The Peak of Trump’s Fact-Free Vendetta Against Regulation |
It’s the end of an era. The GOP, in the person of Donald Trump, has fallen out of love with subjecting regulations to cost-benefit analysis.
Our story begins in December 1980, when President Jimmy Carter signed (over the objection of four Cabinet agencies) a law creating the Office of Information and Regulatory Affairs, or OIRA. The purpose was to establish within the White House budget office a clearinghouse to, in Carter’s words, “regulate the regulators” by reviewing and sometimes jettisoning paperwork requirements that regulatory agencies imposed on the public.
Two months later, Carter’s successor, Ronald Reagan, greatly expanded OIRA’s mandate by giving it review power over the regulations themselves. All major new regulations (defined as any that imposed a cost to industry of $100 million or more) would henceforth be submitted to OIRA for cost-benefit review. If the benefits didn’t outweigh the costs, the regulation would be modified or scrapped.
Liberals complained that cost-benefit analysis biased OIRA against protecting health and safety because a regulation’s benefit to society, being widespread, was harder to quantify than its narrow cost to specific businesses. In addition, because calculations of regulatory cost relied on industry input, these were highly exaggerated.
For Republicans, though, regulatory cost-benefit analysis became a kind of religion. So confident were they that it was a reliable regulation killer that in the 1994 midterm elections they pledged, as part of Newt Gingrich’s Contract With America, to make it a statutory requirement. After Republicans retook the House of Representatives in 1995, the House passed a bill that fulfilled that pledge—and rigged cost-benefit methodology even further in industry’s direction. The legislation died in the Senate, in large part because President Bill Clinton had already signed in 1993 an executive order that reaffirmed Reagan’s cost-benefit requirement for major rules. By then cost-benefit analysis was, among social science wonks across the ideological spectrum, too respectable to discard. Whatever its flaws, cost-benefit analysis was rational, it was market-friendly (these were the “Washington consensus” years), and, with a little effort, its pro-business bias could be........