Once Again, Benefits of Public Standards and Safeguards Far Outweigh Costs
by Ronald White, 6/22/2015
The Office of Management and Budget (OMB) recently issued an annual report to Congress that finds the benefits of major standards and safeguards far outweigh their costs. It serves as yet another indicator of the value of public protections and the positive impacts they have on Americans' everyday lives.
The report, required under the Regulatory Right-to-Know Act, summarizes the benefits and costs of major federal rules issued between fiscal years 2004 to 2013. Major rules have an anticipated annual economic impact of $100 million or more and are subject to review by the Office of Information and Regulatory Affairs at OMB.
The benefits of public protections vastly outweigh their costs.
The version OMB submitted on June 15 updates a draft report released in June 2014, and it assesses the yearly benefits and costs of 116 “major rules” issued by nine federal agencies during the past decade. OMB found that the total benefits of these rules outweighed costs by as much as a 10-1 margin.
Specifically, the report found that the total annual benefits of these rules ranged between $262 billion to $1 trillion over 10 years, compared to estimated costs of between $69 and $102 billion (in 2010 dollars).
As illustrated in the figure below, the report also finds that the benefits of rules exceeded their costs every year of the ten-year period. In some years, the benefit-to-cost ratio reached more than 20 to 1.
Note: The figures shown in the chart above represent the midpoints of the range of benefits and costs estimated for the rules issued in each fiscal year
But this may be just the tip of the iceberg: as the report indicates, “in many instances, agencies were unable to quantify all benefits and costs…the monetized estimates we present necessarily exclude these unquantified effects.” In other words, the full benefits of standards and safeguards are even greater than what OMB included in the report estimates.
The vast majority of the estimated benefits and costs come from 24 air pollution rules the Environmental Protection Agency (EPA) issued over the past decade.
EPA rules have contributed to a substantial improvement in air quality and public health. For example, levels of small particle pollution, linked to a host of health impacts including early death, lung cancer, and low birth weights in babies, declined by 34 percent between 2000 and 2013.
In addition to environmental protections, the report examined public protections related to food safety, worker safety, transportation safety, patient safety, consumer finance, and safety of imported goods and foods.
The report underscores previous findings that the public protections developed by the federal government not only safeguard our health and safety, they make economic sense, as well.
For Additional Reading:
Center for Effective Government, The Benefits of Public Protections: Ten Rules That Save Lives and Protect the Environment - http://www.foreffectivegov.org/benefits-public-protections-2014 (July 2014)
Center for Effective Government, The Fine Print: 2014 OMB Report Shows Substantial Public Protection Benefits Achieved at Low Cost - http://www.foreffectivegov.org/blog/2014-omb-report-shows-substantial-public-protection-benefits-achieved-low-cost (6/10/14)
Center for Effective Government, The Fine Print: OMB Report: Standards and Safeguards Have Produced Vast Benefits at Minimal Cost - http://www.foreffectivegov.org/standards-and-safeguards-have-produced-vast-benefits-at-minimal-cost (5/7/13)