Lawmakers and the public would get the opportunity to review cost-benefit analyses of proposed regulations before they are enacted under the Truth in Regulating Act of 2000, which the Senate passed Tuesday.
Regulatory cost-benefit analysis is already required for federal laws as a whole. By law, the Office of Management and Budget must produce an annual report comparing the costs and benefits of federal regulations. But there is no law requiring that individual regulations go through a rigorous cost-benefit analysis.
"This legislation will give Congress and the public the ability to see how government works, or doesn't," said Sen. Fred Thompson, R-Tenn., chairman of the Governmental Affairs Committee. Thompson's committee approved the legislation last November.
The act (S. 1198) would establish a three-year pilot program. Under the pilot, if an agency proposes a new law or rule, lawmakers with jurisdiction over that agency can request that the General Accounting Office review the rule, if it could have a major economic impact on those it regulates. GAO then has 180 days to write a report discussing the pros and cons of the rule.
GAO's analysis would include benefits and consequences that cannot be quantified in monetary terms. "This will make the regulatory process more clear, more accountable and more democratic," said Thompson.
Two similar bills are circulating in the House, H.R. 3669 and H.R. 3531.
Last year, OMB reported that regulatory benefits outweigh their costs as a whole. But a separate study by a think tank concluded that most individual regulations aren't cost-effective.
While the General Accounting Office is always available to Congress for analysis of government programs, currently there's no oversight of proposed regulations, a Governmental Affairs Committee spokesman said. "Oversight comes after the regulation is in play. This would allow GAO to look at it before that happens," she said.
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