Congress debates the purpose and promise of regulations, but rarely debates how to manage the cost of new rules. Agencies propose standards and businesses absorb compliance costs that rarely shrink. Economist Ike Brannon urges policymakers to prioritize cost-benefit analysis at the front end.
“I don’t see a lot of evidence that we’re thinking about regulatory approaches from a cost-benefit perspective,” he says. “I want a regime that looks critically and honestly at proposed regulations.”
Brannon has spent decades in government and the policy world. He is senior fellow with the Jack Kemp Foundation, and he co-leads the Prosperity Caucus. His earlier stops included the Cato Institute, the Joint Economic Committee, Senate Finance Committee, the Republican Policy Committee, House Energy and Commerce Committee, the Office of Management and Budget, and the U.S.
Regulatory politics, he says, still eclipses analysis. “What the Trump administration is doing is exercising its own agenda,” he says, but adds, “I don’t see any evidence that we’re thinking systematically about what regulations we should have and shouldn’t have.”
In his view, the deeper problem is structural. Brannon especially wants a more pronounced role for OIRA, or the Office of Information and Regulatory Affairs. OIRA is a division within the U.S. Office of Management and Budget (OMB), that reviews regulations proposed by federal agencies, oversees government information collection, and ensures that rules align with presidential policies and broader economic and legal standards.
“What I want is just a rational OIRA that has enough power to stop agencies from doing bad things,” he says. “I’m not convinced that this OIRA is going to have this power.”
He believes policymakers who dream of big savings from repealing old rules may be wasting their time. “Once the regulation has been issued, and everybody has had to comply, repealing that regulation might not really buy anybody much,” he says. “This idea that there are all kinds of savings to be made by repealing antique regulations is a bunch of nonsense.”
Incremental fixes still matter, especially on paperwork. “There are some marginal savings to be had,” he says, citing work with policy veterans on steps that “save businesses a lot of compliance costs.” Yet, according to Brannon, priorities should “focus on a regulatory regime that looks critically and honestly at proposed regulations,” he says. “Going back and fixing existing regulations, I don’t think there’s a lot of savings to be had.”
Gaming the math alarms him most, he says, and he points to efforts to tilt cost-benefit methods and to inflate the “value of a statistical life” for certain groups. “It clearly puts a thumb on the scale,” he says. “The most outrageous thing is that the Consumer Product Safety Commission decides they’re going to use a new value of a statistical life, and if it’s for a child, it’s going to be twice as much. It takes all the research that’s been done and just arbitrarily decides to double it.” That change greenlights expansive rulemaking.
Durable reform requires an independent scorekeeper with real stature. He envisions a new entity. “Give it its own building and populate it with economists respected on both sides of the aisle who have expertise in regulatory analysis.”
Human nature and Hill culture still complicate the task. “Ultimately, if something is remotely political, it becomes a political decision rather than a straight economic decision,” he says of his OIRA experience. He recalls a minor rule that ballooned into a West Wing fight. “It told me that even in a Republican administration, it’s really difficult to rein in the government.”
Coalition-building has proved harder in regulation than in taxes or retirement policy, according to Brannon. “It’s tough to work on this issue and not choose a team,” he says. He and colleagues tried to convene bipartisan lunches. “We could get a bunch of Republicans in the room. We could get some Democrats in the room. It was like cats and dogs.”
