NCPA - National Center for Policy Analysis

OMB Report Tries To Estimate Regulatory Costs And Benefits

February 12, 1999

The Office of Management and Budget has made a second attempt to estimate the costs and benefits of federal regulation -- and what an estimate it is.

  • OMB said it couldn't come any closer than somewhere between $30 billion and $3.3 trillion annually for the net benefits of health, safety and environmental regulations.
  • For the costs, the numbers were closer -- about $170 billion to $230 billion.
  • Jacob Lew, director of the OMB warned Congress in a covering letter that "...the state of knowledge regarding costs and benefits of regulatory programs is still relatively rudimentary" and "significant methodological problems remain to be resolved."
  • The benefits number seems to have been driven into the stratosphere by a study from the Environmental Protection Agency which assessed the benefits of the Clean Air Act -- numbers which were not included in last year's report.

Last year, OMB estimated benefits at $300 billion and costs at $279 billion.

Robert Hahn, director of the American Enterprise Institute- Brookings Joint Center for Regulatory Studies, said he "would like to see a bold report where they have the courage of their convictions -- and this isn't it."

Republicans want OMB to do more than offer broad, sweeping estimates and rely on agency data to come up with estimates on the price tag of individual rules. They insist that OMB should make its own assessments and offer recommendations on what programs are worthwhile and which should be eliminated.

Source: Cindy Skrzycki, "OMB Tries to Add Up the Bill for Federal Rules," Washington Post, February 12, 1999.


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