Is Biden putting obstacles in the way of implementing his agenda?

Industry wants it both ways. The executive branch is required to enact new laws via regulation and rulemaking. Often industry wants the bureaucracy to go slow, consider every alternative, find the least burdensome way no matter how long it takes or how many people are harmed during the process.

On the other hand, if industry wants a permit to build a facility or dig a coal mine, it wants the same bureaucracy to not consider alternatives or climate impacts or anything that would slow it down the project, particularly input from affected communities.

The new Inflation Reduction Act only passed through Congress and became law after Senate leadership secured a key vote from Sen. Joe Manchin (D-W.Va.) — with the agreement of a side deal on “permitting reform” seen by many as an opportunity to soft industry regulation. Meanwhile, the White House nominated Richard Revesz for administrator of the Office of Information and Regulatory Affairs at the U.S Office of Management and Budget, where he would head the federal regulatory review process.

With these recent events, I believe the Biden administration is unnecessarily undercutting its climate and societal goals. Industry will win and the public lose.

The vague Manchin side deal on “permitting reform” is apparently based on a document by the American Petroleum Institute. This proposal ignores the seven National Environmental Policy Act (NEPA) and regulatory changes since 2015 and promises more confusion and less public input into projects who have both good and bad impacts. Although most project delays are caused by local opposition not just by NIMBYs (those who cry “not in my backyard”) but zoning restrictions, local elected officials, supply chain problems and inadequate funding. The proposal instead takes dead aim at NEPA  and its requirement to consider — not reduce, but just consider — climate impacts and public comments.

If the “permitting reform” draft is accurate, the proposals attempt to run roughshod over the public and the climate hindering the frontispiece of the Biden agenda. 

The other problem on the horizon is the attempt to put a break on the pedal of implementing the Biden agenda, by using the faulty “science” of cost-benefit analysis to slow down rules implementing the laws Biden proposed.

The regulatory process

Past administrations, Democratic and Republican, pushed by Congress and stoked by industry lobbyists, made the rulemaking process so time-consuming and treacherous that public health and safety were sacrificed. Public protections were weakened or abandoned to the false claim of regulatory burdens on the economy. It takes a decade for the simplest safety labor regulation to come into effect and most environmental rules takes more than an administration to finish. When Congress passes a law and tells the agencies to implement it, four years should not be considered warp speed.

The regulatory maze

The regulatory process for a typical rule with a $100 million cost (without considering any benefit yet, if it has a billion-dollar benefit, the entire process must still be adhered to) enters an Alice-in-Wonderland world of a statutory and non-statutory process that requires numerous steps of questionable value. The key problem is the cost-benefit analyses.

Cost-benefit analysis is the art or fantasy of predicting the future based on limited data. Imagine the number of variables in a new gas mileage requirement or mobile air sources rule — a rule that may impact millions of individual decisions by consumers and businesses. Other technical issues, such as discounting future benefits seem designed to undercut governmental efforts to address future problems such as climate change or the value of future lives.

What’s an IQ point worth, in dollars?

In many cases, particularly in the environmental area, benefits are next-to-impossible to monetize (mathematically or ethically) such as the value, in dollars of a child’s IQ, per point, to evaluate whether it is worth it to remove lead from water pipes. (More per point for males than females because males earn more than females.) In many cases, as Temple University Law Professor Amy Sinden points out, the solution in the cost-benefit process is to assume those benefits are zero even in cases, such as removing toxics from the air was the specific intent of the law. In the end, in many cases, despite the best efforts of governmental officials, costs are exaggerated and the benefits discounted.

Cost-benefit analysis is such a problematic science that when proponents do the rare “retrospective review” to look back at the predictive quality of past cost-benefit studies, they are forced to admit that the past data was often inadequate or has too many variables. If they can’t look back, how can they look ahead? Ironically, cost-benefit studies would fail a cost-benefit test.

One of the academic supporters of this failed policy is Revesz, who is the White House pick to be the regulatory czar at the Office of Management and Budget. Undoubtedly, this nominee will have no problem getting Republican support for his appointment, while persuading the progressives to support returning to a cost-benefit state. But it was a failed state.

Revesz is likely aware of many of the fairness issues involved with cost-benefit analysis, such as its neglect of distributive effects among low-income communities. However, all their solutions will mean more questionable analysis and even more delay.

Regulatory standards redundancy

Downgrading cost-benefit does not make statutory requirements arbitrary. As University of Chicago Law Professor Daniel Faber noted in his critique of an article Revesz co-authored on using cost-benefit to protect the environment, most health and environmental statutes have balancing requirements: some that favor worker safety over costs and others that put a heavy emphasis on cost. Overlaying cost-benefit on top of the statutory requirements just makes the whole process more complicated and easier for anti-regulatory forces to prevail.

The president and the Democratic congressional leadership need to call a time out and consider whether undercutting NEPA and its climate analysis and encouraging bureaucratic processes to slow down needed safety, health, environment and securities regulations on everything Biden wants to accomplish, makes sense.

Scott Slesinger is a former lobbyist and legislative director of the Natural Resources Defense Council. He previously worked as a staffer in the House, the Senate, as well as in the Environmental Protection Agency’s Office of Legislative Affairs and Enforcement Office.