Trade associations call on Office of Management and Budget for cost-benefit analysis in federal departments

A collective 101 business trade associations signed onto a joint letter last week addressed to Neomi Rao, administrator of the Office Information and Regulatory Affairs within Management and Budget (OMB), to make a case for cost-benefit balancing in federal offices.

“We believe the time has come for EPA to reexamine its statutory interpretations, and unless prohibited by statute, implement its regulatory statutes through cost-benefit balancing,” the organizations wrote. “Agencies must prepare cost-benefit analyses to support their most significant regulations, and to the extent permitted by law, not regulate unless the benefits justify the costs and the selected regulatory option maximizes net benefits to society.”

Their argument is built on the notion of the net good — that while cost-benefit analyses might not be perfect, they would help provide more harm than good and eliminate arbitrary decisions from federal action. They called for better government process overall, laying out a series of points they believe agencies should follow in the creation, amendment or elimination of regulations.

“First, the regulatory process must be transparent and inclusive of public input,” the associations wrote. “Second, agencies should use the best available science and should clearly identify areas in which meaningful uncertainties remain. Third, agencies should be accountable to Congress and the public for the quality of their rulemaking.”

They also requested that those affected by regulations be allowed input into the decisions made. This, coupled with a strengthened basis on peer review and reliable science, would help resist “backroom negotiations, partisan rulemaking and overly bureaucratic decisions” that undermine public faith in government.

Organizations signees included the Air Conditioning Contractors of America, the Edison Electric Institute, the Plastics Industry Association, and the Wood Machinery Manufacturers of America, together with dozens of others throughout the country.