NYU Law’s Institute for Policy Integrity (IPI) held its fifth annual Cost-Benefit Analysis and Issue Advocacy Workshop on October 28, celebrating not only its own anniversary but also the vigentennial of Executive Order 12,866, signed by President Clinton in 1993 to establish principles that government agencies must follow when developing regulations, including cost-benefit analysis, risk assessment, and performance-based standards.
The keynote address of the all-day event was delivered by Howard Shelanski, the administrator of the Office of Information and Regulatory Affairs (OIRA), which operates within the Office of Management and Budget to oversee the review and implementation of regulatory policies. In introducing Shelanski, who has been a visiting professor at the Law School, Richard Revesz, dean emeritus and faculty director of IPI, called him, “from our perspective, close to the most important official in the federal government.”
In his first public address outside Washington, DC, as OIRA administrator, Shelanski, described by Revesz as a lawyer, economist, academic, and public servant, took the opportunity to outline his priorities for OIRA, discuss the progress his office has made, and examine certain elements of cost-benefit analysis.
Although, as Shelanski pointed out, OIRA has other duties, such as ensuring (per the Paperwork Reduction Act) that the government’s collection of information is not an undue burden, its biggest job is reviewing regulations under Executive Order 12,866 as well as Executive Order 13,653, which further tweaked the reviewing guidelines.
Shelanski’s current priorities include making the review process more predictable through greater timeliness and transparency, while still engaging in appropriately rigorous analysis of each regulation.
“Unnecessary delays in review,” said Shelanski, “are harmful to everyone: to those who lose the benefits of regulation, to those who wish to comment on proposed rules and influence policy, and to those who must plan for any changes the regulations require of them.” Recently, OIRA has reduced by more than half the number of rules under review for more than 200 days.
OIRA doesn’t examine just new regulation, Shelanski added; the office also retrospectively reviews existing rules in the interest of improving or eliminating them when necessary. “Regulatory review should not be a one-way ratchet,” he said, “but a process that removes unnecessary burdens while keeping beneficial regulation up to date and dynamic.” In addition, the office collaborates with foreign partners, the State Department, and the Office of the United States Trade Representative on matters of international regulation.
On the subject of cost-benefit analysis, Shelanski argued that it is an essential tool for regulatory policy, that it is difficult and must be done carefully, and that not all regulatory costs are new. Sometimes they are just shifted costs, he explained, as when a firm that had been dumping garbage in a neighbor’s lot must now pay to have it hauled away.
“Understanding what benefits a regulation will predictably bring to society and what society will predictably pay for those benefits brings both transparency and discipline to policymaking,” he said. “It prevents stakeholders that would point only to the costs from hiding the good things that a regulation might bring, but it also requires those who would regulate to show that the regulation really will bring benefits, and prevents them from achieving those benefits without regard to social cost.”
Also at the daylong workshop were former OIRA administrators Sally Katzen, a visiting professor at NYU Law, and Boris Bershteyn, as well as adjunct professor and former White House counsel C. Boyden Gray, who all spoke on a panel concerning the history of Executive Order 12,866. Other panels included one on jobs and environmental regulation, and another on the social cost of carbon moderated by Michael Livermore ’06, former executive director of IPI.
Watch the full video of Howard Shelanski’s keynote (16 min):
Watch the full video of “Issue Advocacy and Cost-Benefit Analysis 101” (57 min):
Watch the full video of the workshop introduction and “The Social Cost of Carbon” (1 hr, 55 min):
Watch the full video of “Jobs and Environmental Regulation” (1 hr, 21 min):
Watch the full video of “Twenty Years of Executive Order 12,866” (1 hr, 14 min):