Opinion: Report undermines Republican orthodoxy on regulations

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In this Feb. 6, 2018 photo, dawn breaks over the Capitol in Washington. (AP Photo/J. Scott Applewhite)

Anyone familiar with the political debates surrounding government regulations (I know, fascinating stuff) is aware that Republicans hate them. Either they are an unnecessary burden on industry, job-killers or both. There are certainly regulations on the books that can be burdensome (e.g. some complex building requirements), but overall many of the regulations crafted by the government yield substantial benefits for the citizens of the country.

This isn’t just my view, but the conclusion of a report by the White House Office of Management and Budget (OMB) on major government regulations ($100+ million economic impact) between 2006 and 2016. The report found that the total quantized benefits of regulations during this time period was between $219 to $696 billion, while the total economic cost was between $59 and $88 billion. Any way you look at it, federal regulations were in the green.

Perhaps the most interesting aspect of this study was not that regulations were saving money overall, but who specifically was receiving the benefits of these savings. Take, for example, the 2015 Mercury and Air Toxics Standards (MATS) rule intended to limit toxic emissions from power plants. The standards cost the relevant industries about $9.6 billion, but yielded an estimated $33-$90 billion. So why is the range of savings so large and to whom are they going?

The answers are very closely related. When it comes to this particular set of air quality rules, the savings are primarily directed toward health benefits for American citizens, especially the more vulnerable citizens who live close to pollution sources. They are what Americans might otherwise have spent on health and social costs if the same levels of pollution had persisted. The exact monetary benefits are hard to pinpoint (ergo the $60 billion spread). The fact remains that even the most conservative estimate of the savings is three times the most ambitious estimate of the cost to industry.

As if the savings themselves weren’t evidence of the tremendous good government regulations can do, consider that the savings are going for the most part to those who most need it most. The industry owners who are raking in record profits are seeing their wealth redistributed to workers whose wages have not substantially improved in decades. It is easy then to see why Republicans would be opposed to regulations like these. If their recent tax plan is any indication, their goal is the redistribution of wealth upwards not downwards.

But are these billions of dollars in public health and other savings worth the cost of the millions of jobs we must be hemorrhaging? The answer is that according to the reporter, on the national level these regulations are not a significant factor in employment. There can be temporary changes, and they can affect certain localized places, but other factors matter much more. The most that can be said is that regulations can facilitate the movement of jobs between particular regions or industries, but in the grand scheme of things, they do not outright kill jobs.

So, please remember that every time Trump or some other Republican is touting his or her latest elimination of some environmental regulation as a “yuge” money saver he or she is simply making the wealthy wealthier and costing average Americans billions. It may be more subtle and more nuanced than their tax plan, which essentially states outright that the rich would get more in tax breaks, but they are the same concept nonetheless.

We cannot fall into the trap of regarding every regulation as a burden on business. Many regulations have numerous benefits, even if they are not immediately obvious. The corporations and stock market may love the regulation-slashing of this administration, but their carelessness for a fair analysis of these rules will hurt the most vulnerable Americans in the long run. In the future, we must more carefully evaluate the impacts of regulations when determining which to implement, alter, or remove.


Jacob Kowalski is opinion editor for The Daily Campus opinion section. He can be reached via email at jacob.kowalski@uconn.edu.

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