said on paper with the new president's professed agenda to overhaul the regulatory system to address workplace, environmental, consumer and financial protections.

Cindy Skrzycki is a regulatory columnist for Bloomberg News. She can be reached at cskrzycki@bloomberg.net.