On the departure of Obama’s regulatory czar and cost-benefit analysis

In a New York Times story reporting on the resignation of Cass Sunstein, President Obama’s director of the Office of Information and Regulatory Affairs (OIRA), the paper missed an opportunity to take readers beyond the rhetoric to reality.   One sentence in the article said this:

“Business lobbies and Republicans in Congress complain frequently about ‘job-killing’ regulations, citing rules like the E.P.A.’s new standard for carbon emissions from power plants (recently upheld by a federal appeals court) and the Department of Labor’s new worker-safety rules.”

“What Department of Labor’s new worker-safety rules?” I asked myself.   Under President Obama, the Occupational Safety and Health Administration (OSHA) has only issued three new worker safety rules, two of which were initially proposed during the G.W. Bush Administration.

  • One issued in August 2010 on construction cranes which was estimated to affect only bout 210,000 firms nationwide that own or rent this type of equipment.  Fewer than 4% of the 5.7 million business across the country are affected by this rule.
  • One issued in May 2011 regarding working conditions in the nation’s 2,725 shipyards, such as lock-out/tag-out protections and training for first-aid responders.  The regulation replaced rules that were 40 years old and ridiculously outdated.
  • One issued in March 2012 to harmonize chemical hazard warnings and labels with global standards. This rule was largely supported by the business community because of the estimated annual savings of $475 million to comply with it compared to the current regulation.

I’m sure some of the complaining has not actually been about “new” worker safety rules, but about OSHA’s decision to begin enforcing some rules that have been on the books for decades.  This would include fall protection standards for workers involved in residential construction and renovation,  and certain requirements to prevent work-related hearing loss.   Or maybe some of the business communities’ belly aching was about a Labor Department’s proposal to protect workers aged 15 years and younger from certain dangerous tasks on farming operations.  Ultimately, the Obama Administration’s Labor Department ditched two of three of these other worker safety improvements, facts that reporters and editors should give readers when media outlets decide to repeat erroneous complaints about too many worker safety regulations.

The announcement of OIRA chief Cass Sunstein’s departure brought about this laudatory statement from the President:

“From putting in place lifesaving protections for America’s families, to eliminating tens of millions of hours of paperwork burdens for our nation’s citizens and businesses, Cass has shown that it is possible to support economic growth without sacrificing health, safety, and the environment.  Cass has shepherded our review of existing rules to get rid of those that cost too much or no longer make sense, an effort that is already on track to save billions of dollars.  With these reforms and his tenacious promotion of cost-benefit analysis, his efforts will benefit Americans for years to come.”

But it’s another one that needs a reality check.  I’ve not forgotten last year when President Obama jumped head first onto the anti-regulatory band wagon, some of his favorite examples of allegedly burdensome rules involved worker safety protections.  Failing to act—when the consequence is more years of harm—is a decision that indeed sacrifices health and safety.  Do they think we’re stupid?

Alan White, 47, a foundry worker from Buffalo, New York suffers from silicosis, the disabling, irreversible, fibrotic lung disease that could be prevented with an effective OSHA silica regulation.  It’s one of the oldest known occupational health hazards, yet OSHA doesn’t have a comprehensive standard to protect workers from it. The agency set out to change that and submitted a draft proposed regulation in February 2011 to OIRA for review.  Eighteen months later it’s still there collecting dust.  So much for “putting in place lifesaving protections for America’s families.”

What’s really appalling is that this review is for a proposed rule—not a rule that will take affect any time in the near future—but a document about which the public will be encouraged to critique, comment and improve.   For every month the proposed rule is delayed, the time clock for when a final rule might be issued is pushed further and further into the future, adding years of silica exposure to the affected workers.  Where Mr. Obama sings Mr. Sunstein’s praises, I see failure and measurable harm.

And did the President really say Mr. Sunstein’s “tenacious promotion of cost-benefit analysis” serve well America’s families?  As scholars with the Center for Progressive Reform have written convincingly:

“As practiced in the real world, cost-benefit analysis has proved hopelessly indeterminate—that is, cost-benefit analysis has proved incapable of eliminating those ambiguities and uncertainties that are of such a magnitude that they render it impossible to calculate the costs and/or benefits of a proposed regulation with sufficient specificity to allow any meaningful comparison.  These flaws open up government decisionmaking to manipulation by interest groups, rather than rationalizing the process.  Similarly, rather than promoting the democratic goals of transparency and public accountability, cost-benefit analysis obscures the inevitable policy choices and value judgments that underlie government decisionmaking behind a veil of numbers…”

Mr. Alan White and other silicosis-ridden workers will tell you, it’s one thing to calculate medical care or loss wages for the inputs in a cost-benefit analysis.  It’s quite another thing to try to assign a value to simply taking a big, deep breath, carrying your grandchild in your arms without getting winded, climbing a flight of stairs, or knowing you’ll be alive for your children’s weddings.   Because these factors can’t be monetized, they are just white noise in cost-benefit analyses.  It makes me sad to hear our President say that a regulatory system that pays homage to cost-benefit analysis serves America’s families well.