This paper critically reviews the draft of the Office of Management and Budget’s fifth report on the benefits and costs of federal regulation. The draft report is a significant improvement over previous reports in terms of the responsiveness to the congressional mandate, and the information it provides on recent improvements at OMB. We think the changes that OMB has made to increase transparency and efficiency are significant. These include making greater use of the Internet to communicate information, sending letters to agencies encouraging specific regulations with net benefits, and providing information on turnaround time for reviewing rules.
There is still room for substantial improvement, however. We offer six recommendations––one for Congress and five for OMB––that we believe would be helpful in holding regulators and lawmakers 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 Congress require agencies to comply with OMB’s economic guidelines. We also suggest that OMB improve its report by including a scorecard on the extent to which regulatory analyses comply with their guidelines; providing more information on regulations aimed at reducing terrorism; and making greater use of its inhouse expertise to improve estimates of benefits and costs for individual regulations.