Budget Office Reports On Regulations

A 2005 air pollution rule is a major reason why benefits from federal regulations continue to outpace costs, says a draft White House Office of Management & Budget report released on April 13.

Federal regulations issued between 1996 and 2005 generate total annual benefits estimated to be between $94 billion and $449 billion, the OMB report says. Costs of those rules, which range from health and education standards to transportation and labor regulations, are estimated to be between $37 billion and $44 billion yearly, the draft report says. The document is the 2006 installment of an analysis that OMB by law must prepare each year for Congress.??

The ratio of benefits to costs is higher for the 1996???2005 decade than it was between 1995 and 2004 primarily because of a single rule reducing air pollution from power plants, the draft report says.

That EPA regulation requires 28 eastern states and the District of Columbia to control sulfur dioxide and nitrogen oxide, two key pollutants released by coal-fired power plants. According to the draft report, that rule will generate from $50 billion to $60 billion a year worth of health benefits by reducing public exposure to fine particulate matter. This rule will cost about $1.8 billion annually to implement.

Most of the costs and benefits of federal regulation are due to EPA rules, the draft report adds. During the 1996???2005 decade, the annual benefits of the agency's rules are calculated to be between $59 billion and $394 billion, while estimated costs ranged from $24 billion to $26 billion.

The draft report is available at www.whitehouse.gov/omb/inforeg/reports/2006_draft_cost_benefit_report.pdf.