NCPA - National Center for Policy Analysis

Pinning Down Cost Of Regulations

February 7, 2000

For the past three years, the Office of Management and Budget has been under orders from Congress to come up with an estimate of the costs of government regulations. But over that time the agency has grumbled that the task may be impossible. And the figures it does come up with have so wide a range as to make them ludicrous.

  • Its latest draft report estimates that as of the first quarter of 1999, the cost of federal health, safety and environmental regulations yielded net benefits of between $32 billion and $1.621 trillion annually.
  • Costs to the economy were put at $174 billion to $234 billion.
  • OMB says that regulatory paperwork required 7.202 billion hours -- costing $109 billion, when figured at $26.50 per hour.
  • The report also noted that between April 1998 and March 1999, 4,752 final rules were issued by federal agencies -- of which the OMB reviewed 255.

Aside from the wildly divergent cost figures, critics point out that OMB doesn't conduct its own analysis -- but depends on figures supplied by the various regulatory agencies. There are no uniform standards for how the agencies do their accounting. So the methodologies employed vary greatly from agency to agency.

Source: Cindy Skrzycki, "OMB's Cost Analyses Questioned," Washington Post, February 4, 2000.


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