The Precarious Legality of Cost-Benefit Analysis
Cross-posted from Legal Planet.
Cost-benefit analysis has become a ubiquitous part of regulation, enforced by the Office of Management and Budget. A weak cost-benefit analysis means that the regulation gets kicked back to the agency. Yet there is no statute that provides for this; it’s entirely a matter of Presidential dictate. And reliance on cost-benefit analysis often flies in the face of specific directions from Congress about how to write regulations. There are a few exceptions, such as regulations involving pesticides, bans on toxic substances, and thermal water pollution, where Congress called for EPA to balance costs and benefits equally. But almost all environmental laws direct agencies to use some standard other than cost-benefit analysis. The statutes generally place a greater weight on environmental quality and public health than on cost.
For example, it’s fairly obvious that Congress did not contemplate much of a role for cost-benefit analysis when it passed the Clean Air Act. Some key provisions of the Act are based completely on health risks and do not allow consideration of costs. When costs are a factor, Congress carefully specified factors to be taken into account and provided different standards for different situations. All of the …
CPR President Rena Steinzor had an op-ed in The Hill yesterday, dismantling right wing arguments about "excessive" regulation, and shaming the White House Office of Information and Regulatory Affairs for sitting on rules long past their required deadlines.
Noting just some of the now-taken-for-granted results of safeguards that were regulated into existence -- things like clean tap water, safe and effective drugs, and safety belts in automobiles, she points out that opponents of regulation are working hard to turn back the clock, producing proposal after proposal to further hamstring enforcement of laws like the Clean Water Act, the Clean Air Act, the Occupational Safety and Health Act, and more. She dismisses the right wing's argument that there's some sort of tsunami of regulation coming from the Obama Administration, noting that fewer regs were adopted in 2012 than in any single year of the Bush Administration. And …
Dear Cass:
As you know, we picked a spat with the Office of Information and Regulatory Affairs (OIRA) last week over Randy Lutter’s supposedly temporary detail appointment to your office. It’s not the first time we’ve criticized the workings of OIRA, and almost certainly won’t be the last.
I’ve spoken to a number of people in the media and elsewhere who have expressed surprise that progressive organizations like CPR are such relentless critics of a progressive Administration. I’m sure Administration officials feel this frustration as well. That dynamic is at work in OIRA’s case because you have a reputation as a progressive thinker on many issues.
I won’t try to speak for all progressives, but I can assure you that very few of us criticize the Administration lightly. Nor do we do it with any sense of pleasure. The …
As reporters dug deeper on our post yesterday about the return of Randy Lutter, chief economist at the Food and Drug Administration (FDA) under the George W. Bush Administration, to “regulatory czar” Cass Sunstein’s office, OMB spokesman Tom Gavin worked to downplay the significance of Lutter’s reappearance. Gavin confirmed that Lutter was in fact ensconced in OIRA, as reported by Inside EPA this morning, but said he was merely “on detail” from the FDA as a career civil servant who would report up the chain of command to Sunstein. The implication, of course, is that Lutter would have little influence on policy.
How heartwarming that argument must have been for civil servants at OIRA and elsewhere. As my colleague Sid Shapiro and I argue in a forthcoming book (The People's Agents and the Battle to Protect the American Public, arriving in spring), civil servants are …
For a number of days now, we’ve been hearing rumors that Cass Sunstein, President Obama’s “regulatory czar,” was on the verge of hiring conservative economist Randall Lutter to join him at the Office of Information and Regulatory Affairs (OIRA). Few personnel developments could be more discouraging to those hopeful that the Obama Administration will fulfill its many commitments to revitalize the agencies responsible for protecting public health, worker safety, and natural resources.
The best thing that can be said about the prospect of hiring Randall Lutter, a Cornell-educated economist who cut his teeth at the American Enterprise Institute (AEI), is that he is a straightforward traditionalist. No “soft” or “humane” cost-benefit analysis for him, he likes his de-regulatory policy nice and raw. Lutter was the senior economist at the benighted Food and Drug Administration during the George W. Bush Administration, and now he brings his …
Perhaps caught up in the spirit of the holiday shopping season, a large number of industry bargain hunters have been busy seeking great deals on regulatory relief at the White House's Office of Information and Regulatory Affairs (OIRA) in recent weeks. To be precise, the bureau hosted no fewer than 11 meetings with corporate interests regarding seven different regulatory issues between November 4 and November 16.
The meetings covered a range of topics. One meeting saw representatives of Shell Oil Company complaining about EPA’s proposed rule on fuel and fuel additives under the renewable fuel standards program mandated by the 2007 Energy Independence and Security Act. In a second meeting, representatives of the beef and poultry industries met with OIRA officials to attack a proposed Department of Agriculture rule regarding nutritional labels for their products. Other meetings concerned NHTSA’s updated CAFÉ standards; EPA’s rule …
This morning, Toyota Motor Corporation announced it intends to replace accelerator pedals on about 3.8 million recalled vehicles in the United States because the pedals can get stuck in a floor mat. But the recall could still leave more than a million faulty cars on the road.
As I wrote earlier, there had been over 2,000 reports from the owners of Toyota cars that they have surged forward without warning reaching speeds of up to 100 miles per hour. NHTSA has investigated Toyota for runaway cars on eight separate occasions, but the agency only ordered two small recalls, which addressed floor mats and carpet panels. It is not apparent why the agency did not act more forcefully, and Congress should investigate that.
A problem with relying on recalls, as NHTSA often does to correct safety defects, is that not all vehicle owners will have the …
The Obama Administration is expected to issue revisions to Executive Order 12,866, which specifies how the White House Office of Management and Budget (OMB) supervises federal regulatory agencies as they develop regulations to protect health, safety, the environment, and more (see the full comments on the matter submitted by CPR's board members in March).
CPR President Rena Steinzor and Board Member Rob Glicksman have issued a backgrounder on the coming Executive Order -- explaining the context and setting out six specific criteria on which to judge the Order. They are:
- Does the new EO continue to require agencies to justify proposed rules by quantifying “benefits” in dollar terms only – thus inviting agencies to ignore benefits that defy such monetization?
- Does the new EO continue to apply a “discount rate” to benefits of regulatory protections that won’t be realized for several years to come? And if it …
The National Highway Traffic Safety Administration (NHTSA) recently chastised the Toyota Motor Company for claiming that no defect existed in its cars, even while recalling 3.8 million of them. Toyota instituted the recall one month after a Lexus sedan suddenly accelerated out of control killing four people near San Diego. When Toyota blamed the problem on improperly installed floor mats, NHTSA said it expected the company to provide a “suitable vehicle solution.” The company then said that it was working on “vehicle-based remedies” for the problem.
Government regulators have two methods of promoting safer cars. NHTSA can adopt binding regulations requiring car manufacturers to adopt safety equipment, such as airbags. But Congress also authorized the agency to order a company to recall defective cars. In light of this authority, companies will voluntarily engage in a recall, as Toyota has done. According to news reports, there had …
When the Electric Power Research Institute (ERPI)—the research arm of the U.S. power industry—met with OIRA last month to discuss the various “beneficial uses” of spent coal ash from power plants, their timing was impeccable. Or so it would seem. On the day of the meeting, October 16, EPA submitted for OIRA review its pre-rule proposals regarding the regulation of coal ash disposal under the Resource Conservation and Recovery Act (RCRA). In reality, the meeting demonstrates how eager regulated industries are to air their complaints to OIRA on rules they dislike, or in this case, expect to dislike. The industry’s lobbyists earned their paycheck this time around, getting in to see their traditional champions at OIRA to lay the groundwork for protesting a rule that has not yet even reached the notice-and-comment stage of rulemaking.
Coal ash comprises all the solid waste that …
