رونوشت کامل Deep Dive 306 - Weighing Regulations: The Metrics of White House Review

lawyers. But first of all, 67 00:04:13.199 --> 00:04:15.560 let me let me ask us a question out to 68 00:04:15.560 --> 00:04:22.439 both panelists, why is benefit costs relevant for lawyers? And 69 00:04:22.600 --> 00:04:24.439 I say that presuming that we have an audience of 70 00:04:24.480 --> 00:04:26.639 mostly lawyers on this on some webinar. 71 00:04:27.720 --> 00:04:30.879 Thanks Paul and thanks Libya in the Federalist Society for 72 00:04:30.959 --> 00:04:35.160 hosting this. So, benefit cost analysis has had a key 73 00:04:35.240 --> 00:04:41.199 role in regulatory decisions for decades. And when you think 74 00:04:41.199 --> 00:04:45.279 about it, what's the alternative to basing your regulations on 75 00:04:45.480 --> 00:04:49.399 understanding of the likely impacts? Is it, you know, intuition? 76 00:04:49.600 --> 00:04:53.199 Is it who whatever interest group has has the most power. 77 00:04:53.560 --> 00:04:57.639 So presidents since Carter have required agencies to look at 78 00:04:57.639 --> 00:05:00.000 the costs as well as the benefits of their regular 79 00:05:00.000 --> 00:05:03.800 relations before issuing them. So it's an important component of 80 00:05:03.839 --> 00:05:06.839 regulatory impact analysis that we're going to talk more about, 81 00:05:06.920 --> 00:05:12.079 I think today, and the principles for doing it. For 82 00:05:12.199 --> 00:05:15.439 the requirements for agencies to do it is in President 83 00:05:15.480 --> 00:05:18.600 Clinton's Executive Order twelve eight sixty six, So that has 84 00:05:18.720 --> 00:05:23.439 lasted since nineteen ninety three. Successive president has continued to 85 00:05:23.519 --> 00:05:26.000 rely on that, and that requirement is to ensure the 86 00:05:26.000 --> 00:05:30.480 benefits of your regulation justify the costs. Now, a few 87 00:05:30.560 --> 00:05:33.360 statutes require them, you know, many don't. 88 00:05:33.680 --> 00:05:34.560 But even if. 89 00:05:34.399 --> 00:05:37.680 It's not explicit in a statute that agencies should base 90 00:05:37.720 --> 00:05:41.000 their decision on looking at costs and benefits, courts are 91 00:05:41.040 --> 00:05:46.399 increasingly expecting them to do that. So, probably most significantly 92 00:05:46.519 --> 00:05:51.879 was Michigan VPA, where the Supreme Court looked at language 93 00:05:51.920 --> 00:05:56.720 that said set regulations that are appropriate and necessary to 94 00:05:56.800 --> 00:06:00.959 protect public health and the environment, and they said that 95 00:06:01.519 --> 00:06:04.399 you can't decide an action is appropriate and necessary unless 96 00:06:04.399 --> 00:06:07.079 you look at the cost relative to the benefits, So 97 00:06:07.160 --> 00:06:09.839 that weighing of costs and benefits is important. In fact, 98 00:06:10.040 --> 00:06:13.680 cass Sunstein has written about the cost benefit state that 99 00:06:13.720 --> 00:06:16.959 we are now in a state where courts and agencies 100 00:06:16.959 --> 00:06:21.560 and even Congress is expecting it. Now, as we'll talk 101 00:06:21.600 --> 00:06:26.279 about some or many of Trump's actions are norm defying 102 00:06:26.319 --> 00:06:29.879 and disrupting. But with respect to the requirement that agencies 103 00:06:29.920 --> 00:06:34.439 conduct regulatory impact analysis and the role for benefit cost analysis. 104 00:06:34.800 --> 00:06:36.920 He has retained long standing practices. 105 00:06:38.560 --> 00:06:42.959 Yeah, I already like Susan's first comment that if not 106 00:06:43.000 --> 00:06:45.519 benefit cost analysis, how do you make decisions? I mean, 107 00:06:45.560 --> 00:06:49.480 whenever I get into these conversations, that's you flip a coint. 108 00:06:49.480 --> 00:06:52.519 I'm not really sure what the alternative suggestion is. But 109 00:06:53.040 --> 00:06:56.360 you know, benefit cost analysis is a tool that developed 110 00:06:56.360 --> 00:07:00.839 by economists and legal freshmen as well. You know, from 111 00:07:00.839 --> 00:07:05.079 the economic perspective. It's a tool to evaluate whether regulations 112 00:07:05.160 --> 00:07:09.600 fix market failures and improve economic efficiency. And what's really 113 00:07:09.680 --> 00:07:12.000 nice there is that it's a it you know, it 114 00:07:12.079 --> 00:07:14.519 looks at both the costs, because sometimes fixing a market 115 00:07:14.560 --> 00:07:16.759 failure can be very costly, and you have to balance 116 00:07:16.800 --> 00:07:20.560 that with the benefits of fixing the market failure, and 117 00:07:20.639 --> 00:07:24.279 you also have to think about all the possible unintended consequences. 118 00:07:24.560 --> 00:07:29.240 And benefit cost analysis provides this really nice systematic way 119 00:07:29.959 --> 00:07:35.399 to you know, put all those impacts together in to 120 00:07:35.519 --> 00:07:37.480 a framework to say, well, are the benefits greater than 121 00:07:37.480 --> 00:07:40.800 the cost? Is this an improvement in economic efficiency? And 122 00:07:40.800 --> 00:07:42.199 I think we'll be kind of coming back to that 123 00:07:42.240 --> 00:07:45.319 over and over, But I mean the broader context of 124 00:07:45.360 --> 00:07:48.759 exactly how they plays out in different you know, with 125 00:07:48.839 --> 00:07:51.680 the executive orders and through Ohira and everything. I think 126 00:07:51.879 --> 00:07:56.120 Susan is already spoken well too, so I'll stop. 127 00:07:57.920 --> 00:08:00.439 Well, thank you both. That's that's very helpful. One question 128 00:08:00.480 --> 00:08:03.160 I have for you following up on that is one 129 00:08:03.360 --> 00:08:06.519 lesser discussed part of the ten for one executive order 130 00:08:06.800 --> 00:08:10.120 is a regulatory budgeting provision. This carries forward a provision 131 00:08:10.160 --> 00:08:14.560 from the twenty seventeen two for one order. So what 132 00:08:14.800 --> 00:08:17.600 role of any this benefit cost analysis play in the

133 00:08:17.600 --> 00:08:18.800 regulatory budgeting world? 134 00:08:20.199 --> 00:08:24.759 Right? I mean, yeah, it's the executive orders became known 135 00:08:24.959 --> 00:08:27.519 but is known as the ten for one rule, just 136 00:08:27.600 --> 00:08:29.600 like in the first Trump administration was the two for 137 00:08:29.639 --> 00:08:32.080 one rule, and you said double down. I guess that's 138 00:08:32.080 --> 00:08:38.000 put tupling down, actually, isn't it. But the look counting 139 00:08:38.080 --> 00:08:41.080 up the number of new of old rigs that have 140 00:08:41.120 --> 00:08:44.000 to be deregulated for every new one. That's one way 141 00:08:44.039 --> 00:08:47.200 to think about these rules. But you know, the regulatory 142 00:08:47.240 --> 00:08:51.159 budget is really I think that the heart of that rule, 143 00:08:51.519 --> 00:08:56.279 and that says that any has some kind of a 144 00:08:56.320 --> 00:09:00.759 regular rule requirement on what total costs of all new 145 00:09:00.799 --> 00:09:06.879 regulations and deregulations on net that creates the economy. And 146 00:09:07.480 --> 00:09:11.600 in the first Trump administration, the first year was it 147 00:09:11.600 --> 00:09:15.480 should have no net cost, zero net cost. In the 148 00:09:15.519 --> 00:09:18.000 new rule, the ten for one rule actually said it 149 00:09:18.039 --> 00:09:23.159 should be significantly less than zero, so net cost savings. 150 00:09:23.840 --> 00:09:26.159 And so that certainly shows you, well, you know, obviously 151 00:09:26.440 --> 00:09:28.360 part of the cost benefit analysis is there, you're looking 152 00:09:28.360 --> 00:09:32.240 at the regulatory cost. But what is also really key 153 00:09:32.320 --> 00:09:36.080 is that again both the first and now the second 154 00:09:36.799 --> 00:09:44.320 Trump administrations, the guidance documents very clearly require that this 155 00:09:44.519 --> 00:09:49.720 is conducted together with the benefit cost analysis of every 156 00:09:49.799 --> 00:09:54.679 regulation and every deregulation. And so it doesn't supplant, it 157 00:09:54.720 --> 00:09:58.039 doesn't remove those requirements. It just adds to those requirements. 158 00:09:58.360 --> 00:10:00.519 And now this gets you you have to get your 159 00:10:00.559 --> 00:10:02.600 head around it for a second. Now, how do you 160 00:10:02.600 --> 00:10:06.919 do a benefit cost analysis of a deregulation. Well, the 161 00:10:06.919 --> 00:10:11.159 benefits are the cost savings, the regulatory cost removed because 162 00:10:11.200 --> 00:10:14.159 you've taken away this regulation. That's the benefit side. And 163 00:10:14.200 --> 00:10:19.000 now the cost side of deregulation is that we're giving 164 00:10:19.080 --> 00:10:22.480 up the benefits that the regulation used to create. So 165 00:10:22.559 --> 00:10:27.000 presumably even if it's a regulation or a deregulation that 166 00:10:27.000 --> 00:10:31.799 passes the benefit cost

test, there's still typically opportunity cost 167 00:10:31.879 --> 00:10:36.200 of hey, we're giving up some public good that was 168 00:10:36.879 --> 00:10:40.519 created by this regulation, but it wasn't. It didn't justify 169 00:10:40.559 --> 00:10:43.240 the cost of that regulation. So it's kind of the 170 00:10:43.240 --> 00:10:45.480 flip side of say a regulation doesn't pass the benefit 171 00:10:45.519 --> 00:10:49.440 cost analysis, a deregulation does cost pass the cost benefit 172 00:10:49.519 --> 00:10:52.600 and benefit cost analysis. Now, at the same time, you 173 00:10:52.639 --> 00:10:55.120 can't just sort of put negative signs and flip everything over. 174 00:10:55.480 --> 00:11:00.240 The agencies have to conduct new analyzes to see, you know, 175 00:11:01.279 --> 00:11:05.200 given the currents status of the world, given new data, 176 00:11:05.320 --> 00:11:10.519 new evidence, does it look like this regulation or this deregulation, 177 00:11:11.080 --> 00:11:14.440 are the cost savings actually greater than the benefits? So 178 00:11:14.480 --> 00:11:18.120 that that's how they're layered on top and you know 179 00:11:18.200 --> 00:11:20.679 that this is one of ways where I guess, especially 180 00:11:20.720 --> 00:11:23.159 in the first Trump administration, that this I don't know 181 00:11:23.159 --> 00:11:28.200 if it was exactly an ever quite you know, norm busting, 182 00:11:28.240 --> 00:11:32.519 I mean actually ever since the Carter administration, the car 183 00:11:32.600 --> 00:11:38.360 Administration's Council of Economic Advisors started a conversation about regulatory budgeting, 184 00:11:38.879 --> 00:11:40.840 and it's been used in a lot of other countries. 185 00:11:40.879 --> 00:11:47.440 Canada and the Netherlands, Denmark and Norway and so in 186 00:11:47.519 --> 00:11:52.320 the UK as well. What it's been tricky, I think 187 00:11:52.399 --> 00:11:56.320 is sometimes it's the totality of regulatory costs. It is 188 00:11:56.320 --> 00:12:01.080 so large that the idea of saying, okay, here's a 189 00:12:01.120 --> 00:12:04.440 regulatory budget, here's totally how much cost the regulations can 190 00:12:04.440 --> 00:12:09.759 impose on the economy. That measurement problem has shifted their 191 00:12:09.799 --> 00:12:14.519 attention to what referred to as an incremental budget regulatory budget, 192 00:12:14.519 --> 00:12:16.399 and that is, Okay, we're not quite sure how much 193 00:12:16.440 --> 00:12:19.720 cost are out there, frankly, but we can say something 194 00:12:19.720 --> 00:12:22.480 about the new cost being created by new budget, by 195 00:12:22.519 --> 00:12:27.240 new regulations, and the cost savings created by old by 196 00:12:27.279 --> 00:12:31.200 deregulating old regulations. And so that's that's how this regulatory 197 00:12:31.240 --> 00:12:37.519 budgeting is working. As an incremental budget, that yeah, renal 198 00:12:37.559 --> 00:12:40.799 regulatory budget, and you know there's some tension. I mean, 199 00:12:40.799 --> 00:12:44.799 I can certainly imagine that with benefit cost analysis, I 200 00:12:44.840 --> 00:12:50.720 mean they're the directive to find regulations to cut and 201 00:12:50.759 --> 00:12:54.120 to save. I mean that could be implemented by path 202 00:12:54.440 --> 00:12:59.080 by deregulating taking away really good regulations, but and by 203 00:12:59.159 --> 00:13:01.960 growing good I mean regulations that have benefits greater than costs. 204 00:13:02.000 --> 00:13:06.159 But when you combine it with the running the benefit 205 00:13:06.240 --> 00:13:10.799 cost analysis of the deregulation as well. Uh, that should 206 00:13:10.879 --> 00:13:14.360 keep that from happening. And it also addresses this concept 207 00:13:14.440 --> 00:13:17.519 which this problem that a lot of people have noticed 208 00:13:17.559 --> 00:13:22.000 that you know, they of cumulative regulatory burden, which again 209 00:13:22.039 --> 00:13:26.399 that dates back to the President Clinton's executive order as well, 210 00:13:26.440 --> 00:13:30.639 that you know, agencies should be considering about the fact 211 00:13:30.679 --> 00:13:34.600 that they're laying layering but regulation over regulation, but a 212 00:13:34.600 --> 00:13:38.000 lot of times one at a time, benefit cost analysis 213 00:13:38.039 --> 00:13:41.399 of one regulation doesn't really capture that. So that's a 214 00:13:41.480 --> 00:13:45.399 that plus also a retrospective review. It really forces the 215 00:13:45.440 --> 00:13:49.000 agencies that now doge to look at the body of 216 00:13:49.039 --> 00:13:52.000 regulations and try to figure out, you know, which ones 217 00:13:52.120 --> 00:13:57.000 might be a good target to deregulation and generate cost savings. 218 00:13:58.240 --> 00:14:02.399 Yeah, excuse going if I just jump in and add something. Yeah, 219 00:14:02.440 --> 00:14:06.399 because I think that's all right. In an ideal world 220 00:14:06.480 --> 00:14:10.960 where we had perfect information about consequences of our government 221 00:14:11.000 --> 00:14:17.679 actions and perfect incentives to maximize public welfare, benefit cost 222 00:14:17.720 --> 00:14:20.759 analysis on its own might be sufficient, and a regulatory 223 00:14:20.759 --> 00:14:27.240 budget might seem unnecessary and wrong. But neither of those 224 00:14:27.240 --> 00:14:30.919 are two. We don't have perfect information and the incentives 225 00:14:31.039 --> 00:14:34.120 aren't necessarily always in the public interest. So you know, 226 00:14:34.159 --> 00:14:37.480 agencies incentives maybe you know, they tend to have tunnel 227 00:14:37.519 --> 00:14:40.240 vision and focus on their particular issue and therefore think 228 00:14:40.279 --> 00:14:43.519 that the benefits are much bigger and discount the costs. 229 00:14:43.679 --> 00:14:46.720 So I think it does address that. 230 00:14:46.919 --> 00:14:52.279 And as Don said, if and this isn't an

ideal world, 231 00:14:52.480 --> 00:14:55.960 it would provide an incentive to actually look at the 232 00:14:56.039 --> 00:14:59.919 regulations that are in effect and determine whether they're act 233 00:15:00.240 --> 00:15:02.679 achieving the benefits that we predicted. We tend not to 234 00:15:02.720 --> 00:15:05.279 do that. We tend always just to predict new benefits 235 00:15:05.440 --> 00:15:09.080 and then move on to the next regulation. So, just 236 00:15:09.799 --> 00:15:14.840 to supplement what John said about that a regulatory budget 237 00:15:14.919 --> 00:15:21.000 isn't necessarily anathma to the requirement for benefit costs analysis. 238 00:15:20.200 --> 00:15:22.759 I'm also point the regulatory budget doesn't have to be 239 00:15:23.080 --> 00:15:26.039 less than zero. And as a matter of fact, the 240 00:15:26.080 --> 00:15:29.360 Executive Order says that in future fiscal years. When I 241 00:15:29.360 --> 00:15:32.279 said it was significantly less than zero, you know, cost reduction, 242 00:15:32.799 --> 00:15:35.639 that was for fiscal year twenty twenty five. The Executive 243 00:15:35.720 --> 00:15:40.440 Order specifically says in future fiscal years, OMB will tell 244 00:15:40.519 --> 00:15:43.679 agencies what their target is, and that target could say 245 00:15:45.639 --> 00:15:52.159 positive regulatory costs are warranted given what's on your regulatory agenda. 246 00:15:52.840 --> 00:15:54.960 And to Membory serves, in the first From administration, there 247 00:15:54.960 --> 00:15:57.600 were in fact agencies that in given years had positive 248 00:15:57.600 --> 00:16:01.679 regulatory budgets. By the way, I should apologize, I'm gonna 249 00:16:01.679 --> 00:16:04.039 be sneezing a bit here. Uh for those of us 250 00:16:04.039 --> 00:16:06.679 with allergies, we can we can verify T. S Eliott's 251 00:16:06.679 --> 00:16:09.279 line that April is the coolest month. So thank you 252 00:16:09.320 --> 00:16:10.480 all for for bearing with me. 253 00:16:12.440 --> 00:16:15.799 I think Paul you introduced us, but we should clarify 254 00:16:15.840 --> 00:16:19.279 that you were a wire administrator during the first Trump administration. 255 00:16:19.440 --> 00:16:21.399 So yes, that's that's true. 256 00:16:20.879 --> 00:16:23.639 That regulatory budget two, Yes. 257 00:16:23.480 --> 00:16:29.919 That's that's right. So uh yeah, So that's all extremely helpful. 258 00:16:30.080 --> 00:16:32.679 Now let's talk a bit about Circular A four, which 259 00:16:32.720 --> 00:16:36.039 is which is the heart of of of the debate 260 00:16:36.519 --> 00:16:41.519 that we're here to talk about. So what is Circular 261 00:16:41.559 --> 00:16:45.759 A for and and what's his provedance? Susan, you're pretty 262 00:16:45.759 --> 00:16:46.840 well set up to talk about that. 263 00:16:48.120 --> 00:16:48.360 Yeah. 264 00:16:48.799 --> 00:16:51.480 I liked your your opening comment about it being perhaps 265 00:16:51.600 --> 00:16:54.639 one of the most important circulars that that you haven't 266 00:16:54.679 --> 00:16:56.840 heard of. I think more people may be a part 267 00:16:56.840 --> 00:16:57.039 of it. 268 00:16:57.120 --> 00:16:57.320 Now. 269 00:16:58.879 --> 00:17:01.919 So it was first issued in two thousand and three 270 00:17:02.679 --> 00:17:06.599 in the George W. Bush administration, but that circular was 271 00:17:06.640 --> 00:17:10.720 built on guidance that had been from the Reagan and 272 00:17:10.759 --> 00:17:16.359 then Bush and Clinton administration, So each of those administrations 273 00:17:16.400 --> 00:17:22.599 incrementally built built on the earlier administration's guidance. What made 274 00:17:22.640 --> 00:17:24.960 it a circular is it went through notice and comment 275 00:17:25.079 --> 00:17:27.400 and peer review, so that was a part of it. 276 00:17:27.720 --> 00:17:35.920 So the focus of the previous guidance and the circular 277 00:17:36.440 --> 00:17:40.279 was on net social benefits, that economic efficiency lens that 278 00:17:40.759 --> 00:17:45.920 Don talked about just now. So why it's topical right 279 00:17:45.960 --> 00:17:48.880 now is that in twenty twenty three, the Biden administration 280 00:17:49.799 --> 00:17:55.000 revised it, also going through notice and comment and with 281 00:17:55.079 --> 00:17:58.480 the goal to They talked about it being a modernization, 282 00:17:58.680 --> 00:18:01.480 that the circular is twenty years all that needed modernizing, 283 00:18:02.000 --> 00:18:07.640 and some of the changes I think were worthwhile and appropriate, 284 00:18:07.880 --> 00:18:13.079 but it also in other places their concerns were raised. 285 00:18:13.119 --> 00:18:16.680 I'll use the passive voice because it was a dramatic 286 00:18:16.759 --> 00:18:20.319 shift from that economic efficiency lens and the traditional goal 287 00:18:20.480 --> 00:18:26.880 of benefit cost analysis to provide a transparent accounting of 288 00:18:26.920 --> 00:18:32.279 what we know about the consequences of regulation, the benefits, 289 00:18:32.440 --> 00:18:36.359 the costs, the intended the unintended, and then allow policy 290 00:18:36.400 --> 00:18:38.720 makers they don't need to make their decision based on 291 00:18:39.400 --> 00:18:43.200 the option that looks like it has the net benefits. 292 00:18:43.240 --> 00:18:45.759 There may be other factors, but that that's what the 293 00:18:45.920 --> 00:18:52.079 RIA should should provide them. So Ohira received a lot 294 00:18:52.119 --> 00:18:55.799 of comments and including a letter from all the former 295 00:18:55.880 --> 00:18:59.400 presidents of the Society for Benefit Cost Analysis, of which 296 00:18:59.440 --> 00:19:05.480 Don and I I are in that club, and we 297 00:19:05.559 --> 00:19:08.319 raise concerns about that. You know, we made that point 298 00:19:08.400 --> 00:19:10.839 that some of these are worthwhile, but there are other 299 00:19:10.960 -->

00:19:16.200 changes that that really do move regulatory analysis and benefit 300 00:19:16.279 --> 00:19:20.039 cost analysis away from its traditional purpose. 301 00:19:22.640 --> 00:19:25.680 Yeah, I'll check that. I also mentioned, just as someone 302 00:19:25.680 --> 00:19:28.240 who's taught benefit cost analysis for many, many years, I 303 00:19:28.240 --> 00:19:30.759 really loved the old the two thousand and three Circulary 304 00:19:30.759 --> 00:19:35.000 fourth I was a great document. The textbook I was using. 305 00:19:35.640 --> 00:19:38.720 I actually used an option of actually having that sort 306 00:19:38.759 --> 00:19:41.400 of included in the textbook as an appendix, and I 307 00:19:41.400 --> 00:19:43.880 would constantly refer to the students saying, so, you know, 308 00:19:44.079 --> 00:19:46.519 here's how the textbook is saying, and basically the exact 309 00:19:46.559 --> 00:19:51.279 same thing is being said in Circulary for and then 310 00:19:51.400 --> 00:19:55.559 again this twenty twenty three revision did a lot of 311 00:19:55.559 --> 00:19:58.079 good things. I mean, you know, the idea of modernizing 312 00:19:58.119 --> 00:20:02.279 makes sense, and I think also to some extent, I 313 00:20:02.319 --> 00:20:04.319 know a lot of people from the agencies in Ohira 314 00:20:04.440 --> 00:20:06.720 worked on it. It helped, you know, just sort of 315 00:20:06.759 --> 00:20:09.759 incorporate some things they realize would be useful guidance just 316 00:20:09.799 --> 00:20:13.519 from two more decades of experience doing benefit costs analysis 317 00:20:13.559 --> 00:20:20.400 of regulations. But the shift really was quite fundamental of 318 00:20:20.920 --> 00:20:26.720 this idea that the economists had a very big question, 319 00:20:26.799 --> 00:20:28.720 I think, you know, does it economic efficiency? Does a 320 00:20:28.799 --> 00:20:34.799 regulation improve economic efficiency? And in that it's very specific 321 00:20:34.839 --> 00:20:37.960 that you know, we're using very very precise definition of 322 00:20:38.000 --> 00:20:40.119 what we mean by economic efficiency, and it boil was 323 00:20:40.200 --> 00:20:46.039 down too well. Virtually every real, real world regulation is 324 00:20:46.079 --> 00:20:49.799 going to have winners and losers, and the question comes 325 00:20:49.839 --> 00:20:51.960 down to, you know, can the winners at least potentially 326 00:20:52.039 --> 00:20:55.279 could the winners compensate the losers so everybody'd be better off? 327 00:20:55.319 --> 00:20:57.519 And that's the same thing as saying are the benefits 328 00:20:57.559 --> 00:21:00.920 greater than the cost? And that's the question about economic 329 00:21:00.960 --> 00:21:05.880 efficiency that traditional standard benefit cost analysis addresses. But notice 330 00:21:05.920 --> 00:21:08.920 that it doesn't say anything about who wins, who wins, 331 00:21:08.920 --> 00:21:13.319 and who loses in that, and that's always been noted 332 00:21:13.359 --> 00:21:16.039 as a limitation of benefit costs analysis, and you know, 333 00:21:17.480 --> 00:21:20.200 the seminal works in the academic works say, yeah, we 334 00:21:20.839 --> 00:21:24.240 don't think that's an unimportant question. In fact, we think 335 00:21:24.240 --> 00:21:27.680 sometimes it might be the most important question. It's just 336 00:21:27.880 --> 00:21:32.720 not a question that economists have expertise in terms of 337 00:21:32.759 --> 00:21:35.759 the value judgment is how do you make that trade offs? 338 00:21:35.799 --> 00:21:38.039 You know, how do you decide when this is important 339 00:21:38.119 --> 00:21:44.720 enough to go past the uh the economic have an 340 00:21:44.960 --> 00:21:49.200 an economically inefficient policy that is still worthwhile because it 341 00:21:49.240 --> 00:21:53.440 achieves these other objectives like improving the distribution of income 342 00:21:53.599 --> 00:22:00.559 or addressing racial justice social justice issues. And the twenty 343 00:22:00.599 --> 00:22:05.720 twenty three revisions took a very specific approach to answering 344 00:22:05.759 --> 00:22:10.160 that question, which is again actually very old, and benefit 345 00:22:10.160 --> 00:22:14.920 cost analysis recent research, and it really moves from this 346 00:22:15.079 --> 00:22:17.920 narrow question of economic efficiency to this much broader question 347 00:22:17.960 --> 00:22:23.720 of social welfare. Will this change improve social welfare? And 348 00:22:24.039 --> 00:22:30.680 in particular by making things more equitable? And to judge that, 349 00:22:30.720 --> 00:22:36.680 they introduced the idea of distributional weights. Weiting a benefit 350 00:22:37.000 --> 00:22:42.319 or cost based on the income level of the person 351 00:22:43.000 --> 00:22:45.440 getting the benefit or receiving the cost. And they have 352 00:22:45.440 --> 00:22:47.839 a very precise formula for it. They have a very 353 00:22:47.839 --> 00:22:52.400 precise parameter value to plug into that formula, and what 354 00:22:52.440 --> 00:22:56.200 it results in is weights that would say that like 355 00:22:56.279 --> 00:23:00.599 a dollar to someone in the lowest income quintile is 356 00:23:01.160 --> 00:23:06.240 worth like forty times more than the dollar to somebody 357 00:23:06.279 --> 00:23:11.680 in the top income quintile, and that could therefore justify 358 00:23:12.559 --> 00:23:18.440 a regulation that totally fails economic efficiency. In fact, you 359 00:23:18.480 --> 00:23:23.759 could have like ninety five percent loss of economic efficiency 360 00:23:23.759 --> 00:23:26.599 in the sense of you know, imposing cost on the 361 00:23:26.720 --> 00:23:28.880 rich and giving them to the point giving benefits to 362 00:23:28.920 --> 00:23:33.440 the core. But this weighted benefit cost analysis would conclude 363 00:23:33.759 --> 00:23:40.039 this such a regulation does improve social welfare, and you

know, 364 00:23:40.079 --> 00:23:44.279 there's there's return to the sort of the the I 365 00:23:44.279 --> 00:23:48.880 guess humility of economists hopefully we have is that we 366 00:23:48.960 --> 00:23:52.400 can judge the regula the benefits that whether the benefits 367 00:23:52.400 --> 00:23:55.400 of the costs in general outweigh whether the benefits out 368 00:23:55.400 --> 00:23:58.599 weigh the costs or vice versa. But making the value 369 00:23:58.720 --> 00:24:02.160 judgment there and it's also I think, by the way, 370 00:24:02.319 --> 00:24:06.759 sort of very non transparently putting a value judgment in 371 00:24:06.799 --> 00:24:10.160 a formula of being used by analysts that the agencies 372 00:24:11.880 --> 00:24:14.079 is not the best way to make that decision, and 373 00:24:14.119 --> 00:24:18.880 so it's better to if you know, we think we 374 00:24:18.880 --> 00:24:21.759 can the economists now and saying we think that we 375 00:24:21.799 --> 00:24:24.000 can provide, you know, evidence on the efficiency of a 376 00:24:24.079 --> 00:24:29.359 regulation and then let democratically accountable decision makers weigh these 377 00:24:29.359 --> 00:24:34.960 other factors with this, and so our regulars, we hope, 378 00:24:34.960 --> 00:24:37.559 we know, provide useful information, but we don't make the decision. 379 00:24:39.359 --> 00:24:42.880 Reject on that point, I think that one thing economists 380 00:24:42.920 --> 00:24:46.319 can do is maybe look at the benefits and costs 381 00:24:46.319 --> 00:24:49.960 by different groups. So you can definitely provide decision makers 382 00:24:50.039 --> 00:24:55.079 information because you certainly wouldn't want to pursue a regulation that, 383 00:24:55.440 --> 00:24:58.480 even if it had huge net benefits, that benefited the 384 00:24:58.480 --> 00:25:04.000 wealthiest individuals and harm the lowest income individuals. But that 385 00:25:04.079 --> 00:25:05.200 actually often does happen. 386 00:25:05.279 --> 00:25:05.640 Regret. 387 00:25:05.799 --> 00:25:09.839 You know, regulations can be quite regressive. So that kind 388 00:25:09.839 --> 00:25:13.039 of information is really valuable and economists can do that. 389 00:25:13.359 --> 00:25:18.079 But as you say, it's the embedding of those values 390 00:25:18.240 --> 00:25:22.559 in what should be a transparent analysis is what the 391 00:25:22.640 --> 00:25:23.279 problem is. 392 00:25:23.880 --> 00:25:27.000 Yeah. Absolutely, I think if the revisions in twenty twenty three, 393 00:25:27.400 --> 00:25:30.079 I think they did circularly four, I think they did 394 00:25:30.079 --> 00:25:33.880 do a good job of emphasizing the economists can do that, 395 00:25:33.880 --> 00:25:36.799 the agency should be talking about the distribution of benefits 396 00:25:36.799 --> 00:25:39.640 and costs much more than they do. They just stopped there. 397 00:25:41.000 --> 00:25:43.640 I would have been all on board, but when the 398 00:25:43.720 --> 00:25:45.839 next step is when they lost me. 399 00:25:47.079 --> 00:25:47.279 Yeah. 400 00:25:47.400 --> 00:25:49.440 So one point that both of you have made, I 401 00:25:49.480 --> 00:25:53.000 think it's a really important one, is that benefit costs 402 00:25:53.000 --> 00:25:58.599 analysis was never meant to be a kind of a 403 00:25:58.720 --> 00:26:02.279 kind of policy algorithm where you put in the right 404 00:26:02.359 --> 00:26:05.759 numbers and out pops of policy and you just you know, 405 00:26:05.920 --> 00:26:08.920 you you the agency just sort of follow the guidance 406 00:26:08.960 --> 00:26:11.720 of the algorithm and making policy. Rather, it was meant 407 00:26:11.759 --> 00:26:15.000 to be a tool that that equips policymakers to make 408 00:26:15.079 --> 00:26:19.839 sound political judgments. That's what I hear both of you saying. So, 409 00:26:19.880 --> 00:26:24.359 you know, some sometimes there's a there's a uh, there's 410 00:26:24.440 --> 00:26:26.880 this criticism benefit cost analysis that it's that it's a 411 00:26:26.960 --> 00:26:30.279 kind of uh it's a it's it results from a 412 00:26:30.359 --> 00:26:36.039 kind of uh default, from from policymakers to to to 413 00:26:36.160 --> 00:26:41.319 bureaucratic decision makers employing employing some sort of algorithm. But 414 00:26:41.400 --> 00:26:44.839 I what I hear you both saying is that just 415 00:26:44.880 --> 00:26:49.039 to the contrary, benefit cost analysis is what allows policy 416 00:26:49.079 --> 00:26:54.279 makers to make informed decisions that effectuate their their policy goals. 417 00:26:54.519 --> 00:26:57.480 Is that Is that a fair way to put it? 418 00:26:57.559 --> 00:27:02.039 Absolutely, I'm kind of smiling. My own history of teaching, 419 00:27:02.079 --> 00:27:04.799 I think the first couple of times, when I was 420 00:27:04.799 --> 00:27:07.759 a very young assistant professor, I more or less told 421 00:27:07.799 --> 00:27:13.039 students it was an algorithm, and experience, both with teaching 422 00:27:13.079 --> 00:27:15.440 and with thinking more harder about it made me realize that, Yeah, 423 00:27:15.440 --> 00:27:18.039 benefit cost analysis can't be an algorithm that you just 424 00:27:18.400 --> 00:27:23.119 plug into a computer, but it informs helps helps decision 425 00:27:23.119 --> 00:27:25.440 makers make more informed decisions. 426 00:27:26.319 --> 00:27:26.480 Yes. 427 00:27:26.559 --> 00:27:29.279 Sally Katson, who was a WIRED administrator in the Clinton 428 00:27:29.279 --> 00:27:32.960 administration and the lead author of the executive order that 429 00:27:33.079 --> 00:27:36.720 still guys today, she often says it's informative, but not 430 00:27:36.839 --> 00:27:38.119 just positive. 431 00:27:38.119 --> 00:27:42.720 Right, And that was certainly my experience as well. Yeah. 432 00:27:42.799 --> 00:27:47.279 So we've talked about a couple of similar moments in 433 00:27:47.319 --> 00:27:50.640

the history of Circular A four almost two thousand and three, 434 00:27:51.039 --> 00:27:54.039 almost twenty twenty three, but another, surely February of twenty 435 00:27:54.039 --> 00:27:59.079 twenty five, when the President directed OMB to revoke the 436 00:27:59.079 --> 00:28:01.440 twenty twenty three amendments and go back to the two 437 00:28:01.480 --> 00:28:06.559 thousand and three amendments, a version rather now there's been 438 00:28:06.559 --> 00:28:15.279 a criticism of of that directive that it basically that 439 00:28:15.400 --> 00:28:21.559 it pre judges what the standards should be for for 440 00:28:21.720 --> 00:28:26.319 benefit cost analysis, when in fact, the statute under which 441 00:28:27.279 --> 00:28:30.240 Circular A Floor operates, that's the Regulatory Right to Know Act, 442 00:28:30.759 --> 00:28:36.920 requires requires peer review for those standards, and there's peer 443 00:28:36.960 --> 00:28:39.640 review in two thousand and three, there's peer review in 444 00:28:39.680 --> 00:28:43.160 the twenty twenty three. Well, I guess I forgive it 445 00:28:43.200 --> 00:28:45.279 was late twenty twenty two or early twenty twenty three, 446 00:28:45.720 --> 00:28:47.680 but peer view that resulted in the in the in 447 00:28:47.720 --> 00:28:51.799 the in the issuance of a November twenty twenty three amendments. 448 00:28:53.119 --> 00:28:58.039 But there's but there's not been peer review of the 449 00:28:58.160 --> 00:29:00.599 of the recision going back to the two thousand and 450 00:29:00.640 --> 00:29:03.880 three versions. So I came to hear your thoughts and 451 00:29:03.960 --> 00:29:08.240 whether peer review was statutorially required toyeer back to the 452 00:29:08.240 --> 00:29:11.799 two thousand and three and then it's whether, regardless of 453 00:29:11.880 --> 00:29:13.680 what the required by statue, whether it would have been 454 00:29:14.160 --> 00:29:15.680 a good idea to seek peer review. 455 00:29:17.279 --> 00:29:20.319 So we're not lawyers, Paul, so we may come back 456 00:29:20.319 --> 00:29:21.920 and ask you that say, what do you think about 457 00:29:21.960 --> 00:29:24.000 that same question? But I'll give you my non lawyer 458 00:29:24.240 --> 00:29:28.279 answer and that is that the peer review. 459 00:29:29.400 --> 00:29:32.319 Really didn't support some of these key changes. 460 00:29:32.720 --> 00:29:36.519 So for example, that waiting the peer review did not 461 00:29:37.000 --> 00:29:40.680 support that, it did not support a very low discount rate, 462 00:29:40.720 --> 00:29:43.400 which maybe don can talk more about if people are interested. 463 00:29:43.799 --> 00:29:46.319 So there were several aspects of it. Some of the 464 00:29:46.319 --> 00:29:50.160 ones that I think this is the former presidents of 465 00:29:50.200 --> 00:29:53.240 the Society for ben but Cost Analysis, several of whom 466 00:29:53.279 --> 00:29:57.079 were peer reviewers, by the way, raised in our letter 467 00:29:57.240 --> 00:30:02.880 and in their comments. So the Trump administration asked me, 468 00:30:02.960 --> 00:30:06.720 which they did not. I think they could have, and 469 00:30:06.839 --> 00:30:11.160 maybe they still could say, we actually looked at all 470 00:30:11.200 --> 00:30:14.799 the comments you received and the peer review feedback that 471 00:30:14.839 --> 00:30:17.680 you got, and we think that supports the two thousand 472 00:30:17.680 --> 00:30:20.839 and three version more than it supports the twenty twenty 473 00:30:20.839 --> 00:30:24.400 three version. So I think that would not require a 474 00:30:24.440 --> 00:30:27.880 new notice and comment period and a new peer review, 475 00:30:28.160 --> 00:30:31.640 because I think the existing one really does support the 476 00:30:31.680 --> 00:30:33.720 old version more than it does the new version. 477 00:30:35.640 --> 00:30:37.119 Yeah, I don't think I have to have much to 478 00:30:37.160 --> 00:30:40.799 add to that. I mean, I would. I agree that 479 00:30:41.880 --> 00:30:45.839 it was quite disappointing to see the final version of 480 00:30:45.839 --> 00:30:50.720 the twenty twenty three revisions, and though as I sort 481 00:30:50.720 --> 00:30:53.039 of read all the peer review comments and as well 482 00:30:53.039 --> 00:30:56.400 as the public comments like I submitted, I realized that 483 00:30:58.160 --> 00:31:00.480 I was not in the minority that a lot of 484 00:31:00.519 --> 00:31:05.119 people experts more expert than I am, can agreed with 485 00:31:05.599 --> 00:31:07.519 a lot. We agreed on a lot of points, and 486 00:31:07.519 --> 00:31:10.519 a lot of those points disagreed with the final version 487 00:31:10.599 --> 00:31:15.599 of the twenty twenty three circulary for the distributional weights 488 00:31:15.640 --> 00:31:21.680 was one of choosing a single relatively low discount rate 489 00:31:22.240 --> 00:31:24.440 was another one where you know, that could have a 490 00:31:24.519 --> 00:31:32.359 huge impact the issue about whether benefits should be counted 491 00:31:32.359 --> 00:31:38.480 globally versus just domestic benefits. The guidance there, I think 492 00:31:38.640 --> 00:31:40.880 was again, you know, sort of treating that as a 493 00:31:40.880 --> 00:31:43.559 more cut and dried issue than it should be given. 494 00:31:44.079 --> 00:31:47.160 You know, sometimes the statutes are pretty clear that US 495 00:31:47.279 --> 00:31:51.160 laws are designed to improve the welfare of US citizens 496 00:31:51.240 --> 00:31:55.599 or US residents, usually not just citizens. But and yet 497 00:31:55.680 --> 00:31:58.720 that doesn't really follow through some of the A four guidance. 498 00:31:58.759 --> 00:32:01.039 And so those two things alone, by the way, the 499 00:32:01.079 --> 00:32:07.400 discount rate and the global versus domestic that those basically 500 00:32:07.519 --> 00:32:13.920 drove the difference between the Obama and early years

Biden 501 00:32:13.960 --> 00:32:16.720 administration's estimate of the social cost of carbon, which is 502 00:32:16.759 --> 00:32:20.200 like forty dollars a ton, and then in the first 503 00:32:20.200 --> 00:32:25.759 Trump administration when they recalculated it using the guidance consistent 504 00:32:25.839 --> 00:32:28.319 with the two thousand and three clear A four which 505 00:32:28.400 --> 00:32:33.599 was in place at the time, the social cost of 506 00:32:33.599 --> 00:32:36.839 carbon drops to seven dollars a time. So it's you know, 507 00:32:37.319 --> 00:32:41.359 these sort of art might seem like arcane. Differences can 508 00:32:41.480 --> 00:32:44.359 lead to very big differences in a key estimate like 509 00:32:44.359 --> 00:32:46.640 the social cost of carbon or right social cost of 510 00:32:46.640 --> 00:32:50.720 greenhouse gases, because those drive so many environmental and energy policies. 511 00:32:52.079 --> 00:32:58.519 And yet in that circular Afour revision, they didn't fully 512 00:32:58.759 --> 00:33:03.240 really incorporate a lot of for key comments made by 513 00:33:04.119 --> 00:33:06.119 lots of the peer reviewers. 514 00:33:07.240 --> 00:33:09.799 Yeah, and I'll just to be Devil's advocates, because we 515 00:33:09.839 --> 00:33:12.640 don't have anyone anyone on this call who is a 516 00:33:12.680 --> 00:33:15.440 strong supporter of the revisions. As I say, I think 517 00:33:15.480 --> 00:33:17.680 both on and I and a lot of people did 518 00:33:17.839 --> 00:33:21.720 like some of those revisions, but it's a few very 519 00:33:21.759 --> 00:33:25.039 important key things that we raise concerns about. So I 520 00:33:25.039 --> 00:33:27.599 think the supporters would say, yes, they did listen to 521 00:33:27.640 --> 00:33:30.319 peer review, and they did pay attention, and they did 522 00:33:30.400 --> 00:33:35.160 make changes. If people are interested in diving into that more. 523 00:33:35.480 --> 00:33:38.119 You can obviously look at the peer reviewers comments, there's 524 00:33:38.119 --> 00:33:42.319 a packet of those, but of one of the peer 525 00:33:42.359 --> 00:33:45.119 reviewers and also a former president of the Society for 526 00:33:45.160 --> 00:33:48.720 Benefit Cost Analysis and editor of the Journal for Benefit 527 00:33:48.759 --> 00:33:52.279 Cost Analysis, he did a comparison. He looked at all 528 00:33:52.319 --> 00:33:57.079 the peer reviewers' comments, quoted from them and compared that 529 00:33:57.160 --> 00:34:00.759 to the final and the title of his paper is 530 00:34:01.519 --> 00:34:05.079 consensus ignored. So he certainly found that they did not. 531 00:34:05.920 --> 00:34:10.039 And that's available as a working paper on Society for 532 00:34:10.079 --> 00:34:12.800 Benefit Cost Analysis website and we'll be published soon in 533 00:34:12.840 --> 00:34:13.320 the journal. 534 00:34:14.559 --> 00:34:18.400 Well that's that's there. Almost really helpful. Thank you both. 535

00:34:19.039 --> 00:34:22.760 Don Actually, my next question was going to be, uh, 536 00:34:23.039 --> 00:34:26.639 could you could you give some illustrations of the kinds 537 00:34:26.679 --> 00:34:31.719 of regulatory policies that are of the way the difference 538 00:34:31.719 --> 00:34:36.039 between the two and three twenty three versions might might 539 00:34:36.079 --> 00:34:38.239 shape the discussion of different different policies. But I think 540 00:34:38.239 --> 00:34:41.480 you're your point about the social culture carbon is right 541 00:34:41.480 --> 00:34:45.159 on point there. So you know, I'm not a panelist, 542 00:34:45.239 --> 00:34:49.280 I'm really the moderator, but that I will say, and 543 00:34:49.280 --> 00:34:51.400 I you know, I think that the provision of the 544 00:34:51.400 --> 00:34:55.760 regulatory right to no acts that's in question here is 545 00:34:56.400 --> 00:34:59.119 It's quite short, as I'll read it to you. The 546 00:34:59.119 --> 00:35:01.440 Director of the Office of Management and Budget shall provide 547 00:35:01.559 --> 00:35:05.000 for independent and external peer review of the guidelines and 548 00:35:05.119 --> 00:35:09.239 each accounting statement and associated report under this section, and 549 00:35:09.280 --> 00:35:12.719 then some other language it's not relevant here. So the 550 00:35:12.800 --> 00:35:15.280 requirement and the Regulatory Right to Know Act is to 551 00:35:15.320 --> 00:35:20.320 provide for independent and external peer review of the guidelines. Now, 552 00:35:21.639 --> 00:35:24.679 to my mind, that leaves open quite a bit of 553 00:35:24.719 --> 00:35:29.239 discretion on the part of the ob directors as to 554 00:35:29.360 --> 00:35:34.320 how to provide for such review. And one way I 555 00:35:34.360 --> 00:35:38.599 would think of doing so it would be to as 556 00:35:38.719 --> 00:35:43.440 as Susan suggested, to look at the comments that were offered, 557 00:35:43.679 --> 00:35:48.000 you know, just just a couple of years ago on 558 00:35:49.679 --> 00:35:51.679 the two thousand and three version and the proposed changes 559 00:35:51.719 --> 00:35:56.639 to it. I would think that those comments would would be, 560 00:35:56.920 --> 00:36:02.280 you know fully as informative of of the recent decision 561 00:36:02.480 --> 00:36:05.960 to go back to the version, as they as they 562 00:36:05.960 --> 00:36:08.760 would have of the decision to go forward with the 563 00:36:08.800 --> 00:36:12.519 twenty twenty three versions. So I'm inclined to think that 564 00:36:12.920 --> 00:36:16.199 that satisfied satisfies the regulatory Right to no requirement. But again, 565 00:36:16.280 --> 00:36:17.800 I'm not a I'm not a panelist here. 566 00:36:18.480 --> 00:36:22.480 So Trump administration need to say they did that, so 567 00:36:23.920 --> 00:36:26.679 the Director of OE would be simply revoked the circular 568 00:36:28.079 --> 00:36:31.559 pursuant to presidential memo or

or executive order. 569 00:36:33.000 --> 00:36:37.039 Yes, that's that's right. So the administration did not expressly 570 00:36:37.079 --> 00:36:41.000 state that that's right. I think that's where it's worthwhile 571 00:36:41.079 --> 00:36:47.639 stating that. So, I guess I want to open it 572 00:36:47.760 --> 00:36:50.519 up for either don or Susan to offer any last 573 00:36:51.639 --> 00:36:53.800 any last thoughts here before turning to the audience for 574 00:36:53.840 --> 00:36:55.639 a questions that we have a number of questions already 575 00:36:55.760 --> 00:36:56.480 already lined up. 576 00:36:58.039 --> 00:36:59.119 Yeah, let's go to the question. 577 00:36:59.719 --> 00:37:03.280 Yeah, all right, right, let's time to do here. All right, 578 00:37:03.400 --> 00:37:12.840 So from Rick Belzer, we have the main alternative to 579 00:37:12.880 --> 00:37:17.320 benefit cost analysis is benefit cost analysis run by special interests, 580 00:37:18.760 --> 00:37:20.679 and he says that that's what the twenty twenty three 581 00:37:21.119 --> 00:37:26.800 revision legitimized. The question remains, will Ohira staff be empowered 582 00:37:26.880 --> 00:37:30.119 to enforce the two thousand and three edition of Circular 583 00:37:30.159 --> 00:37:34.239 A four. So it's a it's a question about the 584 00:37:34.360 --> 00:37:39.440 practical realities of a liar review in the second trend administration. 585 00:37:39.880 --> 00:37:44.280 But so let's begin to answer that question by talking 586 00:37:44.320 --> 00:37:48.800 about what Ohira's role implementing circularly for traditionally has been 587 00:37:50.760 --> 00:37:53.480 so Susan, you're the natural that for that question. 588 00:37:53.880 --> 00:37:55.800 Either I am or you are, you can sell them. 589 00:37:56.079 --> 00:37:56.960 I'm also happy to do that. 590 00:37:57.119 --> 00:38:01.320 Yeah, you know, worked with a similar with deregulatory order 591 00:38:01.400 --> 00:38:02.199 and initiatives. 592 00:38:04.119 --> 00:38:04.320 Yeah. 593 00:38:04.440 --> 00:38:07.719 Why are wear several hats in the review excuse me, 594 00:38:08.039 --> 00:38:12.199 in the review of regulations, both proposed and final regulations, 595 00:38:12.639 --> 00:38:16.360 and one of them is what President Obama called providing 596 00:38:16.440 --> 00:38:21.559 a dispassionate and analytical second opinion on agency actions. And 597 00:38:21.679 --> 00:38:26.159 that part really does try to hold agencies analysis supporting 598 00:38:26.199 --> 00:38:30.440 their regulations, especially their regulations that are likely to have 599 00:38:30.559 --> 00:38:33.519 impacts either benefits or costs of one hundred million or 600 00:38:33.559 --> 00:38:37.400 more in a year to the requirements of circulary for 601 00:38:37.639 --> 00:38:41.480 and the principles of that executive order. The other two 602 00:38:41.559 --> 00:38:46.519 hats are coordinating across agencies and so that also provides 603 00:38:48.199 --> 00:38:53.159 external to the issuing agency input on what the impacts 604 00:38:53.199 --> 00:38:56.039 of their regulations are and maybe whether there are better 605 00:38:56.119 --> 00:39:01.239 alternatives to achieve the goals, and then also accountability within 606 00:39:01.320 --> 00:39:05.400 the White House. So AUIRA is a staff of career professionals, 607 00:39:05.440 --> 00:39:09.119 a small staff, we might add about fifty career professionals, 608 00:39:09.639 --> 00:39:12.679 but they are part of the executive office of the 609 00:39:12.760 --> 00:39:15.840 President and so they do work closely with the policy 610 00:39:15.880 --> 00:39:19.639 officials in the White House. So it adds that presidential accountability. 611 00:39:20.239 --> 00:39:28.360 So to Rick's question, will does that presidential accountability mean? 612 00:39:29.519 --> 00:39:33.360 Can that overrule what a benefit cost analysis might say. 613 00:39:33.840 --> 00:39:36.519 Perhaps it wasn't in my experience when I was a 614 00:39:36.599 --> 00:39:39.679 WIRAY administrator at the end of the Bush administration, that 615 00:39:39.840 --> 00:39:43.199 did not happen a lot. But when it did, the 616 00:39:43.280 --> 00:39:46.960 wira's staff recognized that the president is elected and we're not, 617 00:39:47.239 --> 00:39:48.719 and so sometimes that makes sense. 618 00:39:50.440 --> 00:39:54.239 Yeah, I'll just add that, you know, olira's regulatory review 619 00:39:54.440 --> 00:39:59.599 function is purely a creature of presidential directive. AIRA itself 620 00:39:59.639 --> 00:40:03.880 exist because Congress created and statute, but it's regulatory review 621 00:40:03.920 --> 00:40:09.519 function is purely a function of executive order. And that's 622 00:40:09.559 --> 00:40:14.039 important because I don't think it's possible to conceive of 623 00:40:14.159 --> 00:40:20.000 effective regulatory review other than as a that is flowing 624 00:40:20.039 --> 00:40:22.480 from the directive of the president. At the end of 625 00:40:22.519 --> 00:40:26.039 the day, the agencies are well, they're accountable to many stakeholders, 626 00:40:26.079 --> 00:40:29.079 but at the president most of all, and appropriately in 627 00:40:29.159 --> 00:40:34.840 my judgment, and so any kind of regulatory review that 628 00:40:36.679 --> 00:40:38.599 stem from some source other than the president is just 629 00:40:38.679 --> 00:40:42.800 going to be I think, likely to generate into a 630 00:40:42.840 --> 00:40:46.719 kind of box checking exercise. Right, the agency may feel 631 00:40:46.760 --> 00:40:49.679 obligated to comply with due to statutory requirements, but it 632 00:40:49.719 --> 00:40:53.039 wouldn't actually inform agency decision making. But if it costs 633 00:40:53.039 --> 00:40:56.719 analysis is likely to inform agency decision making in practice 634 00:40:57.079 --> 00:41:01.199 only if agencies think the president and his top leadership 635

00:41:01.920 --> 00:41:05.159 think it should. Right. And so it's to my mind 636 00:41:05.320 --> 00:41:08.360 very important that OHIRA is a White House office and 637 00:41:08.480 --> 00:41:11.760 not some other some some other agency in the in 638 00:41:11.800 --> 00:41:12.559 the federal system. 639 00:41:13.159 --> 00:41:13.239 Uh. 640 00:41:13.440 --> 00:41:17.320 And and that historically it's had it's had the support 641 00:41:17.440 --> 00:41:19.960 of the president of the West wing and enforcing the 642 00:41:20.079 --> 00:41:23.159 requirements of a view of twelve AY six six with 643 00:41:23.280 --> 00:41:29.599 respective benefit cost analysis. I think Susan's right that you 644 00:41:29.639 --> 00:41:33.639 can imagine a situation in which the president's priorities are 645 00:41:35.000 --> 00:41:38.199 are so either predetermined or urgent that it doesn't leave 646 00:41:38.199 --> 00:41:43.559 any space or or benefit cost analysis. And I think 647 00:41:43.599 --> 00:41:45.599 it's I think it's too early at this point to 648 00:41:45.719 --> 00:41:47.920 know whether that's that's a situation that we're in right now. 649 00:41:48.920 --> 00:41:51.559 Yeah, And even in these cases, I think the analysis 650 00:41:52.360 --> 00:41:56.599 still is useful information to be presented, even if the 651 00:41:56.719 --> 00:41:58.360 decision is based on other grounds. 652 00:41:59.480 --> 00:42:00.079 And while. 653 00:42:02.639 --> 00:42:06.519 We're going to interject that the the fact of the 654 00:42:06.719 --> 00:42:11.199 analysis being required and that Ohira will be eventually checking 655 00:42:11.239 --> 00:42:15.719 it over, you know. And I guess also, I'd say 656 00:42:16.320 --> 00:42:19.719 maybe even more so with the incremental regulatory budget. The 657 00:42:19.800 --> 00:42:22.960 ten for one rule gives a lot of incentives to 658 00:42:23.039 --> 00:42:25.960 the agencies to, you know, try to get things right 659 00:42:26.079 --> 00:42:28.519 ahead of time. And I did. I spent one of 660 00:42:28.519 --> 00:42:32.000 my sabbaticals visiting the group that does the benefit cost 661 00:42:32.000 --> 00:42:36.400 analysis at the FDA, and the person that was running 662 00:42:36.519 --> 00:42:40.079 that group explained that a lot of the value, he 663 00:42:40.239 --> 00:42:43.960 thought in the whole requirement of benefit cost analysis was 664 00:42:44.039 --> 00:42:46.599 the fact that economists were working with the other groups 665 00:42:47.000 --> 00:42:51.039 at the FDA and developing the regulations and saying, you know, 666 00:42:51.400 --> 00:42:53.320 another group would say, what we think we need to regulate, 667 00:42:53.719 --> 00:42:56.199 you know, for this type of this address this issue, 668 00:42:56.920 --> 00:42:59.679 but they'd start working on that regulatory impact analysis and 669 00:42:59.719 --> 00:43:02.480 the better fit cost analysis with the economists, and the 670 00:43:02.480 --> 00:43:06.599

economists said, well, is that this particular feature of your 671 00:43:06.639 --> 00:43:09.960 proposed rule is in creating a lot of cost Is 672 00:43:10.039 --> 00:43:13.239 there a way to achieve that without quite so much 673 00:43:13.800 --> 00:43:17.360 and he again he really felt that the there's so 674 00:43:17.519 --> 00:43:21.239 much value of the benefit cost analysis process leading up 675 00:43:21.280 --> 00:43:24.760 to the to the the actual benefit cost analysis that 676 00:43:25.559 --> 00:43:29.360 I wouldn't uh, you know, I don't want to I 677 00:43:29.480 --> 00:43:31.119 want to over I don't want to overemphasize that. I 678 00:43:31.159 --> 00:43:33.719 think it's very much there. And it also fits you. 679 00:43:33.840 --> 00:43:40.199 What what are the agencies incentives? And that's where that 680 00:43:41.159 --> 00:43:45.880 incremental regulatory budget agencies I think for very good reasons, 681 00:43:46.039 --> 00:43:48.440 you are trying to follow the mission of their agency. 682 00:43:48.559 --> 00:43:52.079 If you're in the the e p A or the OSHAW, 683 00:43:52.400 --> 00:43:55.719 you're you're trying to help produce the public good of 684 00:43:55.880 --> 00:44:03.840 environmental safety, health, occupational safety. And the fact that you 685 00:44:04.000 --> 00:44:06.599 have that you're required to come up with these you know, 686 00:44:06.719 --> 00:44:11.719 cost savings from deregulations gives you this incentive well to 687 00:44:11.760 --> 00:44:13.480 do as much good as I want as I can. 688 00:44:14.000 --> 00:44:15.760 I want to get rid of the really cost the 689 00:44:15.920 --> 00:44:21.480 regulations and deregulate some so I can either pass new 690 00:44:21.559 --> 00:44:24.000 better regulations. And I think that kind of gets the 691 00:44:24.079 --> 00:44:26.719 incentives right. And if that even gets the incentives right, 692 00:44:26.760 --> 00:44:29.760 if you have, you know, sort of are a self 693 00:44:29.800 --> 00:44:33.239 interested group view of what the bureaucrats are doing in 694 00:44:33.320 --> 00:44:35.920 the agencies. You know, they're they're always going to want 695 00:44:36.000 --> 00:44:37.400 to try to you know. 696 00:44:37.519 --> 00:44:41.559 Do I think they'll have strong incentives to try to 697 00:44:41.639 --> 00:44:44.239 do as much good as they can, either out of 698 00:44:44.280 --> 00:44:47.519 self interest or out of public interest, and that regulatory 699 00:44:47.559 --> 00:44:50.280 budget is a way of incentivizing them to. 700 00:44:51.880 --> 00:44:52.119 Do that. 701 00:44:53.760 --> 00:44:55.960 So, Susan, you made a point just now that I'm 702 00:44:55.960 --> 00:44:59.280 wanted to to circle back to. Briefly. You said that 703 00:44:59.360 --> 00:45:05.599 you thought benefficult analysis can be important even if there's 704 00:45:05.679 --> 00:45:12.599 already been a political decision at high levels about the policy. 705 00:45:13.639 --> 00:45:14.519

So why would that be. 706 00:45:16.159 --> 00:45:21.920 Because it helps them understand what they're trading off. It's easier, Well, 707 00:45:22.000 --> 00:45:23.280 it's harder to make. 708 00:45:23.400 --> 00:45:26.519 A policy based on intuition if you know that there 709 00:45:26.559 --> 00:45:30.119 are some consequences of that that you had not thought of. 710 00:45:30.280 --> 00:45:34.079 So I think it just helps them, Yeah, I mean, 711 00:45:34.199 --> 00:45:36.679 and then there may be decisions this is worth it. 712 00:45:36.840 --> 00:45:38.880 We're willing to make that trade off, and there are 713 00:45:38.920 --> 00:45:41.519 good reasons for that. For example, as Don pointed out earlier, 714 00:45:41.920 --> 00:45:45.639 benefit cost analysis doesn't consider distributional impacts. 715 00:45:45.559 --> 00:45:46.199 And yet we do. 716 00:45:46.320 --> 00:45:49.159 A lot of our regulations are intended to provide safety 717 00:45:49.239 --> 00:45:55.000 nets for people who are deserving, but doing that analysis 718 00:45:55.119 --> 00:45:57.280 still is valuable and can help you make sure that 719 00:45:57.440 --> 00:46:00.920 you take your action in the most cost defective way, 720 00:46:01.679 --> 00:46:04.400 in the most efficient way, even if it isn't doesn't 721 00:46:04.480 --> 00:46:05.719 maximize that benefits. 722 00:46:07.639 --> 00:46:12.639 So here's another question from Rick Belzer, and Rick, thank 723 00:46:12.639 --> 00:46:16.239 you for sending these, so he said. In the first 724 00:46:16.280 --> 00:46:21.559 from administration, O and B demanded that agencies offer regulatory 725 00:46:21.559 --> 00:46:25.760 impact analyzes for major deregulatory actions, even where the authoring 726 00:46:25.840 --> 00:46:29.039 agency didn't perform. And if it costs analysis to justify 727 00:46:29.159 --> 00:46:33.639 rules in the first place, and that pardon me, and 728 00:46:33.760 --> 00:46:38.320 that that requirement basically resulted in slowing down the little makings, 729 00:46:38.840 --> 00:46:40.480 And so he wants to know if there's a solution 730 00:46:40.639 --> 00:46:42.119 to this, to this problem. 731 00:46:43.840 --> 00:46:45.800 Paul, I might toss that one to you. 732 00:46:46.159 --> 00:46:49.800 Given the president to take regulate not to go through noticing, 733 00:46:50.280 --> 00:46:54.440 to be able to use legal arguments to avoid notice 734 00:46:54.480 --> 00:46:56.320 in comment, is that relevant to this question? 735 00:46:56.840 --> 00:47:01.639 I think it might be. So let me just say offhand, 736 00:47:01.760 --> 00:47:06.760 I can't think of a situation in which, at least 737 00:47:06.760 --> 00:47:09.280 in my tenure, in which the first term administration a 738 00:47:09.360 --> 00:47:15.239 wire required benefit cost analysis to deep to rescind a 739 00:47:15.280 --> 00:47:19.360 regulation that had been issued without benefit cost analysis. But 740 00:47:19.519 --> 00:47:22.360 but but it may will be so that there were 741 00:47:22.440 --> 00:47:28.320 such rulemakings because we didn't typically ask whether the agency 742 00:47:28.400 --> 00:47:31.400 had undertaken benefit cost analysis issue a rule we wanted 743 00:47:31.440 --> 00:47:35.400 to quite regardless, we wanted to undertake benefit cost analysis 744 00:47:35.880 --> 00:47:38.679 to see if recision of the rule would be would 745 00:47:38.679 --> 00:47:42.159 be cost justified. And you know, I think all else equal, 746 00:47:42.440 --> 00:47:45.719 that's that's the right approach. The fact that there was 747 00:47:45.800 --> 00:47:50.599 a defect in a rulemaking doesn't doesn't automatically mean that 748 00:47:53.639 --> 00:47:55.800 in we're wing to issue a rule doesn't automatically mean 749 00:47:55.840 --> 00:47:59.440 the recision of that rule is cost justified. So I 750 00:47:59.480 --> 00:48:03.480 think the question should just be you know, is it uh? 751 00:48:04.480 --> 00:48:10.760 You know, uh? Is the agency likely to likely to 752 00:48:10.880 --> 00:48:14.079 benefit from the benefit cost analysis in the case of 753 00:48:14.119 --> 00:48:18.039 our particular rulemaking, and it is the public likely to 754 00:48:18.079 --> 00:48:22.760 benefit as well? Now, Susan, you just mentioned a recent 755 00:48:22.840 --> 00:48:31.000 executive order by President Trump about about rescinding regulations without 756 00:48:31.079 --> 00:48:37.679 noticing comment, and the order directs agencies to rescind regulations 757 00:48:37.719 --> 00:48:42.519 without noticing comment when the regulations are I think that 758 00:48:42.639 --> 00:48:47.679 I think that the term is clearly unlawful under under 759 00:48:47.719 --> 00:48:50.840 Supreme Court case law, and the order lists several cases 760 00:48:50.920 --> 00:48:55.199 under under which regulations might be might be clearly unlawful. 761 00:48:55.199 --> 00:48:57.639 These are all cases from the last few years which 762 00:48:57.679 --> 00:49:00.079 the Court has made some pretty pretty important chaine is 763 00:49:00.119 --> 00:49:03.480 to administrative law. UH And so you know, I think 764 00:49:03.519 --> 00:49:10.559 that order it doesn't it doesn't tell agencies to rescind 765 00:49:11.039 --> 00:49:14.719 regulations without conducting benefit cost analysis. It just says to 766 00:49:15.320 --> 00:49:18.920 do so without noticing comment. But of course it's in 767 00:49:19.000 --> 00:49:23.079 my experience pretty difficult cost analysis if you don't do 768 00:49:24.840 --> 00:49:27.159 you know, if you don't take comment, because normally public 769 00:49:27.199 --> 00:49:31.400 comments are provide the material to conduct your benefit cost analysis. 770 00:49:31.760 --> 00:49:33.400 So I think it's I think it's fair to say 771 00:49:34.000 --> 00:49:41.159 that AH, that agency uh p c A will be 772 00:49:41.920 --> 00:49:45.239 UH if undertaken at all. In cases in which that 773 00:49:45.280 -->

00:49:49.239 executive order has evoked h will invoked will be will 774 00:49:49.280 --> 00:49:52.079 be pretty thin. And it may well be that agencies 775 00:49:52.280 --> 00:49:55.239 dispense with benefit cost analysis altogether in those cases, though 776 00:49:55.280 --> 00:49:58.280 again that's not replied by the order. I guess what it's. 777 00:49:58.400 --> 00:50:01.679 What I'd say on that point is in cases in 778 00:50:01.760 --> 00:50:08.639 which a regulation is plainly unlawful, that is to say, 779 00:50:08.679 --> 00:50:12.280 the agency has no choice to rescind the regulation because 780 00:50:12.400 --> 00:50:17.960 the existing regulation UH is it violates the underlike statute 781 00:50:17.960 --> 00:50:21.719 of the Constitution. I would say that the need for 782 00:50:21.800 --> 00:50:25.199 benefit cost analysis is probably at its at its low 783 00:50:25.280 --> 00:50:27.920 ad there because the agency knows what it has to 784 00:50:28.000 --> 00:50:33.559 do no matter what the benefit cost analysis indicates. You know, 785 00:50:33.920 --> 00:50:36.880 the agency's authority the statute in the constitution require it 786 00:50:37.039 --> 00:50:40.559 to rescind the regulation. Even if BCA says that doing 787 00:50:40.599 --> 00:50:43.159 so it will costs, that will will result in an 788 00:50:43.360 --> 00:50:49.239 untold prepontrating costs, right than for for exceeded benefits. There's 789 00:50:49.239 --> 00:50:52.400 still a benefit to b c A even in that situation, 790 00:50:52.639 --> 00:50:55.679 because it could be helpful to the public to understand 791 00:50:56.760 --> 00:51:02.159 the costs of of UH well of the source of 792 00:51:02.239 --> 00:51:05.960 law that is requiring recision of the regulation. Right, there's 793 00:51:06.000 --> 00:51:10.639 a statute that an agency determines requires it to presind 794 00:51:10.639 --> 00:51:12.639 a regulation. It could be helpful for the public to 795 00:51:12.719 --> 00:51:18.199 understand the cost that that statute is imposing by requiring 796 00:51:18.239 --> 00:51:22.639 recision of the regulation. That said, UH, one of the 797 00:51:22.880 --> 00:51:25.599 probably the I mean in probably the main reason for 798 00:51:25.719 --> 00:51:28.400 b c A is to guide the agencies exercise of 799 00:51:28.480 --> 00:51:31.440 its discretion. That the agencies have discretion, then the need 800 00:51:32.119 --> 00:51:35.320 for for BCA goes down, even if it's not eliminated. 801 00:51:35.599 --> 00:51:37.159 So that's the right I'd say on that on that point, 802 00:51:37.239 --> 00:51:39.199 but keen to hear from from Susan and Don. 803 00:51:40.960 --> 00:51:43.159 I was actually gonna go on a just a slightly 804 00:51:43.199 --> 00:51:48.000 different category of that type of thing is that, you know, 805 00:51:48.480 --> 00:51:53.559 sometimes the benefit under executive order what you know, Clinton's 806 00:51:53.599 --> 00:51:56.840 Order one two eight sixty six, you know, set out 807 00:51:57.159 --> 00:52:01.440 conditions that regulation either you know, required to go through 808 00:52:01.519 --> 00:52:04.239 notice and comment and the benefit cost analysis, or did not, 809 00:52:05.639 --> 00:52:08.119 especially the benefit of the regulatory impact analysis, not the 810 00:52:08.280 --> 00:52:11.719 notice and common part. And you know there are I 811 00:52:11.800 --> 00:52:14.400 think that's part of the value of that ten for one, 812 00:52:15.079 --> 00:52:17.760 part of the ten for one rule as well as 813 00:52:17.800 --> 00:52:20.360 the incremental budget is that there could be a lot 814 00:52:20.480 --> 00:52:24.519 of regulations out there that were never conducted benefit cost 815 00:52:24.599 --> 00:52:29.159 analysis to begin with, and yet the agencies might have 816 00:52:29.239 --> 00:52:32.239 a pretty good idea that they're not working right or 817 00:52:32.280 --> 00:52:35.519 that they're not very valuable, and they can be counted 818 00:52:35.559 --> 00:52:37.800 in that ten for one in the in the ten 819 00:52:39.440 --> 00:52:42.440 as some of the deregulations, even if even though they're 820 00:52:42.480 --> 00:52:48.000 not kind of contributing to the incremental cost budget calculations. 821 00:52:48.360 --> 00:52:49.639 And this is a way of kind of getting rid 822 00:52:49.639 --> 00:52:53.559 of the underbrush of you know, these sort of ye know, 823 00:52:54.840 --> 00:52:57.880 worthless or even costly regulations. And I think I one 824 00:52:57.960 --> 00:53:00.960 that I guess a number of noticed during the first 825 00:53:00.960 --> 00:53:05.599 Trump administration was the frozen cherry pie standard. For some reason, 826 00:53:05.639 --> 00:53:08.760 the FDA, dating back to the nineteen seventies had issued 827 00:53:08.800 --> 00:53:11.639 a very precise set of things that you had to 828 00:53:11.719 --> 00:53:13.880 do to be able to call yourself a frozen cherry 829 00:53:13.960 --> 00:53:20.480 pie if you're a manufacturer. And there's never any clear 830 00:53:21.440 --> 00:53:23.639 benefits to that rule, and there were probably weren't very 831 00:53:23.679 --> 00:53:26.360 clear costs either, But getting rid of it is this 832 00:53:26.440 --> 00:53:29.400 sort of this idea of a cumulative burden of regulation 833 00:53:29.519 --> 00:53:32.039 that if you wanted to enter business that business, that 834 00:53:32.119 --> 00:53:33.599 would be one more thing you would have had to 835 00:53:33.639 --> 00:53:37.920 have worried about. And that was actually but I guess 836 00:53:37.960 --> 00:53:41.840 i'll that anecdote kind of ends maybe with I think 837 00:53:41.960 --> 00:53:44.639 some of the tension that's going on here with with 838 00:53:44.880 --> 00:53:47.559 a lotless notice and comment rule making, is that that 839 00:53:48.000 --> 00:53:52.239 frozen cherry pie standard. I saw it the deregulation fairly 840 00:53:52.320 --> 00:53:55.679 early on in the Trump

regulatory agenda during the first 841 00:53:55.679 --> 00:54:00.280 Trump administration. It was finalized during the Biden administration, and 842 00:54:00.440 --> 00:54:03.440 so it took years and the Biden administration agreed that 843 00:54:04.320 --> 00:54:08.679 this was a pretty worthless regulation. But I think that's 844 00:54:09.079 --> 00:54:11.800 a lot of the Those are the issues, and the 845 00:54:11.880 --> 00:54:16.159 benefit cost analysis takes time. Regulatory impact analysis takes time. 846 00:54:16.320 --> 00:54:20.400 Is Paul pointed out the notice and comment period can 847 00:54:20.480 --> 00:54:24.519 really provide useful comments to improve the benefit cost analysis 848 00:54:24.960 --> 00:54:29.599 takes time, and I think there's some impatience out there 849 00:54:30.800 --> 00:54:35.719 with trying to get things done faster and then really 850 00:54:35.800 --> 00:54:42.400 can work with the Unless you know, I'll stop there. 851 00:54:43.320 --> 00:54:46.639 I'm afraid I'm probably going to wander into making legal 852 00:54:47.400 --> 00:54:49.440 judgments that I don't have the expertise to make. 853 00:54:51.079 --> 00:54:56.039 Well. Uh, I think Don's frozen cherry pie example is 854 00:54:56.079 --> 00:55:00.639 a good one. The CFR is just full of requirements 855 00:55:00.679 --> 00:55:04.280 like that. I am put in mind of one agency 856 00:55:05.880 --> 00:55:09.079 who came to the White House one day to announce 857 00:55:09.679 --> 00:55:13.920 that it had discovered or requirements still in the books. 858 00:55:14.039 --> 00:55:18.639 In twenty twenty, the required regulated entities to report via telegram. 859 00:55:20.119 --> 00:55:24.360 The last telegram was sent in twenty ten. There are 860 00:55:24.400 --> 00:55:29.159 no telegram companies in the world, so presumably regulated parties 861 00:55:29.199 --> 00:55:33.639 have not been complying. But nevertheless, it's you know, it's 862 00:55:33.719 --> 00:55:38.559 very problematic to have requirements like that that are forgotten, 863 00:55:39.159 --> 00:55:41.480 but that regulated parties have to decide on their own 864 00:55:41.519 --> 00:55:46.320 volition to disregard right, it's quite antithetical to the rule 865 00:55:46.360 --> 00:55:49.159 of law and damp and economic growth and luckt injury. 866 00:55:49.719 --> 00:55:54.639 So the agency was happy to rescind those requirements. But 867 00:55:55.159 --> 00:55:56.719 you know, I think if that story is kind of 868 00:55:56.800 --> 00:55:59.639 standing for the idea that probably just about every agency 869 00:55:59.760 --> 00:56:03.599 has has our cane requirements that it issued decades ago 870 00:56:03.719 --> 00:56:07.280 and forgot about and until it has a reason to 871 00:56:07.400 --> 00:56:09.599 go back and look, it's not it's not going to 872 00:56:09.639 --> 00:56:13.800 do all right. So we have two minutes left until 873 00:56:14.480 --> 00:56:18.559 the until twelve thirty, which

is the end of this webinar. 874 00:56:18.639 --> 00:56:21.199 So we turn for one more question, and here's here's 875 00:56:21.239 --> 00:56:25.880 a question from from Zach Hale. Zach asks how we 876 00:56:26.039 --> 00:56:30.280 know the current administration is actually implementing or achieving the 877 00:56:30.360 --> 00:56:32.519 objectives of the ten for one order. What do we 878 00:56:32.880 --> 00:56:35.199 what will we all be watching for in that ard? 879 00:56:36.880 --> 00:56:38.480 Yeah, that's a that's a good question. 880 00:56:38.760 --> 00:56:39.519 So the. 881 00:56:41.760 --> 00:56:44.519 And it is going to be hard because the ten 882 00:56:44.639 --> 00:56:49.000 for one, I'm sure that they'll meet it because they'll 883 00:56:49.039 --> 00:56:52.239 be able to define what's what's a deregulatory action and 884 00:56:52.280 --> 00:56:55.199 what's a regulatory action in such a way that they 885 00:56:55.280 --> 00:56:58.880 can finesse the accounting. The other part is done said, 886 00:56:58.880 --> 00:57:01.679 it's going to be more binding, the actual cost offset. 887 00:57:03.000 --> 00:57:06.920 So each year O and B is supposed to issue 888 00:57:06.920 --> 00:57:09.880 a report on the benefits and costs of their regulations. 889 00:57:10.000 --> 00:57:13.800 So we'll in the year, we'll see what that report says. 890 00:57:15.679 --> 00:57:18.440 But you know, I think all this will be taken 891 00:57:18.519 --> 00:57:20.360 with a grain of salt. What do you both you 892 00:57:20.480 --> 00:57:22.480 both worked in the Trump administration, what do you think? 893 00:57:24.079 --> 00:57:26.199 Well, I mean, I know that the o IRAH, you know, 894 00:57:26.440 --> 00:57:30.199 has also, you know, separately from the benefit cost report, 895 00:57:30.760 --> 00:57:33.960 also sort of had an accounting statement every year about 896 00:57:34.079 --> 00:57:36.639 exactly how it was doing on the two for one rule. 897 00:57:37.320 --> 00:57:41.519 And again, you know, the the rules, the counting up rules, 898 00:57:41.599 --> 00:57:43.639 REGs and d REGs is sort of the easy part. 899 00:57:44.440 --> 00:57:48.199 The harder parts the incremental budget cost savings. And I 900 00:57:48.199 --> 00:57:52.159 think the hardest part is, you know, have we really 901 00:57:52.280 --> 00:57:56.639 deregulated the most important things to deregulate. It's almost impossible 902 00:57:56.719 --> 00:57:59.039 to know. I mean, I think there when and that's 903 00:57:59.079 --> 00:58:01.280 not something that the administration is going to be able 904 00:58:01.280 --> 00:58:05.599 to definitively say or not. But I hope that academics 905 00:58:06.199 --> 00:58:08.880 will continue to provide that outside voice of Hey, it 906 00:58:08.960 --> 00:58:12.480 looks like yours. What was achieved and what wasn't achieved 907 00:58:12.960 --> 00:58:13.639 by this rule. 908 00:58:15.280 --> 00:58:18.199 Yeah, that tallies of my experience as well. I found 909 00:58:18.239 --> 00:58:24.320 that the cost budget is well really drives agency action 910 00:58:24.519 --> 00:58:27.960 more than the more than the ratio requirement. That was 911 00:58:28.000 --> 00:58:29.440 the case into two for one order. I have to 912 00:58:29.480 --> 00:58:31.079 imagine it's the case under the ten for one order, 913 00:58:31.159 --> 00:58:35.800 especially given that if memory serves, agencies can comply with 914 00:58:35.920 --> 00:58:42.000 the ratio requirement by rescinding guidance. Agencies have just trobes 915 00:58:42.239 --> 00:58:47.719 of guidance from from over the decades that often enough 916 00:58:47.760 --> 00:58:50.000 they don't. They don't bother to rescind. I think you know, 917 00:58:51.440 --> 00:58:54.400 I want to say, I'm the Department of Labor's guidance portal. 918 00:58:54.519 --> 00:58:57.880 Right now, there's nine thousand guidance documents was to write. 919 00:58:58.480 --> 00:59:01.360 I have to imagine that the agency, if it's said 920 00:59:01.800 --> 00:59:06.079 about it, could rescind hundreds of those in pretty short 921 00:59:06.159 --> 00:59:10.280 order and could use that recision to meet the ten 922 00:59:10.320 --> 00:59:12.679 for one requirement pretty well. But that wouldn't be very 923 00:59:12.760 --> 00:59:18.000 useful in meeting the right budgeting requirement unless they can 924 00:59:18.039 --> 00:59:21.880 show economic benefits from the recision of those of those 925 00:59:22.440 --> 00:59:25.400 guidance documents. So yeah, I tend to agree that the 926 00:59:29.119 --> 00:59:31.320 the more important provision of the ten for one order 927 00:59:31.320 --> 00:59:34.400 is actually the cost budgeting provision, and wealthy to assess 928 00:59:34.440 --> 00:59:39.159 on agencies do on that through the ORB reports. Well, I, oh, 929 00:59:39.199 --> 00:59:39.559 go ahead do. 930 00:59:40.400 --> 00:59:42.840 I would like to say. One thing that's true too, 931 00:59:43.000 --> 00:59:47.599 is that one deregulatory action can have huge cost savings, 932 00:59:47.800 --> 00:59:53.400 like the Cafe Standard Safe Act. A lot of the 933 00:59:53.480 --> 00:59:57.320 net regulatory cost savings of the first Trump administration are 934 00:59:57.360 --> 01:00:00.719 accounted for by one action. So when you're looking for 935 01:00:00.760 --> 01:00:03.400 those significant costs, look at the big look at the 936 01:00:03.440 --> 01:00:05.159 big regulation, big big regulations. 937 01:00:06.360 --> 01:00:10.239 That's right. Oh, that's right. Well, we are here at 938 01:00:10.320 --> 01:00:11.800 the at the end of our time together. So I 939 01:00:11.880 --> 01:00:15.599 want to thank our panels, Don and Susan, thank you 940 01:00:15.760 --> 01:00:19.320 very much for joining us, and thanks to the audience 941 01:00:19.559 --> 01:00:22.840 for being here as well, and we hope to see 942 01:00:22.840 --> 01:00:25.159 you soon. Let me over to you great. 943 01:00:25.280 --> 01:00:28.199 What a fantastic discussion. Thank you so much Paul for moderating, 944 01:00:28.320 --> 01:00:30.559 and thank you again to Susan and Don for joining 945 01:00:30.639 --> 01:00:33.320 us and for sharing your insights today. For more content 946 01:00:33.480 --> 01:00:36.280 like this from the Regulatory Transparency Project here at the 947 01:00:36.280 --> 01:00:39.679 Federalist Society discussing the regulatory state in the American way 948 01:00:39.679 --> 01:00:43.159 of life. Please visit us at regproject dot org. That 949 01:00:43.360 --> 01:00:44.760 is regproject dot org. 950 01:00:44.960 --> 01:00:49.079 Thank you on behalf of the Federal Society's Regulatory Transparency Project. 951 01:00:49.159 --> 01:00:52.119 Thanks for tuning in to the Fourth Branch podcast to 952 01:00:52.199 --> 01:00:54.719 catch every new episode when it's released. You can subscribe 953 01:00:54.800 --> 01:00:59.480 on Apple podcasts, Google Play, and speaker relays from our TP. 954 01:00:59.679 --> 01:01:02.800 Please visit our website at reg project dot org. That's 955 01:01:03.039 --> 01:01:04.880 r e G Project dot org. 956 01:01:13.800 --> 01:01:15.679 This has been a FEDSOC audio production