In general, Republican presidencies try to impose bureaucratic procedures that limit agencies’ scope for issuing regulations, while Democratic presidencies tend to go in the opposite direction.

The last two administrations have not been exceptions to this. The Trump administration issued a requirement that an agency wishing to proffer one new rule would have to also propose to end two existing rules that were obsolete, unnecessary, or too costly to justify their continued existence. Shortly after taking office, the Biden administration ended that requirement and asked agencies to take special care to consider the effects of regulations on minority groups as well as the environment. The administration averred that those special interests do not get proper consideration when a regulatory agency is doing its cost–benefit analysis to impose a new rule. (See “Memos to the New OIRA Administrator,” Spring 2022.)

More recently, the Biden White House proposed changes to two standard regulatory guidance documents designed to help agencies promulgate regulations and conduct cost–benefit analysis on any new rules. One of those documents is Circular A‑4, which sets forth how agencies should do a Regulatory Impact Analysis (RIA).

One proposed change to A‑4 would direct agencies to consider the possibility that labor market monopsonies may artificially depress wages, which might bias the values used when calculating the Value of a Statistical Life (VSL) in cost–benefit analysis. An artificially low VSL would lead to fewer regulations being deemed as cost-effective. In their essay below, Tom Kniesner and Kip Viscusi argue that there is no evidence that monopsony has a significant effect on U.S. labor markets. Moreover, even if our economy were rife with wage-depressing monopsonies, Kniesner and Viscusi’s research indicates that would not affect VSL estimates in a material way.

In their essay, Stuart Shapiro and Christopher Carrigan suggest that proposed changes to Circular A‑4 to have cost–benefit analyses consider the distributional analysis of the effects of a rule could have an inadvertent outcome in making such analyses more difficult to conduct and make the RIAs that accompany proposed rules longer and even less accessible to affected groups. While politicians value the distributional effects of a policy change, estimating those effects can be difficult and time-consuming, especially for relatively minor rules, and waiting for an agency to deliver an analysis can delay rulemaking. They suggest that agencies should be encouraged to provide relevant analysis earlier in the rulemaking process, even if the analysis is less rigorous than used in current rulemaking. More timely data would help stakeholders more than more precise data that appear much later.

Finally, Ron Bird echoes the sentiments of Shapiro and Carrigan, arguing that the proposed changes to the A‑4 Circular are going to make it more difficult for groups potentially affected by a rule change to understand what policymakers think will be the outcome of the change. It will also further delay those groups in providing their input on proposed rules in a timely manner. Bird suggests that the A‑4 proposal be modified to increase the length of the comment period from the standard 30–60 days to 90–180 days.

When I worked in the Office of Information and Regulatory Affairs in the aftermath of the 9/11 terrorist attacks, the public had a mere 24 hours to comment on proposed regulations that dealt with improving safety in airports and airplanes. Little public opposition was heard about that miniscule comment period, so other agencies quietly began shortening their comment periods. A short comment period meant fewer comments and less work—and fewer changes—to the proposed rule. Finally, a few affected parties began to complain loudly, the press picked it up, and the practice largely ceased.

There is, of course, a fine line in telling agencies how to do an RIA. They should have the flexibility to tackle their analysis in the most sensible and cost-effective way, yet we don’t want them to take advantage of a system with few strictures in place and produce an RIA that is irrelevant to the task. (Once, during my OIRA tenure, the Environmental Protection Agency submitted a 300-page tome with the words “regulatory impact analysis” written in pen above the crossed-out “engineering report” at the top of the cover.)

Unfortunately, the very nature of the relationship between OIRA and the executive branch agencies—which too often view conducting an RIA as an unnecessary hurdle—means that it remains important to create sensible ground rules to guide the agencies in this task.

More timely and accessible analysis would help the potentially affected parties understand the potential consequences of a proposed rule and work with the government to minimize its cost or maximize its efficacy.