Senators Question Data on Costs, Job Losses From Regulation

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By Cheryl Bolen

Industry representatives who are asked to testify before Congress better come prepared with verifiable data because senators are no longer putting up with platitudes about costs and job losses caused by over-regulation.

An otherwise routine Senate Commerce Committee hearing Feb. 1 into the burdens of regulations exposed deep divides and frustrations by senators unable to get specific data from the industry witnesses.

“My hope is that today’s hearing will examine how we can make the rhetoric of regulatory reform a reality,” said Sen. John Thune (R-S.D.), chairman of the committee, in his opening remarks.

But after sharp exchanges throughout the hearing, including discussion of the “arbitrary” nature of President Donald Trump’s executive order requiring agencies to eliminate two regulations for every one issued, several senators appeared exasperated.

Unusual Forum

The Senate Commerce Committee, which does not have jurisdiction over administrative law and regulatory policy, is an unusual forum for debate of regulatory policy.

Sen. Tom Udall (D-N.M.), for example, said that industry was advocating repeal of the Bureau of Land Management’s methane and waste prevention rule. But there has not been, at least at the state level, any loss of jobs because of this rule, he said.

Two big oil and gas states, Wyoming and Colorado, also have passed rules to reduce waste, Udall said.

Hard Data Wanted

“This is what we need to get down to,” Udall said. “Do you have any published data that you could share with this committee, whether any jobs have been lost as a direct result of Wyoming and Colorado’s waste prevention rules?” he asked.

Jack Gerard, president and CEO of the American Petroleum Institute, said he would go back and provide all the data they had.

“Well, I want to know the hard data,” Udall said, cutting off Gerard. “That’s because you all are in here telling us that these regulations are over the top and we’re losing jobs. I’m picking a regulation—you tell me the hard data.”

Rather than job losses, Gerard said, he had data on the revenue impact of the rule. “This rule is estimated to cost us $400 million,” he said.

Cost Estimate Not Credible

Discussions about regulation often ignore its benefits and fixate solely on its costs, said Lisa Heinzerling, professor of law at Georgetown Law Center.

Information about costs often comes from the industry itself, which has an incentive to overstate costs in the hopes of preventing regulation, Heinzerling said.

And, the errors are even more glaring in estimates of the total costs of regulation to society, Heinzerling said. One perennial favorite of those trying to make regulation look outlandishly expensive is a study that purports to estimate the total annual cost of regulation in the U.S., she said.

The most recent version was put out by the National Association of Manufacturers, estimating that regulation costs $2 trillion per year, Heinzerling said. This report is not credible because of its many flaws, such as including the costs of regulations that do not exist, were withdrawn or are decades old and fully implemented, she said.

To contact the reporter on this story: Cheryl Bolen in Washington at cbolen@bna.com

To contact the editor responsible for this story: Paul Hendrie at pHendrie@bna.com

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