NCPA - National Center for Policy Analysis

When The Supreme Court Looks At Regulations' Costs And Benefits

June 7, 2000

In 1980, the U.S. Court of Appeals for the District of Columbia ruled that regulatory agencies need not conduct a cost-benefit analysis of rules to guard Americans' health and safety. Critics say that decision gave government regulators a blank check to issue costly rules with few benefits.

Now the Supreme Court has said it will rule on this 20-year-old precedent after arguments this fall.

  • The compliance cost of environmental regulations alone has risen 72 percent in real terms since 1990.
  • The estimated total cost of regulations today is around three-quarters of a trillion dollars.
  • More than a quarter of those rules is not subject to any cost considerations.

If the Supreme Court rules that regulators must, indeed, take into account the costs involved in promulgating their rules, would the order be retroactive? In other words, would agencies be required to go back and cost-justify rules they issued before the Court's decision.

A number of legal observers don't think the Court will require that. But advocates of limited government have their fingers crossed that it will.

Source: Editorial, "A Reasonable Question to Ask," Investor's Business Daily, June 7, 2000.

 

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