Imagine that the U.S. government decided to abolish all airline safety regulations and toxic waste disposal rules. The White House could issue a press release, touting billions of dollars in compliance cost savings for regulated companies. But few would be fooled by cost statistics that ignored the very purpose of those regulations, which benefit society enormously by helping avoid tragic plane crashes and toxic hazards.
The Trump administration is currently trying to pull a very similar ruse, promoting its ongoing evisceration of health, environmental, and consumer safeguards by celebrating cost reductions, while deliberately ignoring and concealing the great harms it is inflicting on American communities.
Last week, Neomi Rao, the current administrator of the Office of Information and Regulatory Affairs (OIRA), wrote a self-congratulatory op-ed touting what she views as significant deregulatory accomplishments of the Trump administration.
These so-called accomplishments, which include rolling back hazardous waste regulations and consumer protection rules, will inflict great harms on the American people, resulting in additional deaths, illnesses, and bankruptcies. The damages done by these heedless regulatory rollbacks significantly exceed the cost savings for regulated industries. The actions that Rao is so proud of will make Americans much worse off.
Focusing only on one half of the regulatory equation runs counter to the core mission of Rao’s own agency. Since the Reagan administration, OIRA has been tasked with evaluating regulations’ benefits and costs. OIRA’s job is not to reduce regulatory costs, but to ensure that agencies maximize the net benefits (benefits minus costs) of major rules.
The same requirement applies for deregulation: The cost savings of a deregulatory action, at the very least, have to exceed the forgone benefits. If a rule targeted for repeal costs $1 million to implement but delivers $5 million in tangible benefits to the American public, OIRA’s mandate is to avoid the problematic policy change that will make Americans $4 million worse off, not to implement the change and celebrate $1 million in avoided compliance costs.
In praising the rollbacks of numerous rules that benefit Americans, Rao sees only cost savings for regulated interests. One energy efficiency standard that was halted under her watch would have generated $41 million to 80 million in annual net benefits for the public through reduced consumer costs and avoided pollution. To Rao, the now-delayed rule simply means $0.29 million to add to a cost-savings figure.
An Interior Department rule that limited methane leaks from oil and gas infrastructure on public and tribal lands was projected to generate $46 million to $204 million per year in net benefits. The Trump administration weakened the rule dramatically, allowing $737 million worth of natural gas to leak into the atmosphere over the next decade, significantly increasing greenhouse gas emissions while wasting a valuable natural resource. The administration then tallied this change as more than $1 billion in cost savings, while ignoring the loss of the original rule’s vast benefits.
Some of the cost savings Rao cites never even came to pass because courts have declared several of the Trump administration’s deregulatory moves illegal, often because they were based on poor analysis.
For example, Rao’s statistics include “savings” from three different attempts to delay the Department of Education’s Borrower Defense Rule, which helps students who have been defrauded by for-profit educational institutions. But by the time Rao published her piece, a court had rejected these delays and ordered the Trump administration to implement the rule. Many other attempts to freeze or delay regulations have been reversed by the courts, yet these illegal actions are counted in OIRA’s supposed cost savings.
And as an OIRA brochure cited in Rao’s piece emphasizes, even “bolder efforts” are being planned for the coming months. This is a euphemism for saying that more deaths, heart attacks and asthma episodes are on the way as the administration nakedly prioritizes cost savings for polluters, even when they are much smaller than the forgone benefits of the rules being dismantled.
The EPA is currently working to replace its Clean Power Plan, which regulates power plant emissions, with a vastly weaker rule. The Trump administration’s own analysis admits that this change will lead to more than 1,000 additional premature deaths per year, along with tens of thousands of additional asthma cases and roughly 100,000 lost work days and school absences. The EPA’s own math shows that this change will cause tens of billions of dollars of net harms to the American people.
The administration is also weakening vehicle-emissions standards, which generate massive cost savings for consumers by making cars more fuel-efficient while dramatically reducing air pollution. Weakening these standards will result in roughly $200 billion in additional fuel costs for drivers between now and 2035, along with up to 114 million metric tons of annual carbon pollution by 2035.
To make this effort appear justifiable, the administration relies on an irrational and implausible assumption that improving fuel economy will significantly increase the number of cars on the road, thereby increasing accidents. But decades of research into the vehicle industry show that this is not the case.
No one should support regulation for its own sake: Government rules are justified if they improve the wellbeing of Americans and correct market failures, not if they impose costs on the private sector without corresponding benefits. Regulation is not a cost-free enterprise, but well-designed rules significantly improve our lives.
Rao has assailed the costs of Obama-era regulations, yet an Office of Management and Budget report issued under the Trump administration makes clear that the societal benefits of those rules dwarf their costs. Indeed, the report found that during the final year of the Obama administration, the sum total of regulatory costs for fully quantified rules was less than $5 billion while these rules produced $13.6 billion to $27.3 billion in annual benefits to the public.
Rao says that the Trump administration’s “reform agenda emphasizes individual freedom.” In the context of environmental regulation, this seems to mean that industry is free to avoid regulatory costs, no matter how small, even if it leads Americans, no matter how many, to die from involuntarily exposure to pollution. That is the freedom that she favors
John Graham, one of Rao’s Republican predecessors as OIRA administrator, coined the term “statistical murder” when referring to government policies that stand in the way of saving lives when other regulatory approaches could better protect the population. By gutting welfare enhancing, life-saving regulations in a blind pursuit of cost-savings, the Trump administration is committing large-scale premature deaths — in other words: statistical murder. That is not an accomplishment and it should not be celebrated.
Richard L. Revesz is the Lawrence King professor of law and dean emeritus at New York University School of Law, where he directs the Institute for Policy Integrity.