The Hill Op-ed: Regulatory Analysis Is Too Important to Be Left to the Economists

Sidney Shapiro
Melissa Lutrell

Aug. 17, 2021

The surging COVID-19 delta variant is sending thousands of people to the hospital, killing others, and straining several states' hospital systems to their breaking point. The climate crisis is hurting people, communities and countries as we write this piece, with apocalyptic wildfires, crippling droughts and raging floodwaters. Systemic racism continues unabated, leading to vast economic and environmental injustices. It's beyond time for urgent action, but to get there, the federal government must reform the opaque, biased method it uses to evaluate our nation's public health, economic and environmental protections.

The day President Joe Biden took office, he ordered executive branch agencies to evaluate and reform the regulatory review process to “ensure swift and effective Federal action” to address the urgent problems we currently face. The administration is unlikely to live up to this goal unless the White House addresses the hyper-technical form of cost-benefit analysis that is the centerpiece of this process.

The ongoing national reckoning with racism has prompted widespread scrutiny of many institutions, including the White House's centralized regulatory review process led by the Office of Information and Regulatory Affairs (OIRA). The relentless focus on cost-benefit analysis in regulatory review produces racially biased outcomes in many areas of regulation because it ignores or dramatically undervalues equity concerns — even when the law at issue is meant to reduce disparate impacts — and it promotes weak health, safety and environmental standards, a bias that helps maintain a status quo where racial disparities abound.

There are proposals to modify cost-benefit analysis by using so-called “distributional weights” to reflect the value of improved equity that typically results from regulation. This change is needed, but distributive weights alone are not enough to address the multitude of disparities promoted by the regulatory review apparatus Biden inherited. Moreover, the use of such weights can easily be dismissed by a future administration hostile to the regulatory process and protecting marginalized communities.

More urgently, the White House should immediately take three steps needed to speed up the regulatory process and “promote public health and safety, economic growth, social welfare, racial justice, environmental stewardship, human dignity, equity, and the interests of future generations,” as the president has ordered.

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