New CPR Papers on Dysfunctional Regulatory Agencies, Costs of Delayed Regulations, and Moving Beyond Cost-Benefit Analysis

Matthew Freeman

Oct. 30, 2009

One of the great political communications successes of the past 30 years has been the right wing’s relentless assault on the American regulatory system. Think of the words and images that have come to be associated with “regulation” in that time: red tape, bureaucrats, green eye shades, piles of paper stretching to the ceiling, and more. And the approach has worked – remarkably well, in fact, given the compelling imagery on the other side of the ledger:  children left to play in unregulated polluted waterways, power plants belching smoke into the air we breathe, foods that poison and drugs that induce heart attacks. Imagine if the producers of campaign commercials decided to dig into that Pandora’s Box of images!

Most of the attention that the regulatory system draws focuses on individual skirmishes – a fight over how and to what extent to regulate mercury, for example. Many of those are important fights, to be sure. But if it were possible to draw the camera back and take a snapshot of the entire regulatory structure in the context of its statutory mandate to protect Americans from health and safety hazards, and to protect the environment from abuse, the dynamic would look very different.

Viewed from that distance, each of the recent incidents of large-scale regulatory breakdown – peanut butter, spinach, Vioxx, rollover-prone SUVs, excessive air pollution, inaction on the very real challenge of mercury pollution, and only now the beginnings of action on climate change – each of these examples contributes to a much larger and often untold story: The regulatory system isn’t really working all that well. It’s had prominent successes – removing lead from gasoline, for example, and forcing automobile safety measures on a reluctant industry, to name just two.

But if we believe Congress meant what it said in the various “protective” statutes that the regulatory agencies enforce, we must conclude that the agencies are earning mediocre grades at best.

In a series of three white papers released this morning, CPR Member Scholars Catherine O’Neill, Sidney Shapiro, Amy Sinden, and Rena Steinzor, together with Policy Analysts James Goodwin, and Yee Huang take on three different aspects of what’s wrong with the federal regulatory system. They note that many of the agencies are simply dysfunctional – underfunded, beset by political interference, and operating under statutes written decades ago with a different set of problems in mind. They point out that the glacial pace of promulgating regulations exacts a profound toll, highlighting, among others, a regulation covering mercury pollution that has been in the works at EPA for almost two decades, while unchecked mercury pollution caused brain damage in hundreds of children each year. Finally, they call for the end of the reliance on cost-benefit analysis as the government’s principal means of regulatory impact analysis, urging instead the use of Pragmatic Regulatory Impact Analysis—a method that starts with the actual text of the statutes, rather than with the habit-forming reliance on cost-benefit analysis, a method imposed years ago by a White House bent on deregulating everything in sight.

The papers cover several of the key issues at stake in the regulatory arena, and while the Member Scholars are critical of the current state of regulatory affairs, the white papers, taken together, might reframe the issue. If the Obama Administration is to make good on its commitment to tighten up the regulatory system, better that the discussion be about how to prevent pollution and guard against hazards on the job than about how to make sure industry isn’t the slightest bit inconvenienced by health, safety and environmental standards.

Read more about the white papers, here.

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