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Public Citizen Urges Congress to Reject “Regulatory Budgeting”

May 18, 2004

Public Citizen Urges Congress to Reject “Regulatory Budgeting”

Statement of Public Citizen President Joan Claybrook

In what appears to be yet another attack on health, safety and environmental protections, the U.S. House of Representatives is scheduled to vote today on the misnamed “Paperwork and Regulatory Improvements Act of 2004” (H.R. 2432). The bill would require the Office of Management and Budget to conduct a study of “regulatory budgeting” – a project that is both misguided and a practical impossibility.

Regulatory budgeting imposes a limit on the costs that federal agencies can impose on the private sector. With regulatory budgeting, once the cap on costs has been reached, agencies must stop fulfilling their mandates, regardless of the need for continuing public health, safety and environmental protections.   Regulatory budgeting elevates the interests of corporations over the public interest. 

Further, regulatory budgeting is not even workable.   It is based on the pretense that it is possible to total the costs and benefits of federal regulations like entries in a ledger. But it is well-established that the estimated costs of federal regulations are often vastly overstated by regulated industries and rarely independently evaluated by government agencies, while the benefits are impossible to capture in dollar terms.

The interests that federal regulations promote – such as the ability of a child to breathe free from asthma, or the avoidance of cancer from exposure to toxic chemicals – are not traded in the marketplace. 

By calling only for a study of regulatory budgeting, lawmakers can claim they are not promoting it but are merely researching it. Do not be fooled. This is the proverbial wolf in sheep’s clothing. It is a thinly veiled attempt to prevent the government from protecting the public so corporations can save a buck.

The practice of regulatory budgeting is profoundly out of step with the necessary protective role of government as a check upon market excesses. Not only is the study a waste of taxpayer money and agency resources, but the entire effort is deeply mistaken and should end before it begins.