In testimony before the Senate Committee on Homeland Security and Governmental Affairs in mid-April, Cass Sunstein, Administrator of the White House’s Office of Information and Regulatory Affairs (OIRA), was asked to comment on a much-disputed $1.75 trillion estimate of the annual cost of federal regulations. The number comes from a report commissioned by the Small Business Administration’s Office of Advocacy, often referred to as the Crain and Crain report, for its authors. The $1.75 trillion estimate is grossly at odds with OIRA’s own calculations, but it has been widely bandied about by anti-regulatory advocates on the Hill. Sunstein might well have been expected to knock the question out of the park back in April, but the bat never left his shoulder. “I haven’t studied that document with care,” he said (see 63:50 – 66:43 in the video archive of the …

It's their favorite figure: $1.75 Trillion. Repeated ad nauseam in congressional hearings by members of congress and expert witnesses alike, it is the supposed annual cost of regulations, this according to a study from last year commissioned by the Small Business Administration's Office of Advocacy. Sponsors of anti-regulatory legislation like the number: Olympia Snowe and Tom Coburn included it in the 'findings' of their bill, while Geoff Davis, chief sponsor of the REINS Act, cites it regularly. It's been used by John Boehner and Eric Cantor, and House committee chairs Fred Upton, Darrell Issa, Lamar Smith, and Sam Graves. Conservative think tanks like the Competitive Enterprise Institute and the Heritage Foundation are fond of it. A few Democrats have gotten in on the act, too: Mark Warner, proponent of his own anti-regulatory plan, has cited it, as has Nydia Velazquez, Ranking Member of the House Small …

Claudia Rodgers, Deputy Chief Council for the Office of Advocacy at the U.S. Small Business Administration, testified earlier this month at a hearing conducted by a House Oversight and Government Reform sub-committee. The session ("Assessing The Impact of Greenhouse Gas Regulations on Small Business") was a sparsely attended affair on all sides of the room. But something important happened.

Rep. Jackie Speier asked Rodgers a series of questions (at 1:03:30 in the video) about the Office of Advocacy’s oft-cited report from September, by economists Nicole Crain and Mark Crain, which claims that the cost of regulations in the U.S. in 2008 was $1.75 trillion dollars. Representative Speier cited CPR’s recent report debunking the study. In response, Rodgers mostly gave little new information, telling Speier she'd get back to her. But then there was this:

Rep. Speier:

... Ms. Rodgers, does your …

When the U.S. Small Business Administration issued a study last September claiming regulations cost the U.S. economy $1.75 Trillion in a single year, the agency trumpeted that the "report was peer reviewed consistent with the Office of Advocacy’s data quality guidelines."

But the peer review file included with the study was embarrassingly meager -- comments from all of two individuals. The authors, economists Nicole Crain and Mark Crain, ignored a fundamental criticism raised by one of the two reviewers that struck at the very heart of their estimates of economic regulatory costs. The second reviewer's complete comment had the sort of casual quality to it that suggested a somewhat less than thorough review. The review, in its entirety: “I looked it over and it's terrific, nothing to add. Congrats."

When CPR Member Scholars issued a report in February critiquing SBA's study, they …

Not to be outdone by the Small Business Administration’s aptly named Office of Advocacy, the Chamber of Commerce has issued its own breathless report on how many jobs we could save if we did away with environmental, land use, and utility regulations. Crunching a bunch of dubious numbers, the SBA Office of Advocacy’s consultants, Nicole and Mark Crain, claim that regulations cost $1.75 trillion a year, a number several of my CPR colleagues thoroughly debunked in a report issued in February. Undeterred and not to be outdone, the Chamber’s feverish Project No Project, released yesterday, claims that citizen opposition to polluting plants combined with “excessive” government permitting requirements to deny the economy a “$1.1 trillion short-term boost” and “1.9 million jobs annually.”

The premise of the Chamber’s report is that if busybody neighbors and fussy regulators would just get out …

Having voted to repeal health care legislation, House Republicans have now taken aim at government regulations, describing efforts to protect people and the environment as “job-killing.”  This claim conveniently papers over the fact that it was the lack of regulation of Wall Street that tanked the economy and caused the current downturn.  But nonetheless, seeking rhetorical points to boost their anti-regulations campaign, House Republicans are trumpeting a recent report, done for the Small Business Administration’s Office of Advocacy. The report, authored by Nicole Crain and Mark Crain, claims that regulation cost the U.S. economy $1.75 trillion dollars in 2008. Upon examination, it turns out that the estimate is the result of secret calculations, an unreliable methodology and a presentation calculated to mislead. 

Crain and Crain’s $1.75 trillion estimate is far larger than the estimate generated by the Office of Management and Budget …