White House again focuses on regulatory costs, ignores benefits

White House again focuses on regulatory costs, ignores benefits
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On Monday, in an event closed to the press, Vice President Pence described the efforts by the Trump administration to eliminate regulations and reduce costs on businesses. As has been the case with nearly all of the administration’s announcements on their regulatory initiatives, the vice-president exaggerated their accomplishments and ignored the potential dangers of deregulation.

The Trump administration claims to have eliminated $300 million in regulatory costs.  But this claim is largely dependent on regulations overturned by Congress using the Congressional Review Act (an option that is no longer available for any Obama administration regulations) and on regulatory delays which may not become permanent, particularly if courts rule them illegal. In other words, the Trump administration itself has done little on deregulation thus far.

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But deregulation is a chief goal for Trump. One thing you won’t hear his administration discussing is the increase in the risks to people’s health or safety that his deregulatory approach may cause. So far admittedly the risk increase is small, largely because of the Trump administration’s failure to accomplish much in the way of deregulation.

But if the Trump administration does end up eliminating regulations solely on the basis of cost or creating a regulatory budget which only considers costs the results are likely to be disastrous.

Take a simple hypothetical example.  Suppose regulation A is estimated to cost businesses $100 million but to prolong 50 lives. Regulation B in contrast is estimated to cost businesses $90 million but prolong only 5 lives. A focus on regulatory costs would prioritize elimination of regulation A. But clearly, no matter what your ideological bent, that is a wrong-headed prioritization.

The Office of Management and Budget, in its guidance for implementing Trump’s executive orders emphasizes that agencies should still take into account regulatory benefits.  And as a former OMB employee, I have no doubt that OMB will attempt to ensure that this is the case.

But words matter and words from the President matter more than most words. In Executive Order 13771, the order created the “two for one requirement” requiring that agencies get rid of two regulations for every one they implement, costs are mentioned 19 times and benefits not at all.  This is not an accident as every time President Trump mentions regulations he talks about costs and never about the effects on human health, mortality, and the environment.

All regulations have costs and have benefits and anyone who tells you differently is lying to you. Making public policy is about tradeoffs.  Some regulations are bad ideas because they don’t solve the problem they are designed to solve and they impose unnecessary costs.  But over the past fifty years, government regulation has produced benefits far in excess of the costs it has imposed.  

If the Trump administration insists on ignoring regulatory benefits, perhaps we should be grateful that they have been so ineffective at deregulating. In this case, their success would be worse than their failure.

Stuart Shapiro is professor and director of the Public Policy Program at the Bloustein School of Planning and Public Policy at Rutgers University, and a member of the Scholars Strategy Network. Follow him on Twitter @shapiro_stuart.