Trump versus Cost-Benefit Analysis

EPA’s disavowal of CBA is the culmination of a longer assault.

EPA has said it would no longer try to quantify the harms done by the two most serious, widespread air pollutants. Given that these are the most fully understood of all  environmental impacts, it’s not clear what future regulations, if any, might be still subject to cost benefit analysis.  This didn’t come out of the blue. Rather, it is the culmination of a series of steps that began when Trump took office in 2017.

Trump seems to object to two of the three words in cost-benefit analysis. The first is the word “benefit.”  Trump either doesn’t think regulations have any benefits or doesn’t care. Thus, starting in his first term, he’s modified regulatory review to downplay consideration of the benefits of regulation.

The second objectionable word “analysis.”  Analysis involves expertise, data, and reasoning, all of which have the potential to get in the way of ideology and presidential desires.  That leaves only the third word, “costs,” which is the only aspect of regulation that influences Trump.

Trump first elevated costs above benefits in his first term with an executive order requiring that one existing regulation be repealed for every new regulation and that any new regulation, even if it was beneficial for society, be halted unless previous regulations of equal cost could be found and repealed.

In his second term, Trump issued a new version of this directive, “Unleashing Prosperity Through Deregulation.”   Before any new regulation can be issued, regardless of how great its benefits might be, the agency would need to repeal at least ten prior regulations, and those regulations had to cost more than the new one.  Defenders of cost-benefit analysis like Cass Sunstein correctly pointed out that none of this makes sense if a new regulation passes cost-benefit analysis and increases social welfare.

Trump also indicated the low priority of cost-benefit analysis through his appointments.  His first appoint as regulatory czar was a respected conservative legal scholar, Neomi Rao. Trump moved her to the D.C. Circuit. Her replacement, serving in an active capacity, was a bright young lawyer with the thinnest of resumes.

So far in his second term, he hasn’t even bother to nominate anyone to the fill the position. Instead, he appointed Jeffrey Clark, best known for his effort to overturn the 2020 election, in an acting capacity.  When the time permitted for the acting appointment ran out, Trump installed Clark as the #2 person, who runs the office in the absence of anyone filling the #1 slot. Finally, Clark left, to be replaced by another lackey. Perhaps it doesn’t really matter, since the so-called “regulatory czar” now seems to be only an office assistant to Russell Vought, the head of the Office of Management and Budget, who has worked tirelessly to dismantle government agencies and American science. Notably, Trump’s “10-for-1” deregulation executive order doesn’t even bother with the regulatory czar’s office, instead delegating implementation to Vought.

By 2018, Trump’s executive orders and other administration actions had led me to write a post about “the rise of benefit-blind analysis.”  Little did I know what was coming down the road. The second term is shaping up to be a rough ride not just for environmentalists but for anyone who thinks analysis should be an important part of government decisions.

administrative law, Cost Benefit Analysis, deregulation, Jeffrey Clark, OIRA, regulation, regulatory policy, Russell Vought, Trump Administration