OMB urged to conduct new cost-benefit analyses of regulations

The Office of Management and Budget is weighing whether to supplement cost-benefit data on federal regulations gathered by federal agencies with its own independent estimates, OMB spokesman Chris Ullman said Friday. Ullman said OMB "can't say at this point" whether it will heed the advice of such organizations as George Mason University's Mercatus Center and produce its own objective cost-benefit estimates of federal regulations. But he did say that John D. Graham, administrator of OMB's Office of Information and Regulatory Affairs, plans to make a number of improvements to the regulatory process, including making it more "transparent."

Since 1997, Congress has required agencies to estimate the costs and benefits of their regulations and provide that data to OMB. OMB compiles the data and comes up with an overall estimate of the costs and benefits of the government's major regulations. Beginning in 2002, OMB will have to update its analysis annually and submit it to Congress along with the federal budget. In May, OMB released a draft report on the costs and benefits of 31 major federal regulations from April 1999 to March 2000. Ullman said OMB does not know when it will release its final report. The Mercatus Center at George Mason University and the Joint Center for Regulatory Studies, operated by the American Enterprise Institute and the Brookings Institution, have repeatedly criticized the current cost-benefit analysis method. The two groups have called on OMB to provide its own objective cost-benefit estimates for individual rules, instead of simply summarizing agency data. "OMB experts should say what they really believe about the costs and benefits of significant regulations rather than taking the agency numbers as given," said Robert W. Hahn and Robert E. Litan, directors of the Joint Center for Regulatory Studies, in comments to OMB on its draft report. "Nowhere in the draft of the fourth report does OMB take advantage of its expertise to provide estimates that would allow a comparison with the estimates prepared by the agencies," Hahn and Litan wrote. The Mercatus Center agreed that OMB could provide a more accurate picture of the impact of federal regulations by critically assessing agency data and providing its own independent estimates. "OMB would contribute more to an understanding of the true social impact of federal regulations if it offered its own best estimates of the costs and benefits of individual rules," said Susan Dudley and Jay Cochran, research fellows in regulatory studies at Mercatus, in comments submitted to OMB on the report. Last Thursday, the Mercatus Center released a study on the total cost of workplace regulations, the first in a series of reports looking at federal regulatory costs. OMB acknowledged concerns over its estimates of the costs and benefits of federal regulations, pledging to reevaluate its methodology and work with agencies to improve their data. And the May draft report did not dismiss the idea of someday replacing agencies' estimates with more accurate data. "The question arises whether we should include the agency estimates in our report, if, with the passage of time and the addition of new information in the course of preparing the report to Congress, we find that revised estimates would be more accurate," the report said. "We don't want to make a wholesale judgment on that," Ullman said, when asked whether federal agencies need to provide OMB with more accurate data, "but it is an area of keen interest to Dr. Graham and [OMB] Director Mitch Daniels; they want to reinvigorate the process." Ullman said "some agencies are better than others" when it comes to the accuracy of their data on regulations, but emphasized that OMB plans to continue working with all agencies to improve the quality of their cost-benefit estimates. According to OMB's most recent estimates, the cost of the federal regulatory apparatus ranged from $82 million to $5 billion a year, while benefits stretched from $50 million to $25 billion a year. EPA regulations, including the agency's rule on new motor vehicle emissions standards, accounted for the bulk of the cost-benefit analysis.

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
FROM OUR SPONSORS
JOIN THE DISCUSSION
Close [ x ] More from GovExec
 
 

Thank you for subscribing to newsletters from GovExec.com.
We think these reports might interest you:

  • Sponsored by Brocade

    Best of 2016 Federal Forum eBook

    Earlier this summer, Federal and tech industry leaders convened to talk security, machine learning, network modernization, DevOps, and much more at the 2016 Federal Forum. This eBook includes a useful summary highlighting the best content shared at the 2016 Federal Forum to help agencies modernize their network infrastructure.

    Download
  • Sponsored by CDW-G

    GBC Flash Poll Series: Merger & Acquisitions

    Download this GBC Flash Poll to learn more about federal perspectives on the impact of industry consolidation.

    Download
  • Sponsored by One Identity

    One Nation Under Guard: Securing User Identities Across State and Local Government

    In 2016, the government can expect even more sophisticated threats on the horizon, making it all the more imperative that agencies enforce proper identity and access management (IAM) practices. In order to better measure the current state of IAM at the state and local level, Government Business Council (GBC) conducted an in-depth research study of state and local employees.

    Download
  • Sponsored by Aquilent

    The Next Federal Evolution of Cloud

    This GBC report explains the evolution of cloud computing in federal government, and provides an outlook for the future of the cloud in government IT.

    Download
  • Sponsored by Aquilent

    A DevOps Roadmap for the Federal Government

    This GBC Report discusses how DevOps is steadily gaining traction among some of government's leading IT developers and agencies.

    Download
  • Sponsored by LTC Partners, administrators of the Federal Long Term Care Insurance Program

    Approaching the Brink of Federal Retirement

    Approximately 10,000 baby boomers are reaching retirement age per day, and a growing number of federal employees are preparing themselves for the next chapter of their lives. Learn how to tackle the challenges that today's workforce faces in laying the groundwork for a smooth and secure retirement.

    Download
  • Sponsored by Hewlett Packard Enterprise

    Cyber Defense 101: Arming the Next Generation of Government Employees

    Read this issue brief to learn about the sector's most potent challenges in the new cyber landscape and how government organizations are building a robust, threat-aware infrastructure

    Download
  • Sponsored by Aquilent

    GBC Issue Brief: Cultivating Digital Services in the Federal Landscape

    Read this GBC issue brief to learn more about the current state of digital services in the government, and how key players are pushing enhancements towards a user-centric approach.

    Download
  • Sponsored by CDW-G

    Joint Enterprise Licensing Agreements

    Read this eBook to learn how defense agencies can achieve savings and efficiencies with an Enterprise Software Agreement.

    Download
  • Sponsored by Cloudera

    Government Forum Content Library

    Get all the essential resources needed for effective technology strategies in the federal landscape.

    Download

When you download a report, your information may be shared with the underwriters of that document.