Cost benefit analysis and OIRA
OMB Watch has some strong views on current trends in federal agency regulation.
Federal regulators commonly use cost-benefit analysis as a means for assessing one or moreregulatory policy options. However, cost-benefit analysis is an unreliable and often inappropriate tool.The results of cost-benefit analysis obscure uncertainty and mask the value of those benefits thatagencies cannot translate into dollars and cents. For this reason, cost-benefit analysis should be onlyone of several analytical tools in regulatory decision making.Cost-benefit analysis should be an especially minor tool in the consideration of public healthrulemakings. Monetizing certain benefits of regulation, such as lives saved, is both economicallyflawed and morally suspect. In such cases, the results of a cost-benefit analysis are useless for policymakers.As illustrated by the debate over the revision to the ozone standards, executive power in theregulatory process, especially when wielded by OIRA, may trump any congressional mandate or needfor public protection. OIRA uses cost-benefit analysis to influence the regulatory process in twoways. First, E.O. 12866 and Circular A-4 mandate the preparation of a detailed cost-benefit analysisfor all rules carrying the “economically significant” designation. Such a broad and unyielding policyforces agencies to prepare cost-benefit analyses even in situations when Congress prohibits economicconsiderations or for public health rulemakings.Second, OIRA has granted itself final editorial authority over the content of RIAs and has becomeadept at using this authority to change the tenor of the debate over regulations. By elevating the RIAas the primary decision making tool for federal regulators, OIRA places the onus on agencies toestablish the economic viability of a regulation, rather than the public need or the requirement to fill acongressional mandate.These points highlight, in the view of OMB Watch, the need to reform the regulatory process toachieve a more equal balance between legal requirements and the political power exerted byexecutive branch offices, particularly OIRA. The manipulation of the regulatory process through the use of administrative tools like cost-benefit analysis distorts the balance of power between the twobranches and usurps agency expertise and discretion.It is the duty of Congress and the executive branch to choose the policies most responsive to public need and desire. Federal agencies and the White House should faithfully execute their congressionalmandates as a means of achieving the constitutionally intended balance of powers. Without appropriate balance, the federal government will find increasing difficulty in its ability to protect the public through effective health, safety, and environmental regulations.
(This is a pdf)
There have been many regulations that have changed in a very systematic way with the view to lessen the scope of the regulation, the personnel assigned to a task, penalties and fines, mission expectations, and of course then through the agency of a politically correctness officer.
‘Politically correct’ is a term used to trivialize information or a viewpoint, but in this case is more often pernicious.