Statement of Robert Weissman, President, Public Citizen
The report on federal regulations that CEI re-released on Tuesday does not pass the laugh test. When asked about the report, CEI admitted that it used “back of the envelope” calculations and that no one should assume households actually pay anything in regulatory costs.
The report is full of countless qualifiers that make clear it is little more than a guess – but it’s a terribly inaccurate and unrealistic guess. For example, the total cost figure in CEI’s report includes more than $300 billion in transfer payments totally unrelated to regulations, such as Medicare benefits. Another $330 billion of the costs figure is made up of tax compliance costs, which have nothing to do with regulations.
In claiming that “economic” regulations cost roughly $400 billion per year, CEI’s report relies on an infamous report on the impact of federal regulations commissioned by the U.S. Small Business Administration (SBA). The SBA report has been discredited by all independent observers and received so much criticism that it was eventually disavowed by the SBA itself. Recalculation of the SBA numbers using better data and more reasonable assumptions eliminates most of these purported costs.
In addition to the numerous and serious methodological flaws in the report, it wholly ignores the benefits that regulations provide to the public. CEI admits it made no attempt to compute the benefits of the regulations it scrutinized or compare those benefits to costs. This is akin to grocery shoppers deciding to buy no groceries simply because groceries cost money.
Deceiving the public and lawmakers by hiding regulatory benefits is unacceptable. Yet instead of correcting the report, CEI has decided to double down by re-releasing it in virtually identical form.