Project Updates – Cost-Benefit Analysis

  • Friday
    May 11th,
    2012

    Letter to OIRA on Interagency Coordination

    Policy Integrity submitted a letter to OIRA Administrator Cass Sunstein today with recommendations for how OIRA can improve interagency coordination. The letter focuses on two key areas: (1) concerns about regulatory conflict, and (2) potential for harmonization of cost-benefit analysis methodology.

    Our first recommendation is for OIRA to directly address criticism about the prevalence of conflicting, incoherent, and redundant regulations throughout the administrative state. OIRA should conduct an empirical investigation to assess the real scope of such a problem. Methodologies for this include surveying the academic literature, consulting with agencies, and soliciting comments to better understand the extent of conflicting regulations.

    OIRA can also improve interagency coordination by standardizing methodological practices related to cost-benefit analysis. Developing uniform standards for various aspects of regulatory analysis would create a more logical system with rules that could be easily compared across agencies. More specifically, we recommend that OIRA take the following actions: address the fact that disparate Values of Statistical Life are currently being used by different agencies; to require agencies to conduct distributional analysis of significant rules; to develop best practices for for labeling rules; and to address the need for standard cancer risk assessment protocols.

    Issue(s): Cost-Benefit Analysis   Type: Letters

  • Wednesday
    May 2nd,
    2012

    Public Comments to the Administrative Conference of the United States

    Today, Policy Integrity submitted public comments to the Administrative Conference of the United States regarding their Committee on Regulation’s proposed recommendations for review of regulatory analysis requirements.

    Our suggestions focus on the legally and economically appropriate scope of cost-benefit analysis, as well as other ways to improve the efficiency of regulatory analysis requirements.

    We have two changes we would like to see made. The first is to revise the language of Recommendation Eight to better reflect the types of rules that should be subject to cost-benefit analysis, as required by law and justified by best economic practices.

    The second is to explore additional opportunities to rationalize the practice of regulatory analysis. For example, the Committee could develop guidance on how agencies can use ex‐post, retrospective analysis to improve their ex‐ante analytical estimates of costs and benefits.

    Issue(s): Cost-Benefit Analysis   Type: Public Comments

  • Friday
    February 24th,
    2012

    Suggestions to the Small Business Administration on Regulatory

    This week, President Obama laid out his blueprint for lowering corporate taxes. The response from Republicans: small businesses will suffer.

    Taxes aren’t the only place where small businesses currently get a break, and in the regulatory context, sometimes the special treatment goes too far. Today we submitted suggestions to the Small Business Administration on how to avoid getting overzealous.

    SBA is charged with implementing requirements for agencies to look at alternatives to rules that would adversely affect small businesses. Under its watch, small businesses are shielded from the impacts of regulation through exemptions, lower standards, or longer compliance timelines.

    But it is not always a good idea to allow small businesses off the regulatory hook. If done incorrectly or haphazardly, the public can end up footing an oversized bill and larger companies can end up paying inefficiently high costs.

    If the goal is to maximize benefits to Americans, decisionmakers need to be careful not to go over the top in protecting small businesses. While enhancing small businesses competitiveness may be a good idea, it should not override the environment, public health, or basic economic principles.

    Ultimately, implementation of these small business requirements like the Regulatory Flexibility Act, needs refinement to ensure the American public isn’t hurt in the attempt to boost small businesses.

    Issue(s): Cost-Benefit Analysis   Type: Letters

  • Thursday
    January 26th,
    2012

    Letter to U.S. Parole Commission on Responding to Parole Violators

    The United States Parole Commission, the board responsible for granting parole and supervising parolees in its jurisdiction, is considering a proposal to improve its procedures for determining how to respond when released offenders violate the terms of their parole.

    Policy Integrity recently submitted a detailed letter urging the Parole Commission to rely upon evidence-based analysis and empirical research in modifying its procedures. Some of the most compelling studies demonstrate that parole programs that impose swift yet proportional responses to minor parole violations end up reducing the number of people who end up back in prison for new crimes, and are otherwise benefit-cost justified.

    In most cases, if a parolee commits a technical violation or fails a drug test, he knows in advance what the consequence will be (such as a short return to prison). Studies in several states have shown that this approach, when combined with additional programs that support offenders as they transition from prison to society, can sharply reduce the likelihood future parole violations and recidivism. When more parolees are successfully reintegrated into their communities, it benefits society while simultaneously decreasing the public cost of re-incarceration.

    The Parole Commission is developing these regulations as part of a broader effort to incorporate retrospective review—also known as regulatory “look backs” at existing regulatory programs—into its institutional processes. Policy Integrity suggests implementing individually-tailored release plans, and using a data-management system to track the success of efforts to ensure parolees stay out of prison.

    Issue(s): Cost-Benefit Analysis   Type: Letters

  • Friday
    May 27th,
    2011

    Obama Administration’s Retrospective Review Plan

    Yesterday, the Obama Administration announced the plans from thirty agencies to conduct retrospective review of regulations—a step towards following up on a presidential executive order issued in January.

    The move was referred to as an initial review that would begin the ongoing process focusing on what the administration called “evidence-based, cost-effective rules.” Hundreds of regulations are queued in the proposed punch list for repeal or amendment. Some target reductions in paperwork and others look at more significant changes, but overall the suggestions call attention to the need for more frequent review.

    This is an important step toward creating a lasting system of retrospective review that continuingly evaluates, updates, and improves regulation. Too often, regulations are placed on the books without adequate follow-up to ensure they maximize net benefits. An effective regulatory system benefits the American public, but to work properly, the process of examining rules must be neutral, not be biased either in favor or against regulation. It must also adequately examine both areas of under-regulation as well as unnecessary regulatory burdens.

    To the extent these draft plans do that, they are a step in the right direction. But there is a great deal more to be done. Over the coming months, the Obama Administration will have an opportunity to build on this step by creating a well-structured and balanced system of regulatory review that becomes an enduring feature of the administrative system.

    Issue(s): Cost-Benefit Analysis