There’s an Alarming Statistic in Trump’s Record on Regulations
(Bloomberg Opinion) -- After an unprecedented delay, the Donald Trump administration has released what is required by law to be an annual report on the costs and benefits of federal regulations. The good news in this important document is that in the last two years, the costs of federal regulations have been stunningly low.
The less good news is that in the last two years, the benefits of federal regulations have been...stunningly low. A central reason is that in this period, relatively few regulations have been issued that had a significant economic impact.
Before we get to that, here’s the background. The cost-benefit reports, issued by the Office of Information and Regulatory Affairs, have been released annually for about two decades, and they are all available online. Congress mandated them on the grounds that Americans deserve to know what federal regulators have done every year, in areas that include highway safety, civil rights, food safety, occupational health, environmental protection and health care. The public should also know how much regulations cost – and how much good they do.
The reports are far from perfect. You can dispute some of the numbers. Costs and benefits are sometimes difficult for the government to quantify. And a number of agencies have failed to identify the costs and benefits of what they do – which means that any accounting is incomplete. Still, it’s a lot better than nothing.
Though the Trump administration issued its 2017 report very late – in 2019 -- it’s a professional job. In general, the reports have been substantial documents, with more than 100 pages of numbers, explanation and analysis, and the 2017 report fits with its predecessors.
For unclear reasons, the 2018 report did not appear in 2018. Nor did it appear in 2019. The 2019 report did not appear in 2019. For the first time in history, an administration has had to issue three reports in the same document.
That’s awkward enough, but unlike the report for 2017, the “Draft 2018-2019-2020 Report to Congress on the Benefits and Costs of Federal Regulations” is bare-bones. It is a mere 28 pages, meaning about nine pages per year. Though it is supplemented by separate files offering more details about particular rules, there is much less analysis, explanation and discussion than in previous years.
Despite this, the bottom lines are clear. The draft finds that the total costs of federal regulations were $100 million to $300 million in fiscal year 2018, and up to $600 million in fiscal year 2019. These are very low numbers – the lowest on record. (For ease of comparison, I have converted all reported dollars to 2020 equivalents.)
In fiscal year 2017, by contrast, the costs were between $2.3 billion and $3.5 billion. In fiscal year 2014, they were between $3.6 billion and $5.4 billion, while in fiscal year 2011, they were between $7.3 billion and $14.7 billion.
Taken on their own, the low regulatory costs over the last two fiscal years are a significant achievement. High regulatory outlays are borne not by some abstraction called “corporations,” but by consumers and workers as well.
The catch is that over the last two years, the nation’s regulators also weren’t helping people much. They weren’t significantly reducing premature deaths, and they did relatively little to improve public health.
In fiscal year 2018, the benefits were between $200 million and $700 million. In fiscal year 2019, the benefits were between $300 million and $3.8 billion. That’s the lowest on record.
In 2017, by contrast, the benefits were between $6.4 billion and $10.5 billion. Benefits of that magnitude are not abstractions. They include economic savings for consumers, prevention of premature deaths, and reductions in illnesses and injuries.
Just a few examples from recent years: A regulation designed to reduce risks of salmonella in eggs is expected to prevent 70,000 cases of foodborne illness and 20 annual deaths. A regulation aimed at reducing rollover accidents involving heavy vehicles is expected to prevent dozens of deaths per year, and also to eliminate tens of millions dollars in accident costs. A regulation mandating reduced exposure to silica in the workplace is expected to prevent over 600 deaths per year.
If you look at all available reports under both Republican and Democratic presidents, you will find that in terms of “net benefits” (benefits minus costs), 2018 and 2019 were by far the worst on record, and for the simple reason that they didn’t do much to improve public health or safety.
There is a larger lesson here. It’s very important to keep regulatory costs low. But what most matters is how much you gain, compared with how much you lose.
A lot can be done to help. In the last two years, opportunities to save people money, to prevent premature deaths, and to improve public health have almost certainly been squandered.
I served as administrator of the Office of Information and Regulatory Affairs from 2009 to 2012, and was involved in the drafting of the cost-benefit reports at that time.
To contact the editor responsible for this story: Katy Roberts at kroberts29@bloomberg.net
This column does not necessarily reflect the opinion of Bloomberg LP and its owners.
Cass R. Sunstein is a Bloomberg Opinion columnist. He is the author of “The Cost-Benefit Revolution” and a co-author of “Nudge: Improving Decisions About Health, Wealth and Happiness.”
©2020 Bloomberg L.P.