Federal agencies would have to conduct regular cost-benefit analyses on all major regulations under a bill introduced last week in the Senate.
Sen. Fred Thompson, R-Tenn., chairman of the Senate Governmental Affairs Committee, introduced S. 2161, the Regulatory Right-to-Know Act, on Thursday. The bill would require the Office of Management and Budget to submit a report to Congress every two years quantifying the effect of regulation on the U.S. economy.
"More information on the benefits and costs of regulation will help us make smarter decisions to get more of the good things that sensible regulation can deliver, and reduce needless waste and red tape at the same time," Thompson said.
The bill would cover all regulations that have a cost to the economy of $100 million or more, and would require the president to recommend ways to reform regulations that do not show benefits that justify their costs.
According to an Office of Management and Budget report last year, the benefits of regulations outweigh their costs. The dollar benefit of economic, environmental and social regulations for 1997 was $298 billion, compared to a cost of $289 billion, OMB estimated. The one-time OMB report was prepared at the Congress' request.
The Heritage Foundation, a conservative think tank, has estimated the cost of regulation to be around $700 billion a year.
Policy analysts debate the value and validity of economic analysis for regulations. For example, OMB notes that assigning dollar amounts to benefits like clean air is difficult.
But Thompson argues that cost-benefit analysis would improve regulatory decisionmaking.
"There is substantial evidence that the current regulatory system often misses opportunities for greater benefits and lower costs," Thompson said.
Thompson's proposal is separate from a more sweeping regulatory reform package he is advancing on the Hill.