A main feature of the misleading campaign to scapegoat regulations as the “job-killing” culprit of our nation’s economic troubles has been a dogmatic insistence on more and more “cost-benefit analysis” at federal agencies.
Lobbyists (and the companies that back them) and lawmakers who oppose regulations for ideological (or financial) reasons have long used cost-benefit analysis to obstruct vigorous public health and safety protections. Proponents of such analyses claim they seek merely to require agencies to assess the economic costs and benefits of their actions. In practice, however, cost-benefit analyses amount to the scientific equivalent of trying to predict the future – and then interpreting the predictions through a purely economic lens.
In other words, the practice has more to do with delaying the implementation of regulations and distracting agencies with resource-intensive busywork than ensuring that the will of Congress is carried out.
Consider Rep. Scott Garrett (R-N.J.), who outspokenly supported the need for cost-benefit analysis when it came to regulations he opposed – namely, those created by the Dodd-Frank Wall Street reform bill. Meanwhile, Garrett conveniently ignored the need for cost-benefit analysis of regulations he supported – those originating from the ill-conceived JOBS Act, which lets all but the largest newly public companies dodge regulations that protect investors.
In the previous Congress, Garrett introduced the SEC Regulatory Accountability Act” (PDF), a bill that would require the SEC to conduct a host of new cost-benefit analyses when crafting regulations. It would also require the SEC to prioritize versions of regulations that “impose the least burden on … market participants.” If enacted, this would be a recipe not only for more delays, but likely weakened reforms as well.
Of the 95 rules the SEC was tasked with instituting under Dodd-Frank, the agency has been able to finalize only 32. Garrett’s bill would add further delay to Dodd-Frank’s implementation.
Meanwhile, Garrett is on record complaining that the JOBS Act isn’t being implemented quickly enough. The irony is that if Garret’s own bill had passed, the JOBS Act – which Congress passed more than two years after Dodd-Frank, would also be delayed even further. Garrett and other JOBS Act supporters and Dodd-Frank opponents are trying conveniently to ignore this fact.
Recently, Rep. Patrick McHenry (R-N.C.), one of Rep. Garrett’s colleagues in the House, sent a letter to outgoing SEC Chairwoman Schapiro berating her for delays and missed deadlines in implementing one of the JOBS Act provisions. Missed deadlines, further delays … Sound familiar? Yet, as Public Citizen pointed out, what is so breathtakingly hypocritical is Rep. McHenry’s call, echoed by Rep. Garrett, that the SEC institute JOBS Act rules immediately, with no cost-benefit analysis, and with no public input.
So what’s the takeaway concerning ongoing conservative and corporate support for cost-benefit analysis? The only way to reconcile the need for endless cost-benefit analysis when it comes to Dodd-Frank while giving the JOBS Act a free pass on the same topic, is to recognize that it has become nothing more than a political tool to be exploited when expedient and ignored when inconvenient.
Amit Narang is Public Citizen’s regulatory policy advocate. Keep up with regulatory policy issues on Twitter by following @RegsRock.