All federal agencies should make sure their regulations are the right solutions


When you were in grade school, you probably had a math teacher who insisted that you always show your work. Instead of simply writing your answer, you had to detail how you arrived at it. The idea was that by seeing your process, your teacher could see where you made any mistake and help you correct it. The same principle applies in government.

Sens. Rob Portman (R-Ohio) and Mark Warner (D-Va.) are championing bipartisan legislation that would authorize the president to require independent regulatory agencies like the U.S. Consumer Product Safety Commission (CPSC) to go through the same kind of economic analysis and review that executive branch agencies already use. (Independent agencies are insulated from direct presidential control, unlike executive agencies, which report to the president.)

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The bill would direct agencies to weigh the costs and benefits of any proposed rules and submit them for a check by the administration’s Office of Information and Regulatory Affairs (OIRA). This idea has bipartisan support from numerous current and former officials at independent regulatory agencies and from the American Bar Association. Even so, it draws the ire of some of my colleagues, who see it as a “burdensome” speed bump in the regulatory road.

I see these ideas as reasonable ways to ensure our regulations are making life better for the taxpayers who fund them. One of our paramount obligations as regulators is to do more good than harm, to restrict choice and increase cost no more than is necessary to improve consumer health and safety.

The best way to meet that obligation is to use the analytical tools we have available, including cost-benefit analysis. Further, OIRA review can be a vital crosscheck to make sure we’ve got our math and reasoning right, as it is for executive branch and some independent agencies, such as the Commodity Futures Trading Commission, which has begun voluntarily submitting some of its key rules for review.

Opponents of this analysis and review argue it’s too time-consuming. But the notion that it takes too long to consider and review the costs and benefits of our ideas both overstates the time necessary to do so and misstates the nature of our mission.

True, walking through the clearly defined elements contained in the order that requires executive agencies to analyze costs and benefits would not be instantaneous, nor would having OIRA check our work. But to characterize this process as stalling regulation is inaccurate.

Executive agencies, already subject to this order, still issue rules, and they do so with greater confidence that their rules make sense and have the best possible chance to succeed. (And, sometimes, rules that cannot be justified are stopped before they have the chance to wreak havoc.)

Any additional time the process requires is not wasted time. It’s a moment to reflect on how what we want to do fits in with the market segment we’re trying to regulate and the economy at large, that the costs imposed are balanced or, better yet, outweighed by the benefits created. When we skip that reflection, we can only hope and intuit about the chances we are — or aren’t — solving a problem bigger than the ones we create.

Every step in the regulatory process is an opportunity to improve the quality and reliability of our product. We could have a regulatory scheme in which agency heads simply enacted whatever they felt to be a good idea, but, to everyone’s benefit, we do not. We have laws that require us to do an analysis to see how a rule will affect small business, how much paperwork it will create, and to ensure that the public has a chance to participate in the conversation, as they would if their elected representatives were making the decision. Each of these adds value, as would a cost-benefit analysis, and makes it less likely that we’ll make mistakes we will have to correct in another rule.

I am not the first to ask: If we don’t take the time to do it right the first time, when will we have time to do it over?

Right now at the CPSC — and, I fear, at other agencies — economic analysis is not viewed as a tool to help us get to the least burdensome alternative that adequately addresses a risk. Yet that is exactly the goal we should set. And we should be eager to get another set of eyes on the analysis we do to meet that goal. As it stands, we are doing only part of our work and checking it ourselves, which is always a difficult challenge. Doing a thorough analysis and having it reviewed by another set of eyes can give the taxpayers funding our efforts more confidence that they’re getting their money’s worth.

Nord is a commissioner on and the former acting chairwoman of the U.S. Consumer Product Safety Commission. She has served on the commission since 2005.