This paper critically reviews the draft of the Office of Management and Budget’s eighth report on the benefits and costs of federal regulation. The draft report offers two modest improvements over previous reports. First, it discusses the importance of information quality in regulatory analyses and the agencies’ implementation of the Information Quality Act. Second, it compares ex ante benefit-cost estimates with ex post benefit-cost estimates in some detail.
While there has been progress, there is room for significant improvement. We offer seven recommendations—six for OMB and one for Congress—that would help hold lawmakers and regulators more accountable for the regulations they produce. Our recommendations focus on getting the regulatory agencies to produce better analysis, making that analysis more transparent and readily available, and making the regulatory process itself more transparent.
We recommend that OMB:
- examine the extent to which regulations maximize net benefits;
- include a scorecard showing the number and percentage of final regulations that pass a benefit-cost test based on factors that can be quantified and monetized;
- request that all agencies report on the extent to which they comply with OMB’s guidelines for conducting regulatory analysis;
- provide guidelines for assessing the effectiveness of antiterrorism regulations;
- include a discussion of the costs and benefits of antitrust activities in its annual report; and
- facilitate the use of information markets to increase overall economic efficiency and to inform regulatory decision making.
We also recommend that Congress require all agencies to comply with OMB’s guidelines for conducting regulatory analysis.