New bill would allow cost-benefit analyses of rules

Legislators could order cost-benefit analyses of agencies' proposed rules under a bill recently introduced in the Senate.

The "Truth in Regulating Act of 1999," introduced by Rep. Fred Thompson, R-Tenn., would allow Congress to request that the General Accounting Office review any rule deemed economically significant as it is being developed. Such rules are defined as those that cost at least $100 million or has some other significant effect on the economy, as outlined in President Clinton's Executive Order 12866, "Regulatory Planning and Review."

Under the bill, GAO's analysis must be completed within 180 days of a committee's request. The analysis would include potential costs and benefits of the rule, alternative solutions that would be more cost-effective, a breakdown of how the rule would affect state and local governments and a summary of how GAO's findings differ from agency analyses.

According to Thompson, agencies do not use decision-making tools like cost-benefit analysis or risk assessment enough. "These important tools often are viewed simply as options-options that aren't used as much or as well as they should be," he said.

The bill would establish a three-year pilot program to test the new regulatory review process.

Currently, under the Congressional Review Act, GAO provides committees with a brief checklist stating whether agencies followed certain procedures, such as those outlined in the Regulatory Flexibility Act, when drafting a proposed rule. The reports do not provide in-depth information about the potential costs and benefits of the rule.