Last week I spoke at a meeting of the American Bar Association’s Science and Technology Committee. While the topic was the use of cost benefit analysis in formulating regulatory policy, the question I put on the table for discussion is whether the benefits of multi-member independent agencies outweigh the costs. This is an issue that I have been thinking about for some time. Based on my experience at the CPSC, I question whether these agencies really deliver to the public any better results than those headed by a single administrator.
The theory behind multi-member independent commissions is that with bipartisan members serving a term of office and who can only be removed for cause, the rules coming out of such commissions will be qualitatively better and have bipartisan legitimacy. The reality is that the work product is not necessarily bipartisan and indeed, at the CPSC, has been very partisan. Nor, I would submit, are the rules from independent agencies substantively different or “better” than those coming out of agencies with single administrators, but those rules have substantial process-based costs.
What are those costs? For starters, each commissioner’s office and staff consume approximately $1 million, adding up to almost $5 million annually. While for some agencies that is insubstantial, for the CPSC, with a budget of $108 million, that means almost five per cent of the agency’s budget is spent on housing, staffing and paying for commissioners. But beyond just that obvious cost, there are significant costs associated with a top heavy management system. For example, senior staff spend hours each week briefing commissioners in repetitive one-on-one meetings. Having multiple commissioners also generates controversy where it might not otherwise exist. For example, we have seen the agency start down a path, only to have a commissioner change his mind and, hence, change policy direction of the agency with significant burdens being placed on those who relied on the earlier policy. As another example, commissioners and staff spend hours grappling with whether an issue is administrative in nature, and can be decided solely by the chairman, or whether the issue presents policy questions and therefore must be presented to the commission for decision.
Given these and other costs, would not a single administrator do better? A single administrator would be charged with following broader administration policy and there would be clear accountability for agency decisions. Such a change would avoid the costs of “collegial” decision-making. With respect to the quality of decisions, with good data, the regulatory results would likely be as good as, if not better than, those coming out of a commission. And if they were not, it would be an easy task to fix responsibility.