2011 Report to Congress

on the Benefits and Costs of
 

Federal Regulations

and Unfunded Mandates on
 

State, Local, and Tribal Entities
 

2011
 

Office of Management and Budget

Office of Information and Regulatory Affairs 
2011 REPORT TO CONGRESS 

ON THE BENEFITS AND COSTS OF FEDERAL REGULATIONS AND 

UNFUNDED MANDATES ON STATE, LOCAL, AND TRIBAL ENTITIES
 

Executive Summary...........................................................................................................................3 

PART I: 2011 REPORT TO CONGRESS ON THE BENEFITS AND COSTS OF FEDERAL 

REGULATIONS 

Introduction ........................................................................................................................................8
 

Chapter I: The Benefits and Costs of Federal Regulations...........................................................10 

A. Estimates of the Total Benefits and Costs of Regulations Reviewed by OMB ................12
 

B. Trends in the Annual Benefits and Costs of Regulations Reviewed by OMB .................19
 

C. Estimates of the Benefits and Costs of This Year’s Major Rules .....................................22
 

D. The Impact of Federal Regulation on State, Local, and Tribal Governments, Small 

 Business, Wages, and Economic Growth ..... ..................................................................33 

Chapter II: Recommendations for Reform ..................................................................................51 

A. Executive Order 13563 .....................................................................................................58
 

B. Improving Analysis ...........................................................................................................65

 C. E-rulemaking .....................................................................................................................73
 

D. Regulatory Cooperation ....................................................................................................75
 

Chapter III: Update on the Implementation of Information Quality Initiatives......................78 

A. Recent Developments in Information Quality ..................................................................78
 

B. Government-Wide Information Quality Guidelines .........................................................79
 

C. Information Quality Bulletin for Peer Review..................................................................86 

PART II: SIXTEENTH ANNUAL REPORT TO CONGRESS ON AGENCY COMPLIANCE 

WITH THE UNFUNDED MANDATES REFORM ACT 

Introduction .....................................................................................................................................92 

Chapter IV: Review of Significant Regulatory Mandates ..........................................................94 

A. Environmental Protection Agency ....................................................................................94
 

B. Department of Energy .......................................................................................................95
 

C. Department of Transportation ...........................................................................................96
 

D. Department of Health and Human Services ......................................................................97 

E. Joint Rulemakings .............................................................................................................98 

1 
Appendix A: Benefits and Costs of Individual Regulations........................................................99 

Appendix B: The Benefits and Costs of Fiscal Year 1999 Major Rules ....................................128 

Appendix C: Information on the Regulatory Analyses for Major Rules by

 Independent Agencies..............................................................................................130 

Appendix D: The Benefits and Costs of Major Rules by Administration .................................132 

Appendix E: Executive Order 13563: Improving Regulation and Regulatory Review ............137 

Appendix F: Presidential Memorandum: Regulatory Compliance ...........................................140 

Appendix G: Presidential Memorandum: Regulatory Flexibility, Small Business, and Job
 

Creation ..........................................................................................................................................142 

Appendix H: Presidential Memorandum: Administrative Flexibility ........................................144 

Appendix I: Agency Checklist: Regulatory Impact Analysis .....................................................147 

Appendix J: Information Quality and Peer Review ....................................................................152 

Appendix K: Response to Peer Reviewers and Public Comments ..............................................160
 

Appendix L: References .................................................................................................................164 

2 
 

EXECUTIVE SUMMARY 

In accordance with the Regulatory-Right-to-Know Act,1 the Office of Management and 

Budget (OMB) prepared this draft Report to Congress on the Benefits and Costs of Federal 

Regulations (Report). This is the fourteenth annual Report since OMB began issuing this 

Report in 1997. The Report summarizes estimates by Federal regulatory agencies of the 

quantified and monetized benefits and costs of major Federal regulations reviewed by OMB over 

the last ten years (see page 8, below, for the criteria for identifying “major” regulations for this 

report). 

The principal findings are as follows. 

	 The estimated annual benefits of major Federal regulations reviewed by OMB from 

October 1, 2000, to September 30, 2010, for which agencies estimated and monetized 

both benefits and costs, are in the aggregate between $132 billion and $655 billion, 

while the estimated annual costs are in the aggregate between $44 billion and $62 

billion. These ranges reflect uncertainty in the benefits and costs of each rule at the 

time that it was evaluated. 

	 Some rules are estimated to produce far higher net benefits than others. Moreover, 

there is substantial variation across agencies in the total net benefits produced by 

rules. For example, the air pollution rules from the Environmental Protection Agency 

(EPA) produced 62 to 84 percent of the benefits and 46 to 53 percent of the costs.2 

Most rules have net benefits, but several rules have net costs, typically as a result of 

statutory requirements. 

	 During fiscal year 2010, executive agencies promulgated 66 major rules. 

 For 18 rules, the issuing agencies quantified and monetized both benefits and 

costs. Those 18 rules were estimated to result in a total of $18.8 billion to 

$86.1 billion in annual benefits and $6.5 billion to $12.5 billion in annual 

costs. 

 For two rules, the issuing agency (the Department of the Interior) quantified 

and monetized only benefits. Both of these rules involved migratory bird 

hunting. For these two rules, the agency estimated total one-year benefits of 

$500 million to $600 million. 

 For eight rules, the issuing agencies quantified and monetized only costs. For 

these rules, the agencies estimated total annual costs of $200 million to $300 

million. 

 For 32 rules, the issuing agencies quantified and monetized only the budgetary 

transfer amounts. 

1

 Section 624 of the Treasury and General Government Appropriations Act of 2001, Pub. L. No. 106-554, 31 U.S.C.
 

§ 1105 note.

2

 These estimates do not include the joint EPA/DOT CAFE rule as an “EPA” rule. 

3 
 

 For six rules, the issuing agencies were able to quantify and monetize neither 

benefits nor costs. 

	 The independent regulatory agencies, whose regulations are not subject to OMB 

review under Executive Order 12866, issued 17 major final rules. With the exception 

of the Nuclear Regulatory Commission’s fee recovery rule, all of these rules were 

issued to regulate the financial sector. The Government Accountability Office (GAO) 

reported that none of the 17 rules assessed both anticipated benefits and costs. The 

Federal Reserve System did not assess benefits and costs for its rules. The joint rule 

between the Federal Reserve System and the Federal Trade Commission assessed 

only costs. The Securities and Exchange Commission monetized costs for six of its 

nine rules. 

It is important to emphasize that the figures here have significant limitations. When 

agencies subject to Executive Orders 13563 and 12866 have not quantified or monetized the 

benefits or costs of regulations, or have not quantified or monetized important variables, it is 

because of an absence of relevant information. Many rules have benefits or costs that cannot be 

quantified or monetized in light of existing information, and the aggregate estimates presented 

here do not capture those non-monetized benefits and costs. In fulfilling their statutory mandates, 

agencies must often act in the face of substantial uncertainty about the likely consequences. In 

some cases, quantification of various effects is highly speculative. For example, it may not be 

possible to quantify the benefits of certain disclosure requirements, simply because the impact of 

some such requirements cannot be specified in advance. In other cases, monetization of 

particular categories of benefits (such as ecological benefits and homeland security benefits) can 

present significant challenges. As Executive Order 13563 recognizes, some rules produce 

benefits (such as reductions in discrimination on the basis of disability or prevention of rape) that 

cannot be easily or adequately captured in monetary equivalents. 

In addition, and significantly, prospective estimates may contain erroneous assumptions, 

producing inaccurate predictions; retrospective analysis, recently required by Executive Order 

13563, can be an important way of increasing accuracy. While the estimates in this Report 

provide valuable information about the effects of regulations, they should not be taken to be 

either precise or complete. The increasing interest in retrospective analysis, inside and outside of 

government, should produce improvements on this count, above all by ensuring careful 

evaluation of the actual effects of rules. This process should improve understanding not only of 

those effects, but also of the accuracy of prospective analyses, in a way that can be brought to 

bear on such analyses when they are written. 

OMB emphasizes that careful consideration of costs and benefits is best understood as a 

way of ensuring that regulations will improve social welfare, above all by informing design and 

development of various options so as to identify opportunities for both minimizing the costs of 

achieving social goals (cost-effectiveness) and maximizing net social benefits (efficiency). OMB 

and agencies continue to take steps to improve both quantification and monetization. Consistent 

with this effort and in compliance with the Regulatory Right-to-Know Act, this Report also 

offers a number of recommendations for reform. 

4 
There are two unifying themes. The first is the importance of ensuring that regulation 

(including protection of public health, welfare, safety, and our environment) is undertaken in a 

way that promotes the goals of economic growth, innovation, competitiveness, and job creation. 

By promoting these goals, agencies will be in a better position to avoid excessive regulation, to 

eliminate unnecessary burdens, and to choose appropriate responses. The second unifying theme 

is the importance of ensuring that regulation is evidence-based and data-driven, and hence based 

on the best available work in both science and social science (with full respect for scientific 

integrity). 

To that end, the Report briefly outlines recent steps and best practices that are consistent 

with OMB’s recent recommendations for flexible, empirically informed approaches; increased 

openness about costs and benefits; and the use of disclosure as a regulatory tool. For the future, 

the Report recommends, among other things, that: 

1.	 consistent with Executive Order 13563, regulatory decisions and priority-setting 

should be made in a way that is attentive to the importance of promoting economic 

growth, innovation, job creation, and competitiveness. 

2.	 consistent with Executive Order 13563, agencies should promote retrospective 

analysis of existing significant rules, with careful exploration of their actual effects 

and, when appropriate, consideration of steps to streamline, modify, expand, or repeal 

them. 

3.	 agencies should accompany all economically significant regulations with (1) a tabular 

presentation, placed prominently and offering a clear statement of qualitative and 

quantitative benefits and costs of the proposed or planned action, together with (2) a 

presentation of uncertainties and (3) similar information for reasonable alternatives to 

the proposed or planned action. 

4.	 agencies should carefully explore how best to treat nonquantifiable variables and 

should continue to use “breakeven analysis” when quantification is not possible, with 

such analysis defined as the specification of how high the unquantified or 

unmonetized benefits would have to be in order for the benefits to justify the costs. 

5.	 consistent with OMB Circular A-4, agencies should consider the use of costeffectiveness analysis for regulations intended to reduce mortality risks, and should 

specifically consider the development of estimates for the “net cost per life saved.” 

6.	 consistent with Executive Order 13563, and in particular the emphasis on “the open 

exchange of information and perspectives among State, local, and tribal officials, 

experts in relevant disciplines, affected stakeholders in the private sector, and the 

public as a whole,” agencies should bring rulemaking into the twenty-first century by 

promoting public participation and transparency through the use of Regulations.gov 

and other technological means. 

5 
7.	 in order to promote trade and exports, and thus to increase job creation, agencies 

should promote regulatory cooperation initiatives with key trading partners. 

To promote the goals of Executive Order 13563, the draft of this Report invited public 

suggestions on how best to promote retrospective analysis of rules that may be outmoded, 

ineffective, insufficient, or excessively burdensome, with a view toward modifying, 

streamlining, expanding, or repealing them in accordance with what has been learned. OMB 

continues to be interested in such suggestions, with the ultimate goal of promoting an improved 

regulatory culture in which significant rules are periodically evaluated and where appropriate, 

modified, simplified, expanded, or repealed. 

A possible approach to the potential difficulty of advance assessment of costs and 

benefits involves rigorous experimentation with respect to the likely effects of regulation; such 

experimentation, including randomized controlled trials, can complement and inform prospective 

analysis, and perhaps reduce the need for retrospective analysis. To the extent feasible and 

consistent with law, agencies might, for example, implement a regulation on a trial basis, using a 

randomized controlled trial. Perhaps some firms or locations might be subject to a certain 

requirement while others are not; the agency could learn about the effects of its action from what 

emerges. Pilot projects of various sorts have informed the regulatory process, and they could be 

used more often for this purpose. More generally, OMB recommends careful and continuing 

steps to reassess existing significant rules. 

Chapter III provides an update on agency implementation of the Information Quality Act 

(IQA) (Section 515 of the Treasury and General Government Appropriations Act, 2001 (Pub. L. 

No. 106-554, 31 U.S.C. § 3516 note)). The chapter summarizes (a) the current status of 

correction requests that were received by agencies in FY 2009, along with an update on the 

status of requests received during FY 2003 through FY 2008 and (b) agency annual reports for 

the Information Quality Bulletin for Peer Review for FY 2009. In FY 2010, Federal agencies 

received 27 correction requests and completed 193 peer reviews, 31 of which were highly 

influential scientific assessments. 

This Report is being issued along with OMB’s Sixteenth Annual Report to Congress on 

Agency Compliance with the Unfunded Mandates Reform Act (UMRA) (Pub. L. No. 104-4, 2 

U.S.C. § 1538). OMB reports on agency compliance with Title II of UMRA, which requires that 

each agency conduct a cost-benefit analysis and select the least costly, most cost-effective, or 

least burdensome alternative before promulgating any proposed or final rule that may result in 

expenditures of more than $100 million (adjusted for inflation) in any one year by State, local, 

and tribal governments, or by the private sector. Each agency must also seek input from State, 

local, and tribal governments. 

6 
PART I: 2011 REPORT TO CONGRESS 

ON THE BENEFITS AND COSTS OF FEDERAL REGULATIONS
 

7 
 

 

 

 

 

INTRODUCTION 

The Regulatory Right-to-Know Act requires the Office of Management and Budget 

(OMB) to submit to Congress each year “an accounting statement and associated report” 

including: 

(A) an estimate of the total annual benefits and costs (including quantifiable and 

nonquantifiable effects) of Federal rules and paperwork, to the extent feasible: 

(1) in the aggregate; 

(2) by agency and agency program; and 

(3) by major rule; 

(B) an analysis of impacts of Federal regulation on State, local, and tribal government, 

small business, wages, and economic growth; and 

(C) recommendations for reform. 

The statute does not define “major rule.” For the purposes of this Report, we define 

major rules to include all final rules promulgated by an Executive Branch agency that meet any 

one of the following three conditions: 

 Rules designated as “major” under 5 U.S.C. § 804(2);3 

 Rules designated as meeting the analysis threshold under the Unfunded Mandates 

Reform Act of 1995 (UMRA);4 or 

 Rules designated as “economically significant” under section 3(f)(1) of Executive 

Order 12866.5 

Chapter I summarizes the benefits and costs of major regulations issued between 

September 2000 and September 2010 and examines in more detail the benefits and costs of 

major Federal regulations issued in fiscal year 2009. It also discusses regulatory impacts on 

State, local, and tribal governments, small business, wages, and economic growth. Chapter II 

offers recommendations for reform. Chapter III provides an update on agency implementation of 

the Information Quality Act (IQA) (Section 515 of the Treasury and General Government 

3

A major rule is defined in Subtitle E of the Small Business Regulatory Enforcement Fairness Act of 1996 as a rule 

that is likely to result in: “(A) an annual effect on the economy of $100,000,000 or more; (B) a major increase in 

costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic 

regions; or (C) significant adverse effects on competition, employment, investment, productivity, innovation, or on 

the ability of United States-based enterprises to compete with foreign-based enterprises in domestic and export 

markets.” P.L. 104-121 Sec. 804, 5 U.S.C. § 804(2). 

4

A written statement containing a qualitative and quantitative assessment of the anticipated benefits and costs of the 

Federal mandate is required under the Section 202(a) of the Unfunded Mandates Reform Act of 1995 for all rules 

that may result in: “the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, 

of $100,000,000 or more (adjusted annually for inflation) in any one year.” 2 U.S.C. § 1532(a). 5

A regulatory action is considered “economically significant” under Executive Order 12866 § 3(f)(1) if it is likely to 

result in a rule that may have: "an annual effect on the economy of $100 million or more or adversely affect in a 

material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health 

or safety, or State, local, or tribal governments or communities." 

8 
Appropriations Act, 2001 (Pub. L. No. 106-554, 31 U.S.C. § 3516 note)). Chapter IV
 

summarizes agency compliance with UMRA. 

9 
 

 

 

 

 

 

 

CHAPTER I: THE BENEFITS AND COSTS OF FEDERAL REGULATIONS 

This chapter consists of two parts: (A) the accounting statement and (B) a brief report on 

regulatory impacts on State, local, and tribal governments, small business, and wages. Part A 

revises the benefit-cost estimates in last year’s Report by updating the estimates to the end of 

fiscal year 2010 (September 30, 2010). As in previous Reports, this chapter uses a ten-year lookback. Estimates are based on the major regulations reviewed by OMB from October 1, 2000 to 

September 30, 2010.6

 For this reason, six rules reviewed from October 1, 1999 to September 30, 

2000 (fiscal year 2000) were included in the totals for the 2010 Report but are not included in 

this Report. A list of these fiscal year 2000 rules can be found in Appendix B (see Table B-1). 

The removal of the six fiscal year 2000 rules from the ten-year window is accompanied by the 

addition of 18 fiscal year 2010 rules. 

All estimates presented in this chapter are agency estimates of benefits and costs or 

transparent modifications of agency information performed by OMB.7

 This chapter also 

includes a discussion of major rules issued by independent regulatory agencies, although OMB 

does not review these rules under Executive Orders 13563 and 12866.8 This discussion is based 

solely on data provided by these agencies to the Government Accountability Office (GAO) under 

the Congressional Review Act. 

Aggregating benefit and cost estimates of individual regulations—to the extent they can 

be combined—provides potentially valuable information about the effects of regulations. But 

the resulting estimates are neither precise nor complete. Four points deserve emphasis. 

1.	 Individual regulatory impact analyses vary greatly in rigor and rely on different 

assumptions, baseline scenarios, methods, and data. To take just one example, 

agencies offer different monetary valuations for mortality reductions. Summing 

across estimates involves the aggregation of analytical results that are not strictly 

comparable. OMB continues to investigate inconsistencies in how agencies answer 

central regulatory questions and seeks to identify and to promote best practices. 

Executive Order 13563 emphasizes the importance of such practices and of 

quantification, directing agencies to “use the best available techniques to quantify 

anticipated present and future benefits and costs as accurately as possible.” 

2.	 As we have noted, it is not always possible, in light of limits in existing information, 

6

All previous Reports are available at: http://www.whitehouse.gov/omb/inforeg_regpol_reports_congress/. 7

OMB used agency estimates where available. The benefit and cost ranges represent lowest and highest agency 

estimates using both 3 and 7 percent discount rates. If an agency quantified but did not monetize estimates, we used 

standard assumptions to monetize them, as explained in Appendix A. We adjusted estimates to 2001 dollars, the 

requested format in OMB Circular A-4, using the latest available Gross Domestic Product (GDP) deflator (e.g., 

estimates in 2010 dollars are deflated by a factor of 0.819). All amortizations are performed using a discount rate of 

7 percent, unless the agency has already presented annualized, monetized results using a different explicit discount 

rate. OMB did not independently estimate benefits or costs when agencies did not provide quantified estimates. 

8

Section 3(b) of Executive Order 12866 excludes “independent regulatory agencies as defined in 44 U.S.C. 

3502(10)” from OMB’s regulatory review purview. 

10 
 

to quantify or monetize relevant benefits or costs of rules. For purposes of policy, 

non-monetized benefits and costs may be important. Some regulations have 

significant non-quantified or non-monetized benefits and costs that are relevant under 

governing statutes and that may serve as a key factor in an agency’s decision to 

promulgate a particular rule. 

3.	 Prospective analyses may turn out to overestimate or underestimate both benefits and 

costs; retrospective analysis can be important as a corrective mechanism.9 Executive 

Order 13563 specifically calls for such analysis, with the goal of improving relevant 

regulations through modification, streamlining, expansion, or repeal. The result 

should be a greatly improved understanding of the accuracy of prospective analyses, 

as well as corrections to rules as a result of ex post evaluations. A large priority is the 

development of methods (perhaps including not merely before-and-after accounts but 

also randomized trials, to the extent feasible and consistent with law) to obtain a clear 

sense of the effects of rules. In addition, rules should be written and designed, in 

advance, so as to facilitate retrospective analysis of their effects. In order to promote 

data-driven regulation, OMB continues to be interested in public suggestions on how 

to use retrospective analysis to improve regulations, perhaps by expanding them, 

perhaps by streamlining them, perhaps by reducing or repealing them, perhaps by 

redirecting them. 

4.	 While emphasizing the importance of quantification, Executive Order 13563 also 

refers to “values that are difficult or impossible to quantify, including equity, human 

dignity, fairness, and distributive impacts.” As Executive Order 13563 recognizes, 

such values may be appropriately considered under relevant law. If, for example, a 

rule would reduce the incidence of rape, or allow wheelchair-bound workers to have 

access to bathrooms, a consideration of dignity is involved, and relevant law may 

require or authorize agencies to take that consideration into account. If a regulation 

would disproportionately help or hurt those at the bottom of the economic ladder, or 

those who are suffering from some kind of acute condition or extreme deprivation, 

relevant law may require or authorize agencies to take that fact into account. (In the 

recent past, agencies have referred to human dignity, equity, or distributional impacts 

in the context of proposed or final regulations reducing the risk of prison rape; 

increasing access by wheelchair-bound people to bathrooms; eliminating the ban on 

entry into the United States of those who are HIV-positive; barring lifetime limits on 

health insurance payments; and preventing denial of health insurance to children with 

preexisting conditions.) So far as we are aware, there is only limited analysis of the 

distributional effects of regulation in general or in significant domains;10 such 

analysis could prove illuminating. 

9

 See Greenstone (2009). In its 2009 Report, OMB recommended greater use of retrospective analysis; we continue 

to support that recommendation. 

10 See, e.g., Kahn (2001).
 

11 
 

 

 

 

 

A. Estimates of the Aggregated Annual Benefits and Costs of Regulations Reviewed by 

OMB over the Last Ten Years 

1. In General 

Between fiscal years 2001 and 2010, Federal agencies published over 38,000 final rules 

in the Federal Register.

11 OMB reviewed 3,325 of these final rules under Executive Order 

12866.12 Of these OMB-reviewed rules, 540 are considered major rules, primarily due to their 

anticipated impact on the economy (i.e., estimated benefits or costs were in excess of $100 

million in at least one year). We include in our 10-year aggregate of annual benefits and costs of 

regulations rules that meet two conditions:13 (1) each rule was estimated to generate benefits or 

costs of approximately $100 million in any one year; and (2) a substantial portion of its benefits 

and costs were quantified and monetized by the agency or, in some cases, monetized by OMB. 

The estimates are therefore not a complete accounting of all the benefits and costs of all 

regulations issued by the Federal Government during this period.14 Table 1-1 presents estimates 

of the total annual benefits and costs of 105 regulations reviewed by OMB over the ten-year 

period from October 1, 2000, to September 30, 2010, broken down by issuing agency. 

As discussed in previous Reports, OMB chose a ten-year period for aggregation because 

pre-regulation estimates prepared for rules adopted more than ten years ago are of questionable 

relevance today. The estimates of the benefits and costs of Federal regulations over the period 

October 1, 2000, to September 30, 2010, are based on agency analyses conducted prior to 

issuance of the regulation and subjected to public notice and comments and OMB review under 

Executive Order 12866. 

In assembling these tables of estimated benefits and costs, OMB applied a uniform 

format for the presentation to make agency estimates more closely comparable with each other 

(for example, annualizing benefit and cost estimates). OMB monetized quantitative estimates 

where the agency did not do so. For example, for a few rulemakings within the ten-year window 

11 This count includes all final and interim final rules from all Federal agencies (including independent agencies). 

12 Counts of OMB reviewed rules are available through the “review counts” and “search” tools on OIRA’s 

regulatory information website (www.reginfo.gov). In addition, the underlying data for these counts are available 

for download in XML format on the website. 

13 OMB discusses, in this Report and in previous Reports, the difficulty of estimating and aggregating the benefits 

and costs of different regulations over long time periods and across many agencies using different methodologies. 

Any aggregation involves the assemblage of benefit and cost estimates that are not strictly comparable. In part to 

address this issue, the 2003 Report included OMB’s new regulatory analysis guidance, OMB Circular A-4, that took 

effect on January 1, 2004, for proposed rules and January 1, 2005, for final rules. The guidance recommends what 

OMB defines as “best practices” in regulatory analysis, with a goal of strengthening the role of science, engineering, 

and economics in rulemaking. The overall goal of this guidance is a more transparent, accountable and credible 

regulatory process and a more consistent regulatory environment. OMB expects that as more agencies adopt our 

recommended best practices, the benefits and costs we present in future reports will become more comparable across 

agencies and programs. OMB continues to work with the agencies to ensure that their impact analyses follow the 

guidance.

14 In many instances, agencies were unable to quantify all benefits and costs. We have conveyed the essence of 

these unquantified effects on a rule-by-rule basis in the columns titled “Other Information” in Appendix A of this 

and previous Reports. The monetized estimates we present necessarily exclude these unquantified effects. 

12 
 

 

 

of this Report, we have converted agency projections of quantified benefits, such as estimated 

injuries avoided per year or tons of pollutant reductions per year, to dollars using the valuation 

estimates discussed in Appendix A of this Report and Appendix B of our 2006 Report.15 

Table 1-1: Estimates of the Total Annual Benefits and Costs of Major Federal Rules by 

Agency, October 1, 2000 - September 30, 2010 (billions of 2001 dollars) 

Agency Number of 

Rules 

Benefits Costs 

Department of Agriculture 6 0.9 to 1.3 1.0 to 1.34 

Department of Energy 10 8.0 to 10.9 4.5 to 5.1 

Department of Health and 

Human Services 

18 18.0 to 40.5 3.7 to 5.2 

Department of Homeland 

Security 

1 < 0.1 < 0.1 

Department of Housing and 

Urban Development 

1 2.3 0.9 

Department of Justice 4 1.8 to 4.0 0.8 to 1.0 

Department of Labor 6 0.4 to 1.5 0.4 to 0.5 

Department of Transportation 

(DOT) 

26 14.6 to 25.5 7.5 to 14.3 

Environmental Protection 

Agency (EPA)16 

32 81.8 to 550.7 23.3 to 28.5 

15 The 2006 Report is available at http://www.whitehouse.gov/omb/inforeg_regpol_reports_congress/. We note that 

there are ongoing discussions with respect to the scientific assumptions underlying the benefits per ton numbers that 

we use to monetize benefits that were not monetized. If, for instance, assumptions similar to those described at 

http://www.epa.gov/air/benmap/bpt.html were used, these estimates would be higher. 

16 This total includes the impacts of EPA’s 2005 Clean Air Interstate Rule. On July 11, 2008, the DC Circuit Court 

vacated the rule; however, in response to EPA's petition, the court on December 23, 2008, remanded the rule without 

vacatur, which keeps this rule in effect while EPA conducts further proceedings consistent with the court's July 11 

opinion. On August 2, 2010, EPA published in the Federal Register the proposed rule titled “Federal 

Implementation Plans to Reduce Interstate Transport of Fine Particulate Matter and Ozone.” This rule, once 

finalized, will replace the Clean Air Interstate Rule. This total also includes the impacts of EPA’s 2006 PM 

NAAQS which was inadvertently dropped from last year’s aggregates. 

This total excludes the impacts of two rulemakings we inadvertently neglected to remove from the 10-year 

aggregates in previous reports. The first rule is EPA’s 2005 “Clean Air Mercury Rule--Electric Utility Steam 

Generating Units,” On February 8, 2008, the D.C. Circuit vacated a precursor EPA rule removing power plants from 

the Clean Air Act list of sources of hazardous air pollutants, and at the same time vacated the Clean Air Mercury 

Rule. The second rule is EPA‘s 2004 ―National Emission Standards for Hazardous Air Pollutants: 

Industrial/Commercial/Institutional Boilers and Process Heaters.” On June 19, 2007, the United States Court of 

Appeals for the District of Columbia Circuit vacated and remanded this rule to EPA. 

13 
 

 

 

 

 

 

 

 

 

Agency Number of 

Rules 

Benefits Costs 

Joint DOT and EPA 1 3.9 to 18.2 1.7 to 4.7 

Total 105 131.7 to 655.0 43.7 to 61.7 

The aggregate benefits reported in Table 1-1 are comparable to those presented in the 

2010 Report. As with previous Reports, the reported monetized benefits continue to be 

significantly higher than the monetized costs. (In 2009 and 2010, the monetized benefits were 

also far higher than the monetized costs, as detailed below.) Three agencies -- the Department of 

Health and Human Services, the Department of Transportation, and the Environmental 

Protection Agency -- issued a strong majority of total rules (77 of 105). In addition, the 

Environmental Protection Agency is responsible for a large percentage of both total benefits and 

total costs. 

Table 1-2 provides additional information on aggregate benefits and costs for specific 

agency programs. A program is included in Table 1-2 only if it finalized three or more major 

rules in the last ten years with monetized benefits and costs. 

Table 1-2: Estimates of Annual Benefits and Costs of Major Federal Rules: Selected 

Programs and Agencies, October 1, 2000 - September 30, 2010 (billions of 2001 dollars) 

Agency Number of 

Rules 

Benefits Costs 

Department of Agriculture 

Animal and Plant Health Inspection 

Service 

3 0.9 to 1.2 0.7 to 0.9 

 Department of Energy 

 Energy Efficiency and Renewable Energy 10 8.0 to 10.9 4.5 to 5.1 

 Department of Health and Human 

Services

 Food and Drug Administration 10 2.6 to 22.3 0.9 to 1.3 

 Center for Medicare and Medicaid 

Services 

7 15.4 to 18.1 2.7 to 3.9 

 Department of Labor

 Occupational Safety and Health 4 0.4 to 1.5 0.5 

We also note that this report does not include an estimate of the costs and benefits of the final 2008 revisions to the 

National Ambient Air Quality Standards for Ozone. The reason is that those revisions remain in litigation and on 

January 19, 2010, EPA published a proposed reconsideration and tightening of the primary and secondary ozone 

standards. As a result, for the purposes of this particular Report, we did not consider the latest round of ozone 

rulemakings to be finalized. Of course it remains true that the ozone rule was finalized and for some purposes, it 

would be reasonable to treat its costs and benefits as part of the total catalogue of rulemaking impacts in FY 2008. 

14 
 

 

 

Agency Number of 

Rules 

Benefits Costs

 Administration 

 Department of Transportation

 National Highway Traffic Safety 

 Administration 

11 11.8 to 21.5 5.2 to 10.8 

Federal Aviation Administration 6 0.3 to 1.2 0 to 0.4 

Federal Motor Carriers Safety 

Administration 

4 1.3 to 1.5 1.3 

Environmental Protection Agency

 Office of Air 20 77.3 to 535.1 19.0 to 24.1 

Office of Water 6 1.3 to 3.9 1.1 to 1.2 

Office of Chemical Safety and Pollution 

Prevention 

3 3.2 to 11.4 3.4 

Office of Solid Waste and Emergency 

Response 

3 0 to 0.3 (0.2) 

( ) indicates negative. 

The ranges of benefits and costs reported in Tables 1-1 and 1-2 were calculated by adding 

the lower bounds of agencies’ estimates for each of the underlying rules to generate an aggregate 

lower bound, and similarly adding the upper bounds of agencies’ estimates to generate an 

aggregate upper bound.17 The range reported by the agency for each rule reflects the agency’s 

uncertainty about the likely impact of the rule. In some cases, this range is a confidence interval 

based on a formal uncertainty analysis. In most cases, however, the ranges are generated using 

an informal sensitivity analysis in which input parameters are varied across a “plausible” range. 

The benefits and costs presented in Tables 1-1 and 1-2 are not necessarily correlated. In 

other words, when interpreting the meaning of these ranges, the reader should not assume that 

when benefits are in fact on the low end of their range, costs will also tend to be on the low end 

of their range. This is because, for some rules, there are factors that affect costs that have little 

correlation with factors that affect benefits (and vice-versa). Accordingly, to calculate the range 

of net benefits (i.e., benefits minus costs), one should not simply subtract the lower bound of the 

benefits range from the lower bound of the cost range, and similarly for the upper bound. It is 

possible that the true benefits are at the lower bound and that the true costs are at the upper 

bound, as well as vice-versa. Thus, for example, it is possible that the net benefits of Department 

of Labor rules, taken together, could range from -$30 million to approximately $1.1 billion per 

year. 

2. EPA Air Rules 

17 The approach of adding ranges likely overstates the uncertainty in the total benefits and costs for each agency. The 

actual ranges are probably somewhat tighter than our estimates. 

15 
 

 

It should be clear that the rules with the highest benefits and the highest costs, by far, 

come from the Environmental Protection Agency and in particular its Office of Air. More 

specifically, EPA rules account for 62 to 84 percent of the monetized benefits and 46 to 53 

percent of the monetized costs.18 The rules that aim to improve air quality account for 95 to 97 

percent of the benefits of EPA rules. 

It is important to emphasize that the large estimated benefits of EPA rules are mostly 

attributable to the reduction in public exposure to a single air pollutant: fine particulate matter. 

Of its 20 air rules, the rule with the highest estimated benefits is the Clean Air Fine Particle 

Implementation Rule, with benefits ranging from $19 billion to $167 billion per year. While the 

benefits of this rule far exceed the costs, the cost estimate for the Clean Air Fine Particle 

Implementation Rule is also the highest at $7.3 billion per year. Because the estimated benefits 

and costs associated with the clean air rules provide a majority of the total benefits and costs 

across the Federal Government, and because some of the scientific and economic questions are 

not resolved, we provide additional information. 

With respect to many of these rules, there remains continuing uncertainty in benefits 

estimates. We note that EPA has invested substantial resources to quantify and reduce some 

aspects of that uncertainty over the last few years. Even so, significant uncertainty remains in 

this domain. For this reason, the ranges of benefits and costs presented in Table 1-2 should be 

treated with caution. If the reasons for uncertainty differ across individual rules, aggregating 

high-end and low-end estimates can result in totals that may be misleading. In the case of the 

EPA rules reported here, however, a substantial portion of the uncertainty is similar across 

several rules, including (1) the uncertainty in the reduction of premature deaths associated with 

reduction in particulate matter and (2) the uncertainty in the monetary value of reducing 

mortality risk. EPA continues to improve methods to quantify the degree of technical 

uncertainty in benefits estimates and to make other improvements to EPA’s Regulatory Impact 

Analyses. 

More research remains to be done on several key questions, including analysis of the 

health benefits associated with reduction of particulate matter, which, as noted, drive a large 

percentage of aggregate benefits from air pollution controls.19 Midway through FY 2009, EPA 

18These estimates do not include the joint EPA/DOT CAFE rule as an “EPA” rule. 

19 For example, a committee of the National Research Council/National Academy of Sciences released the study 

Estimating the Public Health Benefits of Proposed Air Pollution Regulations (2002), which recommends 

improvements to EPA benefits estimates. In addition, we continue to work with EPA to incorporate 

recommendations from recent NRC reports such as Miller, et al (2006) and National Research Council (2008). See 

also Environmental Protection Agency (2010). 

The wide range of benefits estimates for particle control does not capture the full extent of the scientific uncertainty 

in measuring the health effects associated with exposure to fine particulate matter and its constituent elements. Six 

of the key assumptions in the benefits estimates are as follows: 

1.	 Inhalation of fine particles is causally associated with premature death at concentrations near those 

experienced by most Americans on a daily basis. The weight of available epidemiological evidence 

supports a determination of causality. Biological mechanisms for this effect, while not completely 

understood, are supportive of this determination. 

16 
 

 

 

made changes to some underlying assumptions as well as updates to some of the model inputs. 

These changes are reflected in EPA’s more recent Regulatory Impact Analyses. With respect to 

particulate matter, additional research, to clarify and resolve relevant scientific issues and to 

make further progress on the relationship between particulate matter and health improvements, 

would be exceedingly valuable. 

3. Rules that Decrease Compliance Costs 

We note as well that several regulatory actions have resulted in decreases in compliance 

costs. The net cost savings generated by these actions are included as “negative costs” for those 

years. In 2004, for example, DOT issued a rule that reduced minimum vertical separation for 

airspace; this rule resulted in net cost savings. Similarly, in 2009, EPA revised its “Spill 

Prevention Control and Countermeasures” regulations, among other things to tailor requirements 

to particular industry sectors and to streamline certain rule requirements, thus producing net cost 

savings. Executive Order 13563, with its emphasis on retrospective analysis and streamlining 

burdensome regulations, is designed to promote decreases in compliance costs where 

appropriate, and many relevant initiatives have been finalized or are in progress. 

4. Qualifications 

In order for comparisons or aggregations to be meaningful, benefit and cost estimates 

should correctly account for all substantial effects of regulatory actions, some of which may not 

be reflected in the available data. Any comparison or aggregation across rules should also 

consider a number of factors that our presentation is not yet able to take into account. Agencies 

have adopted somewhat different methodologies—for example, different monetized values for 

2.	 All fine particles, regardless of their chemical composition, are equally potent in causing premature 

mortality. This is an important assumption, because particulate matter (PM) produced via transported 

precursors emitted from electrical generating utilities (EGUs) may differ significantly from direct PM 

released from diesel engines and other industrial sources, but the scientific evidence is not yet sufficient to 

allow differentiation of effect estimates by particle type. 

3.	 The impact function for fine particles is approximately linear within the range of ambient concentrations 

under consideration. Thus, the estimates include health benefits from reducing fine particles in areas with 

varied concentrations of PM, including both regions that are in attainment with fine particle standard and 

those that do not meet the standard. 

4.	 The forecasts for future emissions and associated air quality modeling are valid. Although recognizing the 

difficulties, assumptions, and inherent uncertainties in the overall enterprise, these analyses are based on 

peer-reviewed scientific literature and up-to-date assessment tools, and we believe the results are highly 

useful in assessing benefits of air quality regulations.. 

5.	 Some rules apply a national dollar benefit-per-ton estimate of the benefits of reducing directly emitted fine 

particulates from specific source categories. Because they are based on national-level analysis, the benefitper-ton estimates used here do not reflect local variability in population density, meteorology, exposure, 

baseline health incidence rates, or other local factors that might lead to an over-estimate or under-estimate 

of the actual benefits of controlling directly emitted fine particulates. 

6.	 The value of mortality risk reduction is taken largely from studies of the willingness-to-accept risk in the 

labor market. 

17 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

effects (such as mortality20 and morbidity), different baselines in terms of the regulations and 

controls already in place, and different treatments of uncertainty. These differences are reflected 

in the estimates provided in Tables 1-1 and 1-2. While we have generally relied on agency 

estimates in monetizing benefits and costs, and while those estimates have generally been subject 

both to public and to interagency review, our reliance on those estimates in this Report should 

20 Agencies often design health and safety regulation to reduce risks to life, and valuation of the resulting benefits 

can be an important part of the analysis. What is sometimes called the “value of a statistical life” (VSL) is best 

understood not as the “valuation of life,” but as the valuation of statistical mortality risks. For example, the average 

person in a population of 50,000 may value a reduction in mortality risk of 1/50,000 at $150. The value of reducing 

the risk of 1 statistical (as opposed to known or identified) fatality in this population would be $7.5 million, 

representing the aggregation of the willingness to pay values held by everyone in the population. Building on an 

extensive and growing literature, OMB Circular A-4 provides background and discussion of the theory and practice 

of calculating VSL. It concludes that a substantial majority of the studies of VSL indicate a value that varies “from 

roughly $1 million to $10 million per statistical life.” Circular A-4 generally reports values in 2001 dollars; if we 

update these values to 2010 dollars the range would be $1.2-$12.2 million. In practice, agencies have tended to use 

a value above the mid-point of this range (i.e., greater than $6.7 million in 2010 dollars). 

Two agencies, EPA and DOT, have developed official guidance on VSL. In its 2009 update, DOT adopts a value of 

$6.0 million ($2009), and requires all the components of the Department to use that value in their RIAs. EPA 

recently changed its VSL to an older value of $6.3 million ($2000) and adjusts this value for real income growth 

post-2000. In its final rule setting a new primary standard for nitrogen dioxide, for example, EPA adjusted this VSL 

to account for a different currency year ($2006) and for income growth to 2020, which yields a VSL of $8.9 million. 

EPA stated in this RIA, however, that it is continuing its efforts to update this guidance, and that it anticipated 

presenting results from this effort to its Science Advisory Board, with draft guidance following soon thereafter. 

EPA has also recently published a white paper “to highlight some key topics related to the valuation of mortality 

risks, and to describe several possible approaches for synthesizing the empirical estimates for mortality risk 

reductions from existing hedonic wage and stated preference studies for the purpose of valuing mortality risk 

reductions associated with future EPA policies.” Some of these issues include the possibilities of reporting value 

estimates in terms of risk changes, rather than “statistical lives”; adding a “cancer differential” to the standard 

estimates of mortality risk reduction values for policies expected to reduce carcinogenic pollutants; examining the 

role of altruism in valuing risk reductions; and, finally, incorporating alternative approaches to benefit transfer 

techniques. See Environmental Protection Agency (2010). 

For the agencies that have not developed binding internal guidelines, we have done a brief review of RIAs and other 

materials to understand how VSLs have been used in practice. Although the Department of Homeland Security has 

no official policy on VSL, it sponsored a report through its U.S. Customs and Border Protection, and has used the 

recommendations of this report to inform VSL values for several recent rulemakings. This report recommends $6.3 

million ($2008) and also recommends that DHS adjust this value upward over time for real income growth (in a 

manner similar to EPA’s adjustment approach). 

Other regulatory agencies that have used a VSL in individual rulemakings include DOL’s Occupational Safety and 

Health Administration (OSHA) and HHS’ Food and Drug Administration (FDA). In OSHA’s rulemaking setting a 

Permissible Exposure Limit for Hexavalent Chromium, OSHA specifically referred to EPA guidance to justify a 

VSL of $7.0 million ($2003), as the types of air exposure risks regulated in this rulemaking were similar to those in 

EPA rulemakings. The FDA has consistently used values of $5.0 and $6.5 million ($2002) in several of its 

rulemakings to monetize mortality risks, but it also uses a monetary value of the remaining life-years saved by 

alternative policies. This is sometimes referred to as a “Value of a Statistical Life Year” or VSLY. (See Circular A4 for discussion.) 

Our review suggests that, in recent years, actual agency practice has generally avoided significant inconsistencies. In 

current dollars, we have not found recent values below $6 million or above $9.5 million, and hence agency practice 

suggests a narrower band than that found in the literature review in Circular A-4. For a recent overview by the 

Congressional Research Service, see Copeland (2010). 

18 
 

not necessarily be taken as OMB endorsement of all the varied methodologies used by agencies 

to estimate benefits and costs. 

We have noted that many major rules have important non-quantified benefits and costs 

that may have been a key factor in an agency’s decision to select a particular approach. In 

important cases, agencies have been unable to quantify the benefits of rules, simply because 

existing information does not permit reliable estimates. These qualitative issues are discussed in 

Table A-1 of Appendix A, agency rulemaking documents, and previous editions of this Report. 

Finally, because these estimates exclude non-major rules and rules adopted more than ten 

years ago, the total benefits and costs of all Federal rules now in effect are likely to be 

significantly larger than the sum of the benefits and costs reported in Table 1-1. More research 

would be necessary to produce comprehensive estimates of total benefits and costs by agency 

and program. And as noted, it is important to consider retrospective, as opposed to ex ante, 

estimates of both benefits and costs; this topic is a continuing theme of this report. 

B. Trends in Annual Benefits and Costs of Regulations Reviewed by OMB over the Last 

Ten Years 

Table 1-3 reports the total benefits and costs of rules issued from October 1, 2000 to 

September 30, 2010, by fiscal year for which reasonably complete monetized estimates of both 

benefits and costs are available.21 For the purposes of showing general trends by fiscal year, 

Figure 1-1 reports the midpoints of the ranges reported in Table 1-3. As the figure shows, the 

monetized additional costs of private mandates tend to be around or below $10 billion per year. 

On average, roughly $5 billion in annual costs have been added each year over this period to the 

total regulatory burden. 

Table 1-3: Total Annual Benefits and Costs of Major Rules by Fiscal Year, 

(billions of 2001 dollars) 

Fiscal Year Number of 

Rules 

Benefits Costs 

2001 12 22.5 to 27.8 9.9 

2002 2 1.5 to 6.4 0.5 to 2.2 

2003 6 1.6 to 4.5 1.9 to 2.0 

2004 1022 8.8 to 69.8 3.0 to 3.2 

2005 1223 27.9 to 178.1 3.8 to 6.1 

21This table includes all rules reported in Table 1-1. The ranges will not necessarily match previously reported 

estimates for a fiscal year in past reports as rules have been dropped over time as described in this and past reports. 

See Appendix A for a complete list of rules included in these totals. 

22 This total excludes the impacts of EPA’s 2004 “National Emission Standards for Hazardous Air Pollutants: 

Industrial/Commercial/Institutional Boilers and Process Heaters,” previously included in our 10-year aggregate. On 

June 19, 2007, the United States Court of Appeals for the District of Columbia Circuit vacated and remanded the 

national emission standards for hazardous air pollutants for industrial/commercial/institutional boilers and process 

heaters. We inadvertently omitted removing this rule from the 10-year aggregates in previous reports. 

19 
 

Fiscal Year Number of 

Rules 

Benefits Costs 

2006 724 6.3 to 44.8 3.7 to 4.3 

2007 12 28.6 to 184.2 9.4 to 10.7 

2008 11 7.0 to 24.4 1.2 to 1.5 

2009 15 8.6 to 28.9 3.7 to 9.5 

2010 18 18.8 to 86.1 6.5 to 12.5 

Variability appears greater in benefit estimates than in cost estimates. Note that the three 

highest years for benefits (2004, 2005, and 2007) are mostly explained by three EPA regulations: 

the 2004 non-road diesel engine rule, the 2005 interstate air quality rule, and the clean air fine 

particle implementation rule.25 Note also that the benefits exceed the costs in every fiscal year; 

that the highest benefit year, in terms of point estimates, was 2007; that 2007 was also the 

highest cost year, in those terms; and that the four highest net benefit years, in those terms, were 

2004, 2005, 2007, and 2010. 

Figure 1-1: Total Annual Benefits and Costs of Major Rules by Fiscal Year 

23 This total excludes the impacts of EPA’s 2005 “Clean Air Mercury Rule--Electric Utility Steam Generating 

Units,” previously included in our 10-year aggregate. On February 8, 2008, the D.C. Circuit vacated EPA's rule 

removing power plants from the Clean Air Act list of sources of hazardous air pollutants. At the same time, the 

Court vacated the Clean Air Mercury Rule. We inadvertently omitted removing this rule from the 10-year 

aggregates in previous reports.

24 This total includes the impacts of EPA’s 2006 PM NAAQS which was inadvertently dropped from last year’s 

aggregates. 

25 This chart includes the impacts of EPA’s 2005 Clean Air Interstate Rule, which (as explained in a previous 

footnote) was vacated and subsequently remanded without vacatur and likely will be replaced by a new rule, 

“Federal Implementation Plans to Reduce Interstate Transport of Fine Particulate Matter and Ozone.” This rule, 

once finalized, will replace the Clean Air Interstate Rule. 

20 
 

 

 

 

The estimates we report here are prospective ones made by agencies during the 

rulemaking process. As we have emphasized, it is possible that retrospective studies will show 

(as they sometimes have) that the benefits and costs were either overestimated or underestimated. 

As discussed elsewhere in this Report (see Appendix A) as well as previous Reports, the 

aggregate estimates of benefits and costs derived from estimates by different agencies and over 

different time periods are subject to significant methodological inconsistencies and differing 

assumptions.26 In addition, the groundwork for the regulations issued by one administration is 

sometimes done in a previous administration.27 

26 This is particularly true for EPA’s air pollution regulations. Caution should be used in comparing benefits and 

costs over time in light of several factors, including new scientific evidence regarding the relationship between 

pollutants and health endpoints; changes in the EPA’s choice of assumptions when uncertainty remains (e.g., 

regarding the shape of the concentration – response function as low levels); and differences in techniques for 

monetizing benefits (including changes to the value assigned to a statistical life). Aggregate estimates in the report 

reflect differences in approaches and assumptions over time. Summing across time does not reflect how EPA would 

calculate the benefits of prior rules today. 

27For example, FDA’s trans fat rule was proposed by the Clinton administration and issued by the Bush 

Administration, while the groundwork for EPA’s 2004 non-road diesel engine rule was set by the NAAQS rules 

issued in 1997. 

21 
 

 

 

C. Estimates of the Benefits and Costs of Major Rules Issued in Fiscal Year 2010 

1. Major Rules Issued by Executive Agencies 

In this section, we examine in more detail the estimated benefits and costs of the 66 

major final rules for which OMB concluded review during the 12-month period beginning 

October 1, 2009, and ending September 30, 2010.28 These major rules represent approximately 

20 percent of the 328 final rules reviewed by OMB.29 OMB believes, however, that the benefits 

and costs of major rules, which have the largest economic effects, account for the majority of the 

total benefits and costs of all rules subject to OMB review.30 

Agencies reported monetized benefits and costs of 18 of the 66 regulations in FY2010. 

These estimates, aggregated by agency in Table 1-4 and listed in Table 1-5(a), are included in the 

ten-year aggregates in Tables 1-1, 1-2, and 1-3. As with previous years, EPA rules dominate 

both the benefits and costs of this year’s final rules. Nine of the 18 rules are primarily intended 

to protect health or safety. These include rules from DOL, DOT, and EPA, which affect health 

and safety through improvements in worker safety, pipeline safety, and environmental quality. 

28 This count excludes rules that were withdrawn from OMB review or rules that were rescinded, stayed, or vacated 

after publication. It also counts joint rules as a single rule, even if they were submitted to OMB separately for 

review. 

29 Counts of OMB-reviewed rules are available through the “review counts” and “search” tools on OIRA’s 

regulatory information website (www.reginfo.gov). 30 We discussed the relative contribution of major rules to the total impact of Federal regulation in detail in the 

“response-to-comments” section on pages 26-27 of the 2004 Report. In summary, our evaluation of a few 

representative agencies found that major rules represented the vast majority of the benefits and costs of all rules 

promulgated by these agencies and reviewed by OMB. 

22 
 

Table 1-4: Estimates, by Agency, of the Total Annual Benefits and Costs of Major Rules: 

October 1, 2009 - September 30, 2010 (Billions of 2001 dollars) 

Agency Number of Rules Benefits Costs 

Department of Energy 3 2.0 to 2.7 1.2 to 1.4 

Department of Justice 3 1.5 to 3.7 0.7 to 0.9 

Department of Labor 1 0.2 0.1 

Department of Transportation 4 0.4 to 0.5 0.9 to 1.8 

Environmental Protection 

Agency 31 

6 10.8 to 60.8 1.9 to 3.6 

Joint DOT and EPA 1 3.9 to 18.2 1.7 to 4.7 

Total 18 18.8 to 86.1 6.5 to 12.5 

Thirty-two of the rules implement Federal budgetary programs, which primarily caused 

income transfers, usually from taxpayers to program beneficiaries. Although rules that affect 

Federal budget programs are subject to Executive Order 12866 and OMB Circular A-4, and are 

reviewed by OMB, past Reports have focused primarily on regulations that have effects largely 

through private sector mandates. This focus is justified in part on the ground that agencies 

typically do not estimate the social costs and benefits of transfer rules. Instead they report the 

estimated budgetary impacts. 

We recognize that markets embed distortions and that the transfers are not lump-sum. 

Hence, transfer rules may impose real costs on society to the extent that they cause people to 

change behavior, either by directly prohibiting or mandating certain activities, or, more often, by 

altering prices and costs. The costs resulting from these behavior changes are referred to as the 

“deadweight losses” associated with the transfer. The Regulatory Right-to-Know Act requires 

OMB to report the social costs and benefits of these rules, and OMB encourages agencies to 

report these costs and benefits for transfer rules; OMB will consider incorporating these 

estimates into future Reports. 

Table 1-5(a-c) lists each of the 34 “non-budget” rules and, where available, provides 

information on their monetized benefits, costs, and transfers. It is worth noting that the 

aggregate benefits far exceed the aggregate costs and that with only two exceptions (Positive 

Train Control, which involved a clear statutory mandate, and Automatic Dependent Surveillance 

– Broadcast (ADS-B)), the estimated benefits of individual rules exceeded the costs in nearly 

31 EPA’s Construction and Development Effluent Limitation Guideline published on December 1, 2009, contained 

estimates of benefits and costs. However, effective January 4, 2011, EPA has stayed the numeric limitation of 280 

nephelometric turbidity units (NTU) in the Guideline and will propose a revised limit in a future rulemaking. 

Therefore, the rule is not included in these estimates. 

23 
 

 

 

32 every case.

Table 1-6 lists each of 32 “budget” rules and provides information on the estimated 

income transfers. Unless otherwise noted, OMB simply converts to 2001 dollars agencies’ own 

estimates of annualized impacts. For all 66 rules, we summarize the information on the nonmonetized impacts, where available, for these regulations in the “other information” column of 

Table A-1. 

Overall, HHS promulgated the largest number of rules: nineteen. Ten of these largely 

transfer income from one group of entities to another without imposing significant private 

mandates; the other nine contain private sector mandates.33 EPA issued the most rules creating 

or modifying private mandates; all ten of its rules contain significant private sector impacts. 

32 DOT’s primary estimates for benefits and costs of Positive Train Control would yield negative net benefits of 

$711 million while ADS-B would also yield negative net benefits of $51 million. DOT’s primary estimates of 

benefits and costs for Distribution Integrity Management were nearly equal, essentially resulting in neither net 

benefits nor net costs. 

33 Six of the nine are joint-rulemaking with Department of Labor and Treasury to implement health insurance 

reforms. 

24 
 

 

 

 

 

 

 

 

Table 1-5 (a): Major Rules Reviewed with Estimates of Both Annual Benefits and Costs, 

October 1, 2009 - September 30, 2010 (billions of 2001 dollars) 

Agency RIN34 Title Benefits Costs 

DOJ 1117-AA61 Electronic Prescriptions for Controlled 

Substances 

0.3-1.3 < 0.1 

DOJ 1190-AA44 Nondiscrimination on the Basis of Disability in 

Public Accommodations and Commercial 

Facilities 

1.1 

Range: 1.0-2.1 

0.6 

Range: 0.5-0.7 

DOJ 1190-AA46 Nondiscrimination on the Basis of Disability in 

State and Local Government Services 

Range: 0.2-0.3 Range: 0.1-0.2 

DOL 1218-AC01 Cranes and Derricks in Construction 0.2 0.1 

DOE 1904-AA90 Energy Efficiency Standards for Pool Heaters 

and Direct Heating Equipment and Water 

Heaters 

1.4 

Range: 1.3-1.8 

Range: 1.0-1.1 

DOE 1904-AB70 Energy Conservation Standards for Small 

Electric Motors 

Range: 0.7-0.8 0.2 

DOE 1904-AB93 Energy Efficiency Standards for Commercial 

Clothes Washers 

Range: 0-0.1 < 0.1 

EPA 2050-AG16 Revisions to the Spill Prevention, Control, and 

Countermeasure (SPCC) Rule 

0 (0.1) 

EPA 2060-AO15 NESHAP: Portland Cement Notice of 

Reconsideration 

Range: 6.1-16.3 Range: 0.8-0.9 

EPA 2060-AO48 Review of the National Ambient Air Quality 

Standards for Sulfur Dioxide35 

10.5 

Range: 2.8-38.6 

0.7 

Range: 0.3-2.0 

EPA 2060-AP36 National Emission Standards for Hazardous Air 

Pollutants for Reciprocating Internal 

Combustion Engines (Diesel) 

Range: 0.7-1.9 0.3 

EPA 2060-AQ13 National Emission Standards for Hazardous Air 

Pollutants for Reciprocating Internal 

Combustion Engines--Existing Stationary 

Spark Ignition (Gas-Fired) 

Range: 0.4-1.0 0.2 

34 In 2010, OMB issued a memorandum on “Increasing Openness in the Rulemaking Process – Use of the 

Regulation Identifier Number (RIN),” available at: 

http://www.whitehouse.gov/sites/default/files/omb/assets/inforeg/IncreasingOpenness_04072010.pdf. The 

memorandum provides that agencies should use the RIN on all relevant documents throughout the entire “lifecycle” 

of a rule. We expect that this requirement will help members of the public to find regulatory information at each 

stage of the process and will promote informed participation. 

35 The agency provided benefit and cost estimates for 2020. In order to annualize, as with previous NAAQS 

rulemakings, OMB assumed that the benefits and costs would be zero in the first year after the rule is finalized, the 

benefits and costs would increase linearly until year 2020, and the benefit and cost estimates would equal the 2020 

estimates thereafter. 

25 
 

 

 

 

 

Agency RIN34 Title Benefits Costs 

EPA 2070-AJ55 Lead; Amendment to the Opt-out and 

Recordkeeping Provisions in the Renovation, 

Repair, and Painting Program 

Range: 0.8-3.0 0.3 

DOT 2120-AI92 Automatic Dependent Surveillance--Broadcast 

(ADS-B) Equipage Mandate to Support Air 

Traffic Control Service 

Range: 0.1-0.2 0.2 

DOT 2126-AA89 Electronic On-Board Recorders for Hours-ofService Compliance 0.2 0.1 

DOT 2130-AC03 Positive Train Control <0.1 0.7 

Range: 0.5-1.3 

DOT 2137-AE15 Pipeline Safety: Distribution Integrity 

Management 

0.1 0.1 

DOT & 

EPA 

2127-AK50; 

2060-AP58 

Light-Duty Greenhouse Gas Emission 

Standards and Corporate Average Fuel 

Economy Standards36 

11.9 

Range: 3.9-18.2 

3.3 

Range: 1.7-4.7 

( ) indicates negative. 

Ten rules partially monetized either benefits or costs and are listed in Table 1-5(b). Two 

such rules, DOI’s Migratory Bird Hunting regulations, assessed only benefits. These regulations 

are promulgated annually to allow hunting of migratory game birds. The agency assessed the 

consumer welfare increase associated with these allowances. Ideally, these benefits should take 

into account the value of recreational alternatives. Administrative costs are of course relevant 

and could help inform a full analysis. 

Eight rules reported only monetized costs and relevant transfers, without monetizing 

benefits. As noted, quantification and monetization sometimes present serious challenges, 

especially in terms of benefits; for some rules, it is not feasible to make projections, because of 

an absence of available information. Four of these eight rules are joint HHS, DOL, and Treasury 

rules that implement health insurance reforms under the Affordable Care Act. (One additional 

rule by the three departments implements the Mental Health Parity and Addiction Equity Act.) 

For these rules, qualitative information with respect to benefits is provided, alongside an 

explanation of limits in available information. The main purpose of health insurance is to spread 

financial risk arising from medical care. In addition, some of these rules address equity 

concerns, for example by preventing denial of health insurance coverage to children with 

preexisting conditions. The potential transfer effects and non-quantified effects are described in 

the “other information” column of Table A-1. We continue to work with agencies to improve 

36DOT and EPA estimates differ somewhat due to programmatic differences between the two rules and differences 

in estimation modeling. The range of cost and benefit are based the total cost and benefits estimates for model years 

2012-2016 in DOT’s RIA, annualized over the life of those vehicles. The primary estimates are based on the total 

cost and benefits estimates for model years 2012-2016 in EPA’s RIA annualized at 7% over the life of those 

vehicles.. 

26 
 

 

 

 

 

the quantification of the benefits and costs of these types of regulations. 

Table 1-5(b): Major Rules Reviewed with Partial Estimates of Annual Benefits or Costs, 

October 1, 2009 - September 30, 2010 (billions of 2001 dollars) 

Agency RIN Title Benefits Costs 

HHS 0920-AA26 Medical Examination of Aliens— Removal of 

Human Immunodeficiency Virus (HIV) Infection 

From Definition of Communicable Disease of 

Public Health Significance 

Not 

Estimated 

< 0.1 

HHS, DOL 

& TREAS 

0938-AP65; 

1210-AB30 

Interim Final Rules Under the Paul Wellstone and 

Pete Domenici Mental Health Parity and Addiction 

Equity Act of 2008 

Not 

Estimated 

< 0.1 

HHS, DOL 

& TREAS 

0991-AB66; 

1210-AB41 

Interim Final Rules for Group Health Plans and 

Health Insurance Issuers Relating to Dependent 

Coverage of Children to Age 26 under the Patient 

Protection and Affordable Care Act 

Not 

Estimated 

< 0.1 

HHS, DOL 

& TREAS 

0991-AB68; 

1210-AB42 

Interim Final Rules for Group Health Plans and 

Health Insurance Coverage Relating to Status as a 

Grandfathered Health Plan under the Patient 

Protection and Affordable Care Act 

Not 

Estimated 

< 0.1 

HHS, DOL 

& TREAS 

0991-AB69; 

1210-AB43 

Patient Protection and Affordable Care Act: 

Preexisting Condition Exclusions, Lifetime and 

Annual Limits, Rescissions, and Patient Protections 

Not 

Estimated 

< 0.1 

HHS, DOL 

& TREAS 

0991-AB70; 

1210-AB45 

Interim Final Rules for Group Health Plans and 

Health Insurance Issuers Relating to Internal Claims 

and Appeals and External Review Processes under 

the Patient Protection and Affordable Care Act 

Not 

Estimated 

< 0.1 

DOI 1018-AX06 Migratory Bird Hunting; Final Frameworks for 

Early-Season Migratory Bird Hunting Regulations 

Range: 0.2­

0.3 

Not 

Estimated 

DOI 1018-AX06 Migratory Bird Hunting; Final Frameworks for Late 

Season Migratory Bird Hunting Regulations 

Range: 0.2­

0.3 

Not 

Estimated 

DOL 1210-AB08 Improved Fee Disclosure for Pension Plans Not 

Estimated 

< 0.1 

TREAS 1557-AD23 S.A.F.E. Mortgage Licensing Act Not 

Estimated 

0.1-0.2 

The regulatory analyses of six of the 34 “non-budget” rules did not provide an estimate of 

the incremental benefits or costs of the rule. These rules are described in Table 1-5(c), in which 

footnotes provide further details on the analysis provided for each rule. The potential transfer 

effects and non-monetized effects are described in the “other information” column of Table A-1. 

27 
 

 

 

 

 

 

 

 

Table 1-5(c): Additional Non-Budget Major Rules Reviewed, 

October 1, 2009 - September 30, 2010 (billions of 2001 dollars) 

Agency RIN Title 

HHS 0910-AF93 Use of Ozone-Depleting Substances; Removal of Essential Use Designations 

[Flunisolide, Triamcinolone, Metaproterenol, Pirbuterol, Albuterol and Ipratropium 

in Combination, Cromolyn, and Nedocromil]37 

HHS 0910-AG33 Regulations Restricting the Sale and Distribution of Cigarettes and Smokeless 

Tobacco to Protect Children and Adolescents38 

HHS, DOL 

& TREAS 

0938-AQ07; 

1210-AB44 

Interim Final Rules for Group Health Plans and Health Insurance Issuers Relating 

to Coverage of Preventive Services under the Patient Protection and Affordable 

Care Act39 

EPA 2060-AO38 Control of Emissions From New Marine Compression-Ignition Engines at or 

Above 30 Liters per Cylinder40 

EPA 2060-AO81 Renewable Fuels Standard Program41 

EPA 2060-AP86 Prevention of Significant Deterioration/Title V Greenhouse Gas Tailoring Rule42 

37 The rule quantifies but does not monetize potential benefits and costs. However, it provides monetized estimates 

of the private sector transfers (see Table A-1). 

38 This rule reinstates a 1996 final rule (as required by statute), and points to the original RIA. It does not provide an 

incremental analysis of the impacts of the rule compared to a baseline that takes into account current levels of 

compliance with the rule. Thus, the 1996 RIA may well overstate both costs and benefits. 

39 The agency provides a discussion of the rule’s potential impact on the use of preventative services and the 

associated benefits (health improvements), costs (medical costs), and transfers (health insurance premiums). 40 The agency presents estimated benefits and costs for the entire coordinated strategy, both national and 

international levels, to control emissions from ocean-going vessels. It includes (1) the engine and fuel controls 

finalizing under the Clean Air Act; (2) the proposal submitted by the United States Government to the International 

Maritime Organization to amend MARPOL Annex VI to designate U.S. coasts as an Emission Control Area in 

which all vessels, regardless of flag, would be required to meet the engine and marine fuel sulfur requirements in 

Annex VI; and (3) the new engine emission and fuel sulfur limits contained in the amendments to Annex VI that are 

applicable to all vessels regardless of flag under the Act to Prevent Pollution from Ships. The estimates, although 

informative and illustrative, do not fully reflect the benefits and costs of the rule. 

41 Emphasizing the conceptual and empirical challenges in presenting an analysis of benefits and costs, EPA uses a 

case study approach to assess the consequences of an expansion of renewable fuel use, whether caused by the RFS2 

program or by market forces. The analytical approach taken by EPA is to predict what the world would be like, in 

terms of a range of economic and environmental factors, if renewable fuel use increases to the level required by the 

RFS2 standards. EPA then compares this prediction to two reference cases without the RFS2 program. The 

estimates, although informative and illustrative, do not reflect the benefits and costs of the rule. In addition, EPA 

has the statutory authority annually to review and lower the requirements for cellulosic ethanol, based on market 

supply. For both 2010 and 2011, EPA used this authority to lower the requirements significantly. Therefore, the 

original case study of the gallon mandates no longer represents the current RFS2 requirements. 

42 EPA noted that the Greenhouse Gas Tailoring rule would provide significant regulatory relief to state permitting 

agencies, because without the rule, the number of permits required (as many as 6 million) would overwhelm the 

resources of permitting authorities and severely impair the functioning of the programs. EPA estimated illustrative 

savings of $22.5 billion for permitting authorities and $55 billion for sources. These savings estimates are not 

included in this report because it is not straightforward to identify the baseline from which to decide whether the rule 

creates benefits or imposes costs, though to be sure the rule does significantly reduce costs as compared with a 

situation in which permits were required more generally. 

28 
 

 

 

Table 1-6: Major Rules Implementing or Adjusting Federal Budgetary Programs, 

October 1, 2009 - September 30, 2010 (billions of 2001 dollars) 

Agency RIN Title Budget Effects 

USDA 0560-AH90 Supplemental Revenue Assistance Payments Program 

(SURE) 

0.1 

USDA 0560-AI07 Dairy Economic Loss Assistance Payment Program 0.2 

USDA 0578-AA43 Conservation Stewardship Program 2.7-3.2 

USDA 0584-AD30 SNAP: Eligibility and Certification Provisions of the Farm 

Security and Rural Investment Act of 2002 

2.2 

DOC 0660-ZA28 Broadband Technology Opportunities Program 2.1 

DOD 0720-AB17 TRICARE: Relationship Between the TRICARE Program 

and Employer-Sponsored Group Health Coverage 

> (0.1) 

DOD 0790-AI59 Retroactive Stop Loss Special Pay Compensation 0.4 

HHS 0938-AP40 Revisions to Payment Policies Under the Physician Fee 

Schedule For CY 2010 (CMS-1413-FC) 

(11.0) 

HHS 0938-AP41 Changes to the Hospital Outpatient Prospective Payment 

System and Ambulatory Surgical Center Payment System 

for CY 2010 (CMS-1414-F) 

0.4 

HHS 0938-AP55 Home Health Prospective Payment System and Rate 

Update for CY 2010 (CMS-1560-F) 

(0.1) 

HHS 0938-AP57 End Stage Renal Disease Bundled Payment System 

(CMS-1418-F) 

(0.2) 

HHS 0938-AP72 State Flexibility for Medicaid Benefit Packages (CMS2232-F4) (0.7) 

HHS 0938-AP77 Revisions to the Medicare Advantage and Medicare 

Prescription Drug Benefit Programs for Contract Year 

2011 (CMS-4085-F) 

(0.3) 

HHS 0938-AP78 Electronic Health Record (EHR) Incentive Program 

(CMS-0033-F) 

1.0-2.5 

HHS 0938-AP80 Medicare Program; Changes to the Hospital Inpatient 

Prospective Payment Systems for Acute Care Hospitals 

and the Long Term Care Hospital Prospective Payment 

System and Fiscal Year 2011 Rates 

(0.2) 

HHS 0991-AB64 Early Retiree Reinsurance Program 1.0 

HHS 0991-AB71 Pre-Existing Condition Insurance Plan Program 1.0 

STATE 1400-AC58 Schedule of Fees for Consular Services, Department of 

State and Overseas Embassies and Consulates 

0.3-0.4 

DHS 1615-AB80 U. S. Citizenship and Immigration Services Fee Schedule 0.2 

29 
 

 

 

 

 

 

Agency RIN Title Budget Effects 

DHS 1651-AA83 Electronic System for Travel Authorization (ESTA): Fee 

for Use of the System 

0.1-0.2 

DHS 1660-AA44 Special Community Disaster Loans Program 0-1.0 

ED 1810-AB04 State Fiscal Stabilization Fund Program--Notice of 

Proposed Requirements, Definitions, and Approval 

Criteria 

9.5 

ED 1810-AB06 School Improvement Grants--Notice of Proposed 

Requirements Under the American Recovery and 

Reinvestment Act of 2009; Title I of the Elementary and 

Secondary Education Act of 1965 

2.9 

ED 1810-AB07 Race to the Top Fund--Notice of Proposed Priorities, 

Requirements, Definitions, and Selection Criteria 

3.2 

ED 1810-AB08 Teacher Incentive Fund--Priorities, Requirements, 

Definitions, and Selection Criteria 

0.4 

ED 1840-AC96 Student Assistance General Provisions; TEACH Grant, 

Federal Pell Grant, and Academic Competitiveness Grant, 

and National Science and Mathematics Access To Retain 

Talent Grant Programs 

0.2 

ED 1840-AC99 General and Non-Loan Programmatic Issues 0.2 

ED 1840-AD01 Federal TRIO Programs, Gaining Early Awareness and 

Readiness for Undergraduate Program, and High School 

Equivalency and College Assistance Migrant Programs 

1.0 

ED 1855-AA06 Investing in Innovation--Priorities, Requirements, 

Definitions, and Selection Criteria 

0.5 

DOE 1901-AB27 Loan Guarantees for Projects That Employ Innovative 

Technologies 

3.5-4.0 

DOE 1904-AB97 Weatherization Assistance Program for Low-Income 

Persons - Multi-unit Buildings 

4.0 

VA 2900-AN54 Diseases Associated With Exposure to Certain Herbicide 

Agents (Hairy Cell Leukemia and Other Chronic B Cell 

Leukemias, Parkinson’s Disease, and Ischemic Heart 

Disease) 

4.1-5.4 

( ) indicates savings from the Federal perspective. 

2. Major Rules Issued by Independent Agencies 

The Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA)43 requires 

the Government Accountability Office (GAO) to submit to Congress reports on major rules, 

including rules issued by agencies not subject to Executive Order 12866 — the independent 

regulatory agencies. In preparing this Report, we reviewed the information contained in GAO 

43 Pub. L. No. 104-121. 

30 
 

 

 

 

 

reports on benefits and costs of major rules issued by independent agencies for the period of 

October 1, 2009 to September 30, 2010.44 GAO reported that three agencies issued a total of 17 

major rules during this period. (Rules by independent agencies are not subject to OMB review 

under Executive Order 13563 and Executive Order 12866.) 

Table 1-7 lists each of these rules and the extent to which GAO reported benefit and cost 

estimates for the rule. All of the rules, except the Nuclear Regulatory Commission’s fee 

recovery rule, were issued to regulate the financial sector. No rule provided complete monetized 

benefit and cost information. The Federal Reserve System promulgated four rules on electronic 

fund transfer and two rules on truth-in-lending, and generally did not provide information on 

benefits and costs. The Federal Reserve System and the Federal Trade Commission issued a 

joint rule on fair credit reporting for which the agencies provided monetized cost information, 

but no monetized benefit assessment. The SEC conducts some benefit-cost analysis of its rules, 

but it generally does not quantify and monetize benefits and costs. OMB does not know whether 

the rigor of the analyses conducted by these agencies is similar to that of the analyses performed 

by agencies subject to OMB review. 

We emphasize that for the purposes of informing the public and obtaining a full 

accounting, it would be desirable to obtain better information on the benefits and costs of the 

rules issued by independent regulatory agencies. The absence of such information is a continued 

obstacle to transparency, and it might also have adverse effects on public policy. Executive 

Order 13563 emphasizes the importance of agency use of “the best available techniques to 

quantify anticipated present and future benefits and costs as accurately as possible.” While that 

Executive Order applies only to executive agencies, independent agencies may wish to consider 

the use of such techniques. In its February 2, 2011, guidance on Executive Order 13563, OMB 

encouraged the independent agencies to follow the principles and requirements of the order.45 

OMB provides in Appendix C of this Report a summary of the information available on 

the regulatory analyses for major rules by the independent agencies over the past ten years. This 

summary is similar to the ten-year look-back for regulation included in recent Reports. It 

examines the number of major rules promulgated by independent agencies as reported to the 

GAO from 2000 through 2010, which are presented in Table C-1.46 Information is also 

presented on the extent to which the independent agencies reported benefit and cost information 

for these rules in Tables C-2 through C-4. 

44 Footnote 3, above, states the criteria for including rules in the report. In practice, a rule was considered “major” 

for the purposes of the report if (a) it was estimated to have either annual costs or benefits of $100 million or more 

or (b) it was likely to have a significant impact on the economy. 

45 Memorandum for the Heads of Executive Departments and Agencies, and of Independent Regulatory Agencies, 

M-11-10, “Executive Order 13563, ‘Improving Regulation and Regulatory Review,’” p. 6, available at 

http://www.whitehouse.gov/sites/default/files/omb/memoranda/2011/m11-10.pdf 

46 OMB did not finalize a Report in 1999; OMB reconstructed the estimates for this period based on GAO reports. 

Prior to the 2003 Report, OMB did not report on independent agency major rules on a fiscal year basis, but rather on 

an April-March cycle. Similar to last year, OMB is reporting all of the rules from 2000 through 2010 on a fiscal 

year basis (see Table C-1). The number of rules presented in earlier Reports may therefore not match the number of 

rules presented here. 

31 
Table 1-7: Major Rules Issued by Independent Regulatory Agencies, 

October 1, 2009 - September 30, 2010 

Agency Rule Information on 

Benefits or Costs 

Monetized 

Benefits 

Monetized 

Costs 

Federal Reserve 

System 

Electronic Fund Transfers (74 FR 

59,033) 

Yes No No 

Federal Reserve 

System 

Electronic Fund Transfers (75 FR 

16,580) 

No No No 

Federal Reserve 

System 

Electronic Fund Transfers (75 FR 

31,665) 

No No No 

Federal Reserve 

System 

Electronic Fund Transfers (75 FR 

50,683) 

No No No 

Federal Reserve 

System 

Truth in Lending (75 FR 7,658) No No No 

Federal Reserve 

System 

Truth in Lending (75 FR 37,526) No No No 

Federal Reserve 

System and 

Federal Trade 

Commission 

Fair Credit Reporting Risk-Based Pricing 

Regulations 

Yes No Yes 

Nuclear 

Regulatory 

Commission 

Revision of Fee Schedules; Fee Recovery 

for FY 2010 (75 FR 34,220) 

Yes No Yes 

Securities and 

Exchange 

Commission 

Amendments to Form ADV (75 FR 

49,234) 

Yes No Yes 

Securities and 

Exchange 

Commission 

Amendments to Regulation SHO (75 FR 

11,232)* 

Yes No Yes 

Securities and 

Exchange 

Commission 

Amendments to Rules for Nationally 

Recognized Statistical Rating 

Organizations (74 FR 63,832) 

Yes No Yes 

Securities and 

Exchange 

Commission 

Custody of Funds or Securities of Clients 

by Investment Advisers (75 FR 1,456) 

Yes No Yes 

Securities and 

Exchange 

Commission 

Facilitating Shareholder Director 

Nominations (75 FR 56,668) 

Yes No No 

Securities and 

Exchange 

Commission 

Internal Control over Financial Reporting 

in Exchange Act Periodic Reports of 

Non-Accelerated Filers (74 FR 53,628) 

Yes No No 

Securities and 

Exchange 

Commission 

Money Market Fund Reform (75 FR 

10,060) 

Yes No No 

Securities and 

Exchange 

Commission 

Political Contributions by Certain 

Investment Advisers (75 FR 41,018) 

Yes No Yes 

Securities and 

Exchange 

Commission 

Proxy Disclosure Enhancements (74 FR 

68,334) 

Yes No Yes 

* Final rule to an interim final rule promulgated in FY 2009 

32 
 

 

 

 

 

 

D. The Impact of Federal Regulation on State, Local, and Tribal Governments, Small 

Business, Wages, and Economic Growth 

Section 624 (a)(2) of the Regulatory Right-to-Know Act requires OMB to present an 

analysis of the impacts of Federal regulation on State, local, and tribal governments, small 

business, wages, and economic growth. In addition, Presidential Memorandum: Administrative 

Flexibility (attached as Appendix H) calls for a series of measures to promote flexibility for 

State, local, and tribal governments; these measures include reduced reporting burdens and 

streamlined regulation. 

1. Impacts on State, Local, and Tribal Governments 

Over the past ten years, only four rules have imposed costs of more than $100 million per 

year ($2001) on State, local, and tribal governments (and thus have been classified as public 

sector mandates under the Unfunded Mandates Reform Act of 1995):47 

	 EPA’s National Primary Drinking Water Regulations; Arsenic and Clarifications to 

Compliance and New Source Contaminants Monitoring (2001): This rule reduces the 

level of arsenic that is allowed to be in drinking water from 50 ppb to 10 ppb. It also 

revises current monitoring requirements and requires non-transient, non-community 

water systems to come into compliance with the standard. This rule may affect State, 

local, or tribal governments or the private sector at an approximate annualized cost of 

$189 million for a 3 percent discount rate, and $216 for a 7 percent discount rate. The 

monetized benefits of the rule range from $146 million to $206 million per year.48 

Qualitative benefits may include reductions in skin and kidney cancer where the skin 

cancer endpoints are well-established. 

	 EPA’s National Primary Drinking Water Regulations: Long Term 2 Enhanced Surface 

Water Treatment (2005): The rule protects against illness due to cryptosporidium and 

other microbial pathogens in drinking water and addresses risk-risk trade-offs with the 

control of disinfection byproducts. It requires the use of treatment techniques, along with 

monitoring, reporting, and public notification requirements, for all public water systems 

that use surface water sources. The monetized benefits of the rule range from 

approximately $260 million to $1.8 billion. The monetized costs of the rule range from 

approximately $80 million to $130 million. 

47 We note that EPA’s rules setting air quality standards for ozone and particulate matter may ultimately lead to 

expenditures by State, local, or tribal governments of $100 million or more. However, Title II of the Unfunded 

Mandates Reform Act provides that agency statements of compliance with Section 202 must be conducted “unless 

otherwise prohibited by law.” 2 U.S.C. § 1532 (a). The conference report to this legislation indicates that this 

language means that the section “does not require the preparation of any estimate or analysis if the agency is 

prohibited by law from considering the estimate or analysis in adopting the rule.” H.R. Conf. Rep. No. 104-76 at 39 

(1995). EPA has stated, and the courts have affirmed, that under the Clean Air Act, the criteria air pollutant ambient 

air quality standards are health-based and EPA is not to consider costs in setting the standards. 48 Benefits were estimated to be constant across time and so annualized benefits are equal at 3 and 7 percent 

discount rates. 

33 
 

	 EPA’s National Primary Drinking Water Regulations: Stage 2 Disinfection Byproducts 

Rule (2006): The rule protects against illness due to drinking water disinfectants and 

disinfection byproducts (DBPs). 49 The rule effectively tightens the existing standards by 

making them applicable to each point in the drinking water distribution system 

individually, rather than only on an average basis to the system as a whole. EPA has 

determined that this rule may contain a Federal mandate that results in expenditures by 

State, local, and tribal governments, and the private sector, of $100 million or more in 

any one year. While the annualized costs fall below the $100 million threshold, the costs 

in some future years may be above the $100 million mark as public drinking water 

systems make capital investments and finance these through bonds, loans, and other 

means. 

	 DHS’s Chemical Facility Anti-Terrorism Standards Rule (2007): This rule establishes 

risk-based performance standards for the security of our nation’s chemical facilities. It 

requires covered chemical facilities to prepare Security Vulnerability Assessments 

(SVAs), which identify facility security vulnerabilities, and to develop and implement 

Site Security Plans (SSPs), which include measures that satisfy the identified risk-based 

performance standards. The rule also provides DHS with the authority to seek 

compliance through the issuance of Orders, including Orders Assessing Civil Penalty and 

Orders for the Cessation of Operations. DHS has determined that this rule constitutes an 

unfunded mandate on the private sector. In the regulatory impact assessment published 

with this rule, DHS estimates that there are 1,500 to 6,500 covered chemical facilities. 

DHS also assumes that this rule may require certain municipalities that own and/or 

operate power generating facilities to purchase security enhancements. Although DHS is 

unable to determine if this rule will impose an enforceable duty upon State, local, and 

tribal governments of $100 million (adjusted annually for inflation) or more in any one 

year, it has been included in this list for the sake of completeness. 

Although these four rules were the only ones over the past ten years to require 

expenditures by State, local, and tribal governments exceeding $100 million (adjusted for 

inflation), they were not the only rules with impacts on other levels of governments. For 

example, many rules have monetary impacts lower than the $100 million threshold, and agencies 

are also required to consider the federalism implications of rulemakings under Executive Order 

13132. 

2. Impact on Small Business 

The Regulatory Right-to-Know Act calls for an analysis of the effects of regulations on 

small business. Consistent with that direction, Executive Order 12866, “Regulatory Planning and 

Review,” recognizes the need to attend to such effects. That Executive Order, reaffirmed by and 

incorporated in Executive Order 13563, “Improving Regulation and Regulatory Review,” calls 

49 While causal links have not been definitively established, a growing body of evidence has found associations 

between exposure to DBPs and various forms of cancer, as well as several adverse reproductive endpoints (e.g., 

spontaneous abortion). 

34 
 

 

 

on agencies to tailor their regulations by business size in order to impose the least burden on 

society, consistent with the achievement of regulatory objectives. It also calls for the 

development of short forms and other efficient regulatory approaches for small businesses and 

other entities. In the findings section of SBREFA, Congress states that “small businesses bear a 

disproportionate share of regulatory costs and burdens.”50 When relevant regulations are issued, 

each firm must determine whether a regulation applies, how to comply, and whether it is in 

compliance. As firms increase in size, fixed costs of regulatory compliance are spread over a 

larger revenue and employee base, which often results in lower regulatory costs per unit of 

output. 

In recognition of these principles, many statutes and regulations explicitly attempt to 

reduce burdens on small businesses, in part to promote economic growth, in part to ensure 

against unnecessary or unjustified costs, in part to avoid adverse effects on employment and 

wages. For example, agencies frequently tailor regulations to limit the costs imposed on small 

business and to offer regulatory relief, including explicit exemptions for small businesses and 

slower phase-in schedules, allowing adequate periods of transition. Moreover, the Regulatory 

Flexibility Act (RFA) requires agencies to assess the effect of regulations on small businesses.51 

Under the RFA, whenever an agency concludes that a particular regulation will have a 

significant economic effect on a substantial number of small entities, the agency must conduct 

both an initial and final regulatory flexibility analysis. This analysis must include (among other 

things) an assessment of the likely burden of the rule on small entities and an analysis of 

alternatives that may afford relief to small entities while achieving the regulatory goals. OMB 

works closely with agencies to promote compliance with RFA and to tailor regulations to reduce 

unjustified costs and to create appropriate flexibility. 

On January 18, 2011, the President issued a memorandum to underline the requirements 

of the RFA and to direct agencies to offer an explanation of any failure to provide flexibility to 

small businesses in proposed or final rules. Such flexibility may include delayed compliance 

dates, simplified reporting requirements, and partial or total exemptions. The President’s 

memorandum emphasizes the relationship between small and new businesses and economic 

growth and job creation; he has directed agencies to ensure, to the extent feasible and consistent 

with law, that regulatory initiatives contain flexibility for small businesses. This memorandum is 

attached as Appendix F. 

The empirical evidence of the effects of regulation on small business remains less than 

entirely clear. We have cited in previous Reports research by the Small Business Administration 

(SBA) Office of Advocacy, suggesting that small entities disproportionately shoulder regulatory 

and paperwork burdens. In a study sponsored by SBA (and cited in our 2010 Report), for 

example, Dean, et al., concludes that environmental regulations act as barriers to entry for small 

firms.52 

Becker offers a more complex view, focusing on the effect of air pollution regulation on 

50 Section 202(2) of Pub. L. No. 104-121. 

51 5 U.S.C. §§ 601-612.
 52 Dean, et al. (2000).
 

35 
 

 

 

 

small business.53 He finds that although “progressively larger facilities had progressively higher 

unit abatement costs, ceteris paribus,”54 the relationship between firm size and pollution 

abatement costs varies depending on the regulated pollutant. For troposphere ozone, the 

regulatory burden seems to fall substantially on the smallest three quartiles of plants. For SOx, 

the relationship between regulatory burden and the firm size seems to be U-shaped. For total 

suspended particles, new multi-unit emitting plants in the smallest size class had $265 more 

capital expenditure (per $10,000 of value added) in non-attainment counties than similar plants 

in attainment counties, while “those in the larger size classes had an additional $511-687 in 

expenditure...though the rise was not monotonic.”55 

The evidence in the literature, while suggestive, remains preliminary, inconclusive, and 

mixed. OMB continues to investigate the evolving literature on the relevant questions in order to 

obtain a more precise picture. It is clear, however, that some regulations have significant adverse 

effects on small business, and that it is appropriate to take steps to create flexibility in the event 

that those adverse effects cannot be justified by commensurate benefits. As the President’s 2011 

memorandum directs, agencies should specifically explain any refusal to take such steps, 

especially in light of the importance of small businesses and startups for economic growth and 

job creation. 

3. Impact on Wages and Employment 

Regulations of many different markets and areas of activity can ultimately affect labor 

markets, producing changes in wages and employment levels. Some regulations can have 

adverse effects on both dimensions, especially if they significantly increase costs; other 

regulations might produce benefits, especially if they significantly decrease costs. The relevant 

effects can be quite complex, since in general equilibrium, regulation in one market can have 

ripple effects across many markets, making it difficult to generalize. In addition, some 

regulations require or promote activities that may have beneficial effects on job creation. 

We discuss here the effect of labor market regulations, environmental regulations, and 

economic regulations on wages and employment. OMB continues to investigate the possibility 

that certain kinds of regulations can have adverse effects on job creation in particular, and is 

interested both in empirical work and in taking steps to reduce or eliminate such adverse effects. 

Under Executive Order 13563, job creation is a relevant consideration in regulatory review (“Our 

regulatory system must promote public health, welfare, safety, and our environment while 

promoting economic growth, innovation, competitiveness, and job creation.”). 

53 Becker (2005).

54 Id., p. 163. 55 Id., p. 165. 

36 
 

 

a. Labor market regulations 

It is perhaps simplest to analyze the effects of direct regulation of labor markets, as they 

can be plausibly analyzed using a relatively simple partial equilibrium framework— 

i.e., one that focuses exclusively on the labor market, ignoring the effects through other markets. 

There are many different types of labor market regulations. Perhaps the most obvious are direct 

price controls, such as minimum wage laws.56 Another form of labor market regulation consists 

of regulations that mandate particular employer-provided benefits, such as the requirement under 

the Family and Medical Leave Act (FMLA) to provide unpaid leave to care for a new child; in 

the same category are rules that affect working conditions, such as workplace safety regulations 

under the Occupational Safety and Health Act. Another category of labor market regulation is 

anti-discrimination law, which protects certain classes of workers from discrimination in hiring 

and wage-setting decisions. Still another form of labor market regulation governs the ability of 

workers and firms to bargain collectively; in general, U.S. competition law prohibits collusion 

among employers and allows collective bargaining by workers. 

The effects of these approaches must be analyzed separately. Here we outline the theory 

and evidence on the effect of mandated benefits regulations on wages and employment levels. 

To be concrete, consider a workplace safety regulation. Summers provides the standard pricetheoretic treatment of such regulations.57 Such a regulation will shift the labor supply curve 

down by the amount that workers value the increase in safety, so that workers are willing to 

supply more labor for a given wage than in the absence of the regulation. Because it imposes 

compliance costs on employers, the regulation also shifts the labor demand curve down by the 

amount of the compliance cost. 

If workers value the mandated benefit at more than it costs employers to provide the 

benefit, then both the employment level and net wages (i.e., monetary compensation plus the 

value of non-monetary benefits such as safety) will rise. Under standard assumptions, employers 

have incentives to provide such benefits, but various market failures may result in suboptimal 

provision of such benefits. Conversely, if workers value the mandated benefit at less than its 

cost, then the employment level and net wages will fall. This simple model assumes that wages 

can indeed perfectly adjust downwards in response to the mandated benefits—but if wages are 

sticky, then the regulation could result in a decrease in employment levels and an increase in net 

wages. 

In the case of group-specific mandated benefits, which are targeted at identifiable groups 

of workers in the population, the theoretical analysis is more complicated. Jolls provides the 

leading account and emphasizes that the interaction of group-specific mandated benefits 

regulation with anti-discrimination law determines its consequences for labor markets.58 

Consider, for instance, regulations under the Americans with Disabilities Act (ADA) that require 

that employers accommodate the special needs of disabled employees—a group-specific 

mandated benefit. The law also forbids employers from discriminating against disabled workers 

56 Neumark & Wascher (2008). 

57 Summers (1989). 

58 Jolls (2000). 

37 
 

 

 

 

in hiring and compensation decisions. To the extent that it is easier to enforce the prohibition of 

discrimination in wage setting than in hiring decisions, Jolls argues that the law will result in no 

reduction in wages for disabled workers but a reduction in their employment level, because 

employers will prefer to hire (cheaper) non-disabled workers. 

In contrast, group-specific mandates that target women, such as maternity leave 

mandates, are more likely to have an effect on wages because women are disproportionately 

represented in a few occupations, and hence their wages can more easily be adjusted downward 

without triggering anti-discrimination enforcement. These mandates can be analyzed in the 

standard framework provided by Summers described above, and because wages adjust down, are 

less likely to have a negative effect on employment. 

The empirical literature does not offer unambiguous conclusions, but some studies 

provide support for the predictions of these simple partial equilibrium models. Acemoglu and 

Angrist find that the ADA resulted in no decrease in relative wages of disabled people but a 

decrease in employment levels.59 In contrast, Gruber finds that regulations that require 

employers to provide comprehensive coverage for childbirth in health insurance plans result in a 

decrease in women’s wages but have no effect on their employment levels.60 Studies examining 

the effect of the FMLA in the US, however, find little effect on either relative employment levels 

or wages of women, perhaps because the mandated leave is short and unpaid and many 

employers provided maternity leave prior to the law.61 OMB continues to investigate the 

growing literature on these topics; the references here are meant to be illustrative rather than 

exhaustive. 

b. Environmental Regulation 

The effects of environmental regulation on the labor market can be difficult to assess, in 

part because they are not easy to disentangle from the effects of other economic changes over 

time and across industries. The underlying questions require careful and continuing empirical 

study. In this section we summarize some of the leading articles that are often cited in the 

academic literature. 

Surveying the early studies, Goodstein (1994) finds that seven of nine relevant studies 

showed increases in employment as a result of environmental regulation, one showed a decrease, 

and one was inconclusive. He states that “on balance, the available studies indicate that 

environmental spending... has probably led to a net increase in the number of jobs in the U.S. 

economy ... although if it exists, this effect is not large.” A more recent discussion finds that the 

research thus far has “yielded mixed results” with respect to “the over-all employment effects of 

environmental regulation” in the short- or medium-term.62 

59 Acemoglu and Angrist (2001). 

60 Gruber (1994). 

61 Waldfogel (1999) and Baum (2003). Ruhm (1998) examines parental leave mandates in Europe and finds that
 

they are associated with increases in women’s relative employment levels and reductions in their relative wages. 62 Berman and Bui (2001b).
 

38 
 

In an influential treatment, Morgenstern, Pizer, and Shih (2002) explore four highly 

polluting, regulated industries to examine the effects on employment of higher abatement costs 

from regulation.63 The authors conclude that increased abatement expenditures generally do not 

cause a significant change in employment. In reaching this conclusion, they provide a general 

framework, identifying three sources of potential effects, both beneficial and adverse, that 

regulation could have on employment: 

	 Demand effect: higher production costs raise market prices and hence reduce 

consumption (and production), thus reducing demand for output, with potentially 

negative effects on employment; in the authors’ words, the “extent of this effect depends 

on the cost increase passed on to consumers as well as the demand elasticity of industry 

output” 

	 Cost effect: As costs go up, plants add more capital and labor (holding other factors 

constant), with potentially positive effects on employment; in the authors’ words, as 

“production costs rise, more inputs, including labor, are used to produce the same amount 

of output” 

	 Factor-shift effect: Post-regulation production technologies may be more or less labor 

intensive (i.e., more/less labor is required per dollar of output); in the authors’ words, 

“environmental activities may be more labor intensive than conventional production,” 

meaning that “the amount of labor per dollar of output will rise,” though it is also 

possible that “cleaner operations could involve automation and less employment, for 

example” 

Isolating these elements, the authors expect, and find, positive employment effects in 

industries (such as petroleum and plastics) where environmental activities are labor-intensive and 

demand is relatively inelastic. Where the pollution abatement activities required or encouraged 

by regulation are not labor-intensive, and where demand is elastic, positive employment effects 

would not be expected and negative effects should be anticipated to occur; in such cases, the 

demand effect will dominate the outcome. The authors find that in those industries where labor 

already represents a large share of production costs and where demand is relatively more elastic 

(such as steel and pulp and paper), there is nonetheless little evidence of any statistically 

significant employment consequence. They also state that “increased environmental spending 

generally does not cause a significant change in industry-level employment. Our average across 

all four industries is a net gain of 1.5 jobs per $1 million in additional environmental spending, 

with a standard error of 2.2 jobs—an insignificant effect.” 

In another study, Berman and Bui (2001) use direct measures of regulation and plant data 

to estimate the employment effects of sharply increased air quality regulation in Los Angeles. 

They compare changes in employment in affected plants to those in other plants in the same 

industries but in regions not subject to the local regulations. The authors find that “while 

regulations do impose large costs, they have a limited effect on employment” – even when exit 

and dissuaded entry effects are considered.64 Their conclusion is that local air quality regulation 

63 Data include information from 1979, 1980, 1981, 1985, 1988 and 1991. 

64 Berman and Bui (2001). 

39 
 

 

 

 

“probably increased labor demand slightly.” In their view, the limited effects likely arose 

because (1) the regulations applied disproportionately to capital-intensive plants with relatively 

little employment; (2) the plants sold to local markets where competitors were subject to the 

same regulations (so that sales were relatively unaffected); and (3) abatement inputs served as 

complements to employment. 

In a related paper, Cole and Elliott (2007) study the impact of UK environmental 

regulations on sectoral employment using panel data spanning 27 different industries over 5 

years. They find that environmental regulation costs did not have a statistically significant effect 

on employment, regardless of whether such costs were treated as exogenous or endogenous. The 

authors suggest that regulation costs could generate “competing effects on employment and 

cancel each other out” or simply have no discernable impact at all. 

By contrast, other sectoral studies – generally focusing on the manufacturing sector – 

have found negative effects on employment.65 The 2010 Report states that OMB is also 

exploring the risk that domestic regulation might lead companies to do business abroad as a 

result of domestic regulation in the environmental area, resulting in depressed wages and 

employment. The economic literature has for some time examined firms’ decisions to locate 

new plants or relocate existing plants in response to environmental regulations. 

In this context, the evidence is both suggestive and mixed. In their review of the 

literature on the effect of environmental regulation on the manufacturing sector, Jaffe et al. find 

that “although the long-run social costs of environmental regulation may be significant, 

including adverse effects on productivity, studies attempting to measure the effect of 

environmental regulation on net exports, overall trade flows, and plant-location decisions have 

produced estimates that are either small, statistically insignificant, or not robust to tests of model 

specification.”66 

Using 17-year panel data, Keller and Levinson (2002) find that the stringency of 

environmental regulation (expressed in terms of pollution abatement costs) has “small deterrent 

effects” on states competing for foreign direct investment.67 By contrast, Xing and Kolstad state 

that “using instruments for the unobserved variables, the statistical results show that the laxity of 

environmental regulations in a host country is a significant determinant of F[oreign] D[irect] 

I[nvestment] from the US for heavily polluting industries and is insignificant for less polluting 

industries.”68 

A recent study by Hanna (2010) measured the response of the foreign direct investment 

decisions of U.S.-based multinationals to the Clean Air Act Amendments, using a panel of firmlevel data over the period 1966-1999. Consistent with the theory that regulation causes firms to 

substitute foreign for domestic production, the authors find that in the environmental area, 

domestic regulation has led US-based multinational companies “to increase their foreign assets 

65 See, e.g., Greenstone (2002); Kahn (1997). See also Walker (2011), for a recent finding of negative effects on 

employment as a result of environmental regulation.

66 Jaffe et al, pp. 157-8. 

67 Keller and Levinson (2002), p. 691.
 68 Xing and Kolstad (2002), p. 1.
 

40 
 

 

 

in polluting industries by 5.3 percent and their foreign output by 9 percent.”69 The authors also 

find that these results are more robust for firms that manufactured within an industry for which 

imports had historically accounted for a large percentage of US consumption (see also 

Greenstone (2002) discussed below). Like Hanna (2010), Brunnermeier and Levinson (2004), 

using panel data, also find “statistically significant pollution haven effects of reasonable 

magnitude.”70 Levinson and Taylor’s (2008) results in examining trade flows and 

environmental regulation are consistent with these other studies.71 

c. Economic regulation 

Rate regulations and restrictions on entry in product markets—commonly referred to as 

“economic regulation”—can have important effects on labor markets. As emphasized by 

Peoples,72 restrictions on entry into an industry can make unionization of the industry easier 

because as a result the industry is dominated by a few large firms, which lowers the cost of 

organizing workers. The resulting high unionization rates give unions in the regulated industries 

substantial bargaining power, and as a result wages in regulated industries, which historically 

include trucking, electricity, and airlines, are higher. Moreover, rate regulations that allow firms 

in these industries to pass costs on to customers may make it easier for unions to bargain for 

relatively high wages. 

If economic regulation also results in higher prices in the product market, consumers, 

including workers, will of course have to pay those prices. Blanchard and Giavazzi show in 

theoretical terms that the increased markups in the product market caused by widespread 

economic regulation can result in both lower real wages of workers, measured in terms of 

purchasing power, and lower employment levels.73 The theoretical negative effect of entry 

regulation on employment was supported empirically by Bertrand and Kramarz,74 who examine 

entry restrictions in the French retail industry and find that they have reduced employment 

growth in France. 

4. Impact on Economic Growth 

Measuring the effects of regulation on economic growth is a complex task. Some forms 

of regulation may have a positive effect on growth, perhaps by promoting stable and efficient 

operation of financial markets, by improving educational outcomes, by promoting innovation, or 

by upgrading the operation of the transportation system. Excessive and unnecessary regulations, 

on the other hand, place undue burdens on companies, consumers, and workers and may cause 

growth and overall productivity to slow. As we have noted, there is some evidence that domestic 

environmental regulation has led some US-based multinationals to invest in other nations 

69 Hanna (2010), p. 160.
 70 Brunnermeier and Levinson (2004), p. 6.
 71 Levinson and Taylor (2008). 

72 Peoples (1998). 

73 Blanchard and Giavazzi (2003). 74 Bertrand and Kramarz (2002). 

41 
 

 

 

 

 

 

(especially in the domain of manufacturing), and in that sense, such regulation may have an 

adverse effect on domestic growth. At the same time, the direct impacts of particular 

regulations, or categories of regulations, on the overall economy may be difficult to establish 

because causal chains are uncertain and because it is hard to control relevant variables. 

a. Some conceptual challenges and the nature of growth. One difficulty with measuring 

the relationship between regulation and economic growth is identifying the appropriate measure 

of output. Economists frequently look at Gross Domestic Product (GDP), which is also our 

principal emphasis here (see below), but GDP may not adequately account for the effects of 

some regulations. For example, GDP does not capture directly relevant benefits of regulation, 

such as environmental protection, that do not result in increases in goods or services produced.75 

Some important benefits, improving people’s actual welfare, are not adequately captured by 

GDP. Efforts to expand the national accounts to incorporate omitted factors – such as 

improvements in environmental quality in satellite accounts – suggest the incompleteness of 

existing measures.76 

A detailed literature explores some of the potentially deeper limitations of national 

income and product accounting. There is a complex and not fully understood relationship 

between GDP growth and subjective well-being (insofar as a rapidly growing literature suggests 

that the latter may be measured).77 Some studies, for example, conclude that, on average, 

increases in subjective well-being are clearly and consistently associated with rising levels of 

GDP across different countries.78 Studies find that the positive relationship between wealth and 

subjective well-being is especially clear when comparing the subjective well-being of richer and 

poorer people within the same country at a single point in time; in brief, the subjective wellbeing of richer people is higher.79 Other studies point to cross-country data suggesting that as 

income per capita increases, subjective well-being increases steeply but only up to a certain 

threshold. Afterwards, levels of happiness are only weakly correlated with further increases in 

income per capita; that is, some studies suggest that above some threshold level, GDP growth 

may have little effect on subjective well-being.80 The precise relationship between GDP growth 

and subjective well-being has yet to be settled. 

A more general observation is that there may be a significant difference between selfreported life satisfaction and self-reported day-to-day experience; the measure of “life 

satisfaction” evidently captures judgments that are not captured in day-to-day experience, and 

vice-versa.81 Some studies, for example, find that life satisfaction generally increases with 

75 See Sen (1999a, 1999b), Krueger (2009), Kahneman, et al. (2004), and Stiglitz, et al. (2010). 

76 Nordhaus & Kokkelenberg (1999); Nordhaus (2004).
 77 See Krueger (2009) for a discussion of subjective well-being and its measurement. See also Stevenson and 

Wolfers (2008b) showing movements in happiness inequality that do not parallel movements in income inequality. 

78 See Deeton (2008); Hagerty & Veenhoven (2003); Stevenson & Wolfers (2008a); Inglehart, Foa, Peterson, & 

Welzel (2008). For a finding of “a clear positive link between average levels of subjective well-being and GDP per 

capita across countries,” see Stevenson and Wolfers (2008a).

79 Stevenson and Wolfers (2008a) characterize this conclusion as one that has garnered a “clear consensus in the
 

literature.” 

80 See Inglehart et al. (2008). Lane (2001) claims that once an individual rises above a basic “subsistence level,” the
 

major sources of well-being are not income but rather friends and family life.

81 Diener et al. (2010); Kahneman (1999). 

42 
 

 

 

 

income but that experienced well-being does not.82 

In this vein, Krueger, et al, offer an alternative measure of well-being—National Time 

Accounting—that proposes to measure and analyze how people spend and experience their 

time.83 One claim is that such measures provide important information that is not fully or 

adequately captured in GDP or other existing measures. This approach provides an extension to 

regular time use surveys, and uses what the authors call the Day Reconstruction Method (DRM) 

to ask respondents what they were doing, and how they felt, at different times during the day. 

Federal statistical initiatives are currently underway that are influenced by and build upon 

this approach. The National Institute on Aging (NIA) is supporting the inclusion of well-being 

measures in a number of large population-based surveys, both nationally and internationally. 

Specifically, a module of questions, designed by Krueger with funding from NIA, was fielded in 

the 2010 American Time Use Survey (ATUS). The ATUS, which is conducted by the U.S. 

Census Bureau for the Bureau of Labor Statistics (BLS), is a continuous survey about how 

individuals age 15 and over spend their time doing various activities, such as work, childcare, 

housework, watching television, volunteering, and socializing. In the module, up to three 

activities that a respondent reports are randomly selected, and respondents are asked how happy, 

tired, sad, stressed, and in pain they felt during each of those activities. Data from this module 

will become available mid-2011. NIA currently intends to fund this module again in 2012, and 

OIRA continues to support these efforts. 

In November 2010, the NIA and the U.K. Economic and Social Research Council 

sponsored a workshop that was held at the National Academy of Sciences on the role of wellbeing measures in public policy. This meeting brought together leading academic and policy 

experts from the U.S. and U.K to explore research needs and practical challenges surrounding 

the integration of subjective well-being measures into policy planning and evaluation process of 

local and national governments and agencies. The NIA has further commissioned a National 

Academy of Sciences panel on development of nonmarket satellite National Accounts of Wellbeing. In addition, NIA, along with the National Center for Complementary and Alternative 

Medicine, is funding a series of research grants on both experienced and evaluative well-being. 

Meanwhile, a rapidly developing literature continues to explore the relationship between 

economic growth and well-being, and this literature may turn out to have implications for 

regulatory policy and uses of cost-benefit analysis.84 For example, a regulatory initiative may 

have effects on subjective well-being, or actual experience, that cost-benefit analysis does not 

fully capture. Consider, just for purposes of illustration, a few of many examples from the 

relevant literature: 

	 Contributing to the extensive literature on the relevance of relative (as opposed to 

absolute) economic position, Luttmer reports that higher earnings of neighbors are 

82 Krueger & Schkade (2008); Diener et al. (2010). 83 Krueger, et al (2009). Krueger and Schkade (2008) also have examined the reliability of subjective well-being
 

measures. For a general account, see Diener, et al. (2009). See also Kahneman et al (2004), Kahneman & Krueger 

(2006), Krueger, ed. (2009). 

84 See, e.g., Vitarelli (2010); Adler and Posner (2008). 

43 
 

 

 

 

associated with lower levels of self-reported happiness, suggesting that subjective 

well-being may be partly a function of relative income.85 Another study suggests that 

the impact of relative income levels matters more at higher levels of income.86 

	 Testing for the differences between experienced well-being and life satisfaction, 

Kahneman and Deaton analyze more than 450,000 responses to the GallupHealthways Well-Being Index, a daily survey of 1,000 US residents conducted by the 

Gallup Organization They find that income and education are more closely related to 

life satisfaction, but that health, care-giving, loneliness, and smoking are relatively 

stronger predictors of day-to-day emotions.87 

	 Biswas-Diener et al. compare subjective well-being measures from the U.S. and 

Denmark. They find that although the Danish claim higher life satisfaction, 

Americans are higher in both positive and negative affect; they are more “emotional.” 

Their study also suggests that poor Danes are happier than their American 

counterparts.88

	 Kahneman et al. use the Day Reconstruction Method in a study of women conducted 

concurrently during one day in Columbus, Ohio and Renne, France. The authors find 

that the specific sources from which the women draw happiness vary between the two 

cities, “reflecting differing cultural norms and social arrangements.”89 

	 Examining changes over time in the United States and Britain, Blanchflower and 

Oswald find that in the last quarter-century, reported levels of well-being have 

declined in the United States and remained flat in Britain and are affected by such 

factors as relative income and age. They estimate the monetary values of events such 

as unemployment and divorce and find that both impose the welfare equivalent of 

large losses in monetary terms.90 

	 Expanding their investigation to 31 European countries, Blanchflower and Oswald 

examine data from the 2007 European Quality of Life Survey and find that the 

statistical structure of well-being in European nations looks “almost exactly the same 

as in the United States.”91 That is, the “same variables enter, and in almost identical 

ways.” They conclude that, across nations, “[h]appy people are disproportionately the 

young and old (not middle-aged), rich, educated, married, in work, healthy, exercisetakers, with high fruit-and-vegetable diets, and slim.” 

	 Responding to critics who claim that subjective well-being measures fail to provide 

valid measures of well-being, Oswald and Wu examine reported life satisfaction 

85 Luttmer (2005). 

86 See Dynan & Ravina (2007).
 87 Kahneman & Deaton (2010). 

88 Biswas-Diener (2010). 

89 Kahneman (2010).
 90 See Branchflower & Oswald (2004). 

91 See Blanchflower & Oswald (2010). 

44 
 

 

 

among a recent random sample of 1.3 million U.S. inhabitants. They observe a high 

(0.6) correlation across states between these measures of subjective well-being and 

objective quality-of-life rankings (calculated from, among other things, state 

indicators such as crime, air quality, taxes, and cost-of-living).92 Oswald and Wu 

conclude that “subjective well-being data contain genuine information about the 

quality of human lives.” 

	 Using African data collected from the Gallup World Poll and African Demographic 

and Healthy Surveys, Deaton et al. show that the death of an immediate family 

member has little effect on life evaluation, but a sizeable impact on measures of 

emotion, such as depression or sadness. They suggest that the amount of money 

necessary to compensate for the emotional effects of a death is larger than that 

required to compensate one’s resulting life evaluation.93 

	 Harter and Arora investigate the relationship between hours worked and perceived 

job fit, and their impact on both life satisfaction and experienced measures of wellbeing.94 Using data drawn from the Gallup World Poll, they find that perceived job fit 

was a robust predictor of life satisfaction across various regions, and increased in 

importance as the hours worked increased. This conclusion adds to prior studies, 

which show meaningful relationships between the subjective experience of work and 

objective outcomes, such as employee productivity and turnover. 95 

	 Though a random-assignment experiment (supported by General Social Survey data), 

Ifcher and Zarghamee find that individuals in a happier mood are less likely to prefer 

present over future utility. In other words, compared to neutral affect, mild positive 

affect significantly decreases time preference over money.96 According to the authors, 

one practical implication is that individuals may benefit from awareness that their 

mood affects their behavior. For example, a new employee may want to postpone 

pension plan contribution decisions until he or she is in a happy mood. 

	 Examining data collected from fifty-eight countries, Engelbrecht finds that natural 

capital per capita across those countries is correlated with subjective life-satisfaction 

measures, especially in high-income nations.97 He concludes that debates about 

sustainable development – which often seek to ensure that future generations will 

have a similar level of wealth per capita available to them as current generations do – 

should incorporate subjective well-being measures. 

92 Oswald & Wu (2010). In more technical terms, their paper claims to “offer[] a crosscheck on the spatial 

compensating-differentials theory of economics and regional science.” 

93 Deaton et al (2010). 

94 Harter and Arora (2010). 

95 Isen (1987); Warr (1999). 96 Ifcher & Zarghamee (2011).
 97 Englebrecht (2009). 

45 
 

 

 

 

 

 

 

OMB continues to investigate the relevant literature and to explore, in a preliminary way, 

its possible implications for improving regulatory policy in ways that promote the goals of 

economic growth, innovation, competitiveness, and job creation. 

b. Regulation and economic activity. While identifying the appropriate measure of output 

is a difficult task, debate also continues about how to evaluate the impact of regulations on the 

standard indicators of economic activity. Exploration of that impact continues to be centrally 

important, as Executive Order 13563 makes clear. At the same time, regulatory impacts on 

economic growth may be difficult to demonstrate because of other simultaneous changes in the 

economy. 

Many regulations affect economic growth indirectly through their effects on intermediate 

factors. There is a growing consensus specifying these intermediate drivers of growth, including 

increased human capital, capital investment, research and development, economic competition, 

physical infrastructure, and good governance.98 Some evidence strongly suggests that 

regulations promoting educational attainment may improve human capital accumulation, thereby 

increasing economic growth.99 Other studies show a positive link between increased life 

expectancy and growth.100 

Regulations can also impose significant costs on businesses, dampening economic 

competition and capital investment. Djankov et. al. (2002) find that increased regulations on 

entry into markets—such as licensing and fees—create higher costs of entry and thus adversely 

affect economic outcomes.101 By contrast, van Stel et. al. (2007) find that entry regulations 

actually have little impact on entrepreneurship, but that regulations creating greater labor rigidity 

have a discernible negative impact. 102 

Relatively few studies attempt to measure the economic impact of regulations in the 

aggregate; the literature focuses instead on particular regulatory arenas.103 The literature 

examining the economic impact of environmental regulations in particular is extensive. Here are 

a few examples:104 

98 See, e.g., Temple (1999) 

99 For a recent empirical analysis using new OECD data to find a strong positive impact of increased education on 

economic output, see Cohen & Soto (2007).

100 See, e.g., Bloom et al (2004). Bloom et al. survey the existing literature on health and economic outcomes, and 

find in their own cross-country analysis that a one year increase in life expectancy generates a 4 percent increase in 

economic output, controlling for other variables. 

101 Djankov et al (2002). 102 van Stel et al (2007). They also find that regulations improving access to credit have a positive impact on 

entrepreneurship. 

103 One of the few such studies is an analysis by Hahn and Hird (1991), which estimates the net costs of regulations 

on the economy to be $46 billion, with aggregate annual transfer payments between $172.1 and $209.5 billion. But 

the authors note that their estimates have a wide range of uncertainty due to difficulties in estimation methods and 

available data. Further, this study is likely to be outdated due to major policy and economic developments in the 

years since its publication. 

104 Berman and Bui (2001a) provide a helpful summary of some of this literature. It should be recalled that many 

environmental regulations affect provision of non-market goods that are not explicitly reflected in standard measures 

of economic activity. Thus, in addition to the direct economic costs imposed by environmental regulations, these 

same regulations have social welfare and other non-market impacts that are not captured in these studies. 

46 
 

 

 

 

 

 

	 Jorgenson and Wilcoxen modeled dynamic simulations with and without 

environmental regulation on long-term growth in the US to assess the effects and 

reported that the long-term cost of regulation is a 2.59% reduction in Gross National 

Product.105 

	 Berman and Bui find that during a period of aggressive environmental regulation, 

productivity increased among the petroleum refineries located in the Los Angeles 

from 1987 to 1992, suggesting that “[a]batement costs may severely overstate the true 

cost of environmental regulation”106 and that “abatement associated with the 

SCAQMD regulations was productivity enhancing.”107 

	 Greenstone, List, and Syverson (2011) analyze plant-level production data to estimate 

the effects of environmental regulations on manufacturing plants’ total factor 

productivity (TFP) levels. Using the Clean Air Act Amendments’ division of 

counties into pollutant-specific nonattainment and attainment categories, they find 

that among surviving polluting plants, a nonattainment designation is associated with 

a roughly 2.6 percent decline in TFP. 

	 Gray and Shadbegian examine the investment activity of paper mills from 1979 to 

1990,108 and they find that “plants with relatively high pollution abatement capital 

expenditures over the period invest less in productive capital. The reduction in 

productive investment is greater than the increase in abatement investment, leading to 

lower total investment at high abatement cost plants. The magnitude of this impact is 

quite large, suggesting that a dollar of pollution abatement investment reduces 

productive investment by $1.88 at that plant. This seems to reflect both 

environmental investment crowing out productive investment within a plant, and 

firms shifting investment towards plants facing less stringent abatement requirements. 

Estimates placing less weight on within-firm reallocation of investment indicate 

approximate dollar-for-dollar ($0.99) crowding out of productive investment.”109 

	 Becker and Henderson110 find that in response to ground-level ozone regulation, in 

polluting industries the births of plants “fall dramatically in nonattainment counties, 

compared to attainment counties...This shift in birth patterns induces a reallocation of 

stocks of plants toward attainment areas. Depending on the interpretation of reducedform coefficients, net present value for a typical new plant in a nonattainment area 

could fall by 13-22 percent.”111 

105 Jorgensen & Wilcoxen (1990).
 106 Id, p. 509. 107 Id, p. 499. SCAQMD is South Coast Air Quality Management District. 108 Gray & Shadbegian (1998).
 109 Id, at 254-255. 110 Becker & Henderson (2000). 111 Id., at 414-415. 

47 
 

 

 

 

	 Greenstone112 finds that “in the first 15 years after the [Clean Air Act Amendments] 

became law (1972-1987, nonattainment counties (relative to attainment ones) lost 

approximately 590,000 jobs, $37 billion in capital stock and $75 billion (1987 

dollars) of output in polluting industries.”113 However, Greenstone notes that these 

impacts remain modest in comparison to the size of the national manufacturing 

sector. Further, these results indicate statistically significant economic costs 

associated with carbon monoxide regulations, but not with ozone or sulfur dioxide 

regulations. 

	 List, et al., examined the effects of air quality regulation stringency and location 

decisions of new plants in New York State from1980 to 1990, and found that 

regulatory stringency and the decision to locate is negatively correlated, and the 

current parametric estimates of this negative correlation may be understated.114 

	 As noted above, Hanna115 finds that domestic environmental regulation has had an 

effect in increasing the outbound foreign direct investment of US-based multinational 

firms. The results include an increase in foreign investments in polluting industries 

by 5.3 percent and in foreign output by 9 percent; the results are concentrated in 

manufacturing. 

	 Jaffe and Palmer116find that increases in compliance costs generated by 

environmental regulations lead to a lagged effect of increases in research and 

development expenditures, as measured by patents of new environmental 

technologies. This corroborates other studies117 with similar findings. These studies 

suggest that there may be positive economic effects related to technological 

innovation in the years following increased environmental regulatory compliance 

costs. As Jaffe and Palmer argue, “in the aggregate, the disincentives for R&D 

attributed to a command-and-control approach to environmental regulation may be 

overcome by the high returns that regulation creates for new pollution-control 

technology.”118 These results, however, are noted to be sensitive to the definitions of 

the time lag and difficulties in specifying research and development models, coding 

patent types, and linking research and development to overall economic growth. 

	 Chay and Greenstone119 find that improvements in air quality induced by Clean Air 

112 Greenstone (2002).
 113 Id, at 1213. 114 List, et al. (2003).
 115 Hanna (2010).
 116 Jaffe and Plummer (1997). 117 See Lanoie et al (2008). 118 Jaffe & Plumer (1997), at 618. 

119 Chay & Greenstone (2005). Fullerton (2011) uses a carbon permit system – specifically, the cap-and-trade 

legislation that passed the U.S. House of Representatives in 2009 (which then stalled in the Senate) – to illustrate six
 

different types of distributional effects: (1) the higher prices of carbon-intensive products, (2) changes in relative 

returns to factors like labor, capital, and resources, (3) allocation of scarcity rents from a restricted number of 

permits, (4) distribution of the benefits from improvements in environmental quality, (5) temporary effects during
 

the transition, and (6) capitalization of all those effects into prices of land, corporate stock, or house values. He 

48 
 

 

 

Act regulations resulted in increased housing values at the county level between 1970 

and 1980. This finding suggests possible economic gains in asset values resulting 

from improved environmental conditions, which may have had longer-term impacts 

on economic growth. Again, these overall impacts are difficult to quantify. 

	 Kahn examines census and state data and finds that better educated, wealthier 

populations experienced cleaner air, but that poorer, less educated populations 

experienced a greater overall improvement in air quality between 1980 and 1998 in 

California. During this time period, the exposure of the Hispanic population to 

pollution also fell sharply along with exposure differentials between richer and poorer 

people. The author concludes that, “[g]iven the overall trend in improvements for 

certain demographic groups, it appears that regulation under the Clean Air Act has 

helped, and not economically harmed, the ‘have nots.’”120 

Outside of the context of environmental regulation, a number of studies find that some 

regulations have promoted economic growth. For example, Carpenter (2009) finds that certain 

approaches to entry regulation – such as the discretionary approval regimes used by the Food and 

Drug Administration – can actually increase economic activity by establishing credible 

expectations of fairness and product safety.121 Similarly, Greenstone et al. (2006) find that 

disclosure rules in the securities industry can reduce the adverse effects of informational 

asymmetries and increase market confidence. Their study finds that the 1964 Securities Act 

Amendments generated $3-6 billion of asset value for shareholders as a result of increased 

investment activity. According to their evidence, higher levels of investor protection and 

disclosure requirements are associated with the higher valuation of equities.122 Regulations 

aimed at managing risks can also have significant economic benefits by increasing the 

willingness of market actors to participate in market transactions.123 

Another body of work focuses more specifically on behaviorally informed approaches to 

regulation, including setting appropriate default rules, using disclosure as a regulatory tool, 

improving framing, or making relevant information more salient. Such approaches might 

improve market functioning or reduce the economic costs associated with more aggressive 

regulatory efforts. Such work suggests that when examining the economic effects of regulation, 

analysts should be mindful of the importance of considering flexible regulatory approaches. 

Executive Order 13563 refers in particular to the importance of flexible approaches, stating that 

with relevant qualifications, “each agency shall identify and consider regulatory approaches that 

reduce burdens and that maintain flexibility and freedom of choice for the public.” In some 

cases, carefully chosen forms of regulation may yield the same social benefits as existing 

regulatory approaches, while imposing lower costs. In other cases, well-designed regulatory 

concludes that, in this particular case, many or all effects may be regressive – that is, the net burden as a fraction of
 

income is higher for the poor than for the rich.

120 Kahn (2001).
 121 Carpenter (2009). For more historical and formal modeling approaches to this same argument, see, e.g., 

Carpenter (2004) and Carpenter & Ting (2007). 

122 Id. See also La Porta et al (1999). 123 On the possible social gains from using alternative regulatory approaches, see generally Moss & Cisternino
 

(2009). 

49 
 

 

 

approaches may actually improve market functioning, increase economic activity, and promote 

economic growth.124 

OMB continues to investigate the underlying questions; no clear consensus has emerged 

on all of the answers. Further work of the sort outlined here might ultimately make it possible to 

connect regulatory initiatives to changes in GDP and also to changes in subjective well-being 

under various measures. 

124 Id. See also Balleisen and Moss, eds. (2009). 

50 
 

 

 

CHAPTER II: RECOMMENDATIONS FOR REFORM 

Careful analysis of benefits and costs has long been designed to ensure that regulations 

are grounded in the best available evidence about their likely consequences. Such analysis can 

reduce the risk that decisions will be made on the basis of intuition, anecdote, or guesswork. 

Armed with such evidence, regulators will be in a position to increase benefits, reduce burdens, 

or both. Careful consideration of benefits and costs is especially important in a period of 

economic difficulty, in which regulatory safeguards must be designed so as to be consistent with 

the central goals of economic growth, innovation, job creation, and competitiveness. If a 

regulation would cost a great deal, it may well impose significant burdens on consumers and 

employees (including prospective employees). It is important to see that even if the immediate 

incidence of costs is imposed on companies, costly regulations do not merely burden some 

abstraction called “business”; the ultimate effects will frequently be felt by consumers and 

workers as well. (See the discussion above of the incidence of regulatory burdens.) Of course 

numerous regulations have significant social benefits as well. 

As OMB Circular A-4 suggests, regulations often respond to conventional market 

failures, including asymmetric information, monopoly power, and negative externalities from 

production and consumption (such as pollution); regulations might also respond to problems of 

myopia and inertia and to difficulties in understanding risks. When properly designed and 

responsive to a market failure of one or another sort, regulations are likely to make society better 

off, in some cases as measured by GDP and in other cases as measured by a full accounting of 

social and economic effects, including those that may not be adequately measured by standard 

measures (see the discussion in the previous chapter). 

Analysis of costs and benefits serves two important roles in this process.125 First, it can 

inform the design and consideration of various options, so that relevant officials and members of 

the public are able to understand the opportunities for both minimizing the costs of achieving a 

social goal (cost-effectiveness) and maximizing net social benefits (efficiency). Analysis of 

costs and benefits may show, for example, that an alternative approach can achieve the social 

goal at lower cost; that an intuitively preferable approach, or one supported by particular groups 

or relevant anecdotes, actually has net costs; that an intuitively disfavored approach would 

actually produce benefits far in excess of costs; or that one of the alternatives has by far the 

highest net benefits. If so, the relevant analysis can help to reveal and to motivate the choice of 

the superior option. Second, such analysis can identify cases in which poorly defined regulatory 

choices might substitute government failure for market failure and impose net costs on society. 

125 For a detailed discussion of the relationship between cost-benefit analysis and social welfare, see Adler and 

Posner (2008). 

51 
 

 

This analysis can inspire better solutions and new approaches by the executive branch or inform 

proposals for legislative reform. 

The Regulatory Right-to-Know Act charges OMB with making “recommendations for 

reform.” In its 2009 Report, OMB made three principal recommendations. First, OMB 

recommended consideration of behaviorally informed approaches to regulation. For example, 

properly designed disclosure policies, appropriate default rules (as in the context of retirement 

savings), and simplification (as in the context of the Free Application for Federal Student Aid) may 

have significant and beneficial results. Recent social science research, including work in behavioral 

economics, provides valuable insight into the design of effective, low-cost methods for achieving 

regulatory goals. In some contexts, small, inexpensive, seemingly modest steps can produce 

significant benefits.126 

Second, OMB recommended that significant regulations should be accompanied with clear, 

tabular presentations of both benefits and costs, including both quantifiable and nonquantifiable 

variables; that analysis should take account, where relevant, of the effects of the regulation on future 

generations and the least well-off; and that continuing efforts should be made to meet some difficult 

challenges posed by regulatory impact analysis, including treatment of variables that are difficult to 

quantify and monetize. Third, OMB recommended that regulatory impact analysis should be seen 

and used as a central part of open government. 

In its 2010 Report, OMB recommended four additional reforms that might improve 

regulatory policy and analysis. First, OMB identified several measures designed to meet 

analytical challenges, involving increased transparency. Second, OMB offered a brief discussion 

of disclosure as a regulatory tool, with particular emphasis on the need to attend to how people 

process information and on the importance of empirical testing of disclosure strategies.127 Third, 

and with an emphasis on disclosure, OMB recommended exploration of certain low-cost 

approaches to the problem of childhood obesity; those approaches offer potential lessons for 

other programs and problems. Fourth, OMB drew on principles of open government to invite 

public suggestions about improvements in existing regulations, with particular reference to 

economic growth. With each of these recommendations, OMB offered concrete suggestions for 

possible improvements. 

OMB continues to support the recommendations from its 2009 and 2010 reports. In 

recent years, significant progress has been made with respect to all of them. The 2010 report 

outlined some of that progress,128 and in the recent past, far more has occurred, with particular 

emphasis on sensible disclosure strategies and on simplification. To offer a few examples: 

 The U.S. Department of Agriculture (USDA) recently unveiled a new and far simpler 

food icon, MyPlate, to replace the MyPyramid image as the primary food group 

symbol. Responding to many complaints about the usefulness of the Food Pyramid, 

the Department described the new symbol as “an easy-to-understand” visual cue to 

126 See Banerjee and Duflo (2011). 127 For recent discussion, see Kamenica et al. (2011). 128 See OMB, 2010 Report to Congress on the Benefits and Costs of Federal Regulations and Unfunded Mandates 

on State, Local, and Tribal Entitles (2010), pp. 40-47, available at 

http://www.whitehouse.gov/sites/default/files/omb/legislative/reports/2010_Benefit_Cost_Report.pdf. 

52 
 

 

help consumers adopt healthy eating habits.”129 One of the advantages of the symbol 

is that it has far more clarity, and far less ambiguity, than did the Food Pyramid in 

helping consumers to make healthy choices. In this respect, the new symbol responds 

to research suggesting that disclosure policies often work poorly when they leave 

people uncertain about what, exactly, they should act to avoid risks. 

 EPA and DOT have issued a joint final rule entitled “Revisions and Additions to 

Motor Vehicle Fuel Economy Label,” establishing new requirements for a fuel 

economy and environment label that will be posted on the window sticker of all new 

automobiles sold in the United States.130 The principal goal of the new label is to 

provide, in clear form, relevant information about the effects of fuel economy – 

prominently including monetary savings and costs. 

Among other things, the labels provide (1) useful estimates of how much 

consumers will save or spend on fuel over the next five years with a particular car 

compared to the average new vehicle; (2) clear descriptions of annual fuel costs; (3) 

easy-to-read ratings of how a model compares to others for smog emissions and 

emissions of pollution that contribute to climate change; (4) estimates of how much 

fuel or electricity it takes to drive 100 miles; and (5) information on the driving range 

and charging time of an electric vehicle. One of the central advantages of the 

information on the new label is that it overcomes some of the limitations of the MPG 

measure, which is subject to the well-known “MPG illusion.” The MPG illusion 

refers to the fact that many people think that the savings of greater fuel economy 

increase linearly with MPG, whereas far larger savings occur with increases from low 

MPG levels to somewhat higher ones than from high MPG levels to still higher ones. 

 Illustrating how sensible default rules (including automatic enrollment) can simplify 

people’s choices and have significant benefits, USDA recently issued an interim final 

rule entitled, “Direct Certification and Certification of Homeless, Migrant and 

Runaway Children for Free School Meals.” Under this rule, children who are eligible 

for benefits under certain programs will be categorically eligible for free lunches and 

free breakfasts, thus reducing paperwork and increasing participation. As a result, as 

many as 270,000 additional children may qualify for meals. 

 An agency checklist for regulatory impact analysis (see Appendix I), has been 

produced with the goal of promoting the link between careful analysis and open 

government. The checklist simplifies and clarifies the central requirements for such 

analysis. 

129 See USDA News Release, “First Lady, Agriculture Secretary Vilsack and Surgeon General Benjamin Launch 

MyPlate Icon as a New Reminder to Help Consumers to Make Healthier Food Choices,” available at 

http://www.usda.gov/wps/portal/usda/usdahome?contentid=2011/06/0225.xml&navid=NEWS_RELEASE&navtype 

=RT&parentnav=LATEST_RELEASES&edeployment_action=retrievecontent. 130 See Environmental Protection Agency and Department of Transportation, “Revisions and Additions to Motor 

Vehicle Fuel Economy Label,” RIN 2060-AQ09; RIN 2127-AK73, available at 

http://www.epa.gov/fueleconomy/label/nprm-label2010.pdf 

53 
Executive Order 13563 underlines and codifies several of the recent recommendations, 

with its emphasis on careful consideration of costs and benefits, on public participation, on 

measurement and improvement of “the actual results of regulatory requirements,” and on use of 

flexible, freedom-preserving approaches (including appropriate default rules and disclosure) -- 

and also with its clear direction to each agency “to use the best available techniques to quantify 

anticipated present and future benefits and costs as accurately as possible.” The Presidential 

Memorandum on Regulatory Compliance, attached as Appendix F, also emphasizes the 

importance of disclosure. 

Our principal and most general recommendation in this Chapter is that, consistent with 

Executive Order 13563, regulatory decisions and priority-setting should be made in a way that is 

attentive to the importance of promoting economic growth, innovation, job creation, and 

competitiveness. The simplest method for achieving that goal is to continue to engage in careful 

analysis of both costs and benefits and as a general rule and to the extent permitted by law, to 

proceed only if the benefits justify the costs. To achieve that goal, it is important to ensure 

careful analysis in advance and also to explore the actual effects of significant rules now on the 

books, to see if their benefits justify their costs, and to explore whether they might be simplified, 

streamlined, or otherwise improved. 

In the past two years, agencies and OMB have worked together to issue a number of rules 

for which the benefits exceed the costs, and by a large margin. Consider the following figure 

and tables: 

54 
 

 

Figure 2-1: Annual Net Benefits of Major Rules 

through the Second Fiscal Year of an Administration131 

131 For the purposes of showing general trends by Administration, figure 2-1 reports the total net benefits – benefits 

minus costs – based on primary agency estimates, or midpoints if only ranges are reported. See Appendix D for a 

list of rules included in the totals. 

55 
 

 

Table 2-1: Annual Benefits and Costs of Major Rules 

through the Second Fiscal Year of an Administration (billions of 2001 dollars)132
 

Administration Benefits Costs 

Obama (1/20/09-09/30/10) $22.7 to $102.2 $8.2 to $16.5 

Bush (1/20/01-09/30/02) $1.9 to $7.4 $1.3 to $3.4 

Clinton (1/20/93-09/30/94) $5.8 to $24.9 $4.5 to $5.0 

Table 2-2: Major Rules with the Highest Net Benefits 

through the Second Fiscal Year of the Obama Administration (billions of 2001 dollars) 133
 

Agency Rule Net 

Benefits 

EPA/AR Review of the National Ambient Air Quality Standards for Sulphur 

Dioxide $9.9 

EPA/AR NESHAP: Portland Cement Notice of Reconsideration $9.4 

DOT/NHTSA 

& EPA/AR 

Passenger Car and Light Truck Corporate Average Fuel Economy 

Standards MYs 2012 to 2016 $8.6 

DOE/EE Energy Efficiency Standards for General Service Fluorescent 

Lamps and Incandescent Lamps $1.4 

HHS/FDA Prevention of Salmonella Enteritidis in Shell Eggs $1.2 

132 Estimates are based on a range of values reported in previous Reports. See Appendix D and Table 1-5(a) for a 

list of rules included in the totals. 

133 Table 2-2 reports the top five rules with highest net benefits – benefits minus costs – based on the primary agency
 

estimates, or midpoints if only ranges are reported.
 

56 
 

Table 2-3: Major Rules with the Highest Benefits 

through the Second Fiscal Year of the Obama Administration (billions of 2001 dollars) 134
 

Agency Rule Benefits 

DOT/NHTSA Passenger Car and Light Truck Corporate Average Fuel Economy 

Standards MYs 2012 to 2016 $11.9 

EPA/AR Review of the National Ambient Air Quality Standards for Sulphur 

Dioxide $10.5 

EPA/AR NESHAP: Portland Cement Notice of Reconsideration $10.3 

DOE/EE Energy Efficiency Standards for General Service Fluorescent 

Lamps and Incandescent Lamps $1.9 

DOT/NHTSA Passenger Car and Light Truck Corporate Average Fuel Economy 

Model Year 2011 $1.7 

134 Table 2-3 reports the top five rules with highest benefits based on the primary agency estimates, or midpoints if 

only ranges are reported. 

57 
 

Table 2-4: Major Rules with the Highest Costs 

through the Second Fiscal Year of the Obama Administration (billions of 2001 dollars) 135
 

Agency Rule Costs 

DOT/NHTSA 

& EPA/AR 

Passenger Car and Light Truck Corporate Average Fuel Economy 

Standards MYs 2012 to 2016 $3.3 

DOE/EE Energy Efficiency Standards for Pool Heaters and Direct Heating 

Equipment and Water Heaters $1.1 

DOT/NHTSA Passenger Car and Light Truck Corporate Average Fuel Economy 

Model Year 2011 $1.0 

DOT/NHTSA Roof Crush Resistance $0.9 

EPA/AR NESHAP: Portland Cement Notice of Reconsideration $0.9 

In the remainder of this Chapter, our main emphasis is on Executive Order 13563, which 

is designed to reconcile regulatory goals with objectives associated with economic growth in 

general and the economic recovery in particular. We also offer brief discussions of (1) three 

pressing analytic challenges; (2) e-rulemaking; and (3) regulatory cooperation. 

A. Executive Order 13563 

On January 18, 2011, President Obama issued Executive Order 13563, which emphasizes 

the importance of protecting “public health, safety and our environment while promoting 

economic growth, innovation, competitiveness, and job creation.”136 Executive Order 13563 

explicitly points to the need for predictability and for certainty, and for use of the least 

burdensome tools for achieving regulatory ends. It indicates that agencies “must take into 

account benefits and costs, both quantitative and qualitative.” As noted, it draws explicit 

attention to the need to measure and to improve “the actual results of regulatory requirements” – 

a clear reference to the importance of retrospective evaluation. 

Executive 13563 reaffirms the principles, structures, and definitions in Executive Order 

12866, which has long governed regulatory review. In addition, it endorses, and quotes, a 

number of provisions of that Executive Order that specifically emphasize the importance of 

considering costs. Importantly, Executive Order 13563 directs agencies “to use the best available 

techniques to quantify anticipated present and future benefits and costs as accurately as 

possible.” This direction reflects a strong emphasis on quantitative analysis as a means of 

improving regulatory choices and increasing transparency. 

135 Table 2-4 reports the top five rules with highest costs based on the primary agency estimates, or midpoints if only
 

ranges are reported.

136 Available at http://www.whitehouse.gov/sites/default/files/omb/inforeg/eo12866/eo13563_01182011.pdf. 

58 
 

Among other things, Executive Order 13563 elaborates five new sets of requirements to 

guide regulatory decisionmaking: 

 Public participation. Agencies are directed to promote public participation, in part by 

making supporting documents available on Regulations.gov to promote transparency 

and public comment. In this way, Executive Order 13563 attempts to move 

rulemaking into the era of the Internet. It also directs agencies, where feasible and 

appropriate, to engage the public, including affected stakeholders, before rulemaking 

is initiated. 

 Integration and innovation. Agencies are directed to attempt to reduce “redundant, 

inconsistent, or overlapping requirements,” in part by working with one another to 

simplify and harmonize rules. This important provision is designed to reduce 

confusion, redundancy, and excessive cost. An important goal of simplification and 

harmonization is “to promote rather than to hamper innovation,” which is a 

foundation of both growth and job creation. Different offices within the same agency 

might work together to harmonize their rules; different agencies might work together 

to achieve the same objective. Such steps can also promote predictability and 

certainty 

 Flexible approaches. Agencies are directed to identify and consider flexible 

approaches to regulatory problems, including warnings, appropriate default rules, and 

disclosure requirements. Such approaches may “reduce burdens and maintain 

flexibility and freedom of choice for the public.” In certain settings, they may be far 

preferable to mandates and bans, precisely because they maintain freedom of choice 

and reduce costs.137 Consistent with the recommendations in previous Reports, and in 

particular the recommendation for use of empirically informed, freedom-preserving, 

low-cost tools, this provision emphasizes the importance of considering appropriate 

default rules and ensuring that disclosure is “clear and intelligible.” 

 Science. Agencies are directed to promote scientific integrity, and in a way that 

ensures a clear separation between judgments of science and judgments of policy. 

 Retrospective analysis of existing rules. Agencies are directed to produce preliminary 

plans to engage in retrospective analysis of existing significant regulations to 

determine whether they should be modified, streamlined, expanded, or repealed. This 

provision, calling for careful evaluation of existing practices, fits closely with the 

suggestion in the first section of the Executive Order that our regulatory system “must 

measure, and seek to improve, the actual results of regulatory requirements.” 

Executive Order 13563 should be seen as addressing both the “flow” of new regulations 

and the “stock” of existing regulations. With respect to the flow, Executive Order 13563 

emphasizes the importance of promoting predictability, of carefully considering costs, of 

choosing the least burdensome approach, and of selecting the most flexible, least costly tools. 

137 See, e.g., Kamenica, Mullainahtan & Thaler (2011). 

59 
 

 

With respect to the stock, Executive Order 13563 calls for careful reassessment, based on 

empirical analysis. It is understood that the purely prospective analysis required by Executive 

Order 13563 may depend on a degree of speculation and that both costs and benefits may be 

lower or higher than what was anticipated. After retrospective analysis has been undertaken, 

agencies will be in a position to reconsider existing rules and to streamline, modify, or eliminate 

those that do not make sense in their current form. 

Retrospective analysis has long been recommended by informed observers. Consider this 

suggestion from Professor Michael Greenstone (recently Chief Economist at the Council of 

Economic Advisers): “The single greatest problem with the current system is that most 

regulations are subject to a cost-benefit analysis only in advance of their implementation. This is 

the point when the least is known and any analysis must rest on many unverifiable and 

potentially controversial assumptions.”138 By contrast, retrospective analysis can help show 

what works and what does not, and in the process can help to promote repeal or streamlining of 

less effective rules and strengthening or expansion of those that turn out to do more good than 

harm. Greenstone thus urges a series of reforms designed to “instill a culture of experimentation 

and evaluation.”139 These reforms include an effort to ensure that regulations are written and 

implemented in ways that lend themselves to experimental evaluation and creation of 

independent review to assess the effectiveness of regulations. 

One of Greenstone’s principal themes involves the importance of experimentation with 

respect to the likely effects of regulation. Such experimentation can take place in advance. It 

might, where feasible and consistent with law, take the form of advance testing of regulatory 

alternatives, perhaps through pilot projects or randomized controlled trials, followed by study of 

their consequences.140 Pilot projects and randomized experiments may well provide valuable 

information about what interventions are likely to be most useful. 

For example, the Department of Transportation’s National Highway Traffic Safety 

Administration has initiated distracted driving demonstration programs in two communities to 

test whether a high visibility enforcement (HVE) model could reduce two specific instances of 

distracted driving – talking or texting using a hand-held cell phone.141 Syracuse, New York, and 

Hartford, Connecticut, (a combination of three contiguous cities – East Hartford, Hartford, and 

West Hartford) conducted the demonstrations. Before and after each enforcement wave, NHTSA 

conducted observations of driver cell phone use and collected public awareness surveys at driver 

licensing offices in each test and comparison site. 

According to early analysis, observed cell phone use decreased at both sites by the end of 

the second wave of the NHTSA’s program. Before the distracted driving programs began, 

observed cell phone use in Syracuse was about half that of the rest of the Nation and Connecticut 

138 Greenstone (2009), at 13. 

139 Id., at 118. 140 See, e.g., Banerjee and Duflo (2011). 141 U.S. Department of Transportation, “Traffic Safety Facts: Research Note, High Visibility Enforcement
 

Demonstration Programs in Connecticut and New York Reduce Hand-Held Phone Use,” available at 

http://www.distraction.gov/files/for-media/2010.09.17-7268-TSF-RN-HighEnforcementCT-NY.pdf 

60 
 

 

 

 

 

 

 

was close to average.142 After the second wave of the high visibility enforcement campaign, 

hand-held cell phone use decreased 38% in Syracuse (from 3.7% to 2.3%) and 58% in Hartford 

(from 6.8% to 3.1%). 

Consistent with Executive Order 13563, we recommend that agencies create long-term 

structures and processes for analyzing the actual effects of significant rules, with special 

attention to those that are most expensive or burdensome. OIRA is now working closely with 

agencies to promote compliance with the retrospective analysis requirements of Executive Order 

13563. The preliminary plans for retrospective review, released on May 26, 2011, demonstrate 

that the relevant process is well under way. In those plans, agencies identify hundreds of possible 

reforms, with immediate savings in the hundreds of millions of dollars and with potential savings 

in the billions of dollars.143 Notably, many of the ideas on the plans are a product of public input, 

following a request for comments on potential reforms. 

To offer just a few examples: 

 The Occupational Safety and Health Administration (OSHA) issued a final rule that 

will remove over 1.9 million annual hours of redundant reporting burdens on 

employers and save more than $40 million in annual costs.144 

 Since the 1970s, milk has been defined as an “oil” and subject to costly rules 

designed to prevent oil spills. In response to objections from the agriculture 

community and the President’s directive, EPA concluded that the rules placed 

unjustifiable burdens on dairy farmers and exempted them. The projected annual 

savings are $140 million.145 

 OSHA plans to finalize a proposed rule projected to result in an annualized $585 

million in estimated savings for employers. This rule would harmonize U.S. hazard 

142 NHTSA observes, however, that both States have had hand-held cell phone bans while driving for some time – 

2001 for New York and 2005 for Connecticut. The laws alone may have served to keep these States at or below the 

national average, but the addition of high visibility enforcement and media emphasizing the enforcement drove the 

rates down even lower. High levels of national media and celebrity attention to distracted driving, such as by the 

Oprah Winfrey Show, may account for some of the high public awareness of the issue and for the steady declines in 

observed hand-held cell phone use in the control sites and among women in three of the five sites overall.

143 The preliminary plans can currently all be viewed at “Regulation Reform,” available at 

http://www.whitehouse.gov/21stcenturygov/actions/21st-century-regulatory-system. Many agencies will also 

publish their preliminary plans online on their Open Government Webpages (www.agency.gov/open).

144 Department of Labor, Preliminary Plan for Retrospective Analysis of Exisiting Rules, p. 8, available at 

http://www.whitehouse.gov/files/documents/2011-regulatory-actionplans/DepartmentofLaborPreliminaryRegulatoryReformPlan.pdf

145 Environmental Protection Agency, Improving Our Regulations: A Preliminary Plan for Periodic Retrospective 

Reviews of Existing Regulations, pp. 13-14, available at http://www.whitehouse.gov/files/documents/2011­

regulatory-action-plans/EnvironmentalProtectionAgencyPreliminaryRegulatoryReformPlan.pdf 

61 
 

 

 

 

 

 

 

classifications and labels with those of a number of other nations by requiring the 

adoption of standardized terms.146 

 To eliminate unjustified economic burdens on railroads, the Department of 

Transportation is reconsidering parts of a rule that requires railroads to install 

equipment on trains. DOT expects initial savings of up to $400 million, with total 20­

year savings of up to $1 billion.147 

 The Environmental Protection Agency will propose to eliminate the obligation for 

many states to require air pollution vapor recovery systems at local gas stations, on 

the ground that modern vehicles already have effective air pollution control 

technologies. The anticipated annual savings are about $67 million.148 

 The Departments of Commerce and State are undertaking a series of steps to 

eliminate unnecessary barriers to exports, including duplicative and unnecessary 

regulatory requirements, thus reducing the cumulative burden and uncertainty faced 

by American companies and their trading partners.149 

 To reduce administrative burdens and increase certainty, the Department of the 

Interior is reviewing outdated regulations under the Endangered Species Act to 

streamline the process, to reduce requirements for written descriptions, and to clarify 

and expedite procedures for approval of conservation agreements.150 

 To promote flexibility, the Department of Health and Human Services will be 

reconsidering burdensome regulatory requirements now placed on hospitals and 

doctors, to ask whether these requirements are redundant and whether they really 

benefit patients.151 

146 Department of Labor, Preliminary Plan for Retrospective Analysis of Exisiting Rules, pp. 8-9, available at 

http://www.whitehouse.gov/files/documents/2011-regulatory-actionplans/DepartmentofLaborPreliminaryRegulatoryReformPlan.pdf

147 Department of Transportation, Draft Preliminary Plan for Implementation of Executive Order 13563: 

Retrospective Review and Analysis of Exisiting Rules, p. 20, available at 

http://www.whitehouse.gov/files/documents/2011-regulatory-actionplans/DepartmentofTransportationPreliminaryRegulatoryReformPlan.pdf

148 Environmental Protection Agency, Improving Our Regulations: A Preliminary Plan for Periodic Retrospective 

Reviews of Existing Regulations, pp. 9, 16, available at http://www.whitehouse.gov/files/documents/2011­

regulatory-action-plans/EnvironmentalProtectionAgencyPreliminaryRegulatoryReformPlan.pdf.

149 Department of Commerce, Preliminary Plan for Retrospective Analysis of Exisiting Rules, available at 

http://www.whitehouse.gov/files/documents/2011-regulatory-actionplans/DepartmentofCommercePreliminaryRegulatoryReformPlan.pdf

150 Department of the Interior, Preliminary Plan for Retrospective Regulatory Review, pp. 10-114, available at 

http://www.whitehouse.gov/files/documents/2011-regulatory-actionplans/DepartmentoftheInteriorPreliminaryRegulatoryReformPlan.pdf

151 Department of Health and Human Service, Preliminary Plan for Retrospective Review of Exisiting Rules, pp. 6­

13, available at http://www.whitehouse.gov/files/documents/2011-regulatory-actionplans/HealthandHumanServicesPreliminaryRegulatoryReformPlan.pdf 

62 
 

 

To create a process of retrospective analysis, and a continuing culture of both prospective 

and retrospective evaluation, OMB recommends that agencies use the best available techniques 

to assess the consequences of regulation, both as part of retrospective review and in the initial 

design of rules. As we have noted, a possible approach involves randomized controlled trials, in 

which regulatory initiatives are used in some domains but not in similarly situated others, thus 

allowing a careful analysis of their effects.152 Of course there are constraints – involving law, 

resources, and feasibility – in using randomized control trials in the regulatory context, but in 

some cases, they may be both appropriate and highly useful. 

The preliminary plans offer relevant discussion. For example, DHS states that it will 

“build in retrospective review at the earliest stages of regulatory development.”153 Its plan calls 

for the Department’s component agencies to “incorporate a discussion of retrospective analysis 

goals into their rulemaking project planning” in order “to ensure that the component considers 

retrospective analysis through the lifespan of the regulation.”154 The Department of Labor 

provides that it “is contemplating how to incorporate the use of experimental designs to 

determine the impact of various regulations.” 155 The Department of Interior states that it “will 

consider” the use of “experimental or quasi-experimental designs, including randomized 

controlled trials.”156 Similarly, the Department of Treasury states that it will work to “develop 

and incorporate experimental designs into retrospective analysis, when appropriate.”157 

More generally, retrospective review of regulations should be conducted so as to provide 

a transparent and credible process for evaluating both costs and benefits. Agencies might, for 

example, announce in advance that they are conducting a retrospective evaluation; they might 

specify the measures of costs and benefits that they will use; they might work with outside 

experts to promote objectivity. Disclosure policies are an obvious candidate for such evaluations. 

Consistent with the goals of open government, agencies might post the materials that underlie 

and follow the analysis so as to promote assessment and scrutiny by others. 

The larger point is that the retrospective analysis required by Executive Order 13563 

should by no means be regarded as a one-shot endeavor. It should be seen as an effort to produce 

a consistent culture of experimentation and reassessment and careful, objective evaluation of 

existing requirements. 

152 See Greenstone (2009) and, in other contexts, Banerjee and Duflo (2009).
 153 Department of Homeland Security, Preliminary Plan for Retrospective Review of Existing Regulations, p. 27, 

available at http://www.whitehouse.gov/files/documents/2011-regulatory-actionplans/DepartmentofHomelandSecurityPreliminaryRegulatoryReformPlan.pdf

154 Id. 155 Department of Labor, Preliminary Plan for Retrospective Analysis of Existing Rules, p., 20, available at 

http://www.whitehouse.gov/files/documents/2011-regulatory-actionplans/DepartmentofLaborPreliminaryRegulatoryReformPlan.pdf.

156 Department of the Interior, Preliminary Plan for Retrospective Regulatory Review, p. 19, available at 

http://www.whitehouse.gov/files/documents/2011-regulatory-actionplans/DepartmentoftheInteriorPreliminaryRegulatoryReformPlan.pdf

157 Department of the Treasury, Preliminary Plan for Retrospective Analysis of Existing Rules, p. 19, available at 

http://www.whitehouse.gov/files/documents/2011-regulatory-actionplans/DepartmentoftheTreasuryPreliminaryRegulatoryReformPlan.pdf. 

63 
 

 

 

It is worth observing that there is an incipient literature on the practice of regulatory 

“look back.” A recent study by Harrington, building on previous work, explores 61 rules for 

which benefit-cost ratios could be compared ex ante and ex post.158 The author identifies various 

reasons that agency and OMB estimates could leave some benefits and costs uncounted.159 For 

the 61 rules analyzed, he finds that both benefits and costs were overestimated “with about equal 

frequency.”160 Specifically, in sixteen of the cases, the ratios were found to be accurate (plus or 

minus 25%).161 In twenty-four cases, the rules showed a better benefit-cost ratio than anticipated. 

In twenty-one cases, the rules showed a worse benefit-cost ratio than anticipated. Harrington’s 

general conclusion is that while both costs and benefits turn out to be lower than prospective 

estimates, there is “no bias in estimates of benefit-cost ratios.”162 

While Harrington focuses on benefit-cost ratios (and does not specify the degree to which 

these costs or benefits were separately misestimated), he refers to other studies that offer more 

disaggregated evaluations, at least of regulatory costs. One study, for example, compares ex post 

costs to ex ante estimates for eleven energy efficiency standards for household appliances issued 

between 1982 and 1995.163 Of those, the researchers found that ex ante costs were overestimated 

for five of the rules and accurate for the remaining six (using the same 25% range).164 Another 

study analyzed 25 environmental and occupational safety regulations for which ex post data 

could be located. It found that total costs were overestimated for twelve rules; accurate in five; 

underestimated in two; and indeterminate for six.165 The authors argue that the overestimation of 

total costs were often due to errors in the quantity of emission reductions achieved, driven by 

both baseline and compliance issues. 

A study by the Office of Technology Assessment examined six regulations of the 

Occupational Safety and Health Administration (OSHA) and found that four rules had lower 

actual compliance costs than anticipated, while two were “reasonably” accurate. Overall, the 

report concluded that “the actual compliance response that was observed included advanced or 

innovative control measures that had not been emphasized in the rulemaking analyses, and the 

actual cost burden proved to be considerably less than what OSHA had estimated.”166 

158 Harrington (2006). 

159 Specifically, Harrington argues that cost estimates are primarily focused on compliance expenditures, and thus 

exclude important cost categories such as employee training; management attention; discouraged innovation and 

investment; tax distortion effects, as well as the costs of rent-seeking (unproductive behavior undertaken by firms 

and individuals to influence regulatory decisions). Similarly, he contends that measurable benefits “tend to be 

concentrated types of public goods where the connections from the regulation to a physical effect that people value 

are clear, and where economists have been able to develop valuation methods that approximate individual 

willingness to pay for changes in those effects.” As such, benefits that fail to meet these criteria often remain 

uncounted, such as the more-difficult-to-measure benefits of, say, ecological preservation. Id., at 10. In addition to 

rules that fail to qualify for the 10-year look-back, Harrington also contends that “nearly 90 percent of the rules that 

[are] reviewed by OMB do not enter the benefit and cost estimate because they are nonmajor rules, which means 

primarily that each has an estimated cost and benefit that is less than $100 million per year.”

160 Id., at 37. 161 Id., at 22 (“An ex ante estimate was considered accurate if [the benefit-cost ratio lay between 0.75 and 1.25.”). 162 Id. 163 Dale et al. (2002). 164 Id. (see Table 2, with OMB’s calculations using the 25% accuracy range). 165 Harrington, Morgenstern & Nelson (2010). 166 Office of Technology Assessment (1995).
 

64 
 

 

In its 2005 Report, OMB provided an overview of various retrospective analyses, based 

on an examination of 47 case studies.167 There were three key conclusions. First, agencies 

accurately estimated benefits over one-third of the time, and they were more likely to overestimate 

benefits than to underestimate them.168 More particularly, agencies overestimated benefits 40% of the 

time, whereas they underestimated benefits only 2% of the time. Second, agencies tended to 

overestimate the benefit-cost ratio; agency estimates were accurate 23% of the time, while the ratio 

was overestimated 47% of the time and underestimated 30% of the time. Third, agencies were 

slightly more likely to overestimate than to underestimate costs; agencies were accurate 26% of the 

time, overestimated 34% of the time, and underestimated 26% of the time. At least from this study, 

it does not appear correct to conclude that agencies have systematically underestimated the ratio of 

benefits to costs, or that the benefits of rules usually turn out to be higher than anticipated. 

Consistent with Executive Order 13563, we believe that a great deal more should be done 

to improve prospective analysis through empirical research, to compare prospective to 

retrospective estimates, to improve prospective analysis accordingly, and to streamline, expand, 

modify, or repeal regulations in accordance with what was been learned. There are many 

opportunities for undertaking and improving retrospective analysis. As part of the effort to 

promote transparency by sharing more data online, agencies could enable external experts to 

undertake ex post analyses of the benefits and costs of regulations. For example, a number of 

agencies have external boards of technical experts. These boards could be asked to provide 

guidance to the regulatory agencies on how they should collect, compile, and post online data 

that would enable non-governmental experts to estimate the realized benefits and costs of 

regulations. This information could be organized and presented so as to facilitate full benefitcost analyses where feasible, and where not feasible, to generate appropriate measures of costeffectiveness. 

We have previously observed that on January 18, 2011, President Obama signed a 

memorandum emphasizing agency obligations under the Regulatory Flexibility Act.169 Drawing 

attention to the job-creating function of small businesses, and their centrality to economic 

growth, the Memorandum asks agencies to justify any decision not to provide flexibility for 

small business – in the form, for example, of delayed compliance dates and partial or total 

exemptions. A central goal of this Memorandum is to direct agencies to pursue regulatory 

objectives with careful attention to the risk of imposing excessive or unjustified burdens on small 

businesses. 

B. Improving Analysis 

With its emphasis on accounting for both costs and benefits and for minimizing costs, 

Executive Order 13563 stresses the need for sound analysis. OMB Circular A-4 continues to 

167 See OMB, Validating Regulatory Analysis: 2005 Report to Congress on the Costs and Benefits of Federal 

Regulations and Unfunded Mandates on State, Local, and Tribal Entities (2005), pp. 46-47, available at 

http://www.whitehouse.gov/sites/default/files/omb/assets/omb/inforeg/2005_cb/final_2005_cb_report.pdf 168 As in the Harrington (2006) study, OMB’s 2005 report used the term “accurate” to mean “that the post-regulation 

estimate is within +/- 25 percent of the pre-regulation estimate.” Id., at p. 42. 

169 Available at http://www.whitehouse.gov/sites/default/files/omb/inforeg/for-agencies/POTUS-Memo-onRegulatory-Flexibility-Small-Business-and-Job-Creation-01-18-2011.pdf. 

65 
 

provide governing principles.170 The “Agency Checklist for Regulatory Impact Analysis,” issued 

on November 3, 2010, and provided as an appendix to this Report, briefly summarizes the central 

requirements.171 Executive Order 13563 explicitly highlights the importance of quantification of 

both costs and benefits and of using the best available techniques for increasing accuracy. We 

briefly discuss several issues here. 

1.	 Quantification, nonquantifiable variables, and breakeven analysis. 

a. Quantification and its limits. A significant goal of Executive Order 13563 is to 

promote quantification of both benefits and costs and to ensure, to the extent permitted by law, 

that agencies proceed only after a reasoned determination that the benefits justify the costs. To 

that end, Section 1(c) states, “each agency is directed to use the best available techniques to 

quantify anticipated present and future benefits and costs as accurately as possible.” Past practice 

suggests that quantification of the central benefits and costs is often possible and that such 

quantification permits a reasoned judgment about the approach that maximizes net benefits. But 

the same section adds, “Where appropriate and permitted by law, each agency may consider (and 

discuss qualitatively) values that are difficult or impossible to quantify, including equity, human 

dignity, fairness, and distributive impacts.” 

It should be clear that such values, where relevant, come in different (if sometimes 

overlapping) categories. 

 The issue may involve specifying the magnitude of relevant effects. An agency may 

know, for example, that a rule will reduce the risk of a terrorist attack, but it may not 

be able to quantify the reduction and thus be unable to convey the extent of the 

reduced risk. Alternatively, a technology-based rule may inhibit innovation and 

impose unknowably higher costs than an equivalent performance-based rule. The 

direction of an effect may be clear, but the magnitude may be difficult or impossible 

to specify. 

 The issue may involve monetization. An agency may know, for example, that a 

particular rule will have a beneficial effect on ecosystems and likely will preserve a 

known number of a certain species of fish, but it might not be able to translate that 

effect into monetary equivalents. 

 A rule may have significant beneficial or adverse distributional effects on lower 

income groups. Those effects may or may not themselves be quantifiable; perhaps the 

agency is aware that poor people will be particularly affected, but perhaps it is unable 

to say to what degree. Even when quantification of the relevant effects is possible, 

they are not easily used as part of a standard analysis of costs and benefits. 

 A rule might be designed to protect human dignity. It might, for example, reduce the 

incidence of rape, or allow wheelchair-bound employees to have easier access to 

bathrooms. Alternatively, an adverse effect on human dignity may be an unintended 

170 Available at http://www.whitehouse.gov/omb/circulars_a004_a-4/. 171 Available at http://www.whitehouse.gov/sites/default/files/omb/inforeg/regpol/RIA_Checklist.pdf. 

66 
 

 

 

 

 

cost of a rule. For example, a security rule might involve body searches or scans that 

some might consider to be an invasion of dignity or privacy. 

 A rule might be designed to protect fairness. It might, for example, prohibit 

discrimination on the basis of sexual orientation with respect to certain government 

benefits, or it might ban sexual harassment. 

 A rule might be designed to protect equity. It might, for example, prohibit insurance 

companies from declining health insurance to children with preexisting conditions. 

An effect might, of course, fall in more than one category. For example, the line between 

“fairness” and “equity” is not always simple or sharp. A rule that is meant to protect lower 

income groups may have relevant distributive impacts; it might also be an effort to promote 

equity. A rule that forbids deception may have a standard economic justification as well as a 

justification in terms of equity. A rule may also have nonquantifiable effects that run counter to 

each other. For example, a rule that is intended to promote fairness of a certain kind may have 

adverse economic consequences for lower-income individuals.172 

b. Transparency. 

It is not always easy to decide how to treat variables of this kind as part of the analysis 

required by Executive Orders 13563 and 12866. The appropriate initial step is to promote 

transparency. OMB has previously recommended that the best practice is to accompany all 

significant regulations with (1) a tabular presentation, placed prominently and offering a clear 

statement of qualitative and quantitative benefits and costs of the proposed or planned action, 

together with (2) a presentation of uncertainties and (3) similar information for reasonable 

alternatives to the proposed or planned action.173 

A key advantage of this approach is that it promotes transparency for the public. If, for 

example, it is possible to quantify certain benefits (such as protection of water quality) but not to 

monetize them, then the public should be made aware of that fact. At the same time, qualitative 

discussion of nonquantifiable benefits and costs should help the public, and relevant 

decisionmakers, to understand the goal of the regulation and how it might achieve that goal. 

The focus on transparency should help in the implementation of Section 1(c) of 

Executive Order 13563. Suppose, for example, that a regulation will have especially high 

benefits for lower income groups, or will impose especially high costs on them. It may be 

appropriate for agencies to offer such information in connection with proposed or final rules. 

And if a rule would promote human dignity – by reducing the incidence of sexual violence or by 

increasing the independence of disabled people – and if that effect is relevant under existing law, 

agencies should so state. 

172 Cf. Kaplow and Shavell (2002). 173 See Office of Management and Budget, Office of Information and Regulatory Affairs, 2009 Report to Congress 

on the Benefits and Costs of Federal Regulations and Unfunded Mandates on State, Local, and Tribal Entities, at p.
 

42, available at http://www.whitehouse.gov/omb/inforeg_regpol_reports_congress/
 

67 
Executive Order 13563, echoing Executive Order 12866, specifically states that agencies 

must “select, in choosing among alternative regulatory approaches, those approaches that 

maximize net benefits (including potential economic, environmental, public health and safety, 

and other advantages; distributive impacts; and equity)” (emphasis added). In assessing the 

approach that maximizes net benefits, quantified benefits and quantified costs are generally the 

relevant variables. But in some cases, the benefits and costs of a rule may include distributive 

impacts, fairness, equity, and dignity; agencies are entitled to refer to that fact and to consider the 

relevant effects. 

c. Prioritization and breakeven analysis. 

Transparency is important, but even when it exists, agencies face serious challenges in 

resolving the question when and how to proceed when important effects cannot be quantified. 

We have noted that in some cases, various effects can be quantified even if they cannot be 

monetized. We have also noted that distributional effects can sometimes be quantified even if 

they are not part of standard analysis of costs and benefits. 

For agencies to know how to weigh the relevant values, the governing law is crucial, and 

it is important for agencies to try to evaluate and rank such values to give a sense of their relative 

significance. In terms of the relevant values, a rule may have significant benefits or relatively 

small ones. For example, a water pollution rule might cover a large or small number of 

ecosystems, and those systems may or may not be ecologically significant. To the extent 

feasible, and with close reference to governing law, agencies should give a sense of the relative 

magnitude and importance of nonquantifiable variables. 

When quantification and monetization are not possible, many agencies have found it both 

useful and informative to engage in “breakeven analysis.” Under this approach, agencies specify 

how high the unquantified or unmonetized benefits would have to be in order for the benefits to 

justify the costs. Suppose, for example, that a regulation that protects water quality costs $105 

million annually, and that it also has significant effects in reducing pollution in rivers and 

streams. It is clear that the regulation would be justified if and only if those effects could 

reasonably be valued at $105 million or more. Once the nature and extent of the water quality 

benefits are understood, it might well be easy to see whether or not the benefits plausibly justify 

the costs – and if the question is difficult, at least it would be clear why it is difficult. Breakeven 

analysis is an important tool, and it has analytical value when quantification is speculative or 

impossible. 

Executive Order 13563 places a strong emphasis on quantification, and it is hoped that it 

will be increasingly possible to use improving available techniques both to quantify and to 

monetize relevant variables. But where this is not possible, breakeven analysis can help to 

produce both transparency and informed judgment. We also recommend that to the extent 

feasible, agencies make efforts to rank and prioritize nonquantifiable variables, so that such 

variables can be properly evaluated and used to supplement and inform judgment, and not as a 

freestanding, ex post justification of rules. 

68 
 

2. Cost-per-life-saved of Health and Safety Regulation 

For regulations intended to reduce mortality risks, an important analytic tool that can be 

used to assess regulations, and to help avoid unjustified burdens, is cost-effectiveness analysis. 

Some agencies develop estimates of the “net cost per life saved” for regulations intended to 

improve public health and safety. To calculate this figure, the costs of the rule minus any 

monetized benefits other than mortality reduction are placed in the numerator, and the expected 

reduction in mortality in terms of total number of lives saved is placed in the denominator. This 

measure avoids any assignment of monetary values to reductions in mortality risk. It does 

reflects, however, a concern for economic efficiency, insofar as choosing a regulatory option that 

reduces a particular mortality risk at a lower net cost to society would conserve scarce resources 

compared to choosing an option that would reduce the same risk at greater net cost. 

Table 2-5 presents the net cost per life saved for twelve recent health and safety rules for 

which calculation is possible. The net cost per life saved is calculated using a 3 percent discount 

rate and using the agencies' best estimates for costs and expected mortality reduction. As is 

apparent, there is substantial variation in the net cost per life saved by these rules. 

Table 2-5: Estimates of the Net Costs per Life Saved of Selected Health and Safety Rules 

Reviewed by OMB in Fiscal Year 2009-2010 (millions of 2001 dollars) 

Agency Rule Net Cost per 

Life Saved 

Notes 

HHS/FDA Prevention of Salmonella 

Enteritidis in Shell Eggs 

Negative Morbidity benefits exceed costs. 

DOL/OSHA Cranes and Derricks in 

Construction 

$4.9 The agency estimates that the rule will 

prevent 22 fatalities and 175 nonfatal 

injuries annually. Total costs associated 

with the rule are $150 million annually 

at 3%. The monetized value of the 

injuries prevented is $11 million and the 

property damage prevented is valued at 

$7 million. If we subtract the injury and 

property benefits from costs, the net cost 

per life saved is thus approximately $6 

million (2010 dollars). Adjusting to 

2001 dollars yields roughly $5 million. 

DOT/FMCSA New Entrant Safety Assurance 

Process 

Negative Property damage and morbidity benefits 

exceed costs. 

69 
 

 

 

 

 

 

 

 

Agency Rule Net Cost per 

Life Saved 

Notes 

DOT/FRA Positive Train Control $235.1 The agency estimates the present value 

of fatality reduction benefits is $267 

million over 20 years using a VSL of $6 

million, implying the prevention of 

approximately 3 fatalities per year. The 

agency also estimates the total nonfatality related benefits over 20 years of 

$407 million implying annual value of 

$27.3 million. Total costs associated 

with the rule are $880 million annually. 

If we subtract the non-fatality related 

benefits from costs, the net cost per life 

saved is roughly $284.2 million in 2009 

dollars. Adjusting to 2001 dollars yields 

$235.1 million per life saved. 

DOT/NHTSA Reduced Stopping Distance 

Requirements for Truck 

Tractors 

Negative Property damage benefits exceed costs. 

DOT/NHTSA Roof Crush Resistance $6.4 to $11.0 The agency estimates that the rule will 

prevent 135 fatalities and 1065 nonfatal 

injuries annually. These figures translate 

into 156 equivalent fatalities. The main 

estimates value equivalent fatalities 

prevented at $6.1 million. It follows that 

the value of nonfatal injuries prevented 

is $6.1 million * (156 - 135) = $128.1 

million annually. Total costs associated 

with the rule range from $875 million to 

$1400 million annually. If we subtract 

the injury benefits from costs, the range 

of net cost per life saved is thus $5.5 

million to $9.4 million (2007 dollars). 

Adjusting to $2001 yields $6.4 million to 

$11.0 million. 

DOT/PHMSA Pipeline Safety: Distribution 

Integrity Management 

Negative Benefits from reduced injuries, reduced 

property damages, and reduced lost gas 

exceeds costs. 

EPA/AR NESHAP: Portland Cement 

Notice of Reconsideration 

Negative Morbidity benefits exceed costs. 

EPA/AR Review of the National 

Ambient Air Quality Standards 

for Sulphur Dioxide 

Negative Morbidity benefits exceed costs. 

EPA/AR National Emission Standards 

for Hazardous Air Pollutants 

for Reciprocating Internal 

Combustion Engines (Diesel) 

$0.9 to $2.2 The agency estimates that the rule will 

prevent 110 to 270 fatalities annually. 

Total costs associated with the rule are 

$355 million annually at 3%. The 

monetized value of the morbidity 

benefits is $66 million. If we subtract 

the morbidity benefits from costs, the net 

cost per life saved is approximately $1.1­

$2.2 million (2008 dollars). Adjusting to 

2001 dollars yields roughly $0.9 million 

to $2.2 million. 

70 
 

 

 

 

Agency Rule Net Cost per 

Life Saved 

Notes 

EPA/AR National Emission Standards 

for Hazardous Air Pollutants 

for Reciprocating Internal 

Combustion Engines--Existing 

Stationary Spark Ignition (GasFired) 

$1.2 to $1.5 The agency estimates that the rule will 

prevent 56 to 140 fatalities in 2013. 

Total costs associated with the rule are 

$244 million annually at 3%. The 

monetized value of the morbidity 

benefits is $36 million. If we subtract 

the morbidity benefits from costs, the net 

cost per life saved is approximately $1.5­

$3.1 million (2008 dollars). Adjusting to 

2001 dollars yields roughly $1.2 million 

to $1.5 million. 

EPA/OPPTS Lead; Amendment to the Optout and Recordkeeping 

Provisions in the Renovation, 

Repair, and Painting Program 

Negative Morbidity benefits exceed costs. 

This table is designed to be illustrative rather than definitive, and continuing work must 

be done to ensure that estimates of this kind are complete and not misleading. For example, 

some mortality-reducing rules have a range of other benefits, including reductions in morbidity, 

and it is important to include these benefits in cost-effectiveness analysis. Other rules have 

benefits that are exceedingly difficult to quantify but nonetheless essential to consider; consider 

rules that improve water quality or have aesthetic benefits. Nonetheless, it is clear that some 

rules are far more cost-effective than others, and it is valuable to take steps to catalogue 

variations and to increase the likelihood that scarce resources will be used as effectively as 

possible. 

In evaluating cost-effectiveness, it is important to note that OMB Circular A-4 observes 

that the majority of estimates of a value of a statistical life (VSL) fall within a $1 million-$10 

million range,174 and that agency practice generally falls within the upper half of that range.175 

While considerable progress has been made since 2000, and while some analysts believe that 

significant narrowing has occurred, the literature has not “settled” on any single number. There 

are, however, recent accounts of the appropriate range. That range includes estimates in the 

vicinity of $8.86 million from what may well be the most influential meta-analysis,176 as well as 

$6.84 million and $6.4 million (all in 2010 dollars) from two other recent meta-analyses.177 It is 

generally agreed, of course, that numbers should be updated for annual income growth. The 

relevant numbers should be taken into account when considering cost-effectiveness analysis. 

Our emphasis on this section is on decreased mortality rates, but we note that some 

observers178 have suggested the importance of analyzing and reporting lost life expectancy. 

174 OMB refers to the meta-analyses by Mrozek and Taylor (2002) and Viscusi and Aldy (2003) as sources of this
 

range: Both examine only the hedonic wage literature. 

175 See note 20, supra. 176 Viscusi and Aldy (2003)
 177 Kochi (2006) and Bellavance (2009) 178 Including Peer Reviewer Christine Jolls, see Appendix G and her peer report, available at
 

http://www.whitehouse.gov/omb/inforeg_regpol_reports_congress. 

71 
 

Commentators have noted the possibility that for some rules, measures of decreased mortality 

rates may well capture cases in which people have died a few days or a few weeks before they 

would have in the absence of regulatory controls. OMB Circular A-4 authorizes the use of lost 

life-years as one way of analyzing the effects of regulation. 

3. Private vs. social benefits and losses. 

As emphasized by OMB Circular A-4, a standard argument for regulation of private markets 

points to social benefits that cannot readily be produced by such markets. For example, firms 

may fail to internalize the health damages caused by the air pollution that they emit. Many 

regulations provide such social benefits. Insofar as they reduce air pollution, fuel economy rules 

and energy efficiency rules are examples. 

Such rules also provide private benefits. They may increase the cost of products at the point 

of purchase, but also reduce costs on balance by, for example, reducing the cost of operating a 

vehicle. In principle and sometimes in practice, the resulting benefits to consumers are 

substantial. In some cases, the economic benefits to consumers far exceed the costs of the 

relevant rule. 

As agencies have recognized, however, the existence of such “private benefits” creates 

certain puzzles, at least on standard economic assumptions. If consumers are informed, they 

should, on those assumptions, seek and purchase the relevant products, simply because it is in 

their economic interest to do so. And to the extent that this is so, regulations that require 

products to have increased levels of (say) energy efficiency may cause consumers to purchase 

products that they have knowingly rejected. In this case, there is at least a question whether it is 

appropriate to count fuel or energy savings as a benefit. Such regulations may also reduce 

consumer welfare by causing individuals to purchase products that they would otherwise reject. 

For example, such products may lack features that consumers prefer, or may have features that 

consumers do not like, in which case the regulations impose a welfare loss that should be 

counted in the overall assessment. If regulations that produce economic savings through energy 

efficiency also produce a loss to consumer welfare, that loss should be taken into account in the 

analysis. 

A departure from the standard economic analysis of these problems is appropriate when 

consumers lack relevant information or suffer from some kind of bias at the time of decision. It is 

possible, for example, that energy efficiency, and the savings from energy efficient products, are 

not sufficiently clear or salient to consumers at the time of purchase; a literature on “shrouded 

attributes” explores this possibility.179 It is also possible that consumers are focusing unduly on 

the short-term and that they do not take sufficient account of long-term gains. And indeed, a 

growing literature, focusing on the Energy Paradox,180 attempts to explain why consumers are 

not purchasing certain goods even though it is in their economic interest to do so. To the extent 

that a lack of information or a relevant bias accounts for consumer behavior, it is appropriate to 

179 Gabiax and Laibson (2006).
 180 For discussion, see, for example, Jaffe and Stavins (1994) (examining the factors that influence public adoption 

of energy-conserving technologies and the potential effects of regulation). 

72 
 

include private savings as a benefit, and there may be little or no accompanying consumer 

welfare loss. 

The empirical literature on this topic, while suggestive, remains in its preliminary stages. We 

recommend continued exploration of these issues, with particular attention to the circumstances 

in which a lack of information and potential errors or biases on the part of consumers are likely 

to support regulatory interventions and to justify an accounting of private savings. We also 

recommend that agencies should clearly separate social and private savings in their Regulatory 

Impact Analyses, and that when private savings are included, agencies should give careful 

attention to the conceptual and empirical issues. 

C. E-Rulemaking: Improving the Regulatory Process 

Under Executive Order 13563, agencies are directed to promote public participation and 

in particular to provide the public with “timely online access to the rulemaking docket on 

Regulations.gov, including relevant scientific and technical findings, in an open format that can 

be easily searched and downloaded.” OIRA remains committed to using technology to improve 

transparency and to increase public participation in the regulatory process. Among other things, 

OIRA has issued a series of memoranda to provide agencies with practical guidance for 

improving access to regulatory actions and their supporting justifications. These memoranda 

should be seen as a beginning of more ambitious efforts, consistent with Executive Order 13563, 

to promote understanding of and participation in rulemaking, with the ultimate goal of improving 

the substance of rules through tapping the diverse perspectives and dispersed knowledge of the 

American people. 

	 In April 2010, OMB published “Increasing Openness in the Rulemaking Process – Use of 

the Regulation Identifier Number (RIN), ” a memorandum that aims to promote greater 

openness by requiring Federal agencies to use the Regulation Identifier Number (RIN) on 

all relevant documents throughout the entire “lifecycle” of a rulemaking.181 By using the 

RIN as the key identifier on all related docket materials, the government will be better 

able to use technology to assemble electronic dockets and will help the public to have 

easier and more comprehensive access to regulatory information. 

	 In May 2010, OMB published “Increasing Openness in the Rulemaking Process – 

Improving Electronic Dockets,” to improve public access to regulatory information by 

requiring Federal agencies to compile and maintain comprehensive electronic regulatory 

dockets on Regulations.gov.182 This memorandum states that to the extent that they are 

part of rulemaking, supporting materials (such as notices, significant guidance 

documents, environmental impact statements, regulatory impact analyses, and 

information collections) should be made available during the notice-and-comment period 

by being uploaded and posted as part of the electronic docket. These materials should be 

181 Available at 

http://www.whitehouse.gov/sites/default/files/omb/assets/inforeg/IncreasingOpenness_04072010.pdf. Executive 

Order 12866, Sec. 4(b) requires each regulatory action in the Unified Regulatory Agenda—a semiannual 

compendium of all regulations under development or review—to contain, among other things, a RIN.

182 Available at http://www.whitehouse.gov/sites/default/files/omb/assets/inforeg/edocket_final_5-28-2010.pdf 

73 
 

 

 

 

in machine-readable format to enable the public to perform full-text searches of the 

documents and to extract information. (This memorandum is consistent with Executive 

Order 13563, which specifically emphasizes the importance of providing the public with 

relevant information, including scientific and technical findings, on Regulations.gov, 

with an opportunity for comment.) 

	 In November 2010, OIRA worked with the eRulemaking Program Management Office 

(PMO) and Federal agencies to publish a best practices document, titled “Improving 

Electronic Dockets on Regulations.gov and the Federal Docket Management System – 

Best Practices for Federal Agencies.” The document outlines strategic goals and best 

practices to improve agency use of the Federal Docket Management System (FDMS) and 

Regulations.gov. The document also seeks to establish a common taxonomy and adoption 

of data protocols for the various rulemaking and non-rulemaking docket and document 

types.183 

The two memoranda and the best practices document establish a new commitment to 

improving the public’s ability to find regulatory documents and inclusive docket information— 

thus promoting public participation in the Federal regulatory process and collaboration between 

the Federal agencies and the public. Efforts to measure compliance with these initiatives 

continue. An ultimate goal of this emphasis on participation is to improve the content of rules by 

bringing diverse perspectives to bear. In his Memorandum on Open Government, President 

Obama noted, “Knowledge is widely dispersed in society, and public officials benefit from 

having access to that dispersed knowledge.” A central purpose of increased participation is to tap 

that widely dispersed knowledge in the rulemaking process. If, for example, a proposal would 

create special hardships for small business, or deliver important benefits to disadvantaged 

groups, it is important for officials to obtain that information. 

OIRA’s work with the Regulatory Information Service Center (RISC) has also led to 

many recent enhancements to Reginfo.gov, a website that displays regulatory actions and 

information collections currently at OIRA for review. In February 2010, RISC launched an 

OIRA “dashboard” and redesigned Reginfo.gov. The OIRA dashboard uses an interactive 

display to present information about rulemakings under review and allows the public to sort rules 

by agency, length of review, stage of rulemaking, and economic significance. During the 2010 

calendar year, Reginfo.gov received a cumulative total of nearly one million page views; since 

the addition of the OIRA dashboard, the website has seen a 28 percent increase in the number of 

site visitors, totaling 169,549 visitors.184 

As a result of recent improvements, Regulations.gov provides the public with easier 

access to regulatory documents and the regulatory process. The improvements include the ability 

183 These strategic goals include 1) increasing the public’s access to regulatory content; 2) building a common 

taxonomy and protocols for managing dockets and regulatory documents; and 3) compiling comprehensive 

electronic dockets and increasing agency efficiency. The document also details plans for system enhancements to 

FDMS and Regulations.gov, as well as new interfaces the RISC/OIRA Consolidated Information System (ROCIS) 

to reduce agency burdens in managing regulatory dockets by pre-populating electronic dockets in FDMS based on 

existing information in the Unified Agenda. 

184 Reginfo.gov site statistics for site visitors were measured by comparing March 1-December 31, 2010 data sets to 

March 1-December 31, 2009 data sets. 

74 
 

to conduct searches within a docket, a regulatory topics index, and posting of public comments, 

as well as a link to helpful videos on the YouTube channel and other sites.185 In May 2009, and 

again in January 2010, the eRulemaking PMO launched Regulations.gov/Exchange, an on-line 

forum to promote interaction with the public and to foster open dialogue among all users, 

including industry, public interest groups, trade associations, and state and local governmental 

entities. During the 2010 calendar year, Regulations.gov received a cumulative total of 123 

million page views; since the addition of these new site features and functions, the site has seen a 

31 percent increase in the number of site visitors, totaling 190 million. The site also received 

approximately 306,000 web form comments in 2010.186 

OMB continues to support these and other efforts to use technological advances to 

facilitate transparency and increase public participation in the regulatory process. We 

recommend continued efforts to improve them, with the central goal of improving the 

understanding and substance of rules. 

D. Regulatory Cooperation 

In the current economic climate, and consistent with the President’s emphasis on 

promoting exports, the Administration recognizes the importance of increased trade and exports 

to economic growth, job creation, entrepreneurship, and innovation. To promote those goals, 

OIRA is participating in a number of regulatory cooperation initiatives with key trading partners. 

For example: 

 Since 2005, OIRA has co-chaired the European Commission-United States HighLevel Regulatory Cooperation Forum, which reports to the Cabinet-level 

Transatlantic Economic Council. 

 In May 2010, President Obama and Mexican President Felipe Calderón 

established a High-Level Regulatory Cooperation Council, which is also cochaired by OIRA and is comprised of senior-level regulatory, trade, and foreign 

affairs officials from the U.S. and Mexico. 

 On February 4, 2011, President Obama and Prime Minister Harper announced the 

creation of a Regulatory Cooperation Council, which is also co-chaired by OIRA 

and is comprised of senior-level regulatory, trade, and foreign affairs officials 

from the U.S. and Canada. 

These and other collaborative efforts are focused, in significant part, on promoting 

exports and on discouraging and addressing unnecessary or unjustified restrictions on trade. In 

addition, such efforts are focused, where feasible and appropriate, on bridging current areas of 

divergence among relevant regulators, as well as preventing unjustified or harmful divergences 

185 In March 2010, the U.S. Department of Agriculture was the first Federal agency to use the homepage link to host
 

an introductory video for the “Let’s Move” Campaign, featuring First Lady Michelle Obama. 186 Regulations.gov site statistics for site visitors were measured by comparing January 1-December 31, 2010 data 

sets to January 1-December 31, 2009 data sets. 

75 
 

from occurring in emerging areas of regulation. Because of the importance of promoting trade 

and exports, we recommend that serious consideration should be given to preventing such 

unjustified divergences. 

In this regard, OIRA recognizes that an adverse impact on trade is possible when 

countries apply different standards or technical requirements to address common environmental, 

health, safety, or other concerns. In some cases, such divergences can lead to additional costs 

and burdens on U.S. suppliers, particularly small and medium-sized enterprises (SMEs), and, in 

some cases, can make it difficult or impossible for U.S. suppliers to penetrate foreign markets. 

Such divergences can also increase regulatory burdens for governments and costs for consumers. 

Cooperative efforts—including regulator-to-regulator dialogue, information exchange, 

mutual recognition arrangements, and similar initiatives—could have significant domestic 

benefits, including increasing the safety and quality of other countries’ exports to the U.S. and 

thus helping to protect U.S. consumers. Regulatory cooperation can also help lower costs and 

burdens for businesses (especially SMEs), as well as for governments and consumers, and 

stimulate U.S. exports, which can promote job creation and economic growth. When regulators 

in different countries share data, studies, and other information on specific regulatory issues, they 

may be more likely to reach similar conclusions on relevant questions, including the risks 

associated with a particular product, appropriate measures to mitigate those risks, and the costs 

and benefits of alternative regulatory approaches. Such steps can lead regulators to adopt 

regulations that are more aligned and allow producers to develop economies of scale, to reduce 

costs associated with complying with divergent regulations, and to pass cost savings on to 

consumers. 

Of course, it is critical that any alignment in regulatory approaches continues to promote 

national health, safety, environmental, and other legitimate policy objectives. To promote the 

relevant goals, we recommend that regulatory cooperation should be based, to the extent feasible 

and appropriate, on an open exchange of information and perspectives among the U.S. 

government, foreign governments, affected domestic and foreign stakeholders in the private 

sector, and the public at large. 

With that objective in mind, the United States Trade Representative and the OIRA issued 

a relevant memorandum to heads of executive agencies and departments on May 19, 2011.187 

The memorandum is designed to promote exports and trade by ensuring a high degree of 

openness and public participation in the rulemaking process, with an emphasis on international 

cooperation. 

E. Public Recommendations on Retrospective Analysis 

In its 2009 and 2010 Reports, OMB emphasized the importance of public participation 

and in particular of obtaining access to “dispersed knowledge” about how to improve regulation. 

187 OMB and USTR, Memorandum for the Heads of Executive Departments and Agencies and Independent 

Regulatory Agencies, M-11-23, “Export and Trade Promotion, Public Participation, and Rulemaking,” available at 

http://www.whitehouse.gov/sites/default/files/omb/memoranda/2011/m11-23.pdf 

76 
The 2009 Report said, “[i]f members of the public have fresh evidence or ideas about 

improvement of existing regulations – including expansion, redirection, modification, or repeal – 

it is important to learn about that evidence or those ideas. A general goal is to connect the 

interest in sound analysis with the focus on open government, in part by promoting public 

engagement and understanding of regulatory alternatives. 

Consistent with Executive Order 13563, OMB is especially interested in how to improve 

retrospective analysis of existing rules. In the draft of this Report, OMB requested information 

about published and unpublished studies (both conceptual and empirical) involving such 

retrospective analysis. OMB also requested suggestions about how to improve understanding of 

the accuracy of prospective analyses of rules and how to undertake retrospective analysis. OMB 

will carefully consider these suggestions. 

77 
 

 

 

 

CHAPTER III: UPDATE ON THE IMPLEMENTATION OF OMB’S INFORMATION QUALITY 

INITIATIVES
 

Objective and high-quality analysis can improve regulatory decisions. OMB and the 

regulatory agencies have taken a number of steps to improve the rigor and transparency of 

analysis supporting their decisions. Of particular importance in the context of regulatory 

analysis is OMB’s Circular A-4, “Regulatory Analysis,” which was issued in 2003 after public 

comment, interagency review, and peer review. Circular A-4 defines good regulatory analysis 

and standardizes how benefits and costs of Federal regulatory actions are measured and 

reported.188 

In this chapter of the Report, we highlight recent developments in OMB’s continuing 

efforts to improve government information quality and transparency, as well as provide a brief 

update on the 2010 Agency reporting under the Government-Wide Information Quality 

Guidelines (“IQ Guidelines”) and the Information Quality Bulletin for Peer Review (“Peer 

Review Bulletin”). The Government-Wide Information Quality Guidelines, issued in 2002 after 

an extensive public comment process, provide policy and procedural guidance to Federal 

agencies for ensuring and maximizing the quality of the information they disseminate.189 The 

Information Quality Bulletin for Peer Review, issued in 2004 after an extensive public comment 

process, provides further guidance for pre-dissemination review of influential scientific 

information.190 

A. Recent Developments in Information Quality 

The Obama Administration’s strong commitment to ensuring information quality has 

been recently reinforced in a variety of contexts. The President’s March 9, 2009 Memorandum 

on Scientific Integrity191 refers to the need for each agency to: 

	 have appropriate rules and procedures to ensure the integrity of the scientific process 

within the agency; 

	 use scientific and technological information that has been subject to well-established 

scientific processes such as peer review when considered in policy decisions; 

	 appropriately and accurately reflect scientific and technological information in complying 

with and applying relevant statutory standards; and 

	 make available to the public the scientific or technological findings or conclusions 

considered or relied upon in policy decisions. 

188 This guidance is available at: http://www.whitehouse.gov/omb/circulars/a004/a-4.pdf. 189 These guidelines are available at: http://www.whitehouse.gov/omb/fedreg/reproducible2.pdf. 190 This Bulletin is available at: http://www.whitehouse.gov/omb/memoranda/fy2005/m05-03.pdf. 191 Available at http://www.whitehouse.gov/the-press-office/memorandum-heads-executive-departments-andagencies-3-9-09. 

78 
 

Since that time, the Director of the Executive Office’s Office of Science and Technology 

Policy (OSTP) issued a Memorandum to the Heads of Departments and Agencies that provides 

further guidance to Executive Branch leaders as they implement Administration policies on 

scientific integrity.192 The OSTP Director’s December 17, 2010, memorandum emphasizes that 

“the accurate presentation of scientific and technological information is critical to informed 

decision making by the public and policymakers.” Several passages in the memorandum 

specifically reinforce the goals of OMB’s ongoing information quality initiatives. Specifically: 

	 Consistent with the Bulletin on Peer Review, the OSTP Director’s Memorandum asks 

that agencies develop policies to ensure that data and research used to support policy 

decisions undergo independent peer review by qualified experts, where feasible and 

appropriate, and consistent with law (Sec I.2(b)). 

	 Consistent with the emphasis on transparency in the Information Quality Guidelines (as 

well Circular A-4), the OSTP Director’s Memorandum asks agencies to develop policies 

that: 

o Expand and promote access to scientific and technical information by making it 

available online in open formats. Where appropriate, this should include data and 

models underlying regulatory proposals and policy decisions (Sec I.3). 

o	 Communicate scientific findings by including a clear explication of underlying 

assumptions; accurate contextualization of uncertainties; and a description of the 

probabilities associated with both optimistic and pessimistic projections, 

including best-case and worst-case scenarios where appropriate (Sec I.4). 

Consistent with this Administration’s current efforts to ensure the quality of information on 

which public policy is based, OMB will continue to work with Executive departments and 

agencies over the next year to ensure that they have in place comprehensive processes for predissemination review of information quality, including the independent peer review of scientific 

information. We note that such efforts may be especially important in agencies where staff 

turnover may have affected agency familiarity with the types of internal processes necessary to 

implement the IQ Guidelines and the Peer Review Bulletin. 

B. Government-Wide Information Quality Guidelines 

Section 515 of the Treasury and General Government Appropriations Act, 2001 (Pub. 

L. No. 106-554, 44 U.S.C. § 3516 note), commonly known as the “Information Quality Act” 

(IQA), requires OMB to develop government-wide standards “for ensuring and maximizing” the 

quality of information disseminated by Federal agencies. 

192 Available at http://www.whitehouse.gov/sites/default/files/microsites/ostp/scientific-integrity-memo12172010.pdf. 

79 
 

 

To implement the IQA, OMB issued final government-wide guidelines on February 22, 

2002 (67 FR 8452), and each Federal agency is charged with promulgating its own Information 

Quality Guidelines. OMB has facilitated the development of these agency guidelines, working 

with the agencies to ensure consistency with the principles set forth in the government-wide 

guidelines. By October 1, 2002, almost all agencies released their final guidelines, which 

became effective immediately. The OMB government-wide guidelines require agencies to report 

annually to OMB providing information on the number and nature of complaints received by the 

agency and how such complaints were resolved. 

In August 2004, the OIRA Administrator issued a memorandum to the President's 

Management Council requesting that agencies post all Information Quality correspondence on 

agency web pages to increase the transparency of the process.193 In their FY 2004 Information 

Quality Reports to OMB, agencies provided OMB with the specific links to these web pages and 

OMB began providing this information to the public in our 2005 update on Information 

Quality.194 This increase in transparency allows the public to view all correction requests, 

appeal requests, and agency responses to these requests. The web pages also allow the public to 

track the status of correction requests that may be of interest. An updated list of agency web 

pages is provided in Appendix I of this Report. 

In our 2003 Report, OMB presented a detailed discussion of the IQA and its 

implementation, including a discussion of perceptions and realities, legal developments, methods 

for improving transparency, suggestions for improving correction requests, and the release of 

the OMB Information Quality Bulletin for Peer Review.195 

This section of the chapter provides a summary of the current status of correction 

requests received in FY 2010, as well as an update on the status of requests received in FY 2004, 

FY 2005, FY 2006, FY 2007, FY 2008 and FY 2009. An update on legal developments is also 

provided. Our discussion of the individual correction requests and agency responses is minimal 

because all correspondence between the public and agencies regarding these requests is publicly 

available on the agencies’ Information Quality web pages. 

193 See OMB, Memorandum for the President’s Management Council (2004)
 

http://www.whitehouse.gov/omb/inforeg/info_quality_posting_083004.pdf. 194 See OMB, Validating Regulatory Analysis: 2005 Report to Congress on the Costs and Benefits of Federal 

Regulations and Unfunded Mandates on State, Local, and Tribal Entities (2005), available at 

http://www.whitehouse.gov/omb/inforeg/2005_cb/final_2005_cb_report.pdf.
 195 See OMB, Information Quality, a Report to Congress FY 2003, (2003), 

http://www.whitehouse.gov/omb/inforeg/fy03_info_quality_rpt.pdf, and OMB, Validating Regulatory Analysis: 

2005 Report to Congress on the Costs and Benefits of Federal Regulations and Unfunded Mandates on

 State, Local, and Tribal Entities (2005), available at 

http://www.whitehouse.gov/omb/inforeg/2005_cb/final_2005_cb_report.pdf. 

80 
 

 

1. Request for Correction Process 

a. New Correction Requests and Appeal Requests Received by the Agencies in FY 2010 

Table 3-1 below lists the departments and agencies that received requests for correction 

in FY 2010. In FY 2010, a total of 27 requests for correction were sent to 10 different 

departments and agencies. FY 2010 was the first year correction requests were sent to the 

Department of Housing and Urban Development (HUD) and the Federal Reserve Board. In 

addition, four appeals associated with these 27 requests were filed in FY 2010. One appeal was 

sent to the Environmental Protection Agency (EPA), one appeal was sent to the National 

Oceanic and Atmospheric Administration (NOAA), within the Department of Commerce (DOC), 

and two appeals were sent to the Department of the Interior (DOI). Within DOI one appeal was 

sent to the U.S. Geological Survey (USGS) and the other appeal was sent to the Fish and 

Wildlife Service (FWS). As some of the agencies’ 27 responses to initial correct requests were 

sent at the end of FY 2010, or were still pending at the end of FY 2010, there is a possibility that 

additional appeals may have since been filed or will be filed in the future. 

Table 3-1: Departments and Agencies that Received Information Quality Correction 

Requests in FY 2010 

Agency Number of FY10 

Correction Requests 

Department of Agriculture 2 

Department of Commerce 1 

Department of Health and 

Human Services 2 

Department of the Interior 4 

National Aeronautics and 

Space Administration 1 

Environmental Protection 

Agency 11 

Department of Labor 1 

Department of Housing and 

Urban Development 1 

Federal Communications 

Commission 3 

Federal Reserve Board 1 

Total 27 

Further, as shown below in Table 3-2, two additional appeals were filed in FY 2010 that 

related to correction requests from FY2009. One was sent to the Bureau of Land Management 

(BLM), within DOI, regarding a 2009 BLM leasing report. The other request was sent to the 

Environmental Protection Agency (EPA) regarding the scientific assessment for oxides of 

nitrogen. Both appeal responses are being deferred until related litigation is complete; to the 

81 
 

extent the litigation addresses the information quality concerns, a further response to the appeal 

may not be required from the agencies. 

Table 3-2: Departments and Agencies that Received Information Quality Appeals 

Requests in FY 2010, Following Responses to Requests Initiated in FY 2009 

Agency Number of FY10 

Appeals 

Department of the Interior 1 

 Environmental Protection 

Agency 1 

Total 2 

The correction requests received in FY 2010 were quite diverse. For instance, the 

American Coatings Association requested that both EPA and HUD withdraw participation and 

sponsorship of public service announcements disseminated to raise awareness of the 

consequences of lead poisoning; the Center for Regulatory Effectiveness asked the Food and 

Drug Administration, within the Department of Health and Human Services (HHS), to correct 

information relating to presentations and statements discussing scientific information on the 

impacts of smoking menthol cigarettes; and the US Association of Reptile Keepers and the Pet 

Industry Joint Advisory Council asked the USGS to correct information in a report relating to the 

biological and management profiles for nine large species of pythons, anacondas and the boa 

constrictor. 

Figure 3-1 shows the status of the 27 FY 2010 correction requests and four appeals. For 

further details, links to all the correction requests, and the complete agency responses, we 

encourage readers to visit the agency Information Quality web pages.196 OMB continues to use 

the “different processes” category to describe responses that were handled by other pre-existing 

processes at the agencies. For instance, comments sent to the Fish and Wildlife Service 

regarding information on the Sage Grouse were handled as public comments under another 

existing review process related to the listing determination. 

196 As mentioned, a listing of webpages for Agency IQ correspondence is available in Appendix I of this report. 

82 
Figure 3-1: Status of IQ Correction Requests Received in FY 2010 

As noted in previous reports, OMB cautions readers against drawing any conclusions 

about trends or year-to-year comparisons because agency procedures for classifying correction 

requests are still evolving. However, we note that in FY 2003 there were 48 correction requests; 

in FY 2004, there were 37 correction requests; in FY 2005, there were 24 correction requests; in 

FY 2006, there were 22 correction requests; in FY 2007, there were 21 correction requests; in FY 

2008, there were 14 correction requests; and in FY 2009, there were 17 correction requests. 

b. Status of Outstanding Correction Requests Received by the Agencies in FY 2003-2009 

At the close of FY 2009, 11 Information Quality correction request responses and 3 

appeal responses remained pending from the agencies. The pending correction requests were 

initiated in FY 2004, FY 2005, FY 2006, FY 2007, FY 2008, and FY 2009. Figure 4-2 shows 

the status of those outstanding correction request responses at the close of FY 2010. Agencies 

responded to 4 of these correction requests and continued to work on responses to the remaining 

7 at the end of FY 2010. Six of the pending requests are requests to the Army Corps of 

Engineers, within the Department of Defense, and one of the pending requests is to the Centers 

for Disease Control, within HHS. As is shown below, there was one appeal that was sent after 

the agencies responded. This appeal was sent to BLM and the response was handled through 

another process. 

83 
Figure 3-2: FY 2010 Status of Pending Correction Requests from FY 2004, FY 2005, 

FY 2006, FY 2007, FY 2008, and FY 2009 

Figure 3-3 below gives the status of the 4 appeal requests pending at the close of FY 

2009. The Forest Service, within USDA, denied an outstanding appeal regarding the naming of 

a location in a draft environmental impact statement, and the Bureau of Reclamation, within 

DOI, denied an appeal regarding information in a biological assessment. In responding to an 

outstanding appeal regarding sampling at a landfill, in lieu of removing maps, EPA clarified that 

many of the documents in the file were interim documents and added clarifying footnotes and 

disclaimers to the maps. In addition, the Federal Communications Commission continued to 

work on the appeal it received in FY 2007 regarding line charges. Correspondence showing the 

agencies’ responses to these requests is publicly available on the agencies’ Information Quality 

web pages. 

84 
Figure 3-3: FY 2010 Status of Pending Appeal Requests from FY 2009 

2. Legal update 

As discussed in previous reports, there has been litigation under the Information Quality 

Act (IQA), as well as regarding the scope of judicial review under the Administrative Procedure 

Act (APA) in those challenges. During calendar year 2010, there were two judicial 

developments. First, the United States Court of Appeals for the Ninth Circuit affirmed the 

district court’s dismissal of the case for lack of jurisdiction under the APA. See Americans for 

Safe Access v. United States Dep’t of Health and Human Servs., No. 07-17388, 2010 U.S. App. 

LEXIS 21282, * 5 (9th Cir. 2010) (holding that HHS’s decision was not a reviewable final 

agency action). Second, the United States Court of Appeals for the District of Columbia Circuit 

declined to find that the IQA had been violated based on its determination that OMB’s 

interpretation regarding “dissemination” (and, in particular, the exclusion from the definition of 

dissemination of documents “prepared and distributed in the context of adjudicative 

proceedings”) was a reasonable interpretation of the statute. Prime Time v. Vilsack, 599 F.3d 

678, 685 (D.C. Cir. 2010). These recent decisions follow other cases that have dismissed IQA 

challenges, including on other grounds. See, e.g., Salt Institute v. Leavitt, 440 F.3d 156, 159 (4th 

Cir. 2006); In re Operation of the Missouri River System Litigation, 363 F. Supp. 2d 1145, 1174­

75 (D. Minn. 2004), vacated in part and aff'd in part on other grounds, 421 F.3d 618 (8th Cir. 

2005). 

85 
 

 

 

 

 

 

C. Information Quality Bulletin for Peer Review 

In keeping with the goal of improving the quality of government information, on 

December 16, 2004, OMB issued the Final Information Quality Bulletin for Peer Review (the 

“Peer Review Bulletin”).197 The Peer Review Bulletin requires executive agencies to ensure that 

all “influential scientific information” they disseminate after June 16, 2005, is peer-reviewed. 

“Influential scientific information” is defined as “scientific information the agency 

reasonably can determine will have or does have a clear and substantial impact on important 

public policies or private sector decisions.”198 The term “influential” is to be interpreted 

consistently with OMB's government-wide Information Quality Guidelines and the information 

quality guidelines of each agency. 

One type of scientific information is a scientific assessment. For the purposes of the Peer 

Review Bulletin, the term “scientific assessment” means an evaluation of a body of scientific or 

technical knowledge, which typically synthesizes multiple factual inputs, data, models, 

assumptions, and/or applies best professional judgment to bridge uncertainties in the available 

information.199 

The Peer Review Bulletin describes the factors that should be considered in choosing an 

appropriate peer review mechanism and stresses that the rigor of the review should be 

commensurate with how the information will be used. It directs agencies to choose a peer 

review mechanism that is adequate, giving due consideration to the novelty and complexity of 

the science to be reviewed, the relevance of the information to decision making, the extent of 

prior peer reviews, and the expected benefits and costs of additional review. When deciding 

what type of peer review mechanism is appropriate for a specific information product, agencies 

should consider at least the following issues: individual versus panel review; timing; scope of the 

review; selection of reviewers; disclosure and attribution; public participation; disposition of 

reviewer comments; and adequacy of prior peer review. 

The Peer Review Bulletin specifies the most rigorous peer review requirements for 

“highly influential scientific assessments,” which are a subset of “influential scientific 

information.” To ensure that implementation of the Peer Review Bulletin is not too costly, these 

requirements for more intensive peer review apply only to the more important scientific 

assessments disseminated by the Federal Government – those that could have a potential impact 

of more than $500 million in any one year on either the public or private sector, or are novel, 

controversial, or precedent-setting, or have significant interagency interest. 

197 See OMB, Memorandum for the Heads of Departments and Agencies, M-05-03, “Issuance of OMB’s ‘Final 

Information Quality Bulletin for Peer Review,’” available at 

http://www.whitehouse.gov/omb/memoranda/fy2005/m05-03.pdf. 198 The Bulletin notes that information dissemination can have a significant economic impact even if it is not part of 

a rulemaking. For instance, the economic viability of a technology can be influenced by the government’s 

characterization of its attributes. Alternatively, the Federal Government's assessment of risk can directly or 

indirectly influence the response actions of state and local agencies or international bodies.

199 These assessments include, but are not limited to, state-of-science reports; technology assessments; weight-ofevidence analyses; meta-analyses; health, safety, or ecological risk assessments; toxicological characterizations of 

substances; integrated assessment models; hazard determinations; or exposure assessments. 

86 
 

Under the Peer Review Bulletin, agencies are granted broad discretion to weigh the 

benefits and costs of using a particular peer review mechanism for a specific information 

product. In addition to the factors noted above, agencies also have the option of employing 

“alternative processes” for meeting the peer review requirement (e.g., commissioning a National 

Academy of Sciences’ panel). Moreover, to ensure that peer review does not unduly delay the 

release of urgent findings, time-sensitive health and safety determinations are exempted from the 

requirements of the Peer Review Bulletin. There are also specific exemptions for national 

security, individual agency adjudication or permit proceedings, routine statistical information, 

and financial information. The Peer Review Bulletin does not cover information disseminated in 

connection with routine rules that materially alter entitlements, grants, user fees, or loan 

programs, or the rights and obligations of recipients thereof. 

The Peer Review Bulletin provides two mechanisms for monitoring the progress of the 

agencies in meeting these peer-review requirements: a transparent peer review planning process 

and annual reporting, described below. 

The good science and good government requirements of the Peer Review Bulletin should 

assist in improving the accuracy and transparency of agency science. Additionally, the peer 

review planning process described in the Peer Review Bulletin, which includes posting of plans 

on agency websites, enhances the ability of the government and the public to track influential 

scientific disseminations made by agencies. 

On June 16, 2005, the Peer Review Bulletin became effective for all influential scientific 

information, including highly-influential scientific assessments. The peer review planning 

component of the Bulletin, discussed below, became fully effective on December 16, 2005. By 

the end of FY 2009, the Bulletin had been implemented for four full years. 

1. Peer Review Planning 

The Peer Review Planning component of the Peer Review Bulletin (Section V) requires 

agencies to engage in a systematic process of peer review planning for influential scientific 

information (including highly influential scientific assessments) that the agency plans to 

disseminate in the foreseeable future. 

A key feature of the agency’s peer review plan is a web-accessible listing (an “agenda”) 

of forthcoming influential scientific disseminations that is updated on a regular basis. These 

postings are designed to allow the public to participate in the peer review process by providing 

data and comments to the sponsoring agencies, as well as to external peer reviewers. By making 

these agendas publicly available, agencies increase the level of transparency in their peer review 

processes, and also have a mechanism to gauge the extent of public interest in their proposed 

peer reviews. 

The agenda is designed to encourage planning for peer review early in the informationgeneration process. Thus, the agenda should cover all information subject to the Peer Review 

87 
 

 

 

Bulletin that the agency plans to disseminate in the foreseeable future. For instance, once an 

agency has established a timeline for the generation of a scientific report, the agency should 

include that report in its agenda. Thus, although the Peer Review Bulletin specifies that agencies 

should update their peer review agendas every six months, the agenda is not a six-month forecast 

(i.e., it should not be limited to information (documents) that the agency plans to peer review in 

the next six months). 

Readers are encouraged to visit the agendas for agencies of interest. OMB asks agencies 

to ensure that there is an easily identifiable hyperlink to the peer review agenda from the 

agency’s Information Quality home page. For cabinet-level departments that have a central 

information quality page but do not have a central peer review agenda, OMB requests that a 

hyperlink to each agency agenda be provided. Section B in Appendix I provides the URLs for 

most agencies’ peer review agendas. 

Cabinet-level departments and agencies that have institutionalized processes for 

proactively identifying documents subject to the Bulletin include the Departments of 

Agriculture,200 Commerce,201 Health and Human Services,202 Housing and Urban Development, 

Interior,203 Labor, Transportation, and the Environmental Protection Agency. Other agencies 

with processes in place for proactively identifying documents subject to the Peer Review 

Bulletin include the Consumer Product Safety Commission, the Small Business Administration, 

and the Federal Communications Commission. 

From time to time, other agencies produce or sponsor influential scientific information, 

but do not identify forthcoming information products subject to the Peer Review Bulletin this 

fiscal year. OMB reminds these agencies to ensure that they maintain processes for determining 

when documents are subject to the Bulletin, and to ensure that the peer review plans for those 

documents are listed on the agency’s agenda in a timely manner. These agencies include the 

Departments of Defense, Education, Energy, Homeland Security, Justice, State, and Veterans 

Affairs, as well as the National Aeronautics and Space Administration, the Nuclear Regulatory 

Commission, the Federal Trade Commission, and the Tennessee Valley Authority. 

Several agencies have determined that they do not currently produce or sponsor 

information subject to the Peer Review Bulletin. Most of these agencies produce primarily 

financial information or routine statistical information for which the Bulletin provides specific 

exemptions. Others primarily engage in management, oversight, or granting activities. A list of 

these agencies can be found in Section C in Appendix I. 

Although the Peer Review Planning section of the Bulletin lays out the specific items that 

should be included in each peer review plan, OMB does not specify the format that agencies 

200 The Animal and Plant Health Inspection Service and the Food Safety and Inspection Service have strong peer
 

review programs, as do the Economic Research Service and the Agricultural Research Service. . 201 The National Oceanographic and Atmospheric Administration is the only agency within Commerce that has 

identified documents subject to the Bulletin; NOAA’s peer review process is strong. 202 The Food and Drug Administration, the Center for Disease Control and Prevention, and the National Toxicology
 

Program are compliant with the Bulletin. 203 The Fish and Wildlife Service has an exemplary peer review process. The US Geological Survey and the 

National Park Service are also compliant with the Bulletin. 

88 
 

 

 

should use, thereby giving agencies the flexibility to incorporate their agendas into existing egovernment and science planning initiatives.204 As such, some agencies house their peer review 

agendas within a research arm of the agency, whereas others operate out of the office of the chief 

information officer or the policy and planning office. Some departments provide an integrated 

agenda across the agencies,205 while other departments have chosen to have individual agencies 

host their own agendas.206 Furthermore, some agencies have chosen to provide a single agenda 

for both influential scientific information and highly influential scientific assessments,207 while 

others provide two separate agendas.208 

The Peer Review Bulletin specifically requires that agencies provide a link from the 

agenda to each document made public pursuant to the Bulletin, including the completed peer 

review report. Although some agencies routinely provide such links,209 agendas at other agencies 

do not yet have this capability. Agencies have advised that provision of these links is not always 

straightforward when the peer review is nested within a more complicated preexisting public 

process.210 OMB is currently working with the agencies to ensure that the required information 

is posted, and that the web sites are easy to locate and navigate. 

204 An example is the Environmental Protection Agency’s incorporation with its science inventory project. 205 An example is the agenda for the Department of Transportation.
 206 An example is the agendas for the Department of Health and Human Services and the Department of the Interior.
 207 For instance, the agenda for the Department of Commerce. 208 For instance, the agenda for the Department of Transportation.
 209 For instance, agendas for the Department of Agriculture’s Animal and Plant Health Inspection Service, the 

Department of Health and Human Services’ Center for Disease Control, and the Environmental Protection Agency 

(See Appendix for URLs for these agencies’ agendas.). 

210 For instance, some National Oceanographic and Atmospheric Administration documents that are part of the 

Endangered Species Act process (e.g., http://www.fakr.noaa.gov/protectedresources/stellers/section7.htm).
 

89 
 

 

 

 

 

 

 

 

Table 3-3: Peer Reviews Conducted Subject to the Bulletin in FY 2010 

Department/ 

Agency** 

Total 

Peer 

Reviews 

Completed 

Reviews of 

Highly 

Influential 

Scientific 

Assessments 

Waivers, 

Deferrals, or 

Exemptions 

Potential 

Reviewer 

Conflicts 

Department of

 Agriculture 74 7 None None 

Department 

of Commerce 24 1 None None 

Department 

of Energy 1 0 None None 

Department 

of Health and 

Human Services 

22 17 None None 

Department 

of the Interior 32 0 7 (Waiver) None 

Department 

of Labor 2 0 None None 

Department 

of Transportation 7 2 None None 

Environmental 

Protection 

Agency 

28 4 None None 

Federal Communications 

Commission 1 0 None None 

Small Business 

Administration 2 0 None None 

Total 193 31 7 None 

While this draft document is available for public comment, OMB is following up on incomplete reports from the 

Departments of Defense and Education. 

Table Details 

	 The Department of Agriculture agencies reporting peer reviews in FY 2010 were the Food Safety Inspection 

Service, the Agricultural Research Service, the Economic Research Service, and the Forest Service. 

	 The only Department of Commerce agency reporting peer reviews in this fiscal year was the National Oceanic 

and Atmospheric Administration. 

	 The only Department of Energy peer review reported in this fiscal year was associated with the Energy 

Efficiency & Renewable Energy, Vehicle Technologies Program. 

	 The Department of Health and Human Services agencies reporting peer reviews in FY 2010 were the Centers 

for Disease Control and Prevention and the National Toxicology Program at the National Institute for 

Environmental Health Sciences. 

	 The Department of the Interior agencies reporting peer reviews in FY 2010 were the Fish and Wildlife Service, 

the Geological Survey, and the National Park Service. 

	 The Department of Labor agencies reporting peer reviews in FY 2010 were the Occupational Health and Safety 

Administration and the Mine Safety and Health Administration. 

	 The Department of Transportation agencies reporting peer reviews in FY 2010 were the Federal Highway 

Administration, the Federal Motor Carrier Safety Administration, and the National Highway Traffic Safety 

Administration. 

90 
PART II: FIFTEENTH ANNUAL REPORT TO CONGRESS ON 

AGENCY COMPLIANCE WITH THE UNFUNDED MANDATES REFORM ACT
 

91 
 

Introduction 

This report represents OMB’s fifteenth annual submission to Congress on agency 

compliance with the Unfunded Mandates Reform Act of 1995 (UMRA). This report on agency 

compliance with the Act covers the period of October 2009 through September 2010; the rules 

published before October 2009 are described in last year’s report. 

In recent years, this report has been included along with our final Report to Congress on 

the Benefits and Costs of Federal Regulations. This is done because the two reports together 

address many of the same issues, and both highlight the need for regulating in a responsible 

manner that accounts for the benefits and costs of rules and takes into consideration the interests 

of our intergovernmental partners. This year, OMB is again publishing the UMRA report with 

the Report to Congress on the Benefits and Costs of Federal Regulations. 

State and local governments have a vital constitutional role in providing government 

services. They have the major role in providing domestic public services, such as public 

education, law enforcement, road building and maintenance, water supply, and sewage treatment. 

The Federal Government contributes to that role by promoting a healthy economy and by 

providing grants, loans, and tax subsidies to State and local governments. However, over the 

past two decades, State, local, and tribal governments increasingly have expressed concerns 

about the difficulty of complying with Federal mandates without additional Federal resources. 

In response, Congress passed the Unfunded Mandates Reform Act of 1995 (UMRA, or 

“the Act”). Title I of the Act focuses on the Legislative Branch, addressing the processes 

Congress should follow before enactment of any statutory unfunded mandates. Title II addresses 

the Executive Branch. It begins with a general directive for agencies to assess, unless otherwise 

prohibited by law, the effects of their rules on the other levels of government and on the private 

sector (Section 201). Title II also describes specific analyses and consultations that agencies 

must undertake for rules that may result in expenditures of over $100 million (adjusted annually 

for inflation) in any year by State, local, and tribal governments in the aggregate, or by the 

private sector. 

Specifically, Section 202 requires an agency to prepare a written statement for 

intergovernmental mandates that describes in detail the required analyses and consultations on 

the unfunded mandate. Section 205 requires that for all rules subject to Section 202, agencies 

must identify and consider a reasonable number of regulatory alternatives, and then generally 

select from among them the least costly, most cost-effective, or least burdensome option that 

achieves the objectives of the rule. Exceptions require the agency head to explain in the final 

rule why such a selection was not made or why such a selection would be inconsistent with law. 

Title II requires agencies to “develop an effective process” for obtaining “meaningful and 

timely input” from State, local and tribal governments in developing rules that contain significant 

intergovernmental mandates (Section 204). Title II also singles out small governments for 

particular attention (Section 203). OMB’s guidelines assist Federal agencies in complying with 

the Act and are based upon the following general principles: 

92 
	 Intergovernmental consultations should take place as early as possible, beginning before 

issuance of a proposed rule and continuing through the final rule stage, and be integrated 

explicitly into the rulemaking process; 

 Agencies should consult with a wide variety of State, local, and tribal officials; 

 Agencies should estimate direct benefits and costs to assist with these consultations; 

 The scope of consultation should reflect the cost and significance of the mandate being 

considered; 

 Effective consultation requires trust and significant and sustained attention so that all who 

participate can enjoy frank discussion and focus on key priorities; and 

	 Agencies should seek out State, local, and tribal views on costs, benefits, risks, and 

alternative methods of compliance, and whether the Federal rule will harmonize with and 

not duplicate similar laws in other levels of government. 

Federal agencies have been actively consulting with States, localities, and tribal governments in 

order to ensure that regulatory activities were conducted consistent with the requirements of 

UMRA. 

The remainder of this report lists and briefly discusses the regulations meeting the Title II 

threshold and the specific requirements of Sections 202 and 205 of the Act from October 1, 2009 

to September 30th, 2010. 

93 
 

CHAPTER IV: REVIEW OF SIGNIFICANT REGULATORY MANDATES 

In FY 2010, Federal agencies issued thirteen final rules that were subject to Sections 202 

and 205 of the Unfunded Mandate Reform Act of 1995 (UMRA), as they require expenditures by 

State, local or tribal governments, in the aggregate, or by the private sector, of at least $100 

million in any one year (adjusted annually for inflation). The Environmental Protection Agency 

has five, Department of Energy has three, Department of Transportation has three, Department of 

Health and Human Services has one, and the Environmental Protection Agency and Department 

of Transportation issued one joint rule.211 

OMB worked with the agencies to ensure that the selection of the regulatory options for 

these rules fully complied with the requirements of Title II of the Act. Descriptions of the rules 

in addition to agency statements regarding compliance with the Act are included in the following 

section. 

A. Environmental Protection Agency 

1. Renewable Fuels Standard Program 

This final rule implements provisions in title II of the 2007 Energy Independence and 

Security Act (EISA) that amend section 211(o) of the Clean Air Act. The amendments revise the 

National Renewable Fuels Standard Program in the United States, increasing the national 

requirement to a total of 36 billion gallons of total renewable fuel in 2022. 

EPA did not estimates annual costs for this rule but did determine that this rule was 

economically significant and would likely create an UMRA mandate. This final rule does not 

contain mandates under UMRA on State, local, and tribal governments. The overall impact on 

the private sector does exceed the $100 million threshold in the aggregate. Consequently, the 

provisions of this rule constitute a private sector mandate under the UMRA. 

2. National Emission Standards for Hazardous Air Pollutants for Reciprocating Internal 

Combustion Engines 

In this final rule, EPA established national emission standards for hazardous air 

pollutants from existing stationary compression ignition (diesel) engines. 

EPA estimates $373 million in annual costs. This final rule does not contain mandates 

under UMRA on State, local, and tribal governments. The overall impact on the private sector 

211 Interim final rules were not included in this chapter since “Section 202 [of the Unfunded Mandates Reform Act] . 

. . does not apply to interim final rules or non-notice rules issued under the ‘good cause’ exemption in 5 U.S.C. 

553(b)(B).” See OMB, Memorandum for the Heads of Executive Departments and Agencies, M-95-09, “Guidance 

for Implementing Title II of S.1,” 1995, available at 

http://www.whitehouse.gov/sites/default/files/omb/memoranda/m95-09.pdf. 

94 
 

does exceed the $100 million threshold in the aggregate. Consequently, the provisions of this 

rule constitute a private sector mandate under the UMRA. 

3. NESHAP: Portland Cement Notice of Reconsideration 

In this final rule, EPA established emissions standards for hazardous air pollutants, such 

as mercury and acid gases, from existing and new Portland cement facilities. EPA also 

established revised emissions limits for particulate matter, nitrogen oxide, and sulfur dioxin at 

new and reconstructed facilities. 

EPA estimates $926 to $950 million in annual costs. This final rule does not contain 

mandates under UMRA on State, local, and tribal governments. The overall impact on the 

private sector does exceed the $100 million threshold in the aggregate. Consequently, the 

provisions of this rule constitute a private sector mandate under the UMRA. 

4. National Emission Standards for Hazardous Air Pollutants for Reciprocating Internal 

Combustion Engines--Existing Stationary Spark Ignition (Gas-Fired) 

In this final rule, EPA established national emission standards for hazardous air 

pollutants and nitrogen oxides from existing stationary gas-fired engines. 

EPA estimates $253 million in annual costs. This final rule does not contain mandates 

under UMRA on State, local, and tribal governments. The overall impact on the private sector 

does exceed the $100 million threshold in the aggregate. Consequently, the provisions of this 

rule constitute a private sector mandate under the UMRA. 

5. Lead; Amendment to the Opt-out and Recordkeeping Provisions in the Renovation, Repair, 

and Painting Program 

This final rule revised the 2008 Lead Renovation, Repair, and Painting Program (RRP) 

rule that established accreditation, training, certification, and recordkeeping requirements as well 

as work practice standards on persons performing renovations for compensation in most pre1978 housing and child-occupied facilities. 

EPA estimates $320 million in annual costs. This final rule does not contain mandates 

under UMRA on State, local, and tribal governments. The overall impact on the private sector 

does exceed the $100 million threshold in the aggregate. Consequently, the provisions of this 

rule constitute a private sector mandate under the UMRA. 

B. Department of Energy 

1. Energy Efficiency Standards for Commercial Clothes Washers 

This final rule amends existing standards for commercial clothes washers. 

95 
DOE estimates $23 million in annual costs. This final rule does not contain mandates 

under UMRA on State, local, and tribal governments. The agency believes the overall impact on 

the private sector likely does not exceed the $100 million threshold in the aggregate; however, 

based on the possibility of crossing the threshold, the agency provided an UMRA analysis. 

2. Energy Conservation Standards for Small Electric Motors 

This final rule establishes energy conservation standards for small electric motors. 

DOE estimates $264 million in annual costs. This final rule does not contain mandates 

under UMRA on State, local, and tribal governments. The overall impact on the private sector 

does exceed the $100 million threshold in the aggregate. Consequently, the provisions of this 

rule constitute a private sector mandate under the UMRA. 

3. Energy Efficiency Standards for Pool Heaters and Direct Heating Equipment and 

Water Heaters 

This final rule establishes energy conservation standards for pool heaters and direct 

heating equipment and amends standards for water heaters. 

DOE estimates $1,285 million in annual costs. This final rule does not contain mandates 

under UMRA on State, local, and tribal governments. The overall impact on the private sector 

does exceed the $100 million threshold in the aggregate. Consequently, the provisions of this 

rule constitute a private sector mandate under the UMRA. 

C. Department of Transportation 

1. Automatic Dependent Surveillance--Broadcast (ADS-B) Equipage Mandate To Support Air 

Traffic Control Service 

This rulemaking would add requirements and performance standards for Automatic 

Dependent Surveillance-Broadcast (ADS-B) Out equipment on aircraft operating in certain 

classes of U.S. airspace. This equipment would need to be installed by aircraft owners by 2020. 

ADS-B Out is an essential piece of a system required to move forward with the Next Generation 

Air system, which will ultimately increase the capacity and safety of U.S. airspace. ADS-B will 

allow planes to fly closer together, to have more precise take-offs and landings, and to have 

better communications with the FAA’s Air Traffic Control centers. 

FAA estimates $261 million in annual costs. This final rule does not contain mandates 

under UMRA on State, local, and tribal governments. The overall impact on the private sector 

does exceed the $100 million threshold in the aggregate. Consequently, the provisions of this 

rule constitute a private sector mandate under the UMRA. 

96 
 

2. Electronic On-Board Recorders for Hours-of-Service Compliance 

With this rule, motor carriers that have demonstrated serious noncompliance with 

existing FMCSA hours of service rules will be subject to mandatory installation of EOBRs 

meeting the new performance standards. If FMCSA determines, based on HOS records reviewed 

during a compliance review, that a motor carrier has a 10 percent or greater violation rate for any 

HOS regulation listed in the new Appendix C to part 385, FMCSA will issue the carrier an 

EOBR remedial directive. The motor carrier will then be required to install EOBRs in all of its 

commercial motor vehicles regardless of their date of manufacture and use the devices for HOS 

recordkeeping for a period of 2 years. 

FMCSA estimates this rule will lead to $140 million in annual costs for the private sector. 

This final rule does not contain mandates under UMRA on State, local, and tribal governments. 

FMCSA does not indentify private sector mandates in this rule; however it is included in this 

chapter because the agency’s private sector cost estimates may be viewed as crossing the UMRA 

threshold.212 

3. Positive Train Control 

The final rule, effective March 2010, required certain freight and passenger railroad 

operations to plan for and install systems on locomotives and on railroad track (among other 

requirements) – enabling the train to be automatically controlled in certain circumstances. 

FRA estimates that this Congressionally mandated regulation has annualized costs of 

approximately $901 million with mandates on private industry as well as some State and local 

governments (those that fund and/or operate intercity passenger and commuter rail 

systems). Consequently, the provisions of this rule constitute a private sector mandate under the 

UMRA. 

D. Department of Health and Human Services 

1. Use of Ozone-Depleting Substances; Removal of Essential Use Designations [Flunisolide, 

Triamcinolone, Metaproterenol, Pirbuterol, Albuterol and Ipratropium in Combination, 

Cromolyn, and Nedocromil] 

This final rule would remove the essential use designations after a specified date for 

metered-dose inhalers (MDIs) containing flunisolide, triamcinolone, metaproterenol, pirbuterol, 

albuterol and ipratropium in combination, cromolyn, and nedocromil. Under the provisions of 

this final rule, these MDIs would have to be removed from the market. This final rule is 

212 The preamble to the final rule states, “This rule would not result in the net expenditure by State, local and tribal 

governments, in the aggregate, or by the private sector, of $141,300,000 or more in any one year, nor would it affect 

small governments. Therefore, no actions are deemed necessary under the provisions of the Unfunded Mandates 

Reform Act of 1995.” 

97 
consistent with obligations under the Clean Air Act and the Montreal Protocol on Substances 

That Deplete the Ozone Layer. 

FDA did not estimate annual costs for this rule but did determine that this rule was 

economically significant and would likely create an UMRA mandate. This final rule does not 

contain mandates under UMRA on State, local, and tribal governments. The overall impact on 

the private sector does exceed the $100 million threshold in the aggregate. Consequently, the 

provisions of this rule constitute a private sector mandate under the UMRA. 

E. Joint Rulemakings 

1. EPA/NHTSA Joint Rulemaking to Establish Light-Duty Greenhouse Gas Emission 

Standards and Corporate Average Fuel Economy Standards 

EPA and NHTSA issued this joint Final Rule to establish a National Program consisting 

of new standards for light-duty vehicles that will reduce greenhouse gas emissions and improve 

fuel economy. This joint Final Rule is consistent with the National Fuel Efficiency Policy 

announced by President Obama on May 19, 2009. EPA is finalizing greenhouse gas emissions 

standards under the Clean Air Act, and NHTSA is finalizing Corporate Average Fuel Economy 

standards under the Energy Policy and Conservation Act, as amended. These standards apply to 

passenger cars, light-duty trucks, and medium-duty passenger vehicles, covering model years 

2012 through 2016, and represent a harmonized and consistent National Program. 

EPA and DOT estimate that the 2012-2016 Model Year lifetime discounted costs are 

$51.5 billion assuming $21/ton social cost of carbon value. (Neither DOT nor EPA provided 

annualized values in their RIAs). This final rule does not contain mandates under UMRA on 

State, local, and tribal governments. The overall impact on the private sector does exceed the 

$100 million threshold in the aggregate. Consequently, the provisions of this rule constitute a 

private sector mandate under the UMRA. 

98 
 

 

 

APPENDIX A: CALCULATION OF BENEFITS AND COSTS 

Chapter I presents estimates of the annual benefits and costs of selected major final 

regulations reviewed by OMB between October 1, 2000 and September 30, 2010. OMB presents 

more detailed explanation of these regulations in several documents. 

 Rules from April 1, 1999 to September 30, 2001: Table 19 of the 2002 Report. 

 Rules from October 1, 2001 to September 30, 2002: Table 19 of the 2003 Report. 

 Rules from October 1, 2002 to September 30, 2003: Table 12 of the 2004 Report. 

 Rules from October 1, 2003 to September 30, 2004: Tables 1-4 and A-1 of the 

 2005 Report. 

 Rules from October 1, 2004 to September 30, 2005: Tables 1-4 and A-1 of the 

2006 Report 

 Rules from October 1, 2005 to September 30, 2006: Tables 1-4 and A-1 of the 

2007 Report. 

 Rules from October 1, 2006 to September 30, 2007: Tables 1-4 and A-1 of the 

2008 Report. 

 Rules from October 1, 2007 to September 30, 2008: Tables 1-4 and A-1 of the 

2009 Report. 

 Rules from October 1, 2008 to September 30, 2009: Tables 1-4 and A-1 of the 

2010 Report. 

 Rules from October 1, 2009 to September 30, 2010: Tables 1-4 and A-1 of this 

Report. 

In assembling estimates of benefits and costs presented in Table 1-4, OMB has: 

(1) Applied a uniform format for the presentation of benefit and cost estimates in 

order to make agency estimates more closely comparable with each other (for 

example, annualizing benefit and cost estimates); and 

(2) Monetized quantitative estimates where the agency has not done so (for example, 

converting agency projections of quantified benefits, such as estimated injuries 

avoided per year or tons of pollutant reductions per year, to dollars using the 

valuation estimates discussed below). 

All benefit and cost estimates are adjusted to 2001 dollars using the latest Gross 

Domestic Product (GDP) deflator, available from the Bureau of Economic Analysis at the 

Department of Commerce.213 In instances where the nominal dollar values the agencies use for 

their benefits and costs is unclear, we assume the benefits and costs are presented in nominal 

dollar values of the year before the rule is finalized. In periods of low inflation such as the past 

few years, this assumption does not affect the overall totals. All amortizations are performed 

using a discount rate of 7 percent unless the agency has already presented annualized, monetized 

results using a different explicit discount rate. 

213 See National Income and Product Accounts, http://www.bea.gov. 

99 
OMB discusses, in this Report and in previous Reports, the difficulty of estimating and 

aggregating the benefits and costs of different regulations over long time periods and across 

many agencies. In addition, where OMB has monetized quantitative estimates where the agency 

has not done so, we have attempted to be faithful to the respective agency approaches. The 

adoption of a uniform format for annualizing agency estimates allows, at least for purposes of 

illustration, the aggregation of benefit and cost estimates across rules; however, agencies have 

used different methodologies and valuations in quantifying and monetizing effects. Thus, an 

aggregation involves the assemblage of benefit and cost estimates that are not strictly 

comparable. 

To address this issue in part, the 2003 Report included OMB’s new regulatory analysis 

guidance, also released as OMB Circular A-4, which took effect on January 1, 2004 for proposed 

rules and January 1, 2005 for final rules. The guidance recommends what OMB considers to be 

“best practices” in regulatory analysis, with a goal of strengthening the role of science, 

engineering, and economics in rulemaking. The overall goal of this guidance is a more 

competent and credible regulatory process, and a more consistent regulatory environment. OMB 

expects that as more agencies adopt these recommended best practices, the benefits and costs 

presented in future Reports will become more comparable across agencies and programs. The 

2006 Report was the first report that included final rules subject to OMB Circular A-4. OMB 

will continue to work with the agencies to ensure that their impact analyses follow the new 

guidance. 

Table A-1 below presents information on the impacts of 66 major rules reviewed by 

OMB from October 1, 2009 through September 30, 2010. Unless otherwise stated, the estimates 

presented in Table A-1 are unmodified agency estimates of annualized impacts except for an 

adjustment to 2001 dollars, which is the requested format in OMB Circular A-4. 

Table 1-5(a) in Chapter I of this Report presents the estimates for the 18 rules finalized in 

fiscal year 2010 that were added to the Chapter I accounting statement totals. Table A-2 below 

presents the benefits and costs of previously reported major rules reviewed by OMB from 

October 1, 2000 through September 30, 2009 that are also included in the Chapter I accounting 

statement totals. 

100 
 

Appendix A: Calculation of Benefits and Costs 

Chapter I presents estimates of the annual benefits and costs of selected major final 

regulations reviewed by OMB between October 1, 2000 and September 30, 2010. OMB presents 

more detailed explanation of these regulations in several documents. 

 Rules from April 1, 1999 to September 30, 2001: Table 19 of the 2002 Report. 

 Rules from October 1, 2001 to September 30, 2002: Table 19 of the 2003 Report. 

 Rules from October 1, 2002 to September 30, 2003: Table 12 of the 2004 Report. 

 Rules from October 1, 2003 to September 30, 2004: Tables 1-4 and A-1 of the 

 2005 Report. 

 Rules from October 1, 2004 to September 30, 2005: Tables 1-4 and A-1 of the 

2006 Report 

 Rules from October 1, 2005 to September 30, 2006: Tables 1-4 and A-1 of the 

2007 Report. 

 Rules from October 1, 2006 to September 30, 2007: Tables 1-4 and A-1 of the 

2008 Report. 

 Rules from October 1, 2007 to September 30, 2008: Tables 1-4 and A-1 of the 

2009 Report. 

 Rules from October 1, 2008 to September 30, 2009: Tables 1-4 and A-1 of the 

2010 Report. 

 Rules from October 1, 2009 to September 30, 2010: Tables 1-4 and A-1 of this 

Report. 

In assembling estimates of benefits and costs presented in Table 1-4, OMB has: 

(1) Applied a uniform format for the presentation of benefit and cost estimates in 

order to make agency estimates more closely comparable with each other (for 

example, annualizing benefit and cost estimates); and 

(2) Monetized quantitative estimates where the agency has not done so (for example, 

converting agency projections of quantified benefits, such as estimated injuries 

avoided per year or tons of pollutant reductions per year, to dollars using the 

valuation estimates discussed below). 

All benefit and cost estimates are adjusted to 2001 dollars using the latest Gross 

Domestic Product (GDP) deflator, available from the Bureau of Economic Analysis at the 

Department of Commerce.214 In instances where the nominal dollar values the agencies use for 

their benefits and costs is unclear, we assume the benefits and costs are presented in nominal 

dollar values of the year before the rule is finalized. In periods of low inflation such as the past 

few years, this assumption does not affect the overall totals. All amortizations are performed 

using a discount rate of 7 percent unless the agency has already presented annualized, monetized 

results using a different explicit discount rate. 

214 See National Income and Product Accounts, http://www.bea.gov. 

101 
 

OMB discusses, in this Report and in previous Reports, the difficulty of estimating and 

aggregating the benefits and costs of different regulations over long time periods and across 

many agencies. In addition, where OMB has monetized quantitative estimates where the agency 

has not done so, we have attempted to be faithful to the respective agency approaches. The 

adoption of a uniform format for annualizing agency estimates allows, at least for purposes of 

illustration, the aggregation of benefit and cost estimates across rules; however, agencies have 

used different methodologies and valuations in quantifying and monetizing effects. Thus, an 

aggregation involves the assemblage of benefit and cost estimates that are not strictly 

comparable. 

To address this issue in part, the 2003 Report included OMB’s new regulatory analysis 

guidance, also released as OMB Circular A-4, which took effect on January 1, 2004 for proposed 

rules and January 1, 2005 for final rules. The guidance recommends what OMB considers to be 

“best practices” in regulatory analysis, with a goal of strengthening the role of science, 

engineering, and economics in rulemaking. The overall goal of this guidance is a more 

competent and credible regulatory process, and a more consistent regulatory environment. OMB 

expects that as more agencies adopt these recommended best practices, the benefits and costs 

presented in future Reports will become more comparable across agencies and programs. The 

2006 Report was the first report that included final rules subject to OMB Circular A-4. OMB 

will continue to work with the agencies to ensure that their impact analyses follow the new 

guidance. 

Table A-1 below presents information on the impacts of 66 major rules reviewed by 

OMB from October 1, 2009 through September 30, 2010. Unless otherwise stated, the estimates 

presented in Table A-1 are unmodified agency estimates of annualized impacts except for an 

adjustment to 2001 dollars, which is the requested format in OMB Circular A-4. 

Table 1-5(a) in Chapter I of this Report presents the estimates for the 18 rules finalized in 

fiscal year 2010 that were added to the Chapter I accounting statement totals. Table A-2 below 

presents the benefits and costs of previously reported major rules reviewed by OMB from 

October 1, 2000 through September 30, 2009 that are also included in the Chapter I accounting 

statement totals. 

102 
Table A-1: Summary of Agency Estimates for Final Rules

October 1, 2009 - September 30, 2010 (As of Date of Completion of OMB Review)

RIN Title Benefits 

(2001$) 

Costs 

(2001$) 

Other Information 

Department of Agriculture 0560-AH90 Supplemental Revenue Assistance Payments 

Program (SURE) [74 FR 68480] 

Not 

estimated 

Not 

estimated 

Transfers: $713-$718 million The full RIA is available from agency upon re

0560-AI07 Dairy Economic Loss Assistance Payment 

Program [74 FR 67805] 

Not 

estimated 

Not 

estimated 

Transfers: $238 million The full RIA is available from agency upon re

0578-AA43 Conservation Stewardship Program [75 FR 

31610] 

Not 

estimated 

Not 

estimated 

Transfers: $2,710-$3,191 million The full RIA is available from agency upon re

0584-AD30 SNAP: Eligibility and Certification 

Provisions of the Farm Security and Rural Investment Act of 2002 [75 FR 4912] 

Not 

estimated 

Not 

estimated 

Transfers: $2,221-$2,223 million The full RIA is included as an appendix in the publication. 

Department of Commerce 0660-ZA28 Broadband Technology Opportunities 

Program [75 FR 3792] 

Not 

estimated 

Not 

estimated 

Transfers: $2,130 million The full RIA is available from agency upon re

Department of Defense 0720-AB17 TRICARE: Relationship Between the 

TRICARE Program and EmployerSponsored Group Health Coverage [75 FR 18051] 

Not 

estimated 

Not 

estimated 

Transfers: $59 million (payment reductions) The full RIA is available from agency upon re

0790-AI59 Retroactive Stop Loss Special Pay 

Compensation [75 FR 19878] 

Not 

estimated 

Not 

estimated 

Transfers: $438 million The full RIA is available from agency upon re

Department of Education 

103 
RIN Title Benefits 

(2001$) 

Costs 

(2001$) 

Other Information 

1810-AB04 State Fiscal Stabilization Fund Program-­

Notice of Proposed Requirements, Definitions, and Approval Criteria [74 FR 58436] 

Not 

estimated 

$31 

million 

Range: 

$25-$37 

million 

Transfers: $9,510 million The RIA is included in the preamble. 

1810-AB06 School Improvement Grants--Notice of 

Proposed Requirements Under the American Recovery and Reinvestment Act of 2009; Title I of the Elementary and Secondary Education Act of 1965 [74 FR 65617] 

Not 

estimated 

Not 

estimated 

Transfers: $2,932 million The RIA is included in the preamble. 

1810-AB07 Race to the Top Fund--Notice of Proposed 

Priorities, Requirements, Definitions, and Selection Criteria [74 FR 59688] 

Not 

estimated 

$1 million Transfers: $3,272 million 

The RIA is included in the preamble. 

1810-AB08 Teacher Incentive Fund--Priorities, 

Requirements, Definitions, and Selection Criteria [75 FR 28714] 

Not 

estimated 

Not 

estimated 

Transfers: $358 million The RIA is included in the preamble. 

1840-AC96 Student Assistance General Provisions; 

TEACH Grant, Federal Pell Grant, and Academic Competitiveness Grant, and National Science and Mathematics Access To Retain Talent Grant Programs [74 FR 61239] 

Not 

estimated 

Not 

estimated 

Transfers: $185 million The RIA is included in the preamble. 

1840-AC99 General and Non-Loan Programmatic Issues 

[74 FR 55902] 

Not 

estimated 

Not 

estimated 

Transfers: $229-$232 million The RIA is included in the preamble. 

1840-AD01 Federal TRIO Programs, Gaining Early 

Awareness and Readiness for Undergraduate Program, and High School Equivalency and College Assistance Migrant Programs [75 FR 

65712] 

Not 

estimated 

Not 

estimated 

Transfers: $1,010 million The RIA is included in the preamble. 

1855-AA06 Investing in Innovation--Priorities, 

Requirements, Definitions, and Selection Criteria [75 FR 12004] 

Not 

estimated 

Not 

estimated 

Transfers: $532 million The RIA is included in the preamble. 

104 
RIN Title Benefits 

(2001$) 

Costs 

(2001$) 

Other Information 

Department of Energy 1901-AB27 Loan Guarantees for Projects That Employ 

Innovative Technologies [74 FR 63544] 

Not 

estimated 

Not 

estimated 

Transfers: $3,457-$3,945 million 

1904-AA90 Energy Efficiency Standards for Pool 

Heaters and Direct Heating Equipment and Water Heaters [75 FR 20112] 

$1,386 

million 

Range: 

$1,274­

$1,817 

million 

$1,063 

million 

Range: 

$975­

$1,122 

million 

The RIA is included in the Technical Support and is available at: http://www1.eere.energy.gov/buildings/appliapdfs/reg_impact_direct_heat_standards_tsd.pd

1904-AB70 Energy Conservation Standards for Small 

Electric Motors [75 FR 10874] 

$707 

million 

Range: 

$688­

$827 

million 

$218 

million 

The RIA is included in the Technical Support and is available at: http://www1.eere.energy.gov/buildings/applial/pdfs/reg_impact_small_motors_nopr_tsd.pd

1904-AB93 Energy Efficiency Standards for Commercial 

Clothes Washers [75 FR 1122] 

$51 

million 

Range: 

$46-$67 

million 

$20 

million 

Range: 

$17-$21 

million 

The RIA is included in the preamble. 

1904-AB97 Weatherization Assistance Program for LowIncome Persons - Multi-unit Buildings [75 

FR 3847] 

Not 

estimated 

Not 

estimated 

Transfers: $4,097 million The RIA is included in the preamble. 

Department of Health and Human Services 

105 
RIN Title Benefits 

(2001$) 

Costs 

(2001$) 

Other Information 

0910-AF93 Use of Ozone-Depleting Substances; 

Removal of Essential Use Designations [Flunisolide, Triamcinolone, Metaproterenol, Pirbuterol, Albuterol and Ipratropium in Combination, Cromolyn, and Nedocromil] [75 FR 19213] 

Quantified Not 

monetized 

Benefits: Reduction of CFC emissions by 310Costs: Possible Change in Use of Asthma and million days of therapy) per year. Transfers: $13-$83 million per year in 2001 dPayers, Medicare and Medicaid to Drug ManuThe RIA is included in the preamble. 

0910-AG33 Regulations Restricting the Sale and 

Distribution of Cigarettes and Smokeless Tobacco to Protect Children and Adolescents [75 FR 13225] 

Not 

estimated 

Not 

estimated 

This rule reinstates a 1996 final rule (as requirto the original RIA (see 61 FR 44395). It doeincremental analysis of the impacts of the rule 

that takes into account current levels of compthe 1996 RIA very likely overstates both costs The RIA is included in the preamble. 

0920-AA26 Medical Examination of Aliens— Removal 

of Human Immunodeficiency Virus (HIV) Infection From Definition of Communicable Disease of Public Health Significance [74 FR 56547] 

Quantified $3 million 

Range: 

$11-$21 

million 

Quantified Benefits: 4,000 to 24,000 HIV-posin the U.S. in Year 5 who would not otherwisQualitative Benefits: 1. Will reduce stigmatizagainst HIV-infected people. 2. Will bring famwho had been barred from entry, thus strengthpermit HIV-infected immigrants with skills in permitted to enter the U.S. to seek employmenproductive members of U.S. society. 4. Compreceive appropriate multi-drug anti-retroviral such therapy survive an additional 13 years, wexpectancy of approximately 29 years (to age life expectancy allows opportunity for longer productivity. Transfers: $71-$513 million (from HIV positiinsurance payers to healthcare providers) The RIA is included in the preamble. 

106 
RIN Title Benefits 

(2001$) 

Costs 

(2001$) 

Other Information 

0938-AP40 Revisions to Payment Policies Under the 

Physician Fee Schedule For CY 2010 (CMS1413-FC) [74 FR 61738] 

Not 

estimated 

Not 

estimated 

Transfers: $10,999 million (payment reductioThe RIA is included in the preamble. 

0938-AP41 Changes to the Hospital Outpatient 

Prospective Payment System and Ambulatory Surgical Center Payment System for CY 2010 (CMS-1414-F) [74 FR 60316] 

Not 

estimated 

Not 

estimated 

Transfers: $441 million The RIA is included in the preamble. 

0938-AP55 Home Health Prospective Payment System 

and Rate Update for CY 2010 (CMS-1560-F) [74 FR 58077] 

Not 

estimated 

Not 

estimated 

Transfers $116 million (payment reductions) The RIA is included in the preamble. 

0938-AP57 End Stage Renal Disease Bundled Payment 

System (CMS-1418-F) [75 FR 49030] 

Not 

estimated 

Not 

estimated 

Transfers: $164 million (payment reductions) The RIA is included in the preamble. 

0938-AP72 State Flexibility for Medicaid Benefit 

Packages (CMS-2232-F4) [75 FR 23068] 

Not 

estimated 

Not 

estimated 

Transfers: $692-$730 million (payment reducThe RIA is included in the preamble. 

0938-AP77 Revisions to the Medicare Advantage and 

Medicare Prescription Drug Benefit Programs for Contract Year 2011 (CMS4085-F) [75 FR 19677] 

Not 

estimated 

$232­

$233 

million 

Transfers: $261-272 million (payment reductiThe RIA is included in the preamble. 

0938-AP78 Electronic Health Record (EHR) Incentive 

Program (CMS-0033-F) [75 FR 44314] 

Not 

estimated 

$524 

million 

Range: 

$513­

$535 

million 

Transfers: $851-$2,542 million The RIA is included in the preamble. 

0938-AP80 Medicare Program; Changes to the Hospital 

Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long Term Care Hospital Prospective Payment System and Fiscal Year 2011 Rates [75 FR 50042] 

Not 

estimated 

Not 

estimated 

Transfers: $237 million (payment reductions) The RIA is included in the preamble. 

107 
RIN Title Benefits 

(2001$) 

Costs 

(2001$) 

Other Information 

0991-AB64 Early Retiree Reinsurance Program 

[75 FR 24450] 

Not 

estimated 

$33 

million 

Transfers: $1,024 million (Federal governmenThe RIA is included in the preamble. 

0991-AB71 Pre-Existing Condition Insurance Plan 

Program [75 FR 45010] 

Not 

estimated 

$2 million Transfers: $1,009-$1,018 million (from Feder

contractors to administer the program) The agency reports $5 billion in transfers for t2010 to December 31, 2013. We assumed a ufunds over the time period and annualized oveand then converted the estimate to 2001 dollarThe RIA is included in the preamble. 

Department of Health and Human Services, Department of Labor and Department of the Treasury 0938­AP65; 1210-AB30 

Interim Final Rules Under the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 [75 FR 5410] 

Not 

estimated 

$10-$12 

million 

Qualitative Benefits: Benefits of the rule incluaccess to mental health and substance abuse dlead to improved health, a reduction in overalthose with mental health or substance abuse dworker productivity and earnings. Parity could 

limitations and lower cost-sharing and out-of-providing financial protection. Transfers: $2.2 billion in 2001 dollars (private do not utilize mental health or substance abusthose that do). The RIA is included in the preamble. 

108 
RIN Title Benefits Costs Other Information 

(2001$) (2001$) 

0938- Interim Final Rules for Group Health Plans Not Not AQ07; and Health Insurance Issuers Relating to estimated estimated 

1210-AB44 Coverage of Preventive Services under the 

Patient Protection and Affordable Care Act [75 FR 41726] 

Qualitative Benefits: By expanding coverage sharing for the required preventive services, th

access and utilization of these services to incrindividuals increase their use of these services anticipate several benefits: (1) prevention and of illnesses as a result of immunization and scdiseases; (2) delayed onset, earlier treatment, and mortality as a result of early detection, scr(3) increased productivity and fewer sick dayslower health care costs. Another benefit of theregulations will be to distribute the cost of preequitably across the broad insured populationQualitative Costs: New costs to the health carbeneficiaries increase their use of preventive schanges in coverage and cost-sharing requiremservices. The magnitude of this effect on utilizprice elasticity of demand and the percentage those with reduced cost sharing or newly gainQualitative Transfers: Transfers will occur to were previously paid out-of-pocket for certain now be covered by group health plans and issfinal regulations. Risk pooling in the group mexpected cost increases across an plan or empaverage premiums for all enrollees. However, will utilize preventive services to an equivaleninterim final regulations create a small transfepremiums in the group market utilizing less thpreventive services in their risk pool to those greater than average. To the extent there is rismarket, a similar transfer will occur. The RIA is included in the preamble. 

109 
RIN Title Benefits Costs Other Information 

(2001$) (2001$) 

0991­ Interim Final Rules for Group Health Plans Quantified $9 million Quantified Benefits: 190,000 to 1.6 million pr

AB66; and Health Insurance Issuers Relating to individuals who gain coverage in 2011. 1210-AB41 Dependent Coverage of Children to Age 26 

under the Patient Protection and Affordable Qualitative Benefits: Expanding coverage optCare Act [75 FR 27122] population should decrease the number uninsu

decrease the cost-shifting of uncompensated cinsurance, increase the receipt of preventive h

more timely access to high quality care, resultpopulation. Allowing extended dependent covgreater job mobility for this population as theino longer be tied to their own jobs or student 19-25 that have chronic or other serious health able to continue their current coverage througextent there is an increase in beneficial utilizacould improve. Transfers: $2.8-$5.7 billion (if the rule causes premiums to increase, there will be a transfer family health insurance coverage who do not 25 to those individuals with family health insudependents aged 19-25). The RIA is included in the preamble. 

110 
RIN Title Benefits Costs Other Information 

(2001$) (2001$) 

0991- Interim Final Rules for Group Health Plans Not $21 AB68; and Health Insurance Coverage Relating to estimated million 

1210-AB42 Status as a Grandfathered Health Plan under 

the Patient Protection and Affordable Care Range: Act [75 FR 34538] $17-$23 

million 

Qualitative Benefits: These interim final reguchoice or retaining or relinquishing grandfathgrandfathered plans are required to offer covebenefit standards and patient protections as reCare Act, while grandfathered plans are only certain provisions. The existence of grandfathprovide individuals with the benefits of plan chave a high value to some. It could potentially increasing, depending on the extent to which tinclude the benefits and protections of the new prevent the employer from dropping of coveranew Medicaid enrollment and spending and louninsured individuals. Qualitative costs: Limits on the changes to cograndfathered plans and the elimination of coservices in non-grandfathered plans, leads to t

premiums payers overall to individuals using pre-existing conditions are fully prohibited antake effect, the extent to which individuals are plans could affect adverse selection, as higher grandfather status to gain new protections whplans retain their grandfather status. This coulwealth from non-grandfathered plans to grandThe RIA is included in the preamble. 

111 
RIN Title Benefits Costs Other Information 

(2001$) (2001$) 

0991­AB69; 1210– AB43 

Patient Protection and Affordable Care Act: Preexisting Condition Exclusions, Lifetime and Annual Limits, Rescissions, and Patient Protections [75 FR 43330] 

Not 

estimated 

$4 million Qualitative Benefits: These patient protection

coverage for children with preexisting conditiface rescissions, lifetime limits, and annual limhealth care costs. Expanded coverage is likely health care, improve health outcomes, improvreduce family financial strain and "job lock". have a distributional component and promote they will be enjoyed by those who are especiaof health problems and financial status. Choiclead to better, sustained patient-provider relatidecreased malpractice claims and improved mhealth promotion. Removing referrals and prioprimary care, OB/GYN, and emergency serviadministrative and time burdens on both patieQualitative Costs: To the extent these patient access to health care services, increased health will result due to increased uptake. Expanding preexisting conditions and individuals subject increase overall health care costs, given that thhigh cost conditions and require more costly cQualitative Transfers: These patient protectionwealth from those paying premiums in the groobtaining the increased patient protections. To pooling in the individual market, a similar tranThe RIA is included in the preamble. 

112 
RIN Title Benefits 

(2001$) 

Costs 

(2001$) 

Other Information 

0991­AB70; 1210– AB45 

Interim Final Rules for Group Health Plans and Health Insurance Issuers Relating to Internal Claims and Appeals and External Review Processes under the Patient Protection and Affordable Care Act [75 FR 43330] 

Not 

estimated 

$42 

million 

Qualitative Benefits: A more uniform, rigorousystem of claims and appeals processing will direct and indirect benefits that will accrue to the affected parties. These interim final regulaextent to which employee benefit plans providthe established terms of individual plans. Whibenefits will largely constitute transfers, the tr

improving, because incorrectly denied benefitcertainty and consistency in the handling of band improved access to information about the and appeals are adjudicated should lead to effsystem, both in terms of the allocation of spenenrollees as well as operational efficiencies amThis certainty and consistency can also be expvarying degrees, all parties within the system, and to lead to broader social welfare gains. TrQualitative transfers: The Departments estimaclaim denials reversed in the external review pamount is a cost to plans, it represents a paymhave previously been paid to participants, but amount is a transfer from plans and issuers to payment for denied benefits. These transfers wbecause incorrectly denied benefits will be pacould also be a cost if the reversal leads to serbeing utilized now that had been denied previare not able to distinguish between the two typreversals are associated with a transfer. The RIA is included in the preamble. 

Department of Homeland Security 1615-AB80 U. S. Citizenship and Immigration Services 

Fee Schedule [75 FR 58961] 

Not 

estimated 

Not 

estimated 

Transfers: $173 million The RIA is included in the preamble. 

113 
RIN Title Benefits 

(2001$) 

Costs 

(2001$) 

Other Information 

1651-AA83 Electronic System for Travel Authorization 

(ESTA): Fee for Use of the System [75 FR 47701] 

Not 

estimated 

Not 

estimated 

Transfers: $121-$206 million The full RIA is available at: http://www.reguDocument ID: USCBP-2010-0025-0002 

1660-AA44 Special Community Disaster Loans Program 

[75 FR 2800] 

Not 

estimated 

< $1 

million 

Transfers: $0-$1,075 million The RIA is included in the preamble. 

Department of the Interior 1018-AX06 Migratory Bird Hunting; Final Frameworks 

for Early-Season Migratory Bird Hunting Regulations [75 FR 52873] 

$271 

million 

Range: 

$234­

$309 

million 

Not 

estimated 

Estimates based on the RIA for the 2008-2009 available at: http://www.fws.gov/migratorybirds/NewRepopics/HuntingRegulations/Mig%20bird%20Redf 

1018-AX06 Migratory Bird Hunting; Final Frameworks 

for Late Season Migratory Bird Hunting Regulations [75 FR 58249] 

$271 

million 

Range: 

$234­

$309 

million 

Not 

estimated 

Estimates based on the RIA for the 2008-2009 available at: http://www.fws.gov/migratorybirds/NewRepopics/HuntingRegulations/Mig%20bird%20Redf 

Department of Justice 1117-AA61 Electronic Prescriptions for Controlled 

Substances [75 FR 16236] 

$348­

$1,320 

million 

$35-$36 

million 

The RIA is available at: http://www.deadiversion.usdoj.gov/ecomm/e_

114 
RIN Title Benefits 

(2001$) 

Costs 

(2001$) 

Other Information 

1190-AA44 Nondiscrimination on the Basis of Disability 

in Public Accommodations and Commercial Facilities [75 FR 56164] 

$1,123 

million 

Range: 

$980­

$2,056 

million 

$611 

million 

Range: 

$549­

$719 

million 

The RIA is available at: http://www.ada.gov/regs2010/ADAregs2010.

1190-AA46 Nondiscrimination on the Basis of Disability 

in State and Local Government Services [75 FR 56236] 

$173 

million 

Range: 

$151­

$304 

million 

$138 

million 

Range: 

$122­

$172 

million 

The RIA is available at: http://www.ada.gov/regs2010/ADAregs2010.

Department of Labor 1210-AB08 Improved Fee Disclosure for Pension Plans 

[75 FR 41599] 

Not 

estimated 

$44-$48 

million 

Qualitative Benefits: Qualitative: The final reamount of information that service providers dfiduciaries. Non-quantified benefits include indiscouraging harmful conflicts of interest, serthrough improved decisions and value, better redress abuse, and harmonization with other EThe RIA is included in the preamble. 

1218-AC01 Cranes and Derricks in Construction [75 FR 

47906] 

$172 

million 

$123­

$126 

million 

The RIA is included in the preamble. 

Department of State 1400-AC58 Schedule of Fees for Consular Services, 

Department of State and Overseas Embassies and Consulates [75 FR 36522] 

Not 

estimated 

Not 

estimated 

Transfers: $322-$394 million The RIA is included in the preamble. 

Department of Transportation 

115 
RIN Title Benefits 

(2001$) 

Costs 

(2001$) 

Other Information 

2120-AI92 Automatic Dependent Surveillance-­

Broadcast (ADS-B) Equipage Mandate to Support Air Traffic Control Service [75 FR 30160] 

$172 

million 

Range: 

$149­

$195 

million 

$233 

million 

Range: 

$153­

$292 

million 

The RIA is available at: http://www.regulatio

Document ID: FAA-2007-29305-0288.1 

2126-AA89 Electronic On-Board Recorders for Hoursof-Service Compliance [75 FR 17208] $165­ $170 

million 

$126­

$129 

million The RIA is available at: http://www.regulatio

Document ID: FMCSA-2004-18940-1157 

2130-AC03 Positive Train Control [75 FR 2597] $34 

million 

Range: 

$34-$37 

million 

$745 

million 

Range: 

$519­

$1,264 

million 

The RIA is available at: http://www.fra.dot.gov/downloads/safety/PTC

2137-AE15 Pipeline Safety: Distribution Integrity 

Management [74 FR 63906] 

$97-$145 

million 

$92-$97 

million 

The RIA is available at: http://www.regulatioDocument ID: PHMSA-RSPA-2004-19854-0

Department of Transportation and Environmental Protection Agency 

116 
RIN Title Benefits 

(2001$) 

Costs 

(2001$) 

Other Information 

2060­AP58; 2127-AK50 

Light-Duty Greenhouse Gas Emission Standards and Corporate Average Fuel Economy Standards [75 FR 25323] 

$11.9 

billion 

Range: 

$3.9­

$18.2 

billion 

$3.3 

billion 

Range: 

$1.7-$4.9 

billion 

The primary estimates are based on the total cfor model years 2012-2016 in EPA’s RIA and and benefit estimates in DOT’s RIA, annualizvehicles covered by the rule. DOT and EPA edue to programmatic differences between the in estimation modeling. DOT’s RIA is available at: http://www.nhtsa.gov/staticfiles/rulemaking/p2016_FRIA_04012010.pdf EPA’s RIA is available at: http://www.epa.gov/otaq/climate/regulations/4

Department of the Treasury 1557-AD23 S.A.F.E. Mortgage Licensing Act [75 FR 

44656] 

Not 

estimated 

$148 

million 

Range: 

$86-$157 

million 

Qualitative Benefits: Rule enhances bank ovemortgage origination through written policiesrequirements on national banks and employee Qualitative Costs: OCC monetized the cost of attempt to account for any possible reduction income due to lower loan originator productivimplementation of the joint interagency Rule. The RIA is available at: http://www.regulatioDocument ID: OCC-2010-0007-0002 

Department of Veterans Affairs 2900-AN54 Diseases Associated With Exposure to 

Certain Herbicide Agents (Hairy Cell Leukemia and Other Chronic B Cell Leukemias, Parkinson’s Disease, and Ischemic Heart Disease) [75 FR 53202] 

Not 

estimated 

Not 

estimated 

Transfers: $4,101-$5,408 million The RIA is available at: http://www.va.gov/ORPM/FY_2010_Publishe(scroll to number 37) 

Environmental Protection Agency 

117 
RIN Title Benefits 

(2001$) 

Costs 

(2001$) 

Other Information 

2050-AG16 Revisions to the Spill Prevention, Control, 

and Countermeasure (SPCC) Rule [74 FR 58784] 

$0 ($81 

million) 

Range 

($78-$85 

million) 

Cost savings. 

The RIA is available at: http://www.RDocket ID: EPA-HQ-OPA-2007-0584 

2060-AO15 NESHAP: Portland Cement Notice of 

Reconsideration [75 FR 54970] 

$6.1­

$16.3 

billion 

$0.8-$0.9 

billion 

The RIA is available at: http://www.epa.gov/ttn/atw/pcem/ria_cement

2060-AO38 Control of Emissions From New Marine 

Compression-Ignition Engines at or Above 30 Liters per Cylinder [75 FR 22897] 

Not 

estimated 

Not 

estimated 

The agency presents estimated benefits and costrategy, both national and international levelsfrom ocean-going vessels. It includes: (1) the finalizing under the Clean Air Act; (2) the proUnited States Government to the Internationaamend MARPOL Annex VI to designate U.SControl Area in which all vessels, regardless oto meet the engine and marine fuel sulfur requand (3) the new engine emission and fuel sulfamendments to Annex VI that are applicable tflag under the Act to Prevent Pollution from Salthough illustrative, do not represent the beneThe RIA available at: http://www.epa.gov/otaq/regs/nonroad/marine

2060-AO48 Review of the National Ambient Air Quality 

Standards for Sulfur Dioxide [75 FR 35519] 

$10.5 

billion 

Range: 

$2.9­

$38.6 

billion 

$0.7 

billion 

Range: 

$0.3-$2.0 

billion 

The agency provided benefit and cost estimate

annualize, as with previous NAAQS rulemakithe benefits and costs would be zero in the firfinalized, the benefits and costs would increasand the benefit and cost estimates would equathereafter. EPA’s RIA is available at: http://www.epa.gov/ttn/ecas/regdata/RIAs/fso

118 
RIN Title Benefits 

(2001$) 

Costs 

(2001$) 

Other Information 

2060-AO81 Renewable Fuels Standard Program [75 FR 

14670] 

Not 

estimated 

Not 

estimated 

EPA utilizes a case study approach to assess texpansion of renewable fuel use, whether cauor by market force. The analytical approach twhat the world would be like, in terms of a raenvironmental factors, if renewable fuel use inrequired by the RFS2 standards. EPA then coreference cases without the RFS2 program. Tillustrative, do not represent the benefits and cEPA’s RIA is available at: http://www.epa.gov/otaq/renewablefuels/420r

2060-AP36 National Emission Standards for Hazardous 

Air Pollutants for Reciprocating Internal Combustion Engines (Diesel) [75 FR 9647] 

Range: 

$709­

$1,920 

million 

$311 

million 

Range: 

$296­

$311 

million 

EPA’s RIA is available at: http://www.epa.gov/ttn/atw/rice/rice_neshap_

119 
RIN Title Benefits 

(2001$) 

Costs 

(2001$) 

Other Information 

2060-AP86 Prevention of Significant Deterioration/Title 

V Greenhouse Gas Tailoring Rule [75 FR 31514] 

Not 

estimated 

Not 

estimated 

EPA estimated that the Tailoring rule would pregulatory relief to state permitting agencies, bthe number of permits required would overwhpermitting authorities, and severely impair the programs. Although EPA estimated savings opermitting authorities and $21 billion for facilestimates are not included in this report for twto count these cost savings, one would have to EPA/DOT greenhouse gas and fuel economy $22.5 billion in costs. In such a case, the incaffects the total net benefits of FY 2010 rulemargued in the Tailoring rule that this level of padministratively impossible. For example, EPthe over 6 million permits needed in the absenlong as 10 years, and indicated even this may other words, these savings estimates, although represent a cost that would be imposed in the EPA’s RIA is available at: http://www.epa.gov/ttnecas1/regdata/RIAs/ria

2060-AQ13 National Emission Standards for Hazardous 

Air Pollutants for Reciprocating Internal Combustion Engines--Existing Stationary Spark Ignition (Gas-Fired) [75 FR 51569] 

$380­

$992 

million 

$202­

$209 

million 

EPA’s RIA is available at: http://www.epa.gov/ttn/atw/rice/fnl_si_rice_ri

2070-AJ55 Lead; Amendment to the Opt-out and 

Recordkeeping Provisions in the Renovation, Repair, and Painting Program [75 FR 24802] 

$785­

$2,953 

million 

$267­

$290 

million 

The RIA is available at: http://www.regulatio

Document ID: EPA-HQ-OPPT-2005-0049

120 
Table A-2: Estimates of Annual Benefits and Costs of Major Final Rules 

October 1, 2000 - September 30, 2009215

(Millions of 2001 Dollars) 

RIN Title Completed Published Benefits 

Department of Agriculture 0579-AB73 Bovine Spongiform Encephalopathy: Minimal Risk Regions and 

Importation of Commodities 

12/29/04 1/4/05 572-639 

0579-AB81 Mexican Hass Avocado Import Program 11/23/04 11/30/04 122-184 

0579-AC01 Bovine Spongiform Encephalopathy; Minimal-Risk Regions and 

Importation of Commodities 

9/14/07 9/18/07 169-340 

0583-AC46 Performance Standards for Ready-To-Eat Meat and Poultry 

Products 

5/30/03 6/6/03 43-152 

0583-AC88 Prohibition of the Use of Specified Risk Materials for Human Food 

and Requirements for the Disposition of Non-Ambulatory Disabled Cattle 

6/29/07 7/13/07 0 

0596-AB77 Special Areas; Roadless Area Conservation -- 36 CFR Part 294 1/5/01 1/12/01 0 

Department of Energy 1904-AA67 Energy Efficiency Standards for Clothes Washers 1/2/01 1/12/01 2,150 

1904-AA76 Energy Efficiency Standards for Water Heaters 1/9/01 1/17/01 680 

1904-AA77 Energy Efficiency Standards for Central Air Conditioners and Heat 

Pumps 

1/17/01 1/22/01 1,233 

215 Based on date of completion of OMB review. 

216 On January 22, 2001, DOE promulgated a regulation that would have raised the energy efficiency of new central air conditioners by 

2002, DOE withdrew the 2001 rule and issued this final rule raising the minimum energy efficiency levels by 20 percent. The latter actlitigation that concluded in 2004, with the court holding that DOE must implement the regulation promulgated on January 22, 2001. On 

published revisions to the Code of Federal Regulations that reflected the energy efficiency increase of 30 percent that will take effect in Thus, in our current 10-year aggregate we have replaced the benefits and costs of the 2002 final rule (originally reported in the 2003 repcosts of the original 2001 final rule. 

121 
RIN Title Completed Published Benefits 

1904-AA78 Energy Efficiency Standards for Residential Furnaces and Boilers 11/6/07 11/19/07 120-182 

1904-AA92 Energy Efficiency Standards for General Service Fluorescent Lamps 

and Incandescent Lamps 

6/26/09 7/14/09 1,111-2,886 

1904-AB08 Energy Efficiency Standards for Electric Distribution Transformers 9/27/07 10/12/07 490-865 

1904-AB59 Energy Efficiency Standards for Commercial Refrigeration 

Equipment 

12/18/08 1/9/09 186-224 

Department of Health and Human Services 0910-AA43 Hazard Analysis and Critical Control Point (HACCP); Procedures 

for the Safe and Sanitary Processing and Importing of Juice 

1/10/01 1/19/01 150 

0910-AB30 Food Labeling: Safe Handling Statements, Labeling of Shell Eggs; 

Refrigeration of Shell Eggs Held for Retail Distribution 

11/29/00 12/5/00 261 

0910-AB66 Food Labeling: Trans Fatty Acids in Nutrition Labeling, Nutrient 

Content Claims, and Health Claims 

7/2/03 7/11/03 230-2,839 

0910-AB76 CGMPs for Blood and Blood Components: Notification of 

Consignees and Transfusion Recipients Receiving Blood and Blood Components at Increased Risk of Transmitting HCV Infection (Lookback) 

8/14/07 8/24/07 28-130 

0910-AB88 Current Good Manufacturing Practice in Manufacturing, Packing, or 

Holding Dietary Ingredients and Dietary Supplements 

5/8/07 6/25/07 10-79 

0910-AC14 Prevention of Salmonella Enteritidis in Shell Eggs 7/2/09 7/9/09 206-8,583 

0910-AC26 Bar Code Label Requirements for Human Drug Products and Blood 

Products 

2/17/04 2/26/04 1,352-7,342 

0910-AC34 Amendments to the Performance Standard for Diagnostic X-Ray 

Systems and Their Major Components 

5/27/05 6/10/05 87-2,549 

0910-AC48 Applications for FDA Approval To Market a New Drug Patent 

Listing Requirements and Application of 30-Month Stays on Approval of Abbreviated New Drug Applications Certifying That a Patent... 

6/9/03 6/18/03 226 

0910-AF19 Declaring Dietary Supplements Containing Ephedrine Alkaloids 

Adulterated Because They Present an Unreasonable Risk of Illness or Injury (Final Rule) 

2/5/04 2/11/04 0-130 

0919-AA01 Patient Safety and Quality Improvement Act of 2005 Rules 11/14/08 11/21/08 69-136 

122 
RIN Title Completed Published Benefits 

0938-AH99 Health Insurance Reform: Standard Unique Health Care Provider 

Identifier -- CMS-0045-F 

1/13/04 1/23/04 214 

0938-AM50 Updates to Electronic Transactions (Version 5010) (CMS-0009-F) 1/9/09 1/16/09 1,114-3,194 6

0938-AN25 Revisions to HIPAA Code Sets (CMS-0013-F) 1/9/09 1/16/09 77-261 0938-AN49 Electronic Prescribing Standards(CMS-0011-F) 11/1/05 11/7/05 196-660 

0938-AN79 Fire Safety Requirements for Long-Term Care Facilities: Sprinkler 

Systems (CMS-3191-F) 

8/6/08 8/13/08 53-56 

0938-AN95 Immunization Standard for Long Term Care Facilities (CMS-3198­

P) 

9/30/05 10/7/05 11,000 

0991-AB08 Standards for Privacy of Individually Identifiable Health 

Information 

12/19/00 12/28/00 2,700 

Department of Homeland Security 1651-AA72 Changes to the Visa Waiver Program To Implement the Electronic 

System for Travel Authorization (ESTA) Program 

5/30/08 6/9/08 20-29 

Department of Housing and Urban Development 2502-AI61 Real Estate Settlement Procedures Act (RESPA); To Simplify and 

Improve the Process of Obtaining Mortgages and Reduce Consumer Costs (FR-5180) 

11/7/08 11/17/08 2,303 

Department of Justice 1117-AA60 Electronic Orders for Schedule I and II Controlled Substances 3/18/05 4/1/05 275 

Department of Labor 1210-AB06 Revision of the Form 5500 Series and Implementing Regulations 8/30/07 11/16/07 0 

1218-AA65 Safety Standards for Steel Erection 1/8/01 1/18/01 167 

1218-AB45 Occupational Exposure to Hexavalent Chromium (Preventing 

Occupational Illness: Chromium) 

2/17/06 2/28/06 35-862 

1218-AB77 Employer Payment for Personal Protective Equipment 11/2/07 11/15/07 40-336 

1219-AB46 Emergency Mine Evacuation 12/5/06 12/8/06 10 

Department of Transportation 

123 
RIN Title Completed Published Benefits 

2120-AH68 Reduced Vertical Separation Minimum in Domestic United States 

Airspace (RVSM) 

10/8/03 10/27/03 (60) 

2120-AI17 Washington, DC, Metropolitan Area Special Flight Rules Area 12/3/08 12/16/08 10-839 

2120-AI23 Transport Airplane Fuel Tank Flammability Reduction 7/9/08 7/21/08 21-66 

2120-AI51 Congestion and Delay Reduction at Chicago O'Hare International 

Airport 

8/18/06 8/29/06 153-164 

2120-AJ01 Part 121 Pilot Age Limit 6/8/09 7/15/09 30-35 

2126-AA23 Hours of Service Drivers; Driver Rest and Sleep for Safe Operation 4/9/03 4/28/03 690 

2126-AA59 New Entrant Safety Assurance Process 11/26/08 12/16/08 472-602 

2126-AA90 Hours of Service of Drivers 8/16/05 8/25/05 19 2126-AB14 Hours of Service of Drivers217 11/13/08 11/19/08 Not 

included 

2127-AG51 Roof Crush Resistance 4/30/09 5/12/09 374-1,160 7

2127-AH09 Upgrade of Head Restraints 11/23/04 12/14/04 111-139 

2127-AI10 Advanced Air Bags: Response to Petitions Federal Motor Vehicle 

Safety Standards; Occupant Crash Protection 

12/5/01 12/18/01 140-1,600 4

2127-AI33 Tire Pressure Monitoring Systems218 5/29/02 6/5/02 Not 

Included 

217 As explained in the 2010 Report, the benefits and costs of this rule are not included in the benefit and cost totals for the 10-year aggr

rule reestablished policies on the maximum time truck drivers were able to drive per day and per week, and the minimum period before restart the count of their weekly driving time. These policies were put in place through previous rulemakings on the same subject, but w

the United States Court of Appeals for the DC Circuit, which held that the Agency had failed to provide an opportunity for public commtheir Regulatory Impact Analysis. Furthermore, the analysis accompanying this interim final rule analyzed the impact of maintaining ththe disruptive impact of their prompt removal, not relative to previous fully-implemented policies. Since OMB already reported and atcosts of the Hours of Service Regulations to other rulemakings, and those policies were maintained by this interim final rule, we felt thaand costs of this rulemaking in the ten-year totals would constitute double counting.

218 Superseded by the 2005 final rule (RIN 2127-AJ23). 

124 
RIN Title Completed Published Benefits 

2127-AI70 Light Truck Average Fuel Economy Standards, Model Years 2005­

2007 

3/31/03 4/7/03 255 

2127-AI91 Rear Center Lap/Shoulder Belt Requirement--Standard 208 11/30/04 12/8/04 188-236 2127-AJ10 Side Impact Protection Upgrade--FMVSS No. 214 8/28/07 9/11/07 736-1,058 42127-AJ23 Tire Pressure Monitoring Systems 3/31/05 4/8/05 1,012-1,316 92127-AJ37 Reduced Stopping Distance Requirements for Truck Tractors 7/16/09 7/27/09 1,250-1,520 

2127-AJ61 Light Truck Average Fuel Economy Standards, Model Year 2008 

and Possibly Beyond 

3/28/06 4/6/06 847-1,035 

2127-AJ77 Electronic Stability Control (ESC) 3/23/07 4/6/07 5,987­

11,282 

2127-AK29 Passenger Car and Light Truck Corporate Average Fuel Economy 

Model Year 2011 

3/24/09 3/30/09 857-1,905 6

2137-AD54 Pipeline Integrity Management in High Consequence Areas (Gas 

Transmission Pipelines) 

11/26/03 12/15/03 154 

2137-AE25 Pipeline Safety: Standards for Increasing the Maximum Allowable 

Operating Pressure for Gas Transmission Pipelines 

10/2/08 10/17/08 85-89 

2130-AB84 Regulatory Relief for Electronically Controlled Pneumatic Brake 

System Implementation 

8/29/08 10/16/08 828-884 

Environmental Protection Agency 2040-AB75 National Primary Drinking Water Regulations, Arsenic, and 

Clarifications to Compliance and New Source Contaminants Monitoring 

1/10/01 1/22/01 140-198 

2040-AD19 National Pollutant Discharge Elimination System Permit Regulation 

and Effluent Guidelines and Standards for Concentrated Animal Feeding Operations (CAFOs) 

12/14/02 2/12/03 204-355 

2040-AD37 National Primary Drinking Water Regulations: Long Term 2 

Enhanced Surface Water Treatment Rule 

6/22/05 1/5/06 262-1,785 

2040-AD38 National Primary Drinking Water Regulations: Stage 2 Disinfection 

Byproducts Rule 

11/23/05 1/4/06 598-1,473 

2040-AD56 Effluent Guidelines and Standards for the Meat and Poultry 

Products Point Source Category (Revisions) 

2/26/04 9/8/04 0-10 

125 
RIN Title Completed Published Benefits 

2040-AD62 Establishing Location, Design, Construction, and Capacity 

Standards for Cooling Water Intake Structures at Large Existing Power Plants (Final Rule) 

2/16/04 7/9/04 72 

2050-AG23 Oil Pollution Prevention; Spill Prevention, Control, and 

Countermeasure (SPCC) Requirements--Amendments 

11/15/06 12/26/06 0 

2050-AG31 Definition of Solid Wastes Revisions 9/17/08 10/30/08 16-285 

2060-AG52 Plywood and Composite Wood Products 2/26/04 7/30/04 152-1,437 

2060-AG63 National Emission Standards for Hazardous Air Pollutants for 

Stationary Reciprocating Internal Combustion Engines 

2/26/04 6/15/04 105-1,070 

2060-AG69 National Emission Standards for Hazardous Air Pollutants: 

Industrial/Commercial/Institutional Boilers and Process Heaters219 

2/26/04 9/13/04 Not 

Included 

2060-AI11 Emissions From Nonroad Spark-Ignition Engines and Standards for 

Recreational Spark-Ignition Engines 

9/13/02 11/8/02 1,330-4,818 

2060-AI34 National Emission Standards for Hazardous Air Pollutants for 

Chemical Recovery Combustion Sources at Kraft, Soda, Sulfite, and Stand-Alone Semichemical Pulp Mills 

12/15/00 1/12/01 293-393 

2060-AI44 Review of the National Ambient Air Quality Standards for 

Particulate Matter 

9/21/06 10/17/06 3,837­

39,879 

2,

2060-AI69 Heavy-Duty Engine Emission Standards and Diesel Fuel Sulfur 

Control Requirements 2007 

12/21/00 1/18/01 13,000 

2060-AJ31 Clean Air Visibility Rule 6/15/05 7/6/05 2,302-8,153 

2060-AJ65 Clean Air Mercury Rule--Electric Utility Steam Generating Units220 3/15/05 5/18/05 Not 

Included 

2060-AK27 Control of Emissions of Air Pollution From Nonroad Diesel 

Engines and Fuel (Final Rule) 

5/7/04 6/29/04 6,853­

59,401 

2060-AK70 Control of Hazardous Air Pollutants From Mobile Sources 2/8/07 2/26/07 2,310-2,983 

219 On June 19, 2007, the United States Court of Appeals for the District of Columbia Circuit vacated and remanded the national emissi

hazardous air pollutants for industrial/commercial/institutional boilers and process heaters. Thus, we exclude this rule from the 10-year reports. (Benefits: $3,752-$38,714 million; Costs: $876 million) 

220 On February 8, 2008, the D.C. Circuit vacated EPA's rule removing power plants from the Clean Air Act list of sources of hazardou

same time, the Court vacated the Clean Air Mercury Rule. Thus, we exclude this rule from the 10-year aggregates. (Benefits: $1-2 mil

126 
RIN Title Completed Published Benefits 

2060-AK74 Clean Air Fine Particle Implementation Rule 3/28/07 4/25/07 18,833­

167,408 

2060-AL76 Clean Air Interstate Rule Formerly Titled: Interstate Air Quality 

Rule221 

3/10/05 5/12/05 11,947­

151,769 

1,

2060-AM06 Control of Emissions from New Locomotives and New Marine 

Diesel Engines Less Than 30 Liters per Cylinder 

2/14/08 5/6/08 4,145­

14,550 

2060-AM34 Control of Emissions From Nonroad Spark-Ignition Engines and 

Equipment 

8/18/08 10/8/08 899-4,762 

2060-AM82 Standards of Performance for Stationary Compression Ignition 6/28/06 7/11/06 679-757 

Internal Combustion Engines 

2060-AN24 Review of the National Ambient Air Quality Standards for Ozone222 3/12/08 3/27/08 Not 

Included 

2060-AN72 Petroleum Refineries--New Source Performance Standards (NSPS)­

-Subpart J 

4/30/08 6/24/08 176-1,669 

2060-AN83 Review of the National Ambient Air Quality Standards for Lead 10/15/08 11/12/08 455-5,203 1

2070-AC83 Lead-Based Paint; Amendments for Renovation, Repair and 

Painting 

3/28/08 4/22/08 657-1,611 

2070-AD38 Lead and Lead Compounds; Lowering of Reporting Thresholds; 

Community Right-to-Know Toxic Chemical Release Reporting 

1/8/01 1/17/01 1,750-6,840 

( ) indicates negative. 221 On July 11, 2008, the DC Circuit Court vacated the rule; however, in response to EPA's petition, the Court on December 23, 2008, r

vacatur, which keeps this rule in effect while EPA conducts further proceedings consistent with the Court's July 11 opinion. On Augus

in the Federal Register the proposed rule titled “Federal Implementation Plans to Reduce Interstate Transport of Fine Particulate Matter 

once finalized, will replace the Clean Air Interstate Rule. 

222 Even though this rule was finalized and has not been overturned by a court, on January 19, 2010, EPA published a proposed reconsi

the primary and secondary ozone standards. Therefore, for the purposes of this Report, we did not consider the latest round of ozone r(Benefits: $1,581-$14,934 million; Costs: $6,676-$7,730 million)

127 
APPENDIX B: THE BENEFITS AND COSTS OF 1999-2000 MAJOR RULES 

Table B-1 lists the rules that were omitted from the ten-year running totals presented in 

Chapter I of our Report to Congress. It consists of the annualized and monetized benefits and 

costs of rules for which OMB concluded review between October 1, 1999 and September 30, 

2000. These rules were included in Chapter I of the 2010 Report as part of the ten-year totals, 

but are not included in the 2011 Report. 

While we limit the Chapter I accounting statement to regulations issued over the previous 

ten years, we have included in this Appendix the benefits and cost estimates provided for the 

economically significant rulemakings that have been covered in previous Reports in order to 

provide transparency. These estimates were first included in the 2002 Report (see table 19 in 

that report). 

128 
 

 

Table B-1: Estimates of Annual Benefits and Costs of Six Major Federal Rules 

October 1, 1999 - September 30, 2000 

(millions of 2001 dollars) 

Agency RIN Title OMB Review 

Completed 

Benefits Costs 

HHS/CMS 0938-AI58 Health Insurance Reform: 

Standards for Electronic 

Transactions 

8/11/00 2,720 700 

DOE/EE 1904-AA75 Energy Conservations 

Standards for Fluorescent 

Lamp Ballasts 

8/31/00 280 70 

EPA/Water 2040-AC82 National Pollutant Discharge 

Elimination System: 

Regulations for Revision of 

the Water Pollution Control 

Program Addressing Storm 

Water Discharges 

10/15/99 700-1,700 900-1,100 

EPA/AR 2060-AE29 Phase 2 Emission Standards 

for New Nonroad Small Spark 

Ignition Handheld Engines At 

or Below 19 Kilowatts and 

Minor Amendments to 

Emission Requirements 

Applicable to Small Spark 

Ignition Engines 

3/1/00 170-890 190-250 

EPA/AR 2060-AI12 Control of Emissions of Air 

Pollution from 2004 and Later 

Model Year Highway HeavyDuty Engines; Revision of 

Light-Duty Truck Definition 

7/28/00 1,840-12,650 482 

EPA/AR 2060-AI23 Control of Air Pollution from 

New Motor Vehicle Emissions 

Standards and Gasoline Sulfur 

Control Requirements 

12/21/99 7,300-13,400 4,000 

129 
 

 

APPENDIX C: INFORMATION ON THE REGULATORY ANALYSES FOR MAJOR RULES BY 

INDEPENDENT AGENCIES
 

Table C-1: Total Number of Rules Promulgated by Independent Agencies 

October 1, 2000 – September 30, 2010 

Agency 200 

1 2002 2003 2004 2005 2006 2007 2008 2009 2010 

Consumer Product Safety 

Commission (CPSC) 0 0 0 0 0 1 0 0 -- --

Federal Communications 

Commission (FCC) 2 4 0 1 4 2 2 4 -- --

Federal Energy Regulatory 

Commission (FERC) 0 0 0 0 0 0 0 1 -- --

Federal Reserve System 0 0 1 1 0 0 0 0 3 7 

Federal Trade Commission (FTC) 0 0 0 0 1 0 0 0 -- 1 

National Credit Union 

Administration (NCUA) 0 0 0 0 0 0 0 0 -- --

Nuclear Regulatory Commission 

(NRC) 1 1 1 1 1 1 1 2 2 1 

Pension Benefit Guaranty 

Corporation (PBGC) 0 0 0 0 0 0 0 0 -- --

Securities and Exchange 

Commission (SEC) 3 3 5 1 5 0 7 4 8 9 

Total 6 8 7 4 11 4 10 11 13 17 

130 
 

 

 

 

Table C-2: Total Number of Rules with Some Information on Benefits or Costs223

 Promulgated by Independent Agencies 

October 1, 2000- September 30, 2010 

Agency 2001 200 

2 2003 2004 2005 2006 2007 2008 2009 2010 

Consumer Product Safety 

Commission (CPSC) -- -- -- -- -- 1 -- -- -- --

Federal Communications 

Commission (FCC) 0 0 0 1 0 0 0 0 -- --

Federal Energy Regulatory 

Commission (FERC) -- -- -- -- -- -- -- 1 -- --

Federal Reserve System -- -- 0 1 -- -- -- -- 0 2 

Federal Trade Commission 

(FTC) -- -- -- -- 0 -- -- -- -- 1 

National Credit Union 

Administration (NCUA) -- -- -- -- -- -- -- -- -- --

Nuclear Regulatory Commission 

(NRC) -- -- -- -- -- -- -- 1 1 --

Pension Benefit Guaranty 

Corporation (PBGC) -- -- -- -- -- -- -- -- -- --

Securities and Exchange 

Commission (SEC) 3 3 5 1 5 -- 7 4 8 9 

Total 3 3 5 3 5 1 7 6 8 11 

223 Table C-2 excludes all fee assessment rules promulgated by independent agencies. FCC promulgated six fee 

assessment rules from 1997 through 2002. NRC promulgated 13 statutorily mandated fee assessment rules from 

1997 through 2010. 

131 
APPENDIX D: THE BENEFITS AND COSTS OF MAJOR RULES BY ADMINISTRATION 

Chapter II presents estimates of the annual benefits and costs of major final regulations 

reviewed by OMB during the first two fiscal years of three Administrations. The totals presented 

in chapter 2 are based on aggregation of estimates presented in previous reports. Table D-1 

includes major final rules OMB completed review between January 20, 1993 to September 30, 

1994 where both benefit and cost estimates were previously reported. Table D-2 includes major 

final rules OMB completed review between January 20, 2001 to September 30, 2002 where both 

benefit and cost estimates were previously reported. Table D-3 includes major final rules OMB 

completed review between January 20, 2009 to September 30, 2009 where both benefit and cost 

estimates were previously reported. The tables and figure presented in chapter II also include the 

benefits and costs of 18 major final rules we report in table 1-5(a). OMB presents more detailed 

explanation of these regulations in several previous documents as noted in the “source” column 

of the tables. 

132 
Table D-1: Estimates of Annual Benefits and Costs of Major Federal Rules 

January 20, 1993 to September 30, 1994224

(millions of 2001 dollars per year) 

Agency RIN Title OMB 

Review 

Completed 

Published Benefits Co

HUD 2502-AE66 Manufactured Housing Construction and Safety 

Standards 

9/21/93 10/21/93 $103 $

DOL 1218-AB25 Occupational Exposure to Asbestos 7/1/94 8/10/94 $92 $4DOT 2105-AE43 Prevention of Alcohol Misuse in the Aviation, 

Transit, Motor Carrier, Railroad, and Pipeline Industries, Common Preamble 

1/25/94 2/15/94 $107 $

DOT 2125-AC85 Controlled Substances and Alcohol Use and 

Testing 

1/25/94 2/15/94 $1,539 $1

EPA 2050-AD89 Land Disposal Restrictions Phase II, Universal 

Treatment Standards and Treatment Standards for Organic Toxicity, Characteristic Wastes, and Newly Listed Wastes 

7/29/94 9/19/94 $26 $240

EPA 2060-AC19 Hazardous Organic NESHAP (HON) for the 

Synthetic Organic Chemical Manufacturing Industry (SOCMI) and Other Processes Subject to the Negotiated Regulation for Equipment Leaks 

2/28/94 4/22/94 $593-$2,628 $295

EPA 2060-AC64 Control of Air Pollution from New Motor 

Vehicles and New Motor Vehicle Engines, Refueling Emission Regulations for Light-Duty Vehicles and Trucks and Heavy-Duty Vehicles 

1/22/94 4/6/94 $167-$760 $

224 Based on date of completion of OMB review. 

133 
Agency RIN Title OMB 

Review 

Completed 

Published Benefits Co

EPA 2060-AC65 Control of Air Pollution from New Motor 

Vehicles and New Motor Vehicle Engines, Regulations Requiring on-Board Diagnostic Systems on 1994 and Later Model Year LightDuty Vehicles 

1/28/93 2/19/93 $702-$3,423 $2

EPA 2060-AD27 Fuel and Fuel Additives: Standards for 

Reformulated Gasoline 

12/15/93 2/16/94 $122-$947 $1,

$1

EPA 2060-AD45 Acid Rain NOX Regulations under Title IV of 

the Clean Air Act Amendments of 1990 

2/25/94 3/22/94 $433-$4,446 $2

EPA 2060-AD54 Determination of Significance for Nonroad 

Sources and Emission Standards for New Nonroad Compression Ignition Engines At or Above 37 Kilowatts, Control of Air Pollution -- SAN 3112 

5/26/94 6/17/94 $647-$6,821 $29

EPA 2060-AD91 Accelerated Phaseout of Ozone Depleting 

Chemicals and Listing and Phaseout of Methyl Bromide 

11/29/93 12/10/93 $1,260­

$3,993 

$1,

$5,791-

$24,885 

$4,

$4,

134 
Table D-2: Estimates of Annual Benefits and Costs of Major Federal Rules 

January 20, 2001 to September 30, 2002225

(millions of 2001 dollars per year) 

Agency RIN Title OMB Published Benefits Co

Review 

Completed 

DOE 1904-AA77 Energy Efficiency Standards for Central Air 1/31/02 5/23/02 Not Included Not In

Conditioners and Heat Pumps 

DOT 2127-AI10 Advanced Air Bags: Response to Petitions 12/5/01 12/18/01 $140-$1,600 $400-

Federal Motor Vehicle Safety Standards; Occupant Crash Protection 

DOT 2127-AI33 Tire Pressure Monitoring Systems 5/29/02 6/5/02 $409-$944 $749-

EPA 2060-AI11 Emissions From Nonroad Spark-Ignition 9/13/02 11/8/02 $1,330­ $1

Engines and Standards for Recreational $4,818 

Spark-Ignition Engines 

$1,879- $1,

$7,362 $3,

225 Based on date of completion of OMB review. 226 On January 22, 2001, DOE promulgated a regulation that would have raised the energy efficiency of new central air conditioners by 

2002, DOE withdrew the 2001 rule and issued this final rule raising the minimum energy efficiency levels by 20 percent. The latter actlitigation that concluded in 2004, with the court holding that DOE must implement the regulation promulgated on January 22, 2001. On 

published revisions to the Code of Federal Regulations that reflected the energy efficiency increase of 30 percent that will take effect in Thus, in our current 10-year aggregate we have replaced the benefits and costs of the 2002 final rule (originally reported in the 2003 repcosts of the original 2001 final rule. 

227 The original table included a typographical error; the low end of the benefits estimate was reported as $1,250 million.

135 
Table D-3: Estimates of Annual Benefits and Costs of Major Federal Rules 

January 20, 2009 to September 30, 2009228

(millions of 2001 dollars per year) 

Agency RIN Title OMB Published Benefits Cos

Review 

Completed 

HHS 0910-AC14 Prevention of Salmonella Enteritidis in Shell 

Eggs 

7/2/09 7/9/09 $206-$8,583 $48-$

DOE 1904-AA92 Energy Efficiency Standards for General Service 

Fluorescent Lamps and Incandescent Lamps 

6/26/09 7/14/09 $1,111­

$2,886 

$192-$

DOT 2120-AJ01 Part 121 Pilot Age Limit 6/8/09 7/15/09 $30-$35 $4 DOT 2127-AG51 Roof Crush Resistance 4/30/09 5/12/09 $374-$1,160 $748-$

DOT 2127-AJ37 Reduced Stopping Distance Requirements for 

Truck Tractors 

7/16/09 7/27/09 $1,250­

$1,520 

$23-$

DOT 2127-AK29 Passenger Car and Light Truck Corporate 

Average Fuel Economy Model Year 2011 

3/24/09 3/30/09 $857-$1,905 $650-$

$3,828- $1,66

$16,089 $4,0

228 Based on date of completion of OMB review. 

136 
 

APPENDIX E: EXECUTIVE ORDER 13563: IMPROVING REGULATION AND REGULATORY
 

REVIEW
 

Executive Order 13563 of January 18, 2011 

Improving Regulation and Regulatory Review 

By the authority vested in me as President by the Constitution and the laws of the United States 

of America, and in order to improve regulation and regulatory review, it is hereby ordered as 

follows: 

Section 1. General Principles of Regulation. (a) Our regulatory system must protect public 

health, welfare, safety, and our environment while promoting economic growth, innovation, 

competitiveness, and job creation. It must be based on the best available science. It must allow 

for public participation and an open exchange of ideas. It must promote predictability and reduce 

uncertainty. It must identify and use the best, most innovative, and least burdensome tools for 

achieving regulatory ends. It must take into account benefits and costs, both quantitative and 

qualitative. It must ensure that regulations are accessible, consistent, written in plain language, 

and easy to understand. It must measure, and seek to improve, the actual results of regulatory 

requirements. 

(b) This order is supplemental to and reaffirms the principles, structures, and definitions 

governing contemporary regulatory review that were established in Executive Order 12866 of 

September 30, 1993. As stated in that Executive Order and to the extent permitted by law, each 

agency must, among other things: (1) propose or adopt a regulation only upon a reasoned 

determination that its benefits justify its costs (recognizing that some benefits and costs are 

difficult to quantify); (2) tailor its regulations to impose the least burden on society, consistent 

with obtaining regulatory objectives, taking into account, among other things, and to the extent 

practicable, the costs of cumulative regulations; (3) select, in choosing among alternative 

regulatory approaches, those approaches that maximize net benefits (including potential 

economic, environmental, public health and safety, and other advantages; distributive impacts; 

and equity); (4) to the extent feasible, specify performance objectives, rather than specifying the 

behavior or manner of compliance that regulated entities must adopt; and (5) identify and assess 

available alternatives to direct regulation, including providing economic incentives to encourage 

the desired behavior, such as user fees or marketable permits, or providing information upon 

which choices can be made by the public. 

(c) In applying these principles, each agency is directed to use the best available techniques 

to quantify anticipated present and future benefits and costs as accurately as possible. Where 

appropriate and permitted by law, each agency may consider (and discuss qualitatively) values 

that are difficult or impossible to quantify, including equity, human dignity, fairness, and 

distributive impacts. 

Sec. 2. Public Participation. (a) Regulations shall be adopted through a process that involves 

public participation. To that end, regulations shall be based, to the extent feasible and consistent 

with law, on the open exchange of information and perspectives among State, local, and tribal 

officials, experts in relevant disciplines, affected stakeholders in the private sector, and the public 

as a whole. 

137 
(b) To promote that open exchange, each agency, consistent with Executive Order 12866 and 

other applicable legal requirements, shall endeavor to provide the public with an opportunity to 

participate in the regulatory process. To the extent feasible and permitted by law, each agency 

shall afford the public a meaningful opportunity to comment through the Internet on any 

proposed regulation, with a comment period that should generally be at least 60 days. To the 

extent feasible and permitted by law, each agency shall also provide, for both proposed and final 

rules, timely online access to the rulemaking docket on Regulations.gov, including relevant 

scientific and technical findings, in an open format that can be easily searched and downloaded. 

For proposed rules, such access shall include, to the extent feasible and permitted by law, an 

opportunity for public comment on all pertinent parts of the rulemaking docket, including 

relevant scientific and technical findings. 

(c) Before issuing a notice of proposed rulemaking, each agency, where feasible and 

appropriate, shall seek the views of those who are likely to be affected, including those who are 

likely to benefit from and those who are potentially subject to such rulemaking. 

Sec. 3. Integration and Innovation. Some sectors and industries face a significant number of 

regulatory requirements, some of which may be redundant, inconsistent, or overlapping. Greater 

coordination across agencies could reduce these requirements, thus reducing costs and 

simplifying and harmonizing rules. In developing regulatory actions and identifying appropriate 

approaches, each agency shall attempt to promote such coordination, simplification, and 

harmonization. Each agency shall also seek to identify, as appropriate, means to achieve 

regulatory goals that are designed to promote innovation. 

Sec. 4. Flexible Approaches. Where relevant, feasible, and consistent with regulatory objectives, 

and to the extent permitted by law, each agency shall identify and consider regulatory 

approaches that reduce burdens and maintain flexibility and freedom of choice for the public. 

These approaches include warnings, appropriate default rules, and disclosure requirements as 

well as provision of information to the public in a form that is clear and intelligible. 

Sec. 5. Science. Consistent with the President’s Memorandum for the Heads of Executive 

Departments and Agencies, ‘‘Scientific Integrity’’ (March 9, 2009), and its implementing 

guidance, each agency shall ensure the objectivity of any scientific and technological 

information and processes used to support the agency’s regulatory actions. 

Sec. 6. Retrospective Analyses of Existing Rules. (a) To facilitate the periodic review of existing 

significant regulations, agencies shall consider how best to promote retrospective analysis of 

rules that may be outmoded, ineffective, insufficient, or excessively burdensome, and to modify, 

streamline, expand, or repeal them in accordance with what has been learned. Such retrospective 

analyses, including supporting data, should be released online whenever possible. 

(b) Within 120 days of the date of this order, each agency shall develop and submit to the 

Office of Information and Regulatory Affairs a preliminary plan, consistent with law and its 

resources and regulatory priorities, under which the agency will periodically review its existing 

significant regulations to determine whether any such regulations should be modified, 

streamlined, expanded, or repealed so as to make the agency’s regulatory program more effective 

or less burdensome in achieving the regulatory objectives. 

138 

on DSK2BSOYB1PROD with NOTICES 

Sec. 7. General Provisions. (a) For purposes of this order, ‘‘agency’’ shall have the meaning set 

forth in section 3(b) of Executive Order 12866. 

(b) Nothing in this order shall be construed to impair or otherwise affect: 

(i) authority granted by law to a department or agency, or the head thereof; or 

(ii) functions of the Director of the Office of Management and Budget relating to budgetary, 

administrative, or legislative proposals. 

(c) This order shall be implemented consistent with applicable law and subject to the 

availability of appropriations. 

(d) This order is not intended to, and does not, create any right or benefit, substantive or 

procedural, enforceable at law or in equity by any party against the United States, its 

departments, agencies, or entities, its officers, employees, or agents, or any other person. 

139 
APPENDIX F: PRESIDENTIAL MEMORANDUM: REGULATORY COMPLIANCE 

Memorandum of January 18, 2011 

Regulatory Compliance 

Memorandum for the Heads of Executive Departments and Agencies 

My Administration is committed to enhancing effectiveness and efficiency in Government. 

Pursuant to the Memorandum on Transparency and Open Government, issued on January 21, 

2009, executive departments and agencies (agencies) have been working steadily to promote 

accountability, encourage collaboration, and provide information to Americans about their 

Government’s activities. 

To that end, much progress has been made toward strengthening our democracy and improving 

how Government operates. In the regulatory area, several agencies, such as the Department of 

Labor and the Environmental Protection Agency, have begun to post online (at ogesdw.dol.gov 

and www.epa-echo.gov), and to make readily accessible to the public, information concerning 

their regulatory compliance and enforcement activities, such as information with respect to 

administrative inspections, examinations, reviews, warnings, citations, and revocations (but 

excluding law enforcement or otherwise sensitive information about ongoing enforcement 

actions). 

Greater disclosure of regulatory compliance information fosters fair and consistent enforcement 

of important regulatory obligations. Such disclosure is a critical step in encouraging the public to 

hold the Government and regulated entities accountable. Sound regulatory enforcement promotes 

the welfare of Americans in many ways, by increasing public safety, improving working 

conditions, and protecting the air we breathe and the water we drink. Consistent regulatory 

enforcement also levels the playing field among regulated entities, ensuring that those that fail to 

comply with the law do not have an unfair advantage over their law-abiding competitors. Greater 

agency disclosure of compliance and enforcement data will provide Americans with information 

they need to make informed decisions. Such disclosure can lead the Government to hold itself 

more accountable, encouraging agencies to identify and address enforcement gaps. 

Accordingly, I direct the following: 

First, agencies with broad regulatory compliance and administrative enforcement 

responsibilities, within 120 days of this memorandum, to the extent feasible and permitted by 

law, shall develop plans to make public information concerning their regulatory compliance and 

enforcement activities accessible, downloadable, and searchable online. In so doing, agencies 

should prioritize making accessible information that is most useful to the general public and 

should consider the use of new technologies to allow the public to have access to real-time data. 

The independent agencies are encouraged to comply with this directive. 

Second, the Federal Chief Information Officer and the Chief Technology Officer shall work with 

appropriate counterparts in each agency to make such data available online in searchable form, 

including on centralized platforms such as data.gov, in a manner that facilitates easy access, 

140 
encourages cross-agency comparisons, and engages the public in new and creative ways of using 

the information. 

Third, the Federal Chief Information Officer and the Chief Technology Officer, in coordination 

with the Director of the Office of Management and Budget (OMB) and their counterparts in each 

agency, shall work to explore how best to generate and share enforcement and compliance 

information across the Government, consistent with law. Such data sharing can assist with 

agencies’ risk-based approaches to enforcement: A lack of compliance in one area by a regulated 

entity may indicate a need for examination and closer attention by another agency. Efforts to 

share data across agencies, where appropriate and permitted by law, may help to promote 

flexible and coordinated enforcement regimes. 

This memorandum is not intended to, and does not, create any right or benefit, substantive or 

procedural, enforceable at law or in equity by any party against the United States, its 

departments, agencies, or entities, its officers, employees, or agents, or any other person. Nothing 

in this memorandum shall be construed to impair or otherwise affect the functions of the Director 

of the Office of Management and Budget relating to budgetary, administrative, or legislative 

proposals. 

The Director of OMB is authorized and directed to publish this memorandum in the Federal 

Register. 

141 
 

 

APPENDIX G: PRESIDENTIAL MEMORANDUM: REGULATORY FLEXIBILITY, SMALL BUSINESS, 

AND JOB CREATION 

Memorandum of January 18, 2011 

Regulatory Flexibility, Small Business, and Job Creation 

Memorandum for the Heads of Executive Departments and Agencies 

Small businesses play an essential role in the American economy; they help to fuel productivity, 

economic growth, and job creation. More than half of all Americans working in the private 

sector either are employed by a small business or own one. During a recent 15-year period, small 

businesses created more than 60 percent of all new jobs in the Nation. 

Although small businesses and new companies provide the foundations for economic growth and 

job creation, they have faced severe challenges as a result of the recession. One consequence has 

been the loss of significant numbers of jobs. 

The Regulatory Flexibility Act (RFA), 5 U.S.C. 601–612, establishes a deep national 

commitment to achieving statutory goals without imposing unnecessary burdens on the public. 

The RFA emphasizes the importance of recognizing ‘‘differences in the scale and resources of 

regulated entities’’ and of considering ‘‘alternative regulatory approaches . . . which minimize 

the significant economic impact of rules on small businesses, small organizations, and small 

governmental jurisdictions.’’ 5 U.S.C. 601 note. 

To promote its central goals, the RFA imposes a series of requirements designed to ensure that 

agencies produce regulatory flexibility analyses that give careful consideration to the effects of 

their regulations on small businesses and explore significant alternatives in order to minimize 

any significant economic impact on small businesses. Among other things, the RFA requires that 

when an agency proposing a rule with such impact is required to provide notice of the proposed 

rule, it must also produce an initial regulatory flexibility analysis that includes discussion of 

significant alternatives. Significant alternatives include the use of performance rather than design 

standards; simplification of compliance and reporting requirements for small businesses; 

establishment of different timetables that take into account the resources of small businesses; and 

exemption from coverage for small businesses. 

Consistent with the goal of open government, the RFA also encourages public participation in 

and transparency about the rulemaking process. Among other things, the statute requires 

agencies proposing rules with a significant economic impact on small businesses to provide an 

opportunity for public comment on any required initial regulatory flexibility analysis, and 

generally requires agencies promulgating final rules with such significant economic impact to 

respond, in a final regulatory flexibility analysis, to comments filed by the Chief Counsel for 

Advocacy of the Small Business Administration. 

My Administration is firmly committed to eliminating excessive and unjustified burdens on 

small businesses, and to ensuring that regulations are designed with careful consideration of their 

effects, including their cumulative effects, on small businesses. Executive Order 12866 of 

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4790 Sfmt 4790 E:\FR\FM\21JAO1.SGM 21JAO1 OB#1.E 

September 30, 1993, as amended, states, ‘‘Each agency shall tailor its regulations to impose the 

least burden on society, including individuals, businesses of differing sizes, and other entities 

(including small communities and governmental entities), consistent with obtaining the 

regulatory objectives, taking into account, among other things, and to the extent practicable, the 

costs of cumulative regulations." 

In the current economic environment, it is especially important for agencies to design regulations 

in a cost-effective manner consistent with the goals of promoting economic growth, innovation, 

competitiveness, and job creation. 

Accordingly, I hereby direct executive departments and agencies and request independent 

agencies, when initiating rulemaking that will have a significant economic impact on a 

substantial number of small entities, to give serious consideration to whether and how it is 

appropriate, consistent with law and regulatory objectives, to reduce regulatory burdens on small 

businesses, through increased flexibility. As the RFA recognizes, such flexibility may take many 

forms, including: 

• extended compliance dates that take into account the resources available to small entities; 

• performance standards rather than design standards; 

• simplification of reporting and compliance requirements (as, for example, through 

streamlined forms and electronic filing options); 

• different requirements for large and small firms; and 

•partial or total exemptions. 

I further direct that whenever an executive agency chooses, for reasons other than legal 

limitations, not to provide such flexibility in a proposed or final rule that is likely to have a 

significant economic impact on a substantial number of small entities, it should explicitly justify 

its decision not to do so in the explanation that accompanies that proposed or final rule. 

Adherence to these requirements is designed to ensure that regulatory actions do not place 

unjustified economic burdens on small business owners and other small entities. If regulations 

are preceded by careful analysis, and subjected to public comment, they are less likely to be 

based on intuition and guesswork and more likely to be justified in light of a clear understanding 

of the likely consequences of alternative courses of action. With that understanding, agencies 

will be in a better position to protect the public while avoiding excessive costs and paperwork. 

This memorandum is not intended to, and does not, create any right or benefit, substantive or 

procedural, enforceable at law or in equity by any party against the United States, its 

departments, agencies, or entities, its officers, employees, or agents, or any other person. Nothing 

in this memorandum shall be construed to impair or otherwise affect the functions of the Director 

of the Office of Management and Budget relating to budgetary, administrative, or legislative 

proposals. among other things, and to the extent practicable, the costs of cumulative 

regulations.’’ 

The Director of the Office of Management and Budget is authorized and directed to publish this 

memorandum in the Federal Register. 

143 
APPENDIX H: PRESIDENTIAL MEMORANDUM: ADMINISTRATIVE FLEXIBILITY 

MEMORANDUM FOR THE HEADS OF EXECUTIVE DEPARTMENTS AND AGENCIES 

SUBJECT: Administrative Flexibility, Lower Costs, and Better Results for State, Local, and 

Tribal Governments 

Over the last 2 years, my Administration has worked with State, local, and tribal 

governments through the Recovery Act and other means to create jobs, build infrastructure, and 

protect critical programs and services in the face of declining revenues. But through smarter 

government we can do even more to improve outcomes and lower costs for the American 

taxpayer. 

Federal program requirements over the past several decades have sometimes been onerous, and 

they have not always contributed to better outcomes. With input from our State, local, and tribal 

partners, we can, consistent with law, reduce unnecessary regulatory and administrative burdens 

and redirect resources to services that are essential to achieving better outcomes at lower cost. 

This is especially urgent at a time when State, local, and tribal governments face large budget 

shortfalls and American taxpayers deserve to know that their funds are being spent wisely. 

On January 18, 2011, I signed Executive Order 13563, which, among other things, calls for 

careful analysis of regulations by executive departments and agencies (agencies), including 

consideration of costs and benefits. Executive Order 13563 also requires retrospective analysis 

of existing significant rules and greater coordination across agencies to simplify and harmonize 

redundant, inconsistent, or overlapping requirements, thus reducing costs. 

Executive Order 13563 applies to regulations involving and affecting State, local, and tribal 

governments. In particular, my Administration has heard from these governments that the array 

of rules and requirements imposed by various Federal programs and agencies may at times 

undermine their efforts to modernize and integrate program delivery. While appropriate data 

collection requirements are important to program accountability, some of these requirements are 

unduly burdensome, may not properly align compliance requirements with outcomes, are not 

synchronized across programs, and fail to give governments and taxpayers meaningful 

information about what works and what needs to be improved or be stopped. I believe that 

working together, State, local, and tribal governments and Federal agencies can distinguish 

between rules and requirements that support important goals -- such as promoting public health 

and welfare; protecting the rights of individuals, organizations, and private businesses; and 

assuring that programs produce intended outcomes -- from rules and requirements that are 

excessively burdensome or may not serve their intended purpose. 

Through this memorandum, I am instructing agencies to work closely with State, local, and tribal 

governments to identify administrative, regulatory, and legislative barriers in Federally funded 

144 
programs that currently prevent States, localities, and tribes, from efficiently using tax dollars to 

achieve the best results for their constituents. 

Section 1. Coordination and Collaboration. To facilitate coordination across Federal agencies 

and State, local, and tribal governments, I direct the Director of the Office of Management and 

Budget (OMB) to lead a process, in consultation with State, local, and tribal governments, and 

agencies, to: (1) provide input to multiple agencies on State-specific, regional, or multistate 

strategies for eliminating unnecessary administrative, regulatory, and legislative burdens; (2) 

enable State, local, and tribal governments to request increased flexibility, as appropriate, from 

multiple agencies simultaneously and receive expeditious and judicious consideration of those 

requests; (3) establish consistent criteria, where appropriate, for evaluating the potential benefits, 

costs, and programmatic effects of relaxing, simplifying, or eliminating administrative, 

regulatory, and legislative requirements; and (4) facilitate consensus among State, local, and 

tribal governments and agencies on matters that require coordinated action. 

The Director of the OMB shall also take the following actions: 

	 Review and where appropriate revise guidance concerning cost principles, burden 

minimizations, and audits for State, local, and tribal governments in order to eliminate, to 

the extent permitted by law, unnecessary, unduly burdensome, duplicative, or lowpriority recordkeeping requirements and effectively tie such requirements to achievement 

of outcomes. 

	 With agencies that administer overlapping programs, collaborate with State, local, and 

tribal governments to standardize, streamline, and reduce reporting and planning 

requirements in accordance with the Paperwork Reduction Act. The OMB should play a 

lead role, with appropriate agencies, in helping to develop efficient, low-cost mechanisms 

for collecting and reporting data that can support multiple programs and agencies. 

	 Facilitate cost-efficient modernization of State, local, and tribal information systems, 

drawing upon the collaboration of the Chief Information Officer in the OMB and the 

Chief Technology Officer in the Office of Science and Technology Policy. 

	 Provide written guidance to agencies on implementation of this memorandum within 60 

days of the date of this memorandum. 

Sec. 2. Streamlining Agency Requirements. Within 180 days of the date of this memorandum, 

agencies shall take the following actions to identify regulatory and administrative requirements 

that can be streamlined, reduced, or eliminated, and to specify where and how increased 

flexibility could be provided to produce the same or better program outcomes at lower cost. 

	 Work with State, local, and tribal governments to identify the best opportunities to realize 

efficiency, promote program integrity, and improve program outcomes, including 

opportunities, consistent with law, that reduce or streamline duplicative paperwork, 

reporting, and regulatory burdens and those that more effectively use Federal resources 

across multiple programs or States. Agencies should invite State, local, and tribal 

governments to identify not only administrative impediments, but also significant 

statutory barriers, to efficiency and effectiveness in program implementation. 

145 
	 Establish preliminary plans to (1) consolidate or streamline processes that State, local, 

and tribal governments must use to obtain increased flexibility to promote the same or 

better outcomes at lower cost; (2) establish transparent criteria or principles for granting 

such increased flexibility, including those that are generally available and those that may 

be granted conditionally; and (3) ensure continued achievement of program results while 

allowing for such increased flexibility. 

	 Identify areas where cross-agency collaboration would further reduce administrative and 

regulatory barriers and improve outcomes. This should include identifying requirements 

for State planning documents that are prerequisites for awards from individual Federal 

programs that could be consolidated into one plan serving a number of agencies and 

programs. 

	 Report the results of these actions to the Director of the OMB. 

Sec. 3. General Provisions. (a) This memorandum shall be implemented consistent with 

applicable law and subject to the availability of any necessary appropriations. 

(b) Nothing in this memorandum shall be construed to impair or otherwise affect the functions 

of the Director of the OMB relating to budgetary, administrative, or legislative proposals. 

(c) This memorandum is not intended to, and does not, create any right or benefit, substantive or 

procedural, enforceable at law or in equity by any party against the United States, its 

departments, agencies, or entities, its officers, employees, or agents, or any other person. 

146 
 

 

 

 

 

 

APPENDIX I: AGENCY CHECKLIST: REGULATORY IMPACT ANALYSIS 

With this document, the Office of Information and Regulatory Affairs is providing a 

checklist to assist agencies in producing regulatory impact analyses (RIAs), as required for 

economically significant rules by Executive Order 12866 and OMB Circular A-4. 

Nothing herein alters, adds to, or reformulates existing requirements in any way. Moreover, this 

checklist is limited to the requirements of Executive Order 12866 (available at: 

http://www.reginfo.gov/public/jsp/Utilities/EO_12866.pdf) and Circular A-4 (available at: 

http://www.whitehouse.gov/OMB/circulars/a004/a-4.pdf); it does not address requirements 

imposed by other authorities, such as the National Environmental Policy Act, the Regulatory 

Flexibility Act, the Unfunded Mandates Reform Act, the Paperwork Reduction Act, and various 

Executive Orders that require analysis. Executive Order 12866 and Circular A-4, as well as 

those other authorities, should be consulted for further information. 

Checklist for Regulatory Impact Analysis: 

	 Does the RIA include a reasonably detailed description of the need for the regulatory 

action?

 229,230 

	 Does the RIA include an explanation of how the regulatory action will meet that need?

231 

	 Does the RIA use an appropriate baseline (i.e., best assessment of how the world would look 

in the absence of the proposed action)?232 

	 Is the information in the RIA based on the best reasonably obtainable scientific, technical, 

and economic information and is it presented in an accurate, clear, complete, and 

unbiased manner?

233 

229 Required under Executive Order 12866, Section 6(a)(3)(B)(i): “The text of the draft regulatory action, together 

with a reasonably detailed description of the need for the regulatory action and an explanation of how the regulatory 

action will meet that need.” 

230 Circular A-4 states: “If the regulation is designed to correct a significant market failure, you should describe the 

failure both qualitatively and (where feasible) quantitatively.” (P. 4)

231 See note 1 above. 232 Circular A-4 states: “You need to measure the benefits and costs of a rule against a baseline. This baseline should 

be the best assessment of the way the world would look absent the proposed action... In some cases, substantial 

portions of a rule may simply restate statutory requirements that would be self-implementing, even in the absence of 

the regulatory action. In these cases, you should use a pre-statute baseline.” (P. 15-16) 233 Circular A-4 states: “Because of its influential nature and its special role in the rulemaking process, it is 

appropriate to set minimum quality standards for regulatory analysis. You should provide documentation that the 

analysis is based on the best reasonably obtainable scientific, technical, and economic information available... you 

should assure compliance with the Information Quality Guidelines for your agency and OMB’s Guidelines for 

Ensuring and Maximizing the Quality, Objectivity, Utility, and Integrity of Information Disseminated by Federal 

Agencies...” (P. 17). The IQ Guidelines (paragraph V.3.a) define objectivity to include “whether disseminated 

information is being presented in an accurate, clear, complete, and unbiased manner.” 

http://www.whitehouse.gov/omb/assets/omb/fedreg/reproducible2.pdf 

147 
 

 

 

 

 

 

	 Are the data, sources, and methods used in the RIA provided to the public on the Internet so 

that a qualified person can reproduce the analysis?234 

	 To the extent feasible, does the RIA quantify and monetize the anticipated benefits from the 

regulatory action?235,

236 

	 To the extent feasible, does the RIA quantify and monetize the anticipated costs?

237 

	 Does the RIA explain and support a reasoned determination that the benefits of the 

intended regulation justify its costs (recognizing that some benefits and costs are difficult 

to quantify)?238 

	 Does the RIA assess the potentially effective and reasonably feasible alternatives?

239 

o	 Does the RIA assess the benefits and costs of different regulatory provisions separately if 

the rule includes a number of distinct provisions?240 

234 Circular A-4 states: “A good analysis should be transparent and your results must be reproducible. You should 

clearly set out the basic assumptions, methods, and data underlying the analysis and discuss the uncertainties 

associated with the estimates. A qualified third party reading the analysis should be able to understand the basic 

elements of your analysis and the way in which you developed your estimates. To provide greater access to your 

analysis, you should generally post it, with all the supporting documents, on the internet so the public can review the 

findings.” (P. 17). OMB IQ Guidelines (paragraph V.3.b.ii) further states: “If an agency is responsible for 

disseminating influential scientific, financial, or statistical information, agency guidelines shall include a high 

degree of transparency about data and methods to facilitate the reproducibility of such information by qualified third 

parties.” 

235 Required under Executive Order 12866, Section 6(a)(3)(C)(i): “An assessment, including the underlying analysis, 

of benefits anticipated from the regulatory action (such as, but not limited to, the promotion of the efficient 

functioning of the economy and private markets, the enhancement of health and safety, the protection of the natural 

environment, and the elimination or reduction of discrimination or bias) together with, to the extent feasible, a 

quantification of those benefits.” 

236 Circular A-4 states: “You should monetize quantitative estimates whenever possible. Use sound and defensible 

values or procedures to monetize benefits and costs, and ensure that key analytical assumptions are defensible. If 

monetization is impossible, explain why and present all available quantitative information.” (P. 19). Circular A-4 

also offers a discussion of appropriate methods for monetizing benefits that might not easily be turned into monetary 

equivalents.

237 Required under Executive Order 12866, Section 6(a)(3)(C)(ii): “An assessment, including the underlying 

analysis, of costs anticipated from the regulatory action (such as, but not limited to, the direct cost both to the 

government in administering the regulation and to businesses and others in complying with the regulation, and any 

adverse effects on the efficient functioning of the economy, private markets (including productivity, employment, 

and competitiveness), health, safety, and the natural environment), together with, to the extent feasible, a 

quantification of those costs;” See also note 6 above. 

238 Executive Order 12866, Section 1(b)(6) states that to the extent permitted by law, “[e]ach agency shall assess 

both the costs and the benefits of the intended regulation and, recognizing that some costs and benefits are difficult 

to quantify, propose or adopt a regulation only upon a reasoned determination that the benefits of the intended 

regulation justify its costs.” As Executive Order 12866 recognizes, a statute may require an agency to proceed with 

a regulation even if the benefits do not justify the costs; in such a case, the agency’s analysis may not show any such 

justification.

239 Required under Executive Order 12866, Section 6(a)(3)(C)(iii): “An assessment, including the underlying 

analysis, of costs and benefits of potentially effective and reasonably feasible alternatives to the planned regulation, 

identified by the agencies or the public (including improving the current regulation and reasonably viable 

nonregulatory actions)...” 

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o	 Does the RIA assess at least one alternative that is less stringent and at least one 

alternative that is more stringent?241
 

o	 Does the RIA consider setting different requirements for large and small firms?242 

	 Does the preferred option have the highest net benefits (including potential economic, 

environmental, public health and safety, and other advantages; distributive impacts; and 

equity), unless a statute requires a different approach? 243 

	 Does the RIA include an explanation of why the planned regulatory action is preferable to 

the identified potential alternatives?244 

	 Does the RIA use appropriate discount rates for benefits and costs that are expected to occur 

in the future?245 

	 Does the RIA include, if and where relevant, an appropriate uncertainty analysis?

246 

240 Circular A-4 states: “You should analyze the benefits and costs of different regulatory provisions separately when 

a rule includes a number of distinct provisions.” (P. 17) 241 Circular A-4 states: “you generally should analyze at least three options: the preferred option; a more stringent 

option that achieves additional benefits (and presumably costs more) beyond those realized by the preferred option; 

and a less stringent option that costs less (and presumably generates fewer benefits) than the preferred option.” (P. 

16)

242 Circular A-4 states: “You should consider setting different requirements for large and small firms, basing the 

requirements on estimated differences in the expected costs of compliance or in the expected benefits. The balance 

of benefits and costs can shift depending on the size of the firms being regulated. Small firms may find it more 

costly to comply with regulation, especially if there are large fixed costs required for regulatory compliance. On the 

other hand, it is not efficient to place a heavier burden on one segment of a regulated industry solely because it can 

better afford the higher cost. This has the potential to load costs on the most productive firms, costs that are 

disproportionate to the damages they create. You should also remember that a rule with a significant impact on a 

substantial number of small entities will trigger the requirements set forth in the Regulatory Flexibility Act. (5 

U.S.C. 603(c), 604).” (P. 8) 243 Executive Order 12866, Section 1(a) states: “agencies should select those approaches that maximize net benefits 

(including potential economic, environmental, public health and safety, and other advantages; distributive impacts; 

and equity) unless a statute requires another regulatory approach.” 

244 Required under Executive Order 12866, Section 6(a)(3)(C)(iii): “An assessment, including the underlying 

analysis, of costs and benefits of potentially effective and reasonably feasible alternatives to the planned regulation, 

identified by the agencies or the public (including improving the current regulation and reasonably viable 

nonregulatory actions), and an explanation why the planned regulatory action is preferable to the identified potential 

alternatives.” 

245 Circular A-4 contains a detailed discussion, generally calling for discount rates of 7 percent and 3 percent for 

both benefits and costs. It states: “Benefits and costs do not always take place in the same time period. When they do 

not, it is incorrect simply to add all of the expected net benefits or costs without taking account of when they 

actually occur. If benefits or costs are delayed or otherwise separated in time from each other, the difference in 

timing should be reflected in your analysis.... For regulatory analysis, you should provide estimates of net benefits 

using both 3 percent and 7 percent.... If your rule will have important intergenerational benefits or costs you might 

consider a further sensitivity analysis using a lower but positive discount rate in addition to calculating net benefits 

using discount rates of 3 and 7 percent.” (PP. 31, 34, 36)

246 Circular A-4 provides a detailed discussion. Among other things, it states: “Examples of quantitative analysis, 

broadly defined, would include formal estimates of the probabilities of environmental damage to soil or water, the 

possible loss of habitat, or risks to endangered species as well as probabilities of harm to human health and safety. 

There are also uncertainties associated with estimates of economic benefits and costs, such as the cost savings 

associated with increased energy efficiency. Thus, your analysis should include two fundamental components: a 

149 
 

 

 

 

	 Does the RIA include, if and where relevant, a separate description of distributive impacts 

and equity?

247 

o	 Does the RIA provide a description/accounting of transfer payments?248 

o	 Does the RIA analyze relevant effects on disadvantaged or vulnerable populations (e.g., 

disabled or poor)?249 

	 Does the analysis include a clear, plain-language executive summary, including an 

accounting statement that summarizes the benefit and cost estimates for the regulatory 

action under consideration, including the qualitative and non-monetized benefits and 

costs?250 

quantitative analysis characterizing the probabilities of the relevant outcomes and an assignment of economic value 

to the projected outcomes.” (P. 40). Circular A-4 also states: “You should clearly set out the basic assumptions, 

methods, and data underlying the analysis and discuss the uncertainties associated with the estimates.” (P. 17) 

247 Executive Order 12866, Section 1(b)(5) states; “When an agency determines that a regulation is the best available 

method of achieving the regulatory objective, it shall design its regulations in the most cost-effective manner to 

achieve the regulatory objective. In doing so, each agency shall consider incentives for innovation, consistency, 

predictability, the costs of enforcement and compliance (to the government, regulated entities, and the public), 

flexibility, distributive impacts, and equity” (emphasis added). 

Circular A-4 states: “The term ‘distributional effect’ refers to the impact of a regulatory action across the population 

and economy, divided up in various ways (e.g., income groups, race, sex, industrial sector, geography)... Your 

regulatory analysis should provide a separate description of distributional effects (i.e., how both benefits and costs 

are distributed among sub-populations of particular concern) so that decision makers can properly consider them 

along with the effects on economic efficiency... Where distributive effects are thought to be important, the effects of 

various regulatory alternatives should be described quantitatively to the extent possible, including the magnitude, 

likelihood, and severity of impacts on particular groups.” (P. 14)

248 Circular A-4 states: “Distinguishing between real costs and transfer payments is an important, but sometimes 

difficult, problem in cost estimation. . . . Transfer payments are monetary payments from one group to another that 

do not affect total resources available to society. . . . You should not include transfers in the estimates of the benefits 

and costs of a regulation. Instead, address them in a separate discussion of the regulation's distributional effects.” (P. 

14) 

249 Circular A-4 states: “Your regulatory analysis should provide a separate description of distributional effects (i.e., 

how both benefits and costs are distributed among sub-populations of particular concern) so that decision makers 

can properly consider them along with the effects on economic efficiency. Executive Order 12866 authorizes this 

approach. Where distributive effects are thought to be important, the effects of various regulatory alternatives should 

be described quantitatively to the extent possible, including the magnitude, likelihood, and severity of impacts on 

particular groups.” (P. 14)

250 Circular A-4 states: “Your analysis should also have an executive summary, including a standardized accounting 

statement.” (P. 3). OMB recommends that: “Regulatory analysis should be made as transparent as possible by a 

prominent and accessible executive summary—written in a “plain language” manner designed to be understandable 

to the public—that outlines the central judgments that support regulations, including the key findings of the analysis 

(such as central assumptions and uncertainties)...If an agency has analyzed the costs and benefits of regulatory 

alternatives to the planned action (as is required for economically significant regulatory actions), the summary 

should include such information.” See 2010 Report to Congress on the Benefits and Costs of Federal Regulations 

and Unfunded Mandates on State, Local, and Tribal Entities (2010), p. 51, available at: 

http://www.whitehouse.gov/sites/default/files/omb/legislative/reports/2010_Benefit_Cost_Report.pdf 

150 
 

 

 

 Does the analysis include a clear and transparent table presenting (to the extent feasible) 

anticipated benefits and costs (quantitative and qualitative)?251 

251 Circular A-4 states: “You need to provide an accounting statement with tables reporting benefit and cost 

estimates for each major final rule for your agency.” (P. 44). Circular A-4 includes an example of a format for 

agency consideration. OMB recommends “that agencies should clearly and prominently present, in the preamble and 

in the executive summary of the regulatory impact analysis, one or more tables summarizing the assessment of costs 

and benefits required under Executive Order 12866 Section 6(a)(3)(C)(i)-(iii). The tables should provide a 

transparent statement of both quantitative and qualitative benefits and costs of the proposed or planned action as 

well as of reasonable alternatives. The tables should include all relevant information that can be quantified and 

monetized, along with relevant information that can be described only in qualitative terms. It will often be useful to 

accompany a simple, clear table of aggregated costs and benefits with a separate table offering disaggregated 

figures, showing the components of the aggregate figures. To the extent feasible in light of the nature of the issue 

and the relevant data, all benefits and costs should be quantified and monetized. To communicate any uncertainties, 

we recommend that the table should offer a range of values, in addition to best estimates, and it should clearly 

indicate impacts that cannot be quantified or monetized. If nonquantifiable variables are involved, they should be 

clearly identified. Agencies should attempt, to the extent feasible, not merely to identify such variables but also to 

signify their importance.” See 2010 Report to Congress on the Benefits and Costs of Federal Regulations and 

Unfunded Mandates on State, Local, and Tribal Entities, p. 51, available at: 

http://www.whitehouse.gov/sites/default/files/omb/legislative/reports/2010_Benefit_Cost_Report.pdf 

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APPENDIX J: INFORMATION QUALITY AND PEER REVIEW 

A. Links for Agency Information Quality Correspondence 

Links to Agencies that Received Correction Requests in FY 2010: 

Department of Agriculture: 

http://www.ocio.usda.gov/qi_guide 

Department of Commerce: 

http://ocio.os.doc.gov/ITPolicyandPrograms/Information_Quality/index.htm 

Department of Health and Human Services: 

http://aspe.hhs.gov/infoquality/requests.shtml 

Department of the Interior, Fish and Wildlife Service: 

http://www.fws.gov/informationquality 

Department of the Interior, US Geological Survey: 

http://www.usgs.gov/info_qual 

National Aeronautics and Space Administration: 

http://www.sti.nasa.gov/qualinfo.html 

Department of Housing and Urban Development: 

http://www.hud.gov/offices/adm/grants/qualityinfo/qualityinfo.cfm 

Department of Labor: 

http://www.dol.gov/cio/programs/InfoGuidelines/IQCR.htm 

Environmental Protection Agency: 

http://epa.gov/quality/informationguidelines/iqg-list.html 

Federal Communications Commission: 

http://www.fcc.gov/omd/dataquality/welcome.html 

Federal Reserve Board: 

http://www.federalreserve.gov/iq_correction.htm 

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Links to All Agencies’ IQ Correspondence Web Pages: 

Access Board: 

http://www.access-board.gov/about/policies/infoquality.htm 

Chemical Safety and Hazard Investigation Board: 

http://www.csb.gov/UserFiles/file/legal/FinalDataQualityGuidelines.pdf 

Commodity Futures Trading Commission: 

http://www.cftc.gov/About/CFTCReports/bulletinpeerreview.html 

Consumer Product Safety Commission: 

http://www.cpsc.gov/library/correction/correction.html 

Corporation for National and Community Service: 

http://www.nationalservice.gov/home/site_information/quality.asp 

Defense Nuclear Facilities Safety Board: 

http://www.dnfsb.gov/about/information_quality.php 

Department of Agriculture: 

http://www.ocio.usda.gov/qi_guide 

Department of Agriculture, Forest Service: 

http://www.fs.fed.us/qoi 

Department of Commerce: 

http://ocio.os.doc.gov/ITPolicyandPrograms/Information_Quality/index.htm 

Department of Defense: 

http://www.defenselink.mil/pubs/dodiqguidelines.html 

Department of Defense, Army Corps of Engineers: 

http://www.usace.army.mil/ceci/iqa/pages/mission.aspx 

Department of Education: 

http://www.ed.gov/policy/gen/guid/infoqualguide.html 

Department of Energy: 

http://www.cio.energy.gov/infoquality.htm 

Department of Health and Human Services: 

http://aspe.hhs.gov/infoquality/requests.shtml 

Department of Housing and Urban Development: 

http://www.hud.gov/offices/adm/grants/qualityinfo/qualityinfo.cfm 

Department of Homeland Security: 

http://www.dhs.gov/xabout/compliance/ 

Department of Justice: 

http://www.usdoj.gov/iqpr/iqpr_disclaimer.html 

Department of Labor: 

http://www.dol.gov/cio/programs/InfoGuidelines/IQCR.htm 

Department of State: 

http://www.state.gov/misc/49492.htm 

Department of the Interior: 

http://www.doi.gov/ocio/iq 

Department of the Interior, Bureau of Land Management: 

http://www.blm.gov/wo/st/en/National_Page/Notices_used_in_Footer/data_quality.html 

Department of the Interior, Fish and Wildlife Service: 

http://www.fws.gov/informationquality 

153 
 

 

 

 

Department of the Interior, National Park Service: 

http://www.nps.gov/policy/infoqualcorrect.htm 

Department of Transportation, Surface Transportation Board: 

http://www.stb.dot.gov/stb/InformationQualityGuidelines.htm 

Department of Transportation: 

http://docketsinfo.dot.gov/Dataquality.cfm 

Department of Veteran Affairs: 

http://www.rms.oit.va.gov/Information_Quality.asp 

Environmental Protection Agency: 

http://epa.gov/quality/informationguidelines/iqg-list.html 

Equal Employment Opportunity Commission: 

http://www.eeoc.gov/eeoc/plan/informationquality/index.cfm 

Farm Credit Administration: 

http://www.fca.gov/FCA-Web/fca%20new%20site/home/info_quality.html 

Federal Communications Commission: 

http://www.fcc.gov/omd/dataquality/welcome.html 

Federal Deposit Insurance Corporation: 

http://www.fdic.gov/about/policies/#information 

Federal Energy Regulatory Commission: 

http://www.ferc.gov/help/filing-guide/file-correct.asp 

Federal Maritime Commission: 

http://www.fmc.gov/about/information_quality_guideline_details.aspx 

Federal Reserve Board: 

http://www.federalreserve.gov/iq_correction.htm 

Federal Trade Commission: 

http://www.ftc.gov/ogc/sec515/index.htm 

General Services Administration: 

http://www.gsa.gov/portal/content/104725 

Institute of Museum and Library Services: 

http://www.imls.gov/about/guidelines.shtm 

Internal Revenue Service: 

http://www.irs.gov/irs/article/0,,id=131585,00.html 

Merit Systems Protection Board: 

http://www.mspb.gov/netsearch/viewdocs.aspx?docnumber=251846&version=252119&appli 

cation=ACROBAT 

National Aeronautics and Space Administration: 

http://www.sti.nasa.gov/qualinfo.html 

National Archives: 

http://www.archives.gov/about/info-qual/requests/index.html 

National Credit Union Administration: 

http://www.ncua.gov/resources/RegulationsOpinionsLaws/ProposedRegulations.aspx 

National Endowment for the Arts: 

http://www.arts.gov/about/infoquality.html 

National Endowment for the Humanities: 

http://www.neh.gov/whoweare/dissemination.html 

154 
 

 

 

 

 

 

National Labor Relations Board: 

http://www.nlrb.gov/about_us/public_notices/information_on_quality_guidelines.aspx 

National Science Foundation: 

http://www.nsf.gov/policies/infoqual.jsp 

National Transportation Safety Board: 

http://www.ntsb.gov/info/quality.htm 

Nuclear Regulatory Commission: 

http://www.nrc.gov/public-involve/info-quality.html 

Nuclear Waste Technical Review Board: 

http://www.nwtrb.gov/plans/plans.html 

Occupational Safety & Health Review Commission: 

http://www.oshrc.gov/infoquality/infoquality.html 

Office of Federal Housing Enterprise Oversight: 

http://www.fhfa.gov/Default.aspx?Page=56 

Office of Government Ethics: 

http://www.usoge.gov/management/info_quality.aspx 

Office of Management and Budget: 

http://www.whitehouse.gov/omb/inforeg/info_quality/information_quality.html 

Office of Personnel Management: 

http://www.opm.gov/policy/webpolicy/index.asp 

Office of Special Counsel: 

http://www.osc.gov/InfoQuality.htm 

Overseas Private Investment Corporation: 

http://www.opic.gov/publications/quality-guidelines 

Peace Corps: 

http://www.peacecorps.gov/index.cfm?shell=pchq.policies.docs 

Pension Benefit Guaranty Corporation: 

http://www.pbgc.gov/res/other-guidance/information-quality-guidelines.html 

Small Business Administration: 

http://www.sba.gov/information/index.html 

Social Security Administration: 

http://www.ssa.gov/515/requests.htm 

Tennessee Valley Authority: 

http://www.tva.gov/infoquality/ 

US International Trade Commission: 

www.usitc.gov/documents/infoqualgdl.pdf 

USAID: 

http://www.usaid.gov/policy/info_quality/ 

155 
 

 

 

 

 

B. Links for Agency Peer Review Agendas 

Cabinet-Level Departments 

Department of Agriculture: 

http://www.ocio.usda.gov/qi_guide/qoi_officer_lst.html 

http://www.ocio.usda.gov/qi_guide/scientific_research.html 

Agricultural Research Service: 

http://www.ars.usda.gov//docs.htm?docid=19203&dropcache=true&mode=preview 

Animal and Plant Health Inspection Service: 

http://www.aphis.usda.gov/peer_review/peer_review_agenda.shtml 

Economic Research Service: 

http://www.ers.usda.gov/AboutERS/peerreview.htm 

Food Safety Inspection Service: 

http://www.fsis.usda.gov/Information_Quality/Peer_Review/index.asp 

Forest Service: 

http://www.fs.fed.us/qoi/peerreview.shtml 

Grain Inspection, Packers, and Stockyard Inspection Administration: 

http://www.gipsa.usda.gov/GIPSA/webapp?area=home&subject=iq&topic=pr 

Office of the Chief Economist: 

http://www.usda.gov/oce/peer_review 

Department of Commerce: 

http://ocio.os.doc.gov/ITPolicyandPrograms/Information_Quality/index.htm 

National Oceanic and Atmospheric Administration: 

http://www.cio.noaa.gov/Policy_Programs/prplans/PRsummaries.html 

Department of Defense: 

http://www.defenselink.mil/pubs/dodiqguidelines.html 

Department of Education: 

http://www.ed.gov/policy/gen/guid/iq/peerreview.html 

Department of Energy: 

http://cio.energy.gov/infoquality.htm 

Department of Health and Human Services: 

http://aspe.hhs.gov/infoquality/peer.shtml 

Center for Disease Control: 

http://www2a.cdc.gov/od/peer/peer.asp 

Food and Drug Administration: 

http://www.fda.gov/ScienceResearch/SpecialTopics/PeerReviewofScientificInformationandAssessments/default.htm 

National Toxicology Program: 

http://fmp-8.cit.nih.gov/sif/agenda.php 

Office of Public Health and Science: 

http://aspe.hhs.gov/infoquality/guidelines/ophspeer.html 

Department of Homeland Security: 

http://www.dhs.gov/xabout/compliance/editorial_0633.shtm 

Department of Housing and Urban Development: 

http://www.huduser.org/about/pdr_peer_review.html 

Department of the Interior: 

156 
 

 

http://www.doi.gov/ocio/iq_1.html 

Bureau of Land Management: 

http://www.blm.gov/wo/st/en/National_Page/Notices_used_in_Footer/data_quality.html 

Bureau of Reclamation: 

http://www.usbr.gov/main/qoi/peeragenda.html 

Fish and Wildlife Service: 

http://www.fws.gov/informationquality/peer_review/index.html 

Bureau of Ocean Energy Management, Regulation and Enforcement: 

http://www.boemre.gov/qualityinfo/PeerReviewAgenda.htm 

National Park Service: 

http://www.nps.gov/policy/peerreview.htm 

Office of Surface Mining: 

http://www.osmre.gov/guidance/osm_info_quality.shtm 

US Geological Society: 

http://www.usgs.gov/peer_review 

Department of Justice: 

http://www.usdoj.gov/iqpr/iqpr_disclaimer.html 

Department of Labor: 

http://www.dol.gov/asp/peer-review/index.htm 

Employee Benefits Security Administration: 

http://www.dol.gov/ebsa/regs/peerreview.html 

Occupational Safety and Health Administration: 

http://www.osha.gov/dsg/peer_review/peer_agenda.html 

Mine Safety and Health Administration 

http://www.msha.gov/REGS/PEERReview/PEERreview.asp 

Department of State: 

http://www.state.gov/misc/49492.htm 

Department of Transportation: 

http://www.dot.gov/peerreview/ 

Department of Veterans Affairs: 

http://www.rms.oit.va.gov/Peer_Review.asp 

Other Agencies 

Consumer Product Safety Commission: 

http://www.cpsc.gov/library/peer.html 

Environmental Protection Agency: 

http://cfpub.epa.gov/si/si_public_pr_agenda.cfm 

Federal Communications Commission: 

http://www.fcc.gov/omd/dataquality/peer-agenda.html 

Federal Energy Regulatory Commission: 

http://www.ferc.gov/help/filing-guide/file-correct.asp 

Federal Trade Commission: 

http://www.ftc.gov/ogc/sec515/ 

National Aeronautics and Space Administration: 

157 
http://www.sti.nasa.gov/peer_review.html 

Nuclear Regulatory Commission: 

http://www.nrc.gov/public-involve/info-quality/peer-review.html 

Office of Management and Budget: 

http://www.whitehouse.gov/omb/inforeg/info_quality/information_quality.html 

Small Business Administration: 

http://www.sba.gov/content/sba-information-quality-peer-review-agenda 

Tennessee Valley Authority: 

http://www.tva.gov/infoquality 

158 
 

C. Agencies that Do Not Produce or Sponsor Information Subject to the Bulletin 

See website links in section A of this Appendix. 

Agency for International Development 

Corporation for National and Community Service 

Council on Environmental Quality 

Defense Nuclear Facilities Safety Board 

Department of the Treasury 

Equal Employment Opportunity Commission 

Farm Credit Association 

Federal Maritime Commission 

Federal Reserve 

General Services Administration 

Institute of Museum and Library Services 

International Trade Commission 

Merit Systems Protection Board 

National Archives 

National Credit Union Administration 

National Endowment for the Arts 

National Endowment for the Humanities 

National Labor Relations Board 

National Science Foundation 

Nuclear Waste Technical Review Board 

Office of Federal Housing Enterprise Oversight 

Office of Government Ethics 

Office of Personnel Management 

Overseas Private Investment Corporation 

Patent and Trade Office 

Peace Corps 

Pension Benefit Guaranty Corporation 

Railroad Board 

Securities and Exchange Commission 

Selective Services System 

Social Security Administration 

Surface Transportation Board 

US Occupational Safety and Health Review Commission 

159 
 

APPENDIX K: RESPONSE TO PEER REVIEWS AND PUBLIC COMMENTS 

We would like to express our sincere thanks and appreciation for the extremely helpful 

peer review and public comments that we received on the draft 2011 report. In particular, we 

would like to thank our invited peer reviewers, Joseph Aldy (Harvard Kennedy School), Michael 

Greenstone (Massachusetts Institute of Technology), and Christine Jolls (Yale Law School). We 

are grateful for the time and effort they devoted to providing us with useful comments. We have 

made numerous changes in response to these comments. 

We have read all comments carefully; we summarize here only a few of the major 

comments received and our responses. Full texts of the comments are available at OMB’s 

website at http://whitehouse.gov/omb/inforeg_reports_congress/. 

Peer reviewer Aldy comments that it is important to remind readers that public policy is 

intended to make society better off and that benefit-cost analysis can help to promote that goal. 

We have provided this reminder. Specifically, we emphasize that “careful consideration of costs 

and benefits is best understood as a way of ensuring that regulations will improve social welfare, 

above all by informing design and development of various options so as to identify opportunities 

for both minimizing the costs of achieving social goals (cost-effectiveness) and maximizing net 

social benefits (efficiency).” 

Peer reviewers Aldy and Greenstone both support the use of retrospective analysis, with 

Aldy suggesting that such analyses address not only the “top line” benefits and costs, but also the 

net social benefits of specific components of the rules. Greenstone proposes a number of 

measures designed to implement retrospective analysis in a way that produces credible results. 

These include systematic reporting of ex post benefits and costs; advance announcements of 

retrospective review and the date the results will be published; the funding of contractors or 

academics to conduct retrospective analysis; and the public posting of data. Greenstone also 

suggests designing the implementation of new regulations to allow for credible evaluations, 

including the use of randomized control trials or quasi-experimental approaches. Jolls similarly 

encourages agency experimentation to examine the effects of regulation and suggests that 

agencies can play a valuable role in experimentally implementing alternatives, to the extent 

permitted by law, and then studying their consequences. 

We believe that these comments are extremely useful. To create a process of 

retrospective analysis, and a continuing culture of evaluation, OMB recommends that agencies 

use the best available techniques to assess the consequences of regulation, both as part of 

retrospective review and in the initial design of rules. As Greenstone and Jolls suggest and as we 

have noted, an especially promising approach involves randomized controlled trials, in which 

regulatory initiatives are used in some domains but not in similarly situated others, thus allowing 

a careful analysis of their effects.252 Of course there are constraints – involving law, resources, 

and feasibility – in using randomized controlled trials in the regulatory context, but in some 

cases, they may be both appropriate and highly useful. 

252 See Greenstone (2009) and, in other contexts, Banerjee and Duflo (2011). 

160 
 

 

 

 

OIRA is now working closely with agencies to improve evaluation and to create a culture 

of retrospective analysis. The preliminary plans for retrospective review, released under 

Executive Order 13563, demonstrate that these improvements are well under way. The 

preliminary plans offer relevant discussion. For example, DHS states that it will “build in 

retrospective review at the earliest stages of regulatory development.”253 Its plan calls for the 

Department’s component agencies to “incorporate a discussion of retrospective analysis goals 

into their rulemaking project planning” in order “to ensure that the component considers 

retrospective analysis through the lifespan of the regulation.”254 The Department of Labor states 

that it “is contemplating how to incorporate the use of experimental designs to determine the 

impact of various regulations.” 255 The Department of Interior states that it “will consider” the 

use of “experimental or quasi-experimental designs, including randomized controlled trials.”256 

Similarly, the Department of Treasury states that it will work to “develop and incorporate 

experimental designs into retrospective analysis, when appropriate.”257 

Such experimentation might, where feasible and consistent with law, also take the form 

of advance testing of regulatory alternatives, perhaps through pilot projects or randomized 

controlled trials, followed by study of their consequences.258 Pilot projects and randomized 

experiments – such as DOT’s National Highway Traffic Safety Administration’s distracted 

driving demonstration programs discussed in the report – are likely to provide valuable 

information about what interventions are likely to be most useful. 

With regard to retrospective analysis, Jolls also points out that, in some circumstances, 

altering an existing rule may be inefficient even if a retrospective analysis provides evidence that 

the rule should not have been adopted in the first place. Once private-sector actors have made 

long-term investments and adjustments in response to a rule, the disruption and uncertainty 

associated with a change may simply be too large. OMB agrees with this point and has noted it 

in chapter 1. 

Both Aldy and Greenstone support the involvement of external experts to undertake ex 

post analysis of the benefits and costs of Federal regulations, with Greenstone suggesting a 

“Regulatory Review Board” that would have the power to request evaluations of existing 

regulations, to judge the quality of evidence with respect to a regulation, and possibly to fund an 

evaluation from its own resources. OMB appreciates these suggestions and acknowledges the 

importance of objective evaluation; it will take the suggestions into consideration in the future. 

253 Department of Homeland Security, Preliminary Plan for Retrospective Review of Existing Regulations, p. 27, 

available at http://www.whitehouse.gov/files/documents/2011-regulatory-actionplans/DepartmentofHomelandSecurityPreliminaryRegulatoryReformPlan.pdf.

254 Id. 255 Department of Labor, Preliminary Plan for Retrospective Analysis of Existing Rules, p., 20, available at 

http://www.whitehouse.gov/files/documents/2011-regulatory-actionplans/DepartmentofLaborPreliminaryRegulatoryReformPlan.pdf.

256 Department of the Interior, Preliminary Plan for Retrospective Regulatory review, p. 19, available at 

http://www.whitehouse.gov/files/documents/2011-regulatory-actionplans/DepartmentoftheInteriorPreliminaryRegulatoryReformPlan.pdf

257 Department of the Treasury, Preliminary Plan for Retrospective Analysis of Existing Rules, p. 19, available at 

http://www.whitehouse.gov/files/documents/2011-regulatory-actionplans/DepartmentoftheTreasuryPreliminaryRegulatoryReformPlan.pdf. 258 See, e.g., Banerjee and Duflo (2011). 

161 
 

Aldy asks why 2001 dollars were used for all tables and figures. Circular A-4 currently 

states: “Please report all monetized effects in 2001 dollars. You should convert dollars expressed 

in different years to 2001 dollars using the GDP deflator.” In the alternative, Aldy suggested 

providing a deflator in a footnote to allow the reader to convert to 2010 dollars. We have done 

so (footnote 2). 

Aldy suggests making explicit that the definition of the value of a statistical life is a 

population-based measure. We have accepted his suggestion and included a footnote that reads 

“the average person in a population of 50,000 may value a reduction of mortality risk of 1/50,000 

at $150. The value for reducing the risk of 1 statistical (as opposed to known or identified) 

fatality in this population would be $7.5 million, representing the aggregation of the willingness 

to pay values held by everyone in the population.” 

Aldy also points out that given the lumpy timing of investments to comply with 

regulations, benefit-cost analysis should present not simply a future year’s benefits and costs 

(e.g., in 2020) but also the stream of annual benefits and costs. While OMB acknowledges the 

value of this suggestion, this report generally relies on agency estimates in monetizing benefits 

and costs and is limited by the data provided; OMB continues to encourage agencies to provide 

the stream of annual benefits and costs in their RIAs. 

Jolls points out that the statement that “U.S competition law prohibits collusion among 

employers but allows collective bargaining by workers” appears misplaced given that it seems 

somewhat unnatural to suggest a tension between prohibiting companies from price-fixing, on 

the one hand, and permitting individuals to engage in collective action through unions, on the 

other. She also suggests revising the statement that “economic regulation . . . results in higher 

prices in the product market” given that economists often assume that economic regulation will 

lower product prices below what they would be in the absence of economic regulation. The 

report has been edited to reflect both concerns. 

Jolls also suggests that Figure 2-1 would be more illuminating if it contained a second bar 

for each administration showing the number of major rules promulgated during the 

Administration. OMB notes that the number of major rules is stated on page 20 of this report. 

Greenstone recommends that OIRA develop a checklist to determine the credibility of 

evidence in regulatory impact analyses in order to make clearer the quality of evidence that 

underlies the case for the regulation. He also suggests the importance of clearly distinguishing 

between private and social benefits. He urges that agencies and OIRA undertake a systematic 

study and offer resulting judgments about when consumer biases are likely to be a problem that 

requires regulation (e.g., in the context of energy efficiency). 

OIRA appreciates these suggestions, and will consider them going forward. Several 

revisions have been made in this report, including a new discussion of social and private benefits 

in chapter 2, to reflect Greenstone’s points. We recommend continued exploration of these 

issues, with particular attention to the circumstances in which a lack of information and potential 

biases on the part of consumers are likely to support regulatory interventions and to justify 

162 
counting private savings as benefits. We also recommend that agencies should clearly separate 

social and private savings in their Regulatory Impact Analyses, and that when private savings are 

included, agencies should give careful attention to the conceptual and empirical issues. 

Greenstone states that a complete analysis of the benefits of air pollution regulations 

requires an estimate of the loss of life expectancy associated with premature deaths. He suggests 

that the resulting information should be reported as a regular matter in estimating the benefit of 

reductions in air pollution. While this report generally relies on agency estimates in monetizing 

benefits and costs, OMB continues to encourage agencies (consistent with Circular A-4) to report 

results with multiple measures of effectiveness. 

Aldy suggests that cost-effectiveness should be evaluated across agencies and that the 

report could present estimates for all rules with a primary or significant mortality risk reduction 

benefit. We agree that such an evaluation would be valuable and we will consider the suggestion 

in the future. Jolls notes that Table 2-5 presents the net cost per life saved for twelve recent 

health and safety rules for which calculation is possible; she suggests also including a description 

of whether monetizing morbidity costs is significantly less controversial or difficult than 

monetizing mortality costs. We acknowledge the point but in light of existing information, the 

only consistent metric that we are able to use across health and safety rules is “lives saved.” 

In line with the report’s emphasis on transparency and disclosure, OMB continues to 

support Circular A-4’s statement that “agencies should use their web site to provide OMB and 

the public with the underlying data, including mortality and morbidity data, the age distribution 

of the affected populations, and the severity and duration of disease conditions and trauma, so 

that OMB and the public can construct apples-to-apples comparisons between rulemakings that 

employ different measures.” Increasing transparency would allow the public to draw meaningful 

comparisons between rulemakings that employ different effectiveness measures. 

The Mercatus Center at George Mason University submitted comments supporting 

OMB’s suggestion that agencies undertake retrospective analysis and encourages independent 

organizations to perform the analyses. OMB agrees and has made edits to further emphasize 

these points. The Mercatus Center also states that the research on “happiness” should be 

approached with a great deal of caution and suggests that growth and employment may be much 

better indicators of human well-being. OMB agrees – as stated in the report – that the precise 

relationship between GDP growth and subjective well-being has yet to be settled, and presents 

the literature as nascent and exploratory. 

In response to OMB’s request last year for suggestions about regulatory changes that 

might increase employment, innovation, and competitiveness, the HR Policy Association has 

resubmitted its comments focusing on FLSA regulations to the Department of Labor, and has 

copied OMB. OMB appreciates the time and thought put into this proposal and will continue to 

consider the recommended reforms. 

163 
 

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Adler, Matthew and Posner, Eric A. “Happiness Research and Cost-Benefit Analysis.” Journal 

of Legal Studies, 2008, 37(S2), S253-S292. 

Balleisen, Edward and Moss, David. Government and Markets: Toward a New Theory of 

Regulation, 2009, Cambridge, U.K.: The Tobin Project. 

Banerjee, Abhijit V. and Esther Duflo. “The Experimental Approach to Development 

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Baum, Charles L. “The Effect of State Maternity Leave Legislation and the 1993 Family and 

Medical Leave Act on Employment and Wages.” Labour Economics, 2003, 10(5), 573-596. 

Becker, Randy and Henderson, Vernon. “Effects of Air Quality Regulation on Polluting 

Industries.” Journal of Political Economy, 2000, 108(2), 379-421. 

Berman, Eli and Bui, Linda T.M. “Environmental Regulation and Labor Demand: Evidence from 

the South Coast Air Basin.” Journal of Public Economics, 2001, 79: 265-295. 

Berman, Eli and Bui, Linda T. M. “Environmental Regulation and Productivity: Evidence from 

Oil Refineries.” The Review of Economics and Statistics, 2001, 83(3), 498-510. 

Bertrand, Marianne and Kramarz, Francis. “Does Entry Regulation Hinder Job Creation? 

Evidence from the French Retail Industry.” The Quarterly Journal of Economics, 2002, 117(4), 

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Biswas-Diener, R., Vitterso, J., & Diener, E. (2010). The Danish effect: Beginning to explore 

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Blanchard, Olivier and Giavazzi, Francesco. “Macroeconomic Effects of Regulation and 

Deregulation in Goods and Labor Markets.” The Quarterly Journal of Economics, 2003, 118(3), 

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Blanchflower, David G. and Oswald, Andrew J. “Well-Being Over Time in Britain and the 

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Blanchflower, David G. and Oswald, Andrew J. “International Happiness,” 2010. National 

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Bloom, David; Canning, David and Sevilla, Jaypee. “The Effect of Health on Economic Growth: 

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Carpenter, Dan. “Confidence Games: How Does Regulation Constitute Markets?” in Edward 

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Chay, Kenneth and Greenstone, Michael. “Does Air Quality Matter? Evidence from the Housing 

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Deaton, Angus. “Income, Health, and Well-Being Around the World: Evidence from the Gallup 

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Djankov, Simeon; La Porta, Rafael; Lopez-de-Silanes, Florencio and Shleifer, Andrei. “The 

Regulation of Entry,” Quarterly Journal of Economics, 2002, 107:1: 1-37 

Dynan, Karen E. and Ravina, Enrichetta. “Increasing Income Inequality, External Habits, and 

Happiness.” American Economic Review, 2007, 97(2): 226-231. 

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