Trump administration is cooking the books to attack regulation

Trump administration is cooking the books to attack regulation
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The Trump administration is shamelessly cooking the books to justify its reckless and unpopular war on regulation.

Federal agencies pushing President TrumpDonald John TrumpAustralia recognizes West Jerusalem as Israeli capital, won't move embassy Mulvaney will stay on as White House budget chief Trump touts ruling against ObamaCare: ‘Mitch and Nancy’ should pass new health-care law MORE’s deregulatory agenda are systematically ignoring the vast benefits of regulations to the public, focusing exclusively on reducing the costs of rules on behalf of regulated industries.

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To highlight the potential damage of Trump’s deregulation frenzy, Public Citizen just published a report showing that the Trump administration’s reckless deregulatory rollbacks would deprive workers, consumers and the economy of more than $2.1 trillion in benefits over the next two decades. The potential losses from the 13 rules examined in the report would amount to nearly $17,000 per household, far exceeding any savings for businesses.

Tallying up costs and benefits has been part of the federal rulemaking process since 1981. But the cost-benefit crystal ball can be profoundly misleading — dramatically overstating the costs, which are derived from data supplied by regulated industries, and underestimating the benefits. Often missing from these calculations are intangible values such as avoided pain and suffering, privacy, democracy, equality and fairness.

Nevertheless, federal agencies have done their best to calculate the economic benefits of proposed rules. In many cases — particularly for pollution and energy efficiency standards — the economic benefits of regulation are massive, far exceeding the costs.

A case in point are the automotive fuel economy and greenhouse gas standards that Trump is proposing to repeal. These rules are so beneficial to consumers and the economy that the Trump administration has resorted to some seriously tortured logic to repeal them.

For example, the administration implausibly claimed that rolling back Obama-era clean car standards would increase safety. And despite objections of career officials at the U.S. Environmental Protection Agency (EPA), the administration also contended that consumers would be more likely to buy new cars at a lower price without fuel economy technology. In fact, the opposite is true: better fuel economy is a big incentive for consumers shopping for a new car. 

In another example of sloppy analysis, former EPA Administrator Scott PruittEdward (Scott) Scott PruittEPA to pursue final 'science transparency' rule in 2019 Trump administration to unveil strategy for fighting lead exposure Overnight Energy — Sponsored by the National Biodiesel Board — Court blocks Atlantic coast pipeline | Kerry calls Trump climate actions 'profoundly dangerous' | EPA asked to investigate Pruitt Fox News hits MORE included almost no evidence or analysis when proposing to repeal pollution requirements for super-polluting diesel freight trucks that are built by dropping old, dirty engines into new truck bodies.

Pruitt’s proposal simply ignored the EPA’s responsibility to demonstrate that its rules are the product of reasoned decision-making and neglected to mention that repealing these truck pollution rules would deprive Americans of up to $14 billion in economic benefits every year.

It’s an example of an emerging pattern in the Trump presidency. In the past two years, regulatory cost-benefit analysis has degenerated from merely misleading into pants-on-fire dishonesty. The Trump administration and its corporate allies have started ignoring the benefits side of the ledger entirely.

In a proposal to roll back offshore drilling safety standards, the U.S. Department of the Interior neglected the benefits that would vanish if the standards were repealed, including damage to natural resources that would be prevented, worker injuries that would be avoided, harmful impacts of oil spills on commercial fishing that would never occur and the costs of spill containment that wouldn’t be incurred — all of which could add up to $163 million per year. The department acknowledged only the rule’s costs to oil and gas companies.

Trump officials also are undermining efforts to include the economic costs of carbon dioxide emissions in federal rulemaking. The Trump administration imposed an 87 percent cut in the government’s official estimate of the economic damage caused by climate change, making it easier to ignore the costs of climate change.

In a similar vein, the EPA has proposed eliminating consideration of the benefits its rules would have for public health. For example, power plant regulations intended to reduce mercury levels in the air also curb soot and other pollutants, but those benefits would go uncounted if the Trump EPA has its way.

Public interest advocates have long been skeptical of cost-benefit analysis because of how easy it is to manipulate and rig in favor of corporate greed. The wholesale erasure of the benefits side of the ledger from cost-benefit calculations justifies that skepticism. It also demonstrates the bad-faith intentions of those pushing for cost-benefit analysis to have a major role in the federal rulemaking process. 

If cost-benefit analysis means cost-only analysis, that’s just cooking the books.

If cost-benefit analysis is to retain even a shred of credibility, regulators and policymakers must ensure that vast benefits of regulatory protections are always fully counted — all $2.1 trillion of them. 

Alan Zibel is the research director for Public Citizen’s Corporate Presidency Project.