Why White House released report on regulation when no one was looking
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While most of us were enjoying the holidays and opening our presents, the Office of Management and Budget (OMB) belatedly released its required annual report to Congress on the costs and benefits of regulations. The report tallies agency analyses of the costs and benefits of regulations issued between October 2014 and September 2015. (I told you it was late.)

But the essential news in the report (as it almost always is in these reports) was good news. The 21 regulations counted in the report had benefits calculated as ranging between $25.5 and $47.8 billion and costs ranging between $5.5 to $6.9 billion. The vast majority of these costs and benefits come from eight regulations from the Environmental Protection Agency (EPA). And the significant majority of costs and benefits from EPA come from the Clean Power Plan issued in 2015 to regulate carbon emissions from power plants.

The benefits of regulations, particularly those from the EPA, generally reflect people living longer and healthier lives. Forty years of economic work has allowed agencies to better translate these benefits into dollar values so that we can better compare them with the costs of regulation (which are generally already in monetary terms). The bottom line of the OMB report is that these benefits often outweigh the costs.

This is particularly true of the Clean Power Plan.

So why release the report when no one is looking, over the winter holidays? Well, the reporting of benefit-cost analysis is almost never a political winner. Supporters of regulation don't like the act of monetizing the impacts of regulation, feeling that it demeans the value of health and welfare, and it will inevitably undercount these benefits.

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So they won't tout the report despite the fact that is supports their goals.

And opponents of regulations will largely focus on two things: the costs, and the flaws in the report.

The report is indeed far from perfect. The analyses it tallies are done by agencies which have incentives to make assumptions that make their actions look good. Agencies that are independent (like the Securities and Exchange Commssion and the Federal Communications Commission) are not required to analyze their regulations and so their work is not included (though this may change in 2017, and many of their regulations may also have net benefits).

And, because cost-benefit analysis is not an exact science, the methodology can always be improved.

But the numbers in the OMB report are the best we have. And the message they convey is an important one: The benefits of regulation frequently outweigh and often justify their costs.

This isn't always true (a number of the regulations described in the report had benefits and costs that were close to even). But the debate over regulation focuses way too much on the costs. Costs are important and no one wants to see businesses fail because of regulation. But similarly, no one wants to see lifespans shortened and illnesses and injuries occur because of a lack of regulation.

The key is finding the right balance.

By releasing this information when no one is paying attention, the Obama administration played into the false narrative of regulation as something that is harmful and has no benefit to the American public.

As the Trump administration attempts to repeal some of these regulations, it will be important to highlight that many such repeals will cost society more than they will benefit us.

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


The views expressed by contributors are their own and not the views of The Hill.