The Administrative State and Cost Benefit Analysis: Who Really Benefits?
In an executive order signed last week, President Obama ordered all government agencies to conduct a cost-benefit analysis before issuing a new regulation and to develop any future regulations in the least-burdensome manner possible and with specific performance goals. Obama also instructed federal agencies to seek and assess all available alternatives to direct regulation before issuing a new rule.
In an opinion piece published in The Wall Street Journal, Obama singled out the FDA as an example of an agency whose regulations have caused confusion.
Cost benefit analysis must benefit the government too, you know. Obama is not saying “Be nice to industry for a change.” He is saying “Get done in your agencies what I cannot get done in Congress.” Cost benefit analyses are for FDA too; least burdensome to whom? The least-burdensome would be to reduce the burden of existing regulations — that is not proposed at all. Specific performance goals will not be “performance goals for FDA” but “performance goals for the OUTCOME,” the burden of which will always be carried by the industry and imposed by the government.
Do the math on who benefits and who it costs. FDA and President Obama are not looking for ways to benefit the industry — just their opinion on what policies the drug or device or food industries should advance.
Assessing all available alternatives to direct regulation means: no notice and comment, no administrative procedures— just guidance. Why? Because it is more expensive for FDA (for instance) to issue a rule and it takes too long. FDA can issue guidance, implement it like a rule and dare you to sue them tomorrow. This is the triumph of the Administrative State.
- Benjamin L. England, Founder