Back in January 1993, when Bill Clinton ended 12 years of medieval rule under Reagan and Bush, the famed environmentalist David Brower published the following full-page ad in the New York Times:
What was so brain-damaging about “economics”? Cost-benefit analysis, that’s what. The Reagan Administration had ordered the Office of Management and Budget to conduct cost-benefit reviews of proposed government regulations, and if they cost more than they benefits provided, the proposed regulations were usually rejected or sent back for revision. To be sure, calculating a dollar value for a “benefit” can be tricky, while the costs are always very real, but the exercise is at least a speed bump in the path of heedless, single-minded rule-happy regulators. The text of the Brower ad urged President Clinton to get rid of cost-benefit analysis.
Clinton didn’t do it. Neither did President Obama. In fact, to the fury of environmentalists, Obama appointed Cass Sunstein, one of the smartest left-of-center thinkers today, to oversee cost-benefit review in the Obama OMB. Sunstein may be left, but he’s smart enough to understand that if you are imposing costs above benefits, you are wasting resources and not maximizing total social welfare. In fact a few smart lefties have figured out that they are better off with cost-benefit review, but because it gets in the way of the total-rule mentality of stupid lefties that populate our administrative state and their all-important adjunct advocacy groups, they still want this minor speed bump removed.
And that is just what the Biden Administration has done, in one of his many early executive orders. In other words, Biden has taken a step to empower regulators to go wild that even Obama rejected.
David Henderson of the Hoover Institution provides some good background on the importance of this wonky-sounding matter:
President Reagan began regulatory reform with Executive Order 12291, titled simply “Federal Regulation”; and President Trump beefed it up with EO 13771 (“Reducing Regulation and Controlling Regulatory Costs”) and EO 13777 (“Enforcing the Regulatory Reform Agenda.”) The executive orders required a cost/benefit analysis to assure that the costs of major regulations would be compared with their benefits. But on his first day in office, President Biden revoked those executive orders with his own memorandum titled “Modernizing Regulatory Review.” If you read the memorandum carefully, you’ll see that the word “modernizing” is inapt. Indeed, the memorandum would more accurately be labeled “Replacing Cost/Benefit Analysis with Rock, Paper, Scissors.” . . .
Was there a way to rein in the federal agencies more than Ronald Reagan had done? Yes, and President Trump did it with Executive Order 13771. That order gave each federal executive agency a “regulatory budget.” Although the most talked-about provision of that EO was the requirement that an agency issue two deregulatory measures for every new regulation, the arguably more important provision was that the dollar cost of each agency’s new regulations could not exceed zero. One obvious objection to a regulatory budget with a zero-cost cap is that it would preclude an agency from issuing a regulation that has small costs and huge benefits. But that objection ignores the fact that each agency has a myriad of regulations, many of which have costs exceeding benefits. So an agency that wants a new regulation need only find enough old regulations with costs that exceed the cost of the new one. Ideally, these old regulations will also be ones whose costs exceed their benefits.
There’s lots more detail in Henderson’s full article. Meanwhile, over at Reason, analyst Eric Boehm is more blunt:
In other words, if a bureaucrat can conceive of a way that new regulations could advance the goals of racial justice or environmental health, those political aims should be counted as benefits—even if they can’t, well, actually be counted.
That’s a recipe for more regulation, and for a less honest assessment of which rules might be worthwhile and which merely make the appropriate gestures to a political agenda.
So much for “following the science” I guess.