April 10, 1996
"Environmental Reform Dies Again"
San Jose Mercury News
By Timothy Taylor
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REFORMING the federal regulatory process to incorporate some notion of cost-benefit analysis makes overwhelming practical sense, but seems politically impossible.

The problem begins with Congress's habit of passing feel-good laws, in favor of an accident-free workplace or a clean environment or safe highways, and then handing off the job of specifying what actually will be done to regulatory agencies like the Occupational Safety and Health Administration (OSHA) or the Environmental Protection Agency (EPA) or the National Highway and Traffic Safety Administration (NHTSA).

This process lets Congress evade a hard truth: some accidents and injuries and pollution should be allowed to happen, because the steps needed to reduce the risk cost too much.

Many regulations make practical sense; others go too far. To illustrate, consider some recent findings from a group led by Tammy Tengs of Duke University, which collected the available evidence on the costs of 500 possible steps that the government might take to save lives.

A flammability standard for upholstered furniture costs $300 per year of life saved; a flammability standard for children's clothing in sizes 7-14 costs $15 million per year of life saved. Strengthening unreinforced masonry in San Francisco to Los Angeles standards costs $21,000 per year of life saved; strengthening all buildings in earthquake-prone areas costs $18 million per year of life saved.

Banning asbestos in brake blocks or in pipeline wrap costs $29,000 or $65,000 per year of life saved, respectively; banning asbestos in sealant tape or automatic transmission components costs $49 million or $65 million per year of life saved, respectively.

One can quibble and quarrel over the particular estimates, but the underlying point doesn't change: some regulations are far, far, far more cost-effective and sensible than others. But in the last three years, both Bill Clinton and the Congressional Republicans have prevented such calculations from becoming a standard part of the regulatory process.

Back in 1993, when Democrats controlled Congress, the Clinton administration tried to elevate the Environmental Protection Agency to a cabinet-level position. The bill was amended to require that the new Department of the Environment would have to commission professional studies for each new regulation, and state what risk was being reduced, by how much, and at what cost.

The Clinton administration opposed these provisions for delightfully contradictory reasons. It argued that such rules would be far too cumbersome and costly and intrusive and unreasonable - and besides, that such analysis was already happening and required by a presidential order. Rather than compromise, it let the EPA bill die. When the Republicans took over Congress in 1994, they made cost-benefit oriented regulatory reform one plank of their Contract with America. A bill including such reform made it through the House of Representatives last year.

But anti-government Republicans kept amending the bill to abolish as many regulations as possible, regardless of merit, and it became a juicy political target for Democrats. Last month, House Speaker Newt Gingrich withdrew the meat of regulatory reform, leaving behind only cosmetic issues like a rule that federal agencies should consider the impact of their regulations on small business.

There seems to be no middle ground in believing that cost-benefit analysis should be used study federal regulations. Democrats fear it will abolish too many regulations. Republicans worry that it won't abolish enough of them. But surely the question for grown-up citizens is not whether regulation is universally good or bad, but to distinguish the sensible regulations from the silly. After all, the cost of federal regulations exceeds $500 billion a year, according to Thomas Hopkins at the Rochester Institute of Technology.

Society should pick and choose, seeking out and encouraging regulations with the greatest benefit for the buck. A thorough reworking of our regulatory process, embodying the simple idea of spelling out costs and benefits, holds the promise of saving tens of billions of dollars, better protecting the environment, and safeguarding thousands of additional lives, all at the same time.

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