This post was originally published by the Yale Journal on Regulation's Notice & Comment blog. It is excerpted here.
On the day before President Biden’s inauguration, the Department of Health and Human Services (HHS) adopted the Securing Updated and Necessary Statutory Evaluations Timely rule, colloquially known as the SUNSET Rule, because it would sunset any regulation that had not been assessed and, where required, reviewed within a specific timetable.
Specifically, it provided that all HHS regulations would expire at the end of: (i) five calendar years after the year that the regulation first becomes effective; (ii) ten calendar years after the year of the regulation’s promulgation; or (iii) ten calendar years after the last year in which HHS assessed and (if review of the regulation was required) reviewed the regulation, whichever is latest.
The purpose of the rule, according to HHS, was to incentivize the agency to undertake the reviews required under the Regulatory Flexibility Act (RFA). That Act requires agencies to have a plan for reviewing every ten years those regulations that have a significant effect on a substantial number of small entities, and each year to publish a list of those regulations that the agency …
Cost-benefit analysis is required for all major regulations. It's also highly controversial, as well as being a mysterious procedure unless you're an economist. These FAQs will tell you what you need to know about how cost-benefit analysis (CBA) fits into the regulatory process, how it works, and why it's controversial.
Q: Let's start with a basic question. Exactly what is cost-benefit analysis?
A: The term cost-benefit analysis is sometimes used to mean any comparison of pros and cons, which is something we all do every day in ordinary life. For present purposes, though, it means a very rigorous way of balancing pros and cons, using economic analysis to quantify the costs and benefits of an action. Basically, everything gets converted into dollar equivalents in this process.
Q: Why do agencies conduct cost-benefit analyses?
A: A few …
In the actual work of crafting the regulatory safeguards that protect our environment and health, cost-benefit analysis has been largely ineffectual and irrelevant. Indeed, its ineffectiveness has been so profound as to prompt even its most ardent practitioners and proponents to question whether it has any impact on agency decisions at all. Meanwhile, it plays at best a minor role in the legal standards that actually govern agency decision-making. Despite all this, a certain cost-benefit orthodoxy has become remarkably entrenched in environmental policy circles. Especially in an era when so many progressive ideas are in ascendance, why does the idea of regulatory review based on CBA, first brought to us half a century ago by the two Ronalds—Ronald Coase and Ronald Reagan—have …
Over the last 40 years, the U.S. regulatory system has played an increasingly influential role in redefining our political and economic relationships in fundamentally neoliberal terms. A key but often overlooked institutional force behind this development is the peculiar form of cost-benefit analysis that now predominates in regulatory practice. Building a new regulatory system befitting our vision of a post-neoliberal America requires a formal rejection of prevailing cost-benefit analysis in favor of a radically different approach—one that invites public participation, permits open and fair contestation of competing values at the heart of policy debates, and recognizes and honors our social interdependencies.
The predominant form of cost-benefit analysis—one embraced by neoliberals—finds its theoretical underpinning in the controversial ideology of welfare economics …
Cost-benefit analysis (CBA) is inherently classist, racist, and ableist. Since these are foundational problems with CBA, and are not simply issues with its implementation, they can never be fixed by mere methodological improvements. Instead, the ongoing modernization of centralized regulatory analyses must focus on "moving beyond" CBA, and not on fixing it or improving it. Thus, in implementing President Biden's memorandum on Modernizing Regulatory Review (the Biden Memorandum), the Office of Management and Budget (OMB) should make explicit that regulatory review no longer requires CBA, even—as will be true in the typical case—when regulatory review does demand economic analysis as part of a holistic, multi-factor regulatory impact analysis.
The Biden memorandum endorses a series of goals that are not premised in the …
The Biden administration is looking to make big regulatory changes, not least regarding climate change. Yet the White House office overseeing regulations is vacant. The obscurely named Office of Regulatory Affairs and Information (OIRA) has to sign off on all significant regulations. Even the dilatory Donald Trump had nominated a permanent administrator by July of his first year. Biden's delay in filling this important office is hard to defend.
The main reason for the delay is probably that Biden doesn't have the OIRA administrator's boss in place, either. Biden's nominee to head the Office of Management and Budget (OMB) had to be withdrawn when her Senate support evaporated. That was on March 2, however, and there's still no new OMB nomination six months later. Maybe the reason is an inability to find a candidate who can …
Even most lawyers, let alone the rest of the population, are a bit fuzzy on how the regulatory system works. As the Biden administration is gearing up to start a slew of regulatory proceedings, here's what you need to know about the process.
Q: Where do agencies like EPA get the power to create regulations?
A: EPA and other agencies are created by Congress. They also get the power to issue regulations from laws passed by Congress. For instance, the Clean Water Act tells EPA to issue regulations based on the "best available technology" for controlling the discharge of toxic water pollutants.
Q: Who decides whether an agency should start the process to issue a new regulation?
A: Some statutes set deadlines and require agencies to act. In those situations, a court can intervene …
Political Interference from White House Regulatory Office May Have Played a Role
The Labor Department’s emergency COVID standard, released today, is too limited and weak to effectively protect all workers from the ongoing pandemic. The workers left at greatest risk are people of color and the working poor.
Workers justifiably expected an enforceable general industry standard to protect them from COVID-19, and the Center for Progressive Reform (CPR) has been calling for such a standard since June 2020. But what emerged after more than six weeks of closed-door White House review was a largely unenforceable voluntary guidance document, with only health care workers receiving the benefit of an enforceable standard.
The interference with the COVID standard by the White House regulatory office, the Office of Information and Regulatory Affairs (OIRA), sends the wrong signal about the Biden administration's commitment to improving the regulatory review process, which …
In a little-noticed move on Day One, President Joe Biden issued a memo designed to institute a more progressive process for developing new regulations. Such an effort is essential, given that timely, effective regulations will play a key role in achieving Biden-Harris administration's policy agenda. To succeed, however, it must also tackle the conservative philosophy that guides our government's rulemaking process.
Biden's memo focuses on the mechanics of the rulemaking process, and especially two institutions that heavily influence regulatory decisions: centralized, White House review of proposed rules and economics-focused assessments of them. President Reagan and his successors have issued a string of executive orders to govern these institutions. Biden's memo addresses flaws in the current iteration, Executive Order 12866 (along with some other, related orders). Fixing these flaws is necessary to create a more progressive regulatory system that better protects people and the planet.
Conservatives love to complain about faceless bureaucrats, but blaming bureaucrats for regulations is hopelessly out of date. When Elena Kagan was a professor, she wrote an article called “Presidential Administration.” The article applauded her former boss Bill Clinton for seizing greater control of the regulatory process, away from agencies. That trend has accelerated to the point where the White House controls even the fine details of regulation.
Two things can get sidelined in presidential administration. One is agency expertise. No one in the White House has as much knowledge as agency experts about air pollution, or climate change, or endangered species.
The other thing that gets sidelined is active implementation of the law actually passed by Congress. The White House staff who review regulations care only about costs and benefits. The president and the higher-level staff …