Whither Cost-Benefit Analysis?

Conn Carroll / February 20, 2009

When the Obama Administration appointed Harvard University law professor Cass Sunstein to be the Office of Information and Regulatory Affairs Administrator, many were hopeful that choice signaled the White House would have a “commitment to cost-benefit analysis in regulation.”

Unfortunately Obama Administration actions since the Sunstein appointment have shown anything but a commitment to cost-benefit analysis. Competitive Enterprise Institute’s Iain Murray reports:

It appears that Obama is rescinding Bush 43’s EOs 13258 (drafted by John Graham) and 13422* in order to revert to Clinton’s EO 12866 (drafted by Sally Katzen). The differences are very subtle, but include the following:

a. 13258 and 13422 applied OIRA review to guidance documents as well as rules.

b. 13258 and 13422 required agencies preparing draft rules and guidance docs to “identify in writing the specific market failure (such as externalities, market power, lack of information) or other specific problem that [the rule or guidance] intends to address (including, where applicable, the failures of public institutions) that warrant new agency action, as well as assess the significance of that problem, to enable assessment of whether any new regulation is warranted.” (more…)