Biden White House Releases Newest Regulatory Cost-Benefit Report

The just-ended election cycle highlighted spending and inflation. To the Trump campaign, over-regulation was also central.

We know somewhat precisely the size of the federal debt, now $35.9 trillion. As for regulation, though, we have no clue; and if societal benefits of regulation across the board did exceed costs and do more good than harm, there isn’t anyone who would actually know it. We have good reason to doubt it, since almost none of the federal government costly interventions are actually quantified.

More than a year overdue, a draft fiscal year 2023 edition of the White House Office of Management and Budget’s (OMB) Report to Congress on the Benefits and Costs of Federal Regulations and Agency Compliance with the Unfunded Mandates Reform Act appeared November 6.

The new edition addresses certain rules regarded as major by regulators. It depicts 19 fiscal year 2023 rules with both benefits and costs quantified, that cumulatively cost $16.1 billion annually. It unearths another 10 rules that lack monetized benefits but that that are said to cost $1.92 billion annually (2022 dollars).

In OMB’s report, the new rules come from the Environmental Protection Agency and the Departments of Energy, Health and Human Services, Education, Labor, Transportation plus other bodies. A few dozen other rules involving government transfers are noted, along with acknowledgements of limitations in the reliability of quantifications.

That’s it for the official reckoning but there’s a bigger tale to tell. For example, by way of rough comparison to OMB’s annualized figures, the American Action Forum’s compilation of total costs of 2023 calendar year (not fiscal) rules — based upon a broader set of agencies’ own regulatory impact analyses — is around $129 billion. These latter are total agency-reported costs, not annualized figures; both metrics are valuable.

OMB’s new report does not bring matters current, though, as the date makes obvious. We’ve been in fiscal year 2025 since October 1. Fiscal year 2023 ended September 30 of last year.

A lot happened in fiscal year 2024, and the administration should release its fiscal year 2024 edition before the Trump administration arrives in January (unfortunately, inter-administration lapses have occurred before and might again). As for what we might garner about 2024 regulatory costs, the American Action Forum’s total-cost (again, not annualized) compilation of 331 rules from agencies’ regulatory impact analyses for calendar year 2024 reaches an eye-popping $1.3 trillion. This implies new annualized costs in the tens of billions that OMB should acknowledge.

Naturally, some rules are more equal than others, and the EPA’s Multi-Pollutant Emissions Standards for Model Years 2027 and Later Light-Duty and Medium-Duty Vehicles is a 2024 standout, making up fully $870 billion of the $1.3 trillion total.

While the OMB regularly notes that “the estimates used here have limitations,” (p. 3) it regularly depicts overall net benefits for the relative handful of rules appraised, giving the impression that the entire regulatory enterprise is net-beneficial. But there’s a problem; an aggregate regulatory cost estimate hasn’t been seen in two decades, despite an annual reckoning being required by law. Even the ten-year lookbacks that OMB fell back upon have disappeared.

The proportion of rules reviewed by OMB that sport cost and benefit documentation is rather insignificant compared to the broader body of rules. Moreover entire categories of intervention—such as antitrust, public private partnerships, and the laundering of regulation through guidance documents and the contracting/procurement infrastructure—do not figure into rulemaking at all but constitute a large bulk of regulation.

The table just below, “Rules Without and Without Cost-Benefit Analysis, 2001-Present” incorporates OMB’s new 2023 figures on the bottom row.

As may be seen, OMB reviewed 60 major rules in 2023, 29 of which contained cost analysis. Overall, however, agencies issued 3,018 rules large and small in the Federal Register during calendar year 2023. While the percentage of 2023 rules designated major that had costs tabulated was around 48 percent, the percentage of total rules with costs provided was around one percent.

Looking back over the past two decades, of the 1,319 major rules reviewed by OMB, 495 of them (or around 38 percent), have been accompanied by quantitative cost estimates.

Beyond the self-designated major rules, the proportion of rules with reviewed cost analysis is tiny. Over 83,000 rules have appeared in the Federal Register since 2001; the 495 among them with cost analysis represents only around .6 percent of that total. Quantification for regulatory benefits fares considerably worse.

Many categories of costs simply never find their way into regulatory analysis at all, rendering the impression that the regulatory enterprise is net-beneficial an untenable viewpoint. For example:

• OMB does not review highly influential independent agencies’ rules, like those of the Federal Communications Commission or financial regulatory bodies.
• As noted, entire categories of oversight and intervention like antitrust, public/private partnerships, and federal controls of spectrum, airspace and commercial space operations are omitted. Such interventions elevating federal steering over private sector decision-making have become far more significant since the COVID episode and require corrective measures.
• Deadweight effects of the significant number of budget or “transfer” rules, some of which the OMB report itemizes, can be highly significant but are unquantified.
• Costs of guidance documents, statements of policy, memoranda, bulletins, circulars, manuals and other forms of regulatory dark matter are not incorporated into cost-benefit surveys.
• Cost‑benefit analysis is also mute on what superior benefits might have accrued if an agency’s “regulatory budget” allocation went instead to another agency. In that sense, there exists no actual cost-benefit analysis or net-benefit pursuit for the government as a whole; only those from the perspectives of agencies acting in isolation.

Given such gaps, the incoming Trump administration must realize that net-benefit analysis—especially as it was transformed into a tool of progressive policymaking during the Biden years—serves as oxygen for an ever-expanding federal government. Too much is information is both omitted and assumed for Washington insiders to make bold proclamations that regulations do more good than harm, even though they’ve had decades to practice and provide the full picture.

Regulatory bodies’ that overreach can expect to be targeted in the incoming Trump administration. Where Trump sought to eliminate two rules for every one in the first go-round, he promises in the new term to eliminate ten for one. The fiscal year 2025 Report to Congress might be somewhat more interesting.