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Trump White House quietly issues report vindicating Obama regulations

It was easy to miss, but OMB demolishes the GOP’s deregulatory claims.

Donald Trump at a campaign rally in Miami, Florida.
Off by this much.
Johnny Louis/FilmMagic via Getty

President Donald Trump’s administration has been on a deregulatory bender, particularly when it comes to environmental regulations. As of January, the New York Times counted 67 environmental rules on the chopping block under Trump.

This is not one of Trump’s idiosyncrasies, though. His administration is more ham-handed and flagrant about it, but the antipathy it expresses toward federal regulation falls firmly within the GOP mainstream. Republicans have been complaining about “burdensome” and “job-killing” regulations for so long that their opposition to any particular health, safety, or environmental regulation is now just taken for granted.

For instance, why would the Environmental Protection Agency close a program investigating the effects of toxins on children’s health? Is there some evidence that the money is wasted or poorly spent? Why would the EPA allow more unregulated disposal of toxic coal ash? Don’t people in coal regions deserve clean air and water? Is there any reason to think coal ash is currently well-regulated?

These questions barely come up anymore. Republicans oppose regulations because they are regulations; it’s become reflexive, both for the party and for the media the covers them.

WASHINGTON, DC - MARCH 28: US President Donald Trump makes remarks prior to signing an Energy Independence Executive Order at the Environmental Protection Agency (EPA) Headquarters on March 28, 2017 in Washington, DC. The order reverses the Obama-era clim
One of Trump’s many executive order ceremonies, reversing Obama climate regulations.
Ron Sachs-Pool/Getty Images

As it happens, though, we know something about the costs and benefits of federal regulations. In fact, Trump’s own administration, specifically the (nonpartisan, at least for now) White House Office of Management and Budget (OMB), just released its annual report on that very subject. (Hat tip to E&E.)

The report was released late on a Friday, with Congress out of session and multiple Trump scandals dominating the headlines. A cynical observer might conclude that the administration wanted the report to go unnoticed.

Why might that be? Well, in a nutshell, it shows that the GOP is wrong about regulations as a general matter and wrong about Obama’s regulations specifically. Those regulations had benefits far in excess of their costs, and they had no discernible effect on jobs or economic growth.

OMB, more like OMG, amirite?

OMB gathered data and analysis on “major” federal regulations (those with $100 million or more in economic impact) between 2006 and 2016, a period that includes all of Obama’s administration, stopping just short of Trump’s. The final tally, reported in 2001 dollars:

  • Aggregate benefits: $219 to $695 billion
  • Aggregate costs: $59 to $88 billion

By even the most conservative estimate, the benefits of Obama’s regulations wildly outweighed the costs.

According to OMB — and to the federal agencies upon whose data OMB mostly relied — the core of the Trumpian case against Obama regulations, arguably the organizing principle of Trump’s administration, is false.

Environmental regulations have the highest costs and highest benefits

At least since Reagan, conservatives have had particular and growing hostility toward environmental regulations. This has proven a source of great anguish to (older) environmentalists, who lament that such regulations used to be bipartisan.

But the right-wing turn against environmental rules is no great mystery. The OMB report reveals the core reason: Of all the regulations passed from 2006 to 2016, it is environmental regulations, specifically air pollution regulations, that had both the highest costs and the highest benefits.

omb OMB

EPA rules, OMB writes, “account for over 80 percent of the monetized benefits and over 70 percent of the monetized costs” of federal regulation during this period.

For example, new fuel economy standards for medium- and heavy-duty engines had (in 2001 dollars) between $6.7 billion and $9.7 billion in benefits. But they cost industry $0.8 billion to $1.1 billion.

The MATS rule, aimed at reducing toxic emissions from power plants, had between $33 billion and $90 billion in benefits (in 2007 dollars, for some reason), but it cost industry $9.6 billion.

In short, air quality rules secure enormous health benefits for the American public, but they also ask a great deal of industry.

To frame the same point another way: Air quality regulations serve as a downward redistribution of wealth, out of the pockets of industrialists and into the pockets of ordinary Americans, particularly the poor and vulnerable Americans (African Americans and Hispanics in particular) who tend to live closest to pollution sources. They shift costs, from the much higher health and social costs of pollution remediation to the comparatively smaller costs of pollution abatement.

And therein lies the source of industry and GOP rage toward EPA. It’s why EPA delayed and delayed air rules under Bush. It’s why the GOP Congress worked so furiously to block air rules under Obama. And it’s why EPA is weakening or repealing air rules as fast as possible under Trump.

The GOP is opposed to downward redistribution of wealth. If one policy goal has unified the right above all else, it is upward redistribution. Even as its base drifts further into a fog of xenophobic, reactionary ressentiment, its moneyed interests and policy leaders remain laser-focused on reducing taxes and regulatory burdens on the wealthy. Upward redistribution is what unites GOP health care policy, tax policy, financial sector policy, and environmental policy.

That is why Republicans hate EPA and its rules: They are a burden to industry, but worse, they are a burden to industry that is very obviously worth it. Industry makes a small sacrifice, public health improves, and economic growth continues apace. EPA rules are a living demonstration of the good that government can do.

The “job-killing” thing is also nonsense

Okay, environmental regulations produce enormous health and social benefits, but don’t they kill jobs?

Not really. This is another myth that conservatives have simply repeated with such tenacity that no one bothers to scrutinize it anymore.

The OMB report has a long section looking into the employment effects of environmental regulations, assessing several studies and literature reviews. Mostly it is devoted to explaining how complex and vexed such analysis is. Jobs may be eliminated in one place/industry and created in another. Jobs may be eliminated in the short term but a larger number created in the long term. Effects on employment must be disentangled from contemporaneous social and economic trends, many of which have much larger effects. And so on.

The conclusion — which is in keeping with the broader literature, as I described in this post — is that there may be local and temporary employment effects from environmental regulations, either positive or negative, but at the aggregate national level, such regulations simply aren’t a significant factor in employment. Their effects are lost amid the noise of demographic shifts and macroeconomic drivers.

They don’t “kill jobs.” From the perspective of the overall economy, they don’t do much of anything to jobs, other than shift them from certain regions/industries to others. As it happens, those shifts are often unfavorable to GOP constituencies, but that’s not a license to, you know, lie about them.

There is no coherent policy justification for Trump’s deregulatory frenzy

If the GOP wants to explicitly align itself behind the interests of particular polluting businesses and against the broader public interest, well, it can. If it doesn’t think the costs to industry of reducing pollution are worth much larger benefits to public health, it can say so. If it wants to transfer wealth back from the public to industrialists by reversing all of Obama’s rules, that is its right as the party in power.

But GOP lawmakers shouldn’t be allowed to simply burp up the words “burdensome” and “job-killing” and move on. The OMB finds no evidence that federal regulations have any noticeable impact on aggregate national employment or economic growth. There is evidence that they produce public benefits well in excess of their costs.

If EPA head Scott Pruitt wants to say that defending children from toxics or rural communities from coal ash pollution is burdensome, he ought to offer some numbers, or evidence, or ... something. Goofy homilies are not enough. (His latest claim is that the Bible recommends the deregulatory agenda.)

Believing in the inherent costliness and ineffectiveness of federal regulation is not a religious matter. It’s not an article of faith. It’s an empirical assertion, an argument, and the available evidence indicates that it is incorrect.

It is certainly not a belief to which journalists owe any particular deference.

Until Trump’s administration makes a case that its own OMB and agencies are wrong — not just by a little, but by tens of billions of dollars — the presumption of every journalist and politico in Washington should be that there is no coherent policy rationale for Trump’s deregulatory agenda.

It is, like his health, tax, and infrastructure initiatives, simply the polar opposite of populism: the targeted transfer of wealth to the already wealthy, at the public’s expense.

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