Reg Analysis & Theory
Statutory Delegation, Agency Authority, and the Asymmetry of Impact Analysis
February 26, 2020
By: Jerry Ellig & Michael Horney
This article documents the diverse degrees of discretionary authority Congress grants US executive branch agencies. It then presents a case study that systematically compares the quality of impact analysis that informed legislative and regulatory decisions on positive train control, a technology mandated by statute in 2008.
Regulating Agencies: Using Regulatory Instruments as a Pathway to Improve Benefit-Cost Analysis
February 18, 2020
By: Christopher Carrigan, Mark Febrizio, & Stuart Shapiro
This working paper is part of a symposium hosted by the C. Boyden Gray Center for the Study of the Administrative State at George Mason University’s Antonin Scalia Law School titled Bureaucracy and Presidential Administration: Expertise and Accountability in Constitutional Government.
Regulatory Oversight and Benefit-Cost Analysis: A Historical Perspective
January 15, 2020
By: Susan E. Dudley
The Office of Information and Regulatory Affairs (OIRA) in the Executive Office of the President coordinates the federal government’s regulatory agenda, reviews executive branch agencies’ draft regulations, and oversees government-wide information quality, peer review, privacy, and statistical policies. Remarkably, its regulatory oversight functions, and the benefit-cost framework underlying them, have not changed significantly through six very different presidential administrations. This article examines the evolution of executive regulatory oversight and analysis from the 1970s to today, exploring the reasons for its durability and whether the current imposition of a regulatory budget challenges the bipartisan nature of regulatory practice.
STB's Rate Review and Market Dominance -- Reply Comment
January 13, 2020
By: Jerry Ellig
This reply comment addresses issues raised during two recent proceedings where the Surface Transportation Board proposed a streamlined approach to assessing whether a railroad has market dominance and a final offer process for small rate disputes.
Pursuing Consilience: Using Behavioral Public Administration to Connect Research on Bureaucratic Red Tape, Administrative Burden, and Regulation
December 30, 2019
By: Christopher Carrigan, Sanjay K. Pandey, & Gregg G. Van Ryzin
Behavioral public administration (BPA) research aspires not only to draw on developments in behavioral science but also, importantly, to address central themes in public administration. By focusing a symposium on bureaucratic red tape, administrative burden, and regulation, we encouraged BPA scholarship to engage with fundamental public administration topics that are also relevant for the broader literature on organizations and management. Indeed, the symposium contributions demonstrate how BPA can better meld the behavioral science and public administration literatures. They expand on existing conceptions of BPA, with respect to both methodology and topical focus, and provide a basis for demarcating what might and might not be usefully described as BPA. The symposium contributions provide a blueprint for how BPA research might usefully evolve and the introduction offers a philosophical reflection on the future development of BPA and behavioral science.
OIRA’s Regulatory Reform Report for Fiscal Year 2019
December 18, 2019
By: Mark Febrizio & Daniel R. Pérez
The Regulatory Reform Results for Fiscal Year 2019 are out, and OIRA is touting that regulatory agencies produced $13.5 billion in present value cost savings. Beyond the glossy highlights, however, are a few important “firsts” in implementation, such as total agency cost savings falling short of the government-wide targets.
Upcoming CRA Deadline has Implications for Regulatory Oversight by Congress
December 11, 2019
By: Daniel R. Pérez
The Congressional Review Act allows Congress to disapprove regulations issued by agencies and contains a lookback provision that places almost six months of rulemaking in jeopardy of elimination by the next Congress. The window for this period of review opens in 2020, but agencies will have to weigh the tradeoffs of rushing to publish their rules before the window. According to the 2020 House calendar, any rules issued after May 19, 2020 may be subject to review by the 117th Congress. However, historical data suggest the lookback period is more likely to begin sometime in July or early August of 2020.
Designing a Choice Architecture for Regulators
December 03, 2019
By: Susan E. Dudley & Zhoudan Xie
Recognizing that cognitive biases can also affect regulators themselves, this article attempts to understand how the institutional environment in which regulators operate interacts with their cognitive biases. This article offers suggestions for improving the regulatory choice architecture at federal agencies by having public managers and policy makers factor in predictable biases when regulating individual behaviors or market transactions.
STB's Railroad Revenue Adequacy
December 02, 2019
By: Jerry Ellig
The Surface Transportation Board will hold a hearing on December 12 to discuss recommendations from the STB's Rate Reform Task Force. This comment addresses several of the task force's proposals, and provides additional recommendations for the STB to improve its revenue adequacy regulations.
Regulatory Impact Analysis and Litigation Risk
November 22, 2019
By Christopher Carrigan, Jerry Ellig, and Zhoudan Xie
This paper explores the role that the regulatory impact analyses (RIAs) that agencies are required to prepare for important proposed rules play in decisions by courts about whether these rules should be upheld when they are challenged after promulgation. The results suggest that better RIAs are associated with lower likelihoods that the associated rules are later invalidated by courts, provided that the associated agency explains how it used the RIA in its decision-making. When the agency does not describe how the RIA was utilized, there is no correlation between the quality of analysis and the likelihood the regulation will be invalidated. An explanation of the RIA’s role in the agency’s decision also appears to increase the likelihood that the regulation will be invalidated by inviting an increased level of court scrutiny, and as a result, the quality of the RIA must be sufficiently high to offset this effect.
Rail Regulators Ponder Benefit-Cost Analysis
November 18, 2019
Although regulatory impact analysis would certainly not automate STB regulatory decisions, it would provide a coherent and organized framework for discovering and presenting information about the likely consequences of regulatory alternatives.
STB's Market Dominance and Final Offer Rate Review
November 06, 2019
By: Jerry Ellig
The two rulemakings this comment addresses are the Surface Transportation Board’s (STB’s) latest efforts to develop simpler and less costly rate complaint processes. These two proceedings provide an excellent opportunity for the STB to “test drive” the framework for benefit-cost analysis that is most commonly employed by federal agencies: the analytical principles and requirements articulated in President Clinton’s Executive Order 12866 and OMB Circular A-4. The most common and accurate term for this type of analysis is “Regulatory Impact Analysis” (RIA), because a full RIA involves more than just estimation of benefits and costs. This comment briefly explains the RIA framework and demonstrates how it could be used to answer key factual questions the STB must answer in order to accomplish its statutory goals.
Lost in the Flood?: The Efficacy of Mass Comment Campaigns in Agency Rulemaking
October 02, 2019
By: Steven J. Balla, Alexander R. Beck, Elizabeth Meehan, and Aryamala Prasad
By assembling information about more than 1,000 mass comment campaigns that occurred during Environmental Protection Agency rulemakings between 2012 and 2016, the analysis addresses the manner in which the agency responds to campaigns and the association between campaigns and the substance of rules.
Where's the Spam? Interest Groups and Mass Comment Campaigns in Agency Rulemaking
September 27, 2019
By: Steven J. Balla, Alexander R. Beck, William C. Cubbison, & Aryamala Prasad
Through an analysis of more than one thousand mass comment campaigns submitted on Environmental Protection Agency rulemakings between 2012 and 2016, this article's findings suggest that mass comment campaigns are not a phenomenon meriting unique explanation, but rather occur in a manner similar to lobbying in other policymaking venues, such as lawmaking in Congress. The research also confirms expectations that campaigns submitted by regulated entities (i.e., industries) are more substantive than campaigns generated by beneficiaries of stringent regulations (e.g., environmental advocacy groups).
Dynamic Benefit-Cost Analysis for Uncertain Futures
September 17, 2019
By: Susan E. Dudley, Daniel R. Pérez, Brian F. Mannix, & Christopher Carrigan
Policymakers face demands to act today to protect against a wide range of future risks, and to do so without impeding economic growth. Yet traditional analytical tools may not be adequate to frame the relevant uncertainties and tradeoffs. Challenges such as climate change, nuclear war, and widespread natural disasters don't lend themselves to decision rules designed for discrete policy questions and marginal analyses. We refer to such issues as "uncertain futures."
Muddling-Through and Deep Learning for Managing Large-Scale Uncertain Risks
September 17, 2019
By: Tony Cox
Building on Charles Lindblom's research on the limits of rational-comprehensive decision-making, Tony Cox provides insights on how machine learning can help individuals and institutions make better informed decisions - improving society's experience of 'muddling through' policymaking under uncertainty.
From Football to Oil Rigs: Risk Assessment for Combined Cyber and Physical Attacks
September 17, 2019
By: Fred S. Roberts
Reviewing risk assessment to scenarios of terrorist attacks on critical infrastructure including U.S. sporting venues and the international maritime transportation system. Fred Roberts notes that these assessments traditionally treat physical and cyber attacks separately and are inappropriate for considering the risk of combined attacks that include both a physical and cyber component. He proposes a framework informed by expert judgment to determine whether an attacker would likely prefer executing a combined or traditional physical attack on a given target.
Nuclear War as a Global Catastrophic Risk
September 17, 2019
By: James Scouras
James Scouras identifies nuclear war as a global catastrophic risk and suggests that multidisciplinary studies that combine insights from "historical case studies, expert elicitation, probabilistic risk assessment, complex systems theory, and other disciplines" can address many of the shortcomings of single analytic approaches. He suggests that experts can address current gaps in their assessments of the consequences of nuclear weapons by further investigating understudied phenomena (e.g., the effects of electromagnetic pulses, nuclear winter, the prolonged effects of radiation).
Responsible Precautions for Uncertain Environmental Risks
September 17, 2019
By: W. Kip Viscusi, Joel Huber, & Jason Bell
Elaborating on best practices for decisionmakers facing low probability, high consequence hazards. Viscusi, Huber, and Bell point out that these uncertain risks create incentives to pursue suboptimal policy approaches that potentially over commit public resources to less consequential hazards.
David Versus Godzilla: Bigger Stones
September 12, 2019
By: Jerry Ellig & Richard Williams
For nearly four decades, U.S. presidents have issued executive orders requiring agencies to conduct comprehensive regulatory impact analysis (RIA) for significant regulations to ensure that regulatory decisions solve social problems in a cost-beneficial manner. Yet experience demonstrates that agency RIAs often fail to live up to the standards enunciated in executive orders and OMB guidance. We suggest four managerial changes that could increase OIRA’s leverage.
OIRA Past & Future
September 12, 2019
By: Susan E. Dudley
While some of the Office of Information and Regulatory Affair’s functions are statutorily granted, others—notably those related to regulatory policy—derive from presidential executive orders. This paper reflects on OIRA's evolution over the almost 40 years since the Paperwork Reduction Act created it in 1980 to understand what has made it so durable.
Clean Power v. Clean Energy
July 31, 2019
By: Brian F. Mannix
The Environmental Protection Agency (EPA) recently issued three final regulatory actions governing greenhouse gas emissions from electric power plants. These rules will face new legal challenges based on both the economic analysis and the statutory authority for EPA’s actions. Mannix briefly reviews some of the major issues likely to be in contention.
Agricultural Research and 2018 Farm Bill Implementation
July 31, 2019
By: Joseph J. Cordes
On June 13, 2019, the U.S. Department of Agriculture (USDA) released what it describes as a “Cost-Benefit Analysis” of the proposed relocation of NIFA and ERS from Washington DC to Kansas City. Based on its analysis the USDA concludes that relocation of these two agencies would save $19 million per year which could be reinvested in other USDA programs. This written testimony accesses the agency's benefit cost analysis under Circular A-94 standards.
Nudging the Nudger: Toward a Choice Architecture for Regulators
July 16, 2019
By: Susan E. Dudley & Zhoudan Xie
Recognizing that “bounded rationality” also occurs in the regulatory process and building on public choice insights that focus on how institutional incentives affect behavior, this article explores the interaction between the institutions in which regulators operate and their cognitive biases. It attempts to understand the extent to which the “choice architecture” regulators face reinforces or counteracts predictable biases. Just as behavioral insights can help design a choice architecture that frames individual decisions in ways that encourage welfare-enhancing choices, designing the institutions that counter regulators’ cognitive errors could lead to more public-welfare-enhancing policies.
IRS's Safe Harbor Notice on State and Local Tax Credits
July 10, 2019
By: Jerry Ellig
The IRS seeks comment on a guidance notice that allows taxpayers to count contributions for which they received a state or local tax credit as a payment of state or local taxes, subject to the $10,000 SALT cap. This notice corrects a problem created by a regulation issued on June 11, 2019, which prohibits taxpayers from taking a charitable deduction if they received a state or local tax credit in exchange for the contribution. Without this notice, the regulation is overly broad, because it takes away the deduction for taxpayers below the SALT cap even though they are not a cause of the tax avoidance problem the regulation seeks to solve.
Privacy Research: The Need for Evidence in the Design of U.S. Privacy Policy
July 03, 2019
By: Daniel R. Pérez
This regulatory policy insight details the importance of using evidence to inform the development of U.S. privacy policy and identifies the kinds of evidence that would be particularly useful for policymakers to consider
FDA's Proposed Rule on Mammography Standards
June 24, 2019
By: Bridget C.E. Dooling
Early detection of breast cancer can save lives, and mammography is one of the screening tools that has contributed to reductions in breast cancer mortality. The FDA has a unique role in mammography and should be commended for proposing to update its rules, however, the proposed rule’s breast density notification raises issues of state preemption; lessons that can be learned from testing, evaluation, and assessment of prior state action; and analysis of distributional and equity effects.
From Beginning to End: An Examination of Agencies’ Early Public Engagement and Retrospective Review
May 07, 2019
By: Susan E. Dudley
Susan Dudley testified before the U.S. Homeland Security and Governmental Affairs Regulatory Affairs and Financial Management Subcommittee on May 7, 2019, commending the Subcommittee’s bipartisan regulatory reform legislation. By 1) engaging public input earlier in the regulatory development process and 2) providing for retrospective review of regulations to evaluate whether they are achieving their objectives, the two bills can help ensure that regulations are based on the best evidence available and that they are working as intended for the American people.
DOE's Energy Conservation Program for Appliance Standards
May 07, 2019
By: Mark Febrizio
The Department of Energy is proposing to update and modernize its current rulemaking methodology for establishing new or revised energy conservation standards and test procedures, called the “Process Rule.” While the agency has adhered to internal procedures for years, the notice of proposed rulemaking seeks to make those procedures binding on the agency. The proposed rule includes many important provisions and is largely a step in the right direction. This public comment focuses on eight areas of interest in the revised Process Rule, highlighting both beneficial changes and additional areas for improvement.
Revising WOTUS
April 16, 2019
By: Jonathan H. Adler
In this public interest comment, Jonathan Adler finds that the EPA and the Army Corps of Engineers proposed revision of the definition of “waters of the United States” is a substantial improvement over prior definitions, not least because it acknowledges the statutory and constitutional limits on federal regulatory jurisdiction under the CWA and takes seriously the need for greater clarity and certainty about the scope of federal regulatory jurisdiction.
IRS Qualified Business Income Deduction
April 08, 2019
By Jerry Ellig & Jeffery Kaufman
The 2017 tax reform allowed investors in real estate investment trusts (REITS) and publicly-traded partnerships (PTPs) to take a tax deduction equal to 20 percent of qualifying distributions from REITs and PTPs. The Internal Revenue Service seeks comment on whether investors should also be allowed to take this deduction if they own REITs or PTPs through a regulated investment company, such as a mutual fund. Unfortunately, the IRS did not conduct an economic analysis sufficient to determine which choice is economically efficient. A complete analysis would first assess whether the deduction is economically efficient; building on that analysis, the IRS could then determine whether extending the deduction is efficient. We provide some illustrative calculations that point the way toward a more complete analysis.
Wasted Energy: DOE’s Inaction on Efficiency Standards and Its Impact on Consumers and the Climate
March 07, 2019
By: Brian Mannix
The House Committee on Energy and Commerce, Subcommittee on Energy held a hearing titled, "Wasted Energy: DOE's Inaction on Efficiency Standards and Its Impact on Consumers and the Climate." Research Professor Brian Mannix submitted a written statement on the 40 year history of appliance efficiency standards, and why analysis dating back to the Carter administration is still relevant today.
NTIA's Approach to Consumer Privacy
November 12, 2018
By Daniel R. Pérez
The National Telecommunications and Information Administration issued a request for public comments on developing the administration's approach to consumer privacy. This public interest comment provides an overview of the agency's proposed approach to guide federal policymaking, and provides three core recommendations (1) Privacy regulation should be based on consumers' value, (2) the benefits of regulation should exceed social costs, and (3) future research should be focused on improving benefit-cost analysis of privacy regulations.
EPA's Proposed “Affordable Clean Energy” (ACE) Rule
October 31, 2018
By Brian F. Mannix
The proposed “Affordable Clean Energy” (ACE) rule rests on a stronger legal foundation and a sounder economic analysis than the stayed Clean Power Plan (CPP). In particular, the choice of a “best system of emissions reduction” (BSER) based on heat-rate efficiency, a measure of CO2 intensity, is much more consistent with the Clean Air Act than was the CPP’s statewide budget approach, as is the decision to use domestic benefits to justify the rule. The proposed reforms to section 111(d) procedures and to the New Source Review criteria are both important and stand on their own right.
SAFE Vehicles Rule
October 25, 2018
By Julian Morris
Executive Director of the International Center for Law & Economics and a Senior Fellow at the Reason Foundation - provides insights on the effects of the Safer Affordable Fuel-Efficient Rule and the preliminary regulatory impact analysis thoroughly completed by the EPA and NHTSA. This public interest comment discusses the likely effects of the rule on vehicle fuel economy, fuel consumption, the cost of new and used vehicles, safety, and the environment. The author's findings suggest that the new rule will save billions of dollars in economic costs, potentially decrease traffic fatalities, and is unlikely to have a significant negative effect on the environment.
IRS's Proposed Rule on SALT Credits
October 12, 2018
By Jerry Ellig
The Internal Revenue Service (IRS) has proposed a regulation that would prevent all individual taxpayers from claiming a federal charitable deduction if the taxpayer received a state tax credit equivalent to more than 15 percent of the donation. This comment explains why the proposed regulation is much broader than necessary to address the real problem the IRS seeks to solve: state tax credit programs designed explicitly to aid taxpayers in avoiding the cap on deductibility of state and local taxes.
Dept. of Education's Student Assistance & Loan Programs
September 07, 2018
By: Daniel R. Pérez
This comment argues that the Dept. of Education's proposal to rescind its 2016 change to the definition of misrepresentation and to change its 2016 approach making a priori assumptions about the quality of non-profit and for-profit schools better complies with existing regulatory requirements. The Department should retain borrowers’ ability to file affirmative claims, collect additional data to inform future rulemaking, and more thoroughly consider the net impact of its proposed rules on processing borrower claims on a case-by-case basis.
Council on Environmental Quality - Implementing NEPA
August 20, 2018
By: Mark Febrizio
This comment makes recommendations for how the Council on Environmental Quality could improve its data collection methods, how to use those data to enhance retrospective review of National Environmental Policy Act regulations and their effect on industry and the environment, and where to increase transparency in its decision-making process.
Increasing Transparency in Considering Costs and Benefits in the Rulemaking Process -- Update
August 20, 2018
By: Brian F. Mannix
In this comment, Mannix explores the reasons why the Council on Environmental Quality might choose to conduct a rulemaking on the general topic of how it considers benefits and costs, reviews some of the legal considerations that should be brought to bear on that effort, and recommends that the administration consider encouraging this type of activity in other agencies.