How much is a human life worth?
In the Bush White House, John Graham decides.
As head of the Office of Information and Regulatory Affairs (OIRA) -- sometimes called the "regulations czar" -- he is one of the most powerful -- and least known -- officials in Washington.
Though he plays down his power and chafes at being called a czar -- "I can't just pick up the phone and say, 'Hey, do this' " -- Graham wields enormous influence as the arbiter of which rules need rethinking, which proposed rules need retooling, which areas of public interest need less regulation, which more. A single rule change could mean billions of dollars in added or reduced costs to industry and to consumers. It could also mean thousands of lives saved or illnesses averted.
As the Bush administration reviews a host of rules that businesses object to, and as public advocacy groups push for stricter oversight, debate has crystallized on the question: How does government balance saving money and saving lives?
Graham, intent on achieving a revolution in regulation, has a deep faith in the balancing of costs and benefits, risks and rewards. Those tools, used to some degree under the Clinton administration, have gained prominence in the Bush White House. But what Graham calls "sound science," environmentalists see as corporate coddling.
In December, the National Highway Transportation Safety Administration sent Graham what agency officials thought was a sensible plan to reduce the toll of vehicle rollovers. By requiring automakers to install "a direct" tire pressure warning system at a cost of $66.50 per vehicle, NHTSA said, the government could prevent 141 deaths a year.
Too costly and not enough safety, Graham said. And as the top regulatory official at the Office of Management and Budget, he sent it back to NHTSA in the form of a return letter, the administration's way of telling an agency its work doesn't pass muster. He suggested the agency also consider allowing an "indirect" mechanism, which works with the anti-lock brake system (ABS), that he estimated would cost consumers only $13.29 per vehicle and prevent 70 fatalities.
Liberal watchdog groups howled that Graham was putting the profits of automakers -- some of whom had contributed to his research in the past -- above lives.
"The bottom line is, what's more important: the cost factor or the lives saved?" said Gary Bass, executive director of OMB Watch, a nonprofit group that tracks the regulatory process.
But Graham argued that his proposal would, in the end, save more lives. His reasoning was that because a combined ABS-indirect pressure warning mechanism would make ABS seem a better bargain, more consumers would buy that system, and then, by his staff's reckoning, as many as 336 deaths per year would be avoided.
His rejection of the NHTSA regulation -- a reworked version is expected soon -- has outraged consumer advocates. They say Graham emphasized cost-benefit calculations to the exclusion of other considerations. They take issue with his numbers, pulling contrary conclusions from the same Insurance Institute for Highway Safety report he cited, and they say his alternative allows a less reliable system that often fails to warn drivers.
Joan Claybrook, president of Public Citizen, said Graham's position was influenced by the hundreds of thousands of dollars the auto industry gave over the last decade to a think tank he founded, the Harvard Center for Risk Analysis. Contributors included General Motors Corp., Ford Motor Co., Volvo Car Corp. and the Alliance of Automobile Manufacturers.
Graham, however, says he is committed to practicing the science he preaches, even if it means rejecting agencies' work. He sees his use of return letters as evidence of his commitment.
"I try to write them so they are analytically grounded, not making aspersions about the general competence of the agencies," he said. "But I feel that it is important to articulate what you stand for. If you don't speak publicly, then what do you stand for? Then people say, well, it's probably just politics, the interest groups, the mysterious deals."
His willingness to take on agencies -- so far Graham has issued 17 return letters, while the Clinton administration in its last three years sent none -- has drawn accolades from business groups and criticism from consumer groups.
"Is John Graham a breath of fresh air? Of course," said Andrew Langer, manager of regulatory policy at the National Federation of Independent Business. "For the first time, he's trying to hold the agencies' feet to the fire. . . . He is really bringing a sense of science to the creation of a sound regulatory state."
But Wesley Warren of the Natural Resources Defense Council, a former Clinton OMB appointee, sees Graham's office as a sophisticated version of Vice President Dan Quayle's effort, during the administration of President George H.W. Bush, to end rules considered harmful to economic efficiency.
"The White House, through OMB, is going to be substituting its expertise, which is more political instead of substantive, in directing the priorities of the agencies," Warren said.
Graham grew up in Pittsburgh and went to college at Wake Forest University, where the undergraduate, drawing on Insurance Institute for Highway Safety data, became convinced that the free market alone would not ensure that consumers would clamor for lifesaving devices. At Duke University, his master's thesis adviser showed him how the government invested far more to cure chronic diseases than to prevent deaths and injuries from fires, car accidents and falls.
While working at Harvard, Graham lived in the Democratic enclave of Wellesley, Mass., but in 2000 he was a donor to Elizabeth Dole's presidential campaign. He thought that would end any chance he had of working for President Bush, but OMB Director Mitchell E. Daniels Jr. called on New Year's Eve 2001 to ask him to join the team.
John Cogan, a Hoover Institution fellow who served on Bush's transition team, said Graham's name topped his list because he was not only a "careful scientist," but also someone who could establish a process involving open communication with the agencies, stakeholders and Congress.
He "cannot be pigeonholed as 'conservative' or 'liberal,' " said Cass Sunstein, a University of Chicago law professor who has worked with him. "He's a technocrat in the best sense. . . . Here is someone who really wants government resources to go to serious problems, rather than trivial problems.' "
Activists, however, warn that Graham could do some real damage to the environment. Last week, his office signed off on a rule proposed by the Environmental Protection Agency that will let companies dump waste from mountaintop coal mining operations into rivers and streams. The rule reached OIRA that Wednesday. It went to the Federal Register for printing that Friday.
"We were amazed at how quickly OMB turned this around under Mr. Graham, who claims to be interested in careful review of the costs of regulation to society and in sound science," said Joan Mulhern, a lawyer with Earthjustice, a public interest law firm. "Because it was a gift to industry, it was rubber-stamped in record time."
Yet Graham has taken some environment-friendly steps. In 1990, he urged Congress to introduce controls on indoor air pollution. In his 1997 book, "The Greening of Industry," Graham showed how risk analysis supports regulation of emissions of lead in gasoline and other pollutants. Last month, his office cleared a proposed EPA rule on motorcycle tailpipe emissions.
He also has created the "prompt letter," to urge agencies to issue rules -- for instance, to regulate transfatty acids in food. And he posts transcripts of his speeches and schedules of who he meets with on OIRA's Web site.
"That's the challenge I saw coming into this administration, was to try to create an environment in which people saw the OIRA office as standing for certain principles of science and analysis, and not either an ideological or political hammer," he said.
Graham enjoys support from some liberal Democrats, such as Sen. Carl M. Levin of Michigan, a senior member of the Senate Governmental Affairs Committee. Levin has accused Graham's critics of distorting his record. He said he backed Graham's cost-benefit approach because "while I believe government can make a positive difference in people's lives, I also know that government can waste money on a good cause."
Sally Katzen, who served as Clinton's OIRA administrator, warned that lack of analysis may be an excuse for not regulating. "Good science is good," she said. "But when is good science good enough? Thirty years ago people thought we had very strong science linking cigarette smoke and lung cancer and heart disease, but some industry scientists disputed that. So at what point is the science good enough?"
Ultimately, what Graham says he seeks is cost-effectiveness. "We don't want to invest extravagantly for small safety gain when we could have achieved much more lifesaving through a different investment," he said.