September 2, 2014

OMB 2014 Draft Report to Congress on the Benefits and Costs of Federal Regulations and Unfunded Mandates on State, Local, and Tribal Entities

Key materials

Dear Administrator Shelanski,

Thank you for the opportunity to comment on the Office of Management and Budget’s (OMB) Draft 2014 Annual Report to Congress on the Benefits and Costs of Federal Regulations and Unfunded Mandates on State, Local, and Tribal Entities. This annual report offers an important glimpse into a regulatory system that has profound effects on the well-being and opportunities of the American people. It is important that the costs and benefits of the US regulatory system are transparent and that progress is made each year toward improving our regulatory system such that it achieves important societal goals at a reasonable cost.

The Regulatory Studies Program of the Mercatus Center at George Mason University is dedicated to advancing knowledge about the effects of regulation on society. As part of its mission, the program conducts careful and independent analyses that employ contemporary economic scholarship to assess regulations and their effects on the economic opportunities and the social well-being available to all members of American society. This comment addresses the OMB’s annual Report to Congress on the Benefits and Costs of Federal Regulations from an economic point of view by more closely examining the societal goals the report intends to achieve and whether this report will successfully achieve those goals, including the goals of the Regulatory Right-to-Know Act, which requires this annual report to Congress.1

This year’s report makes several important improvements over reports from previous years. However, there are still a number of ways in which this report can be made more useful if it is to be a meaningful representation to Congress and the American public of the effects of the regulatory system in the United States. Further, there is a great deal more the Office of Information and Regulatory Affairs (OIRA) can do to use the report as a tool to spur improvement in the quality of regulatory analysis and decision-making at federal agencies. This comment is designed to help OIRA achieve the agency’s mandate to ensure compliance with Executive Orders 12866 and 13563 and to make the report a more meaningful representation of what we know, and don’t know, about the effects of federal regulations on society. 

The OMB stated in the final version of its 2013 report that “improving future analyses would likely be facilitated by having high-quality examples readily available for agency analysts to learn from, build on, or otherwise emulate.”2  In response, this comment includes as appendix A a partial list of best and worst practices from agency regulatory analysis. These examples have been identified using findings from the Mercatus Regulatory Report Card project.3

The Regulatory Report Card is an in-depth analysis of the quality and use of agency regulatory impact analysis that uses criteria set forth in Executive Order 12866 and OMB Circular A-4 to evaluate the degree to which regulatory analysis is compliant with federal guidelines. Multiple academic studies that rely on the Report Card’s methodology have already been published in peer-reviewed journals.5

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