A conventional approach to safety is based on the concept of design events. A building code might say, for example, that a building should be able to survive a 7.0 earthquake. This approach has been basic to the regulation of nuclear reactors. As the interim report of the post-Fukushima NRC task force explains:
[The regulation] also requires that design bases . . . reflect (1) appropriate consideration of the most severe of the natural phenomena that have been historically reported for the site and surrounding region, with sufficient margin for the limited accuracy and quantity of the historical data and the period of time in which the data have been accumulated, (2) appropriate combinations of the effects of normal and accident conditions with the effects of the natural phenomena, and (3) the importance of the safety functions to be performed. [p. 25]
The report points out two flaws with this approach. The first issue is selection of the design-basis event. At Fukushima, the design-basis tsunami was chosen too optimistically and without full consideration of the historical record. [p. viii] It is also difficult to ensure uniform treatment since the method for picking the design-basis event may vary between facilities. [p. 20] Selection of the design-basis event may be arbitrary. For instance, as Doug Kysar has explained, the planner for the New Orleans flood control system excluded some historic hurricanes from their calculations on the theory that those hurricanes were outliers.
Full textThe toll: An estimated 6,500 to 17,967 premature deaths, 9,867 non-fatal heart attacks, 3,947 cases of chronic bronchitis, and more than 2.3 million lost work and school days. That's just a partial tally of the costs Americans will bear because of unjustified delays in two critical health and safety regulations. More broadly, the Administration’s Fall 2011 Regulatory Agenda—released late, at the end of January of 2012—shows how many of the most important rules currently in the regulatory pipeline are being similarly delayed, leaving people and the environment inadequately protected against a number of unreasonable risks, possibly for years to come.
Working from the latest regulatory agenda, a new CPR Issue Alert assesses the Obama Administration’s progress in completing 12 key regulatory actions identified in a CPR white paper issued last April. A group of CPR Member Scholars and CPR Policy Analysts warned in that paper that the Administration’s failure to bring a sense of urgency to the job of completing the rules had opened the door to the very real prospect that nine of the twelve might get caught up in the backwash of the 2012 presidential campaign, and indeed might never be completed by the current Administration.
That bleak prediction is coming true before our eyes. Progress on the great majority of these regulatory actions has been delayed further over the last 10 months, and it is now likely most of the rules will not go into effect during the current presidential term.
Full textA new Pew public opinion poll published last week shows substantial public support for specific types of regulation, but skepticism about regulation in general. While 70-89% of the public would either expand or keep current levels of five specific types of regulation, 52% say government regulation of business usually does more harm than good as compared to 40% who think regulating business is necessary to protect the public interest. The five types of regulation were car safety and efficiency, environmental protection, food protection and packaging, prescription drugs, and workplace safety and health. These poll results generally echo previous polling, including an earlier poll by Pew.
It may be, as cynics are likely to point out, you can’t underestimate the power of the American people to hold two contradictory ideas at once. Perhaps, but the polling results do offer insight into how the public thinks about regulation.
For one thing, there is little enthusiasm for the radical cutbacks in regulation that many conservative seem to favor. The proportion of people saying that they favored reducing regulation was as follows: car safety and efficiency (9%), environmental protection (17%), food protection and packaging (7%), prescription drugs (20%), and workplace safety and health (10%). Moreover, the public generally leans toward strengthening regulation as opposed to keeping current levels, as the following comparisons indicate: car safety and efficiency (45% strengthen – 42% keep same); environmental protection (50-29%), food protection and packaging (53-36%), prescription drugs (39-33%), and workplace safety and health (41-45%).
Full textCross-posted from Legal Planet.
Governor Romney has endorsed an idea called regulatory budgeting, but it really means capping protection for public health. Romney’s position paper explains the concept as follows:
To force agencies to limit the costs they are imposing on society, and to provide the certainty that businesses crave, a system of regulatory caps is required. As noted, the federal government has estimated that the existing regulatory burden approaches $1.75 trillion. We cannot afford those costs to go any higher. . . .
. . . .In the first term of a Romney administration, the rate at which agencies could impose new regulations would be capped at zero. What this means is that if an agency wishes or is required by law to issue a new regulation, it must go through a budget-like process and identify offsetting cost reductions from the existing regulatory burden.
Most of the EPA’s major regulations are based on public health, and Romney’s “cap” is very much like rationing health care – it says that EPA cannot protect the health of the public from one threat unless it’s willing in exchange to allow another threat to public health go untreated. Putting a compliance cap on public health protections is akin to saying that, because medical costs are too high, a doctor could not accept a new patient without cutting off care to an existing patient.
Full textThe Economist’s February 18 edition offers a cover package of five articles on “Over-regulated America” (1, 2, 3, 4, 5). Our British friends want you to know there’s a problem here in the States that needs fixing:
A study for the Small Business Administration, a government body, found that regulations in general add $10,585 in costs per employee. It’s a wonder the jobless rate isn’t even higher than it is.
You can almost feel The Economist’s pain: the jobless rate should be a lot higher than it is, if the premise about the costs of regulations is correct. Surely if the regulatory burden were actually 12 percent of GDP – that’s what the SBA numbers say, if you draw them out – things would be far worse than they are. Ideologically unable to consider the obvious alternative – that regulations don’t add $10,585 in costs per employee, The Economist, just, well, “wonders” aloud.
Here’s what The Economist would have found if they’d dug just a little bit: Fully 70 percent of the SBA estimate was actually based on a regression analysis using opinion polling data on perceived regulatory climate across countries (in a strange twist, a separate article in the same issue actually questions the study, briefly). Whole reports have been written on why that number is bogus.
Our economy is still recovering from a tremendous collapse largely caused by under-regulation of financial institutions. But in its group of articles, The Economist wants us to think the opposite: “The home of laissez-faire is being suffocated by excessive and badly written regulation.” That premise, in turn, leads the magazine to – you guessed it – a series of warmed-over right-wing policy ideas aimed at gutting regulations. Let’s take a closer look.
Full textPolitical scientists have coined the term “bureaucracy bashing” to connote the temptation now rife among national politicians to beat up on the civil service for reasons that have nothing to do with reality. Ronald Reagan pioneered this art form of disrespecting bureaucrats in the name of downsizing government, even as federal deficit spending on government programs he favored grew to epic proportions. Ironically, President Obama has lifted the same hammer in an altogether unsuccessful effort to placate the conservative critics who claim the Reagan mantle. His efforts to pal around with the right-wing are unlikely to win him many friends, and risk undermining the credibility of the government he so badly wants to lead into a second term.
The most recent example of the President’s penchant for bureaucracy bashing was the State of the Union’s “spilled milk” joke, which went over like a lead balloon – even Michelle Obama did not crack a smile. Like other recent examples of President Obama’s bureaucracy bashing, this one wasn’t even true.
Consider the following episodes:
The White House announced Tuesday a legislative agenda it is sending Congress as part of its Startup America initiative to foster the growth of new businesses.
The White House was under some pressure to do wrong here: the President’s “Jobs Council” – a group mostly of CEOs – issued a report last month that included a perhaps unsurprising pile of old anti-regulatory proposals. And Senators Mark Warner and Jerry Moran were pushing the White House to endorse their bill, the Startup Act, which includes anti-regulatory measures that would weaken our existing environmental, health, and safety laws.
But here’s a bit of good news: the White House didn’t include any anti-regulation measures in the Startup America legislative agenda. The document gives just a polite nod to Warner-Moran:
The Administration looks forward to working with sponsors of similar initiatives including S. 1965 (Warner-Moran), S. 1866 (Coons-Rubio), S. 1544 (Tester-Toomey), S. 1933 (Schumer-Toomey), S. 1970 (Merkley-Bennet), H.R. 2930 (McHenry), H.R. 1070 (Schweikert), as well as with leaders from the Small Business and Entrepreneurship Committees, including Chairwoman Landrieu, Senator Snowe, Chairman Graves and Representative Velazquez.
Too often this White House has tried to appease big business on the regulatory front, even adopting anti-regulation rhetoric. This has hurt, not helped, the White House politically. And it does nothing to create jobs. So it’s worth noting that the Administration got this one right.
A new poll out Wednesday shows that small business owners’ top concern is lack of demand (echoing previous polls). Weakening health and safety protections, on the other hand, is not popular with most of the electorate, and it hurts the public. Stalling the establishment of badly needed public safeguards and undermining federal agencies will not create new jobs. The Administration should keep that in mind, and resist pressure to endorse any anti-regulatory initiatives as it continues to work with Congress on these bills.
Full textIn its public meeting records, the White House’s Office of Information and Regulatory Affairs (OIRA) frequently misspells the names or affiliations of the attendees. Senator Jon Kyl was once listed as “Sen. Rul.” And John Ikerd, affiliated with the University of Missouri (MO) and the Sierra Club, was listed as “John Ikend, University of MD/Siemen Club.”
Sometimes the misspelled names or affiliations are easy to figure out; other times they aren’t (see page 77 of our OIRA white paper from November for more examples). The public is supposed to be able to tell who these people are – that’s the whole point, transparency.
The misspellings are troublesome, but a new OIRA meeting record I just noticed takes the cake for leaving the public uninformed:
Why list the affiliation of the attendees at all?!
The occasional typo is one thing, but when OIRA gets it wrong so regularly – or now simply leaves out the affiliations of individuals seeking to influence the outcome of public health and environmental safeguards – it’s a mission-defeating problem.
Full textA panel of business leaders comprising President Obama’s Council on Jobs and Competitiveness today published a “Road Map to Renewal,” including proposals for expanded oil and gas drilling, and, of particular interest, five pages of policy recommendations related to regulation. Among them were procedural proposals aimed at further hamstringing regulatory agencies in their effort to promulgate badly needed safeguards for health, safety, and the environment.
For example, the Council proposes:
It’s worth noting that several of the proposals from the Jobs Council are ideas industry and its Republican allies have been pushing for a while; the cost-benefit requirement for independent agencies, for example, was included in the Regulatory Accountability Act and CURB Act, two bills popular in the GOP. The comments-on-comments concept, meanwhile, has been touted by the anti-regulation Center for Regulatory Effectiveness.
All in all, the recommendations start from a false premise – that environmental, health and safety safeguards are the economy’s problem – and proceed toward an unwise conclusion – building in further layers of review by economists. In fact, the regulations that industry is most distressed by already undergo a cost-benefit analysis at the agencies and then endure an industry-friendly second review at the White House Office of Information and Regulatory Affairs. As a recent CPR report demonstrates, OIRA’s review is the gateway to a gross politicization of the process, one that commonly results in weaker safeguards. Further review by another team of economists will only serve to slow and weaken needed protections.
Full textSenators Mark Warner (D-VA) and Jerry Moran (R-KS) introduced a bill earlier this month that proposes to change regulatory and tax policies with the goal of encouraging more entrepreneurial activity and creating more jobs. The legislation contains a grab-bag of proposals, such as allowing more aliens with professional expertise in stem cell research to become permanent residents and extending an income tax credit for certain small businesses. I can’t speak to the merits of these and other proposals in the bill with one exception. The legislation would codify the current requirement found in executive orders that federal agencies complete a cost-benefit analysis of proposed and final “major” rules. This idea may sound reasonable on its face, but ultimately it would hinder the ability of federal agencies to issue health and environmental safeguards, and provide no help to the economy.
As other CPR scholars and I have discussed (see here, here, here, here and here, for example), the policy evidence refutes arguments that regulation is somehow at fault for the slow economic recovery. Ignoring the evidence, House Republicans have spent countless hours on hearings and legislation that is intended to slow down and impede the regulatory process. It is therefore disappointing that Senators Warner and Moran include cost-benefit analysis, one such anti-regulatory idea repeatedly endorsed in the House, as one of their proposals to jump start entrepreneurial activity.
When it comes to deciding the level of protection for people and the environment, Congress most of the time has adopted a precautionary stance – requiring risk creators to do the best they can to reduce safety, health and environmental harms. But every President since Ronald Reagan has required agencies to analyze potential costs and benefits, even though agencies usually do not base regulations on a comparison of costs and benefits. Proponents of this requirement insist that it helps agencies focus on adopting the most appropriate regulation, but this claim ignores the fact that many health, safety and environmental benefits cannot be easily stated in dollar terms. As a result, cost-benefit often consists of incomplete benefit estimates and complete cost estimates (or over-estimates), skewing the analysis in favor of less protection.
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