Rulemaking:

Draft 2003 Report to Congress on the Costs and Benefits of Federal Regulation

Stated Purpose:

"Estimate of the total annual costs and benefits (including quantifiable and nonquantifiable effects) of Federal rules and paperwork"

Summary of RSP Comment:

In its sixth Report to Congress on the Costs and Benefits of Federal Regulations, the Office of Management and Budget misses an opportunity to provide government policymakers and the public a better understanding of the impact of federal regulations. We strongly support efforts by OMB and the respective agencies to assess regulatory costs and benefits, and are encouraged by OMB's extension of its regulation-by-regulation estimates back to 1992. However, the data as presented are still inconsistent and fragmentary and may not offer the American public an accurate picture of the benefits and costs of regulation. As illustrated in this comment with rules Mercatus scholars have studied, individual estimates are not made in accordance with the Administration's Guidelines. Moreover OMB simply reports and sums up agency estimates, so that total cost and benefit estimates are not based on a consistent and objective review of available information.

Holding agencies accountable for basing policy on sound regulatory analysis grounded in accepted scientific and economic principles is an important step. The revised guidelines for the conduct of regulatory analysis and the format of accounting statements, presented in draft as Appendix C of the draft report should support this, though we note here and in more detail in comments on those guidelines that some aspects of the guidelines may undermine the ability of regulators to ensure their initiatives do more good than harm.

Regulations impose a hidden tax on Americans, a tax that ultimately falls on individuals-consumers, workers, entrepreneurs, investors, taxpayers, and citizens--and affects the quality of their lives. In order for the Legislative and Executive branches to understand better the effects of regulations on society, a sober and rigorous analysis of regulatory costs and benefits is vital. We therefore urge OMB to continue this process and include the refinements to the annual report and guidelines that we have suggested.