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Imagine you're in the market for a new furnace. You decide to buy a more fuel-efficient system -- even though the price tag is higher -- because it will lower your monthly heating bills. Another selling point: The fuel-efficient furnace emits less carbon into the atmosphere -- a benefit you can't quite quantify but that you value nonetheless for its small salubrious effect on the planet. Policymakers go through a similar -- though much more complex -- process when implementing laws. But an obscure federal mandate known as cost-benefit analysis renders them unable to fully account for costs and benefits that are difficult to measure in dollars and cents, like the large-scale value to society of federal rules that protect public and environmental health. Despite its name, a true analysis of a rule's full benefits is impossible.

The Office of Information and Regulatory Affairs (OIRA) oversees government regulation across the federal government. Some portray it as a guardian of rationality, others as biased in favor of industry. Public information about OIRA is so limited that it's impossible to know one way or the other, due to the veil of secrecy that surrounds the place.

Scholars and policymakers should recognize the democratic benefits of public comments.

Unless you're deeply immersed in administrative law, you may not have heard of the major questions doctrine. It's a legal theory that conservative judges have used with increasing rigor to block important regulatory initiatives. The doctrine places special obstacles on agency regulation of issues of "major economic and political significance."

Cost-benefit analysis is required for all major regulations. It's also highly controversial, as well as being a mysterious procedure unless you're an economist. These FAQs will tell you what you need to know about how cost-benefit analysis (CBA) fits into the regulatory process, how it works, and why it's controversial.

In the actual work of crafting the regulatory safeguards that protect our environment and health, cost-benefit analysis has been largely ineffectual and irrelevant. Indeed, its ineffectiveness has been so profound as to prompt even its most ardent practitioners and proponents to question whether it has any impact on agency decisions at all. Meanwhile, it plays at best a minor role in the legal standards that actually govern agency decision-making. Despite all this, a certain cost-benefit orthodoxy has become remarkably entrenched in environmental policy circles. Especially in an era when so many progressive ideas are in ascendance, why does the idea of regulatory review based on cost-benefit analysis have such staying power?

Over the last 40 years, the U.S. regulatory system has played an increasingly influential role in redefining our political and economic relationships in fundamentally neoliberal terms. A key but often overlooked institutional force behind this development is the peculiar form of cost-benefit analysis that now predominates in regulatory practice. Building a new regulatory system befitting our vision of a post-neoliberal America requires a formal rejection of prevailing cost-benefit analysis in favor of a radically different approach -- one that invites public participation, permits open and fair contestation of competing values at the heart of policy debates, and recognizes and honors our social interdependencies.

Cost-benefit analysis (CBA) is inherently classist, racist, and ableist. Since these are foundational problems with CBA, and are not simply issues with its implementation, they can never be fixed by mere methodological improvements. Instead, the ongoing modernization of centralized regulatory analyses must focus on "moving beyond" CBA, and not on fixing it or improving it. Thus, in implementing President Biden's memorandum on Modernizing Regulatory Review (the Biden Memorandum), the Office of Management and Budget (OMB) should make explicit that regulatory review no longer requires CBA, even—as will be true in the typical case—when regulatory review does demand economic analysis as part of a holistic, multi-factor regulatory impact analysis.

President Biden has made climate change and racial justice central themes of his presidency. No doubt with these problems in mind, he has signaled a desire to rethink the process and substance of White House review of agencies' regulatory actions. On his very first day in office, Biden ordered administrative agencies to ensure that this review does not squelch regulatory initiatives nor brush aside "racial justice, environmental stewardship, human dignity, equity, and the interests of future generations." At the same time, however, Biden reaffirmed the "basic principles" of a Clinton-era executive order on White House regulatory review, subjecting agencies' major rules to a cost-benefit test. These twin inclinations -- toward acting boldly on climate change and racial justice, and toward judging regulation using cost-benefit analysis -- are trains racing toward each other on the same track. Two entrenched, perhaps even inherent, features of cost-benefit analysis practically ensure that the benefits of regulatory measures addressing climate change and racial injustice will be diminished and deformed in the process of "valuing" them.