americans across the country every year for 20 years. , and a lot ofted those drugs leak into the black market. toot of the drugs are used access by the people to whom they were prescribed. a lot of times those folks get addicted. a massive amount of prescribing has gone on for 20 plus years in this country. a lot of it is, as the doctor said, people were thinking it doesn't matter how many pills you sent home with an acute pain patient -- >> i love it. i am the vice president of economic studies at brookings and the founding director for the center of regulations on markets, a relatively new at brookings. the goal is to improve regulatory process through independent research and host

events like this where we can have informed debate on regulation, regulatory policy, everything with the word reg in it. there is a long history of brookings working on regulatory policy. way back in the 1990's, in my youth, i was affiliated with the joint initiative regulatory studies. when i came to brookings in 2009, that center no longer existed. a lot of people were working on regulations and i wanted to start that up again. low and behold, here we are. it is an opportune time to focus on regulatory policy. we have seen increasing delegation of policymaking to the agencies. into theis nine months trump administration. if you look at the priorities of the president on the domestic

policy front, you have appeal daca, and that didn't go -- appeal the aca, and didn't go as he planned. then we had an agenda of deregulation. unlike the first two, deregulation is something that doesn't require congressional participation. hence, i think it is safe to andise it is less stalled more proactively moving forward in the executive branch. the plan today is for me to talk for 20 minutes or so on a new paper we just released. i co-authored the paper with my and myue at brookings colleague at the council of foreign relations. bob is recovering from illness. he is not here today. i hope he is watching our webcast online. get well soon, bob.

talk, cherylh my will be moderating a panel discussion of the paper and the 's regulatoryp policy more broadly. as we do with all of our events at brookings, we will be taking questions from you. save your questions for that time. i will give you an overview of the paper, and i encourage you to read the paper as well. we are looking at trump's regulatory plan, his requirements. more or less off and running at the beginning of the administration. january 30 issued an administrative order for a regulatory offset and budget requirement. the regulatory offset is essentially what it says. for every new regulation we need 2 offset it by finding

regulations to eliminate. the budget, each fiscal year the omb director will come up with a budget for each agency. there can be no net increase above the budget level for that agency for that fiscal year. this is a break forom the historical emphasis where the vocus was on maximizing net benefits to society. to do that you measure benefits and cost. there is a lot of debate and disagreement on how you measure benefits and cost, but an understanding that we should be balancing benefit and cost. with trump, there is not a disregard of that, but more on the cost side. there have been some differences. president reagan had an executive office and benefits should outweigh costs.

clinton changed that to benefits should justify cost. broadly speaking the democratic administration put more emphasis on equity when considering benefits and to regulations. by and large the goal is how do we better measure benefits and costs to figure out regulations to maximize that difference. the history? as i alluded to from an economic point of view, a redoubled emphasis on the cost side through an offset and budget. it doesn't make economic sense. if you have a regulation that will be extremely costly and have more tremendous amounts of isefits, the difference quite large, you would want to propagate that regulation against law from an economic point of view, that is a regulation we should pursue and we shouldn't disfavor it for another regulation that has smaller net benefits but lower cost.

if you are in a world of cost constraints, you might do that. economically, it doesn't make much sense. , or in the legal academia, there is a political economy of why you would want to use that choice. in the institutional framework of policymaking it could lead to over regulation. agencies could try to maximize their authority or be reluctant to undo regulations that are not very effective. the cost might be diffused so you don't get a lot of political could against it, but you have more political emphasis on one side, though it may not be justified from the net benefit point of view. in terms of blunt political instrument meant to counter political impulses to over regulate. physical budgeting, we come up with direct expenditures that

limit agency spending. it is not like agencies can expand as long as net benefits are increasing. i regulatory out budget is not a new idea. brookings fromut my perch here. in 1978 a longtime economist at workings wrote a brookings economic activity paper advocating for a regulatory budget. lighten, alsobob wrote a book in 1983 advocating for a regulatory budget. if you look at president carter's economic report for the the council who wrote that book was chaired by charlie brookings, they don't endorse a regulatory budget but say here is an idea that one might consider. it is not out of thin air these

ideas have come up. those historical advocates for the fiscalbudgets, budget, congress had a strong role in determining what those budgets should be. it isrump's plan executive order and omb to determine what those budgets should be. it is absent a role of congress, unlike the previous suggestions. there is some international experience with regulatory offsets and regulatory budgeting . had ah columbia in 2001 2-for-1 offset requirement, every new regulation had to have 2 offsetting ones. i misspoke, it was a regulatory requirement, which is a little more subjective than regulation. i will talk about how you measure cost and offset regulatory budget framework. it is a key issue.

british columbia, they went through the regulations and what they thought was regulatory requirements. they have tostep do to be in compliance with a regulation. success often perceive of the british columbia policy, canada as a whole started the one-for-one offset requirement on their regulation. in this case it was not regulatory requirement, it was actual regulation. they also sent a regulatory budget cap. measure they used was the administrative burden cost, compliance cost to business. it is important to consider for all of these how you measure ,ost presents differences challenges, and implications for what comes as a result of the policy. instituted a001

one-for-one, then increased it to a three for one offset. more of a budget than an offset. of regulationar you had to reduce a dollar regulation elsewhere. they used net cost to business. of can imagine scenarios him this happened, where society is not being made better even though you are reducing the net cost to business. if you have a rule saying that businesses can reduce engine costs to workers, it is transferred from the workers to .he businesses under this definition it would be a cost reduction and you can get a perverse outcome if you are not careful about how you measure cost. with trump's plan, it faces both legal and practical challenges,

which we outline. first, the legal one, we had the good fortune of working with bob who worked with the motor vehicles association for state farm. in that case, what happened was president reagan came into office and wanted to resend an existing transportation rule on airbags and seatbelts the carter administration had promulgated. they went through with the administrative procedures act, a review process. the argument was since they were resending a rule didn't the sameeet standard of review. they lost. procedurally, if the administration comes in they can't just eliminate a role. they have to go through the standard administrative procedures act requirement. you can't just strike something. you have to have full evidence

for the rulemaking you are promulgating. also consistent with the law, thatan't promulgate a role the court sees as capricious. you have to establish an evidentiary area basis that is existingt with statutes and provide evidence in support of the role you are proposing. this constrains the administration's ability to deregulate. read the executive order and the guidance documents, and other documentation, there is language that suggests they understand the deferential to the fact they have to comply with these requirements. these are permeating the executive order. law,knowledges permits by otherwise required by law, in accordance with the administrative procedures act, etc. there is an understanding they may not need congress to do

this, but there will be a judicial review coming and they better be prepared for that. on the practical challenges, there are a number of practical challenges. i already alluded to the biggest one. if you are going to require an offset or a regulatory budget on cost, how do you measure cost? such is life, generally the more the measure gets to what we care about, the harder it is to measure it reliably. a cruel twist of fate. it is easy to measure the pages in the quota regulation. you can count each year. if they go up, you can say this correlates to cost and cost is going up. is the requirement for budget neutrality, that is very imprecise. up more thanit that and count the number of regulatory restrictive words. this is where you get kind of biblical.

you count the numbers of shals thous,ts, i almost said but that is the wrong book. use that as a proxy for regulatory costs. it is somewhat informative, but cost.rfect for a the u.k. said you could look at the cost to business. it gets harder to measure compliance cost and other costs in complying with the regulation , the d regulation may inflict on them. it is &'s or one-sided because transfers from workers, customers, to consumers or businesses wouldn't be captured in that. economists have defined what the true costs are. opportunity costs. for this regulation, what with the private entity be doing with their resources? what would be the next best thing they would be doing and

their willingness to pay for that? this is opportunity cost, not just for regulation, but for everything. when the government draws resources away from the private sector, opportunity cost is what would be done with those resources if they had it and subject to the rule? this is a conceptually correct approach to measuring opportunity cost, and is also enormously different. it is like the economist work program. it gives us lots of things to do and measure, but it is enormously difficult to do. broadly speaking, if you want a budget for all of the regulations of a given year, that is a hard number to come by . it creates a challenge. that is the biggest challenge practically in achieving what the trump administration's rules are trying to do. over time, every agency has a

cost setting. how far in the future can a bank that and use it later? there is a question of that flexibility across agencies. that allows for some of the cost savings at one agency to be used as an offset for another agency. it is hard to see how that will work out, but it is at least in the guided documents conceivable. offsetles does this apply to, and what don't they? for one, it doesn't apply to smaller rules. it does apply to guidance documents, it doesn't apply to agencies.t it might apply to international agencies. then you have emergency regulations, foreign affairs functions, most of those it doesn't apply to. there is some discretion about which rules would be subject to the offset requirement. i'm going to be winding down soon.

scenarios, we can lay this out at the end of the paper. this is our attempt at what will happen. one of the luxuries, or challenges, when you have three authors for one paper, you can lay out many scenarios and we can all carry our own probability weight. stop and we all agree on what will happen, these are just possibilities. -- not that we all agree on what will happen, these are just possibilities. one is that it is nonbinding. because ifceivable you have an administration like the trump administration, that is predisposed to this change in process not to regulate, the fact you are addin other constraints might not be binding. ofns to do the minimum out propagation of new rules, meeting requirements on a regulatory cap or offset might be relatively easy.

that is the extreme version. then we have best and worst case outcomes. on the worst case outcomes, you could have this being a total beer that might even be the design. if they want to promulgate a role. they have to promulgate furry rules. free rules.e the opportunity costs and all the rest. it is creating headwinds to promulgating new regulations and could mean, irrespective of net benefits, is slowing the process down. isther bad possible outcome we need to meet these requirements, let's find 2 regulations to cut. let to do it haphazardly because we don't have a well agreed upon

amount of regulations where we have cost and opportunity costs. it could just be haphazard. on the pro side it could do with those advocates starting in the late 1970's and 1980's were suggesting. that it could be a political instrument for budget discipline. if for each role you need to maintain a budget neutral, it is prioritizing and going deeper in the existing rules to find out which ones are not effective or costly. that will be part of the discussion following my talk. i will leave that for the discussions to probe deeper into . one additional thing, this slide tells you our take on the possibilities of what might happen. as we move forward, what is happening? areddition to the paper we

releasing today, we are releasing something we are calling tracking deregulation in the trunk er -- in the trump era. this is what we have online. it is more interactive on the website. this is a screenshot. we are looking at the timeline of key regulations, the ones that have been most highlighted or most in the target of deregulation and giving a timeline of what happened. what happened under obama, what happened under trump, and describing the process now. this is a screenshot. it is an interactive thing. interact with it. url.ill see there is a you will also see an email. for feedback, suggestions, we would love to hear from you. i will invite the panelists up. at me introduce sheryl bolin,

, a whitefor bloomberg house correspondent who writes on regulatory policy. we are delighted she is here. i will sit down. my co-author will represent me, let's hope, on the panel. represent us on the panel. thank you for being here. panelists, come on down. [applause] >> alright.

i am sheryl bolin. i am the white house reporter for bloomberg bna. i have been covering regulatory policy since 2009. i finally recall asking our administrator at the time this easy question. does regulation kill jobs. ? little did i know books have been written on that topic. no such softballs for these guys today. let me introduce our panel. left is howard sh shulansky. he is currently a professor at georgetown law. we have stewart shapiro. edward professor at the faustian school of public

records and university. and a senior fellow here in government studies at the brookings institute. of susan dudley, director the george washington university regulatory studies center. and former administrator in the second term of president george w. bush. is startuld like to do off by asking the panelists to take one or two minutes. if you found any opening spots or have any observations about the paper, if you would like to share those thoughts with us. with a couple of observations about the paper. i think it is a terrific paper that is incredibly valuable right now. it does a nice job of pointing

out some of the history of regulatory review, reform, and some of the challenges it will face. looking at the actual executive orders, i think that there are things to watch out for as we watch the implementation of those executive orders going forward. one thing the paper points out is a very salient point. when one reads executive orders 777hat 13 771 or 13 relative to regulatory reform in the trump administration, no changes are being made to the underlying structure. iscutive orders set what done. telling agencies how to do regulatory impact analysis and rules is not being changed.

there is a shift on emphasis of regulatory cost. because there is a lot to play in the joints in terms of data that is used, in terms of just the political valence this ,articular administration has without changing the underlying executive orders it shifts focus to cost can have substantial impacts. if one looks at the leadership of the agencies, the leadership of omb, there is a clear mandate being sent out through the executive branch, that the executive branch agencies and beyond to the independent agencies, better make sure that the benefits really justify the cost. that every cost is accounted for and, as well as possible, quantified. most notably, what is interesting to me, is mick mulvaney at a certain point criticized the obama

administration for not taking into account cost and looking one sidedly added benefits. that was not an accurate statement and was debunked in a subsequent "washington post" article. where we only looked at one side, there were 15 rules where we only looked at cost, not benefit. when one sees the perception of that will bet running regulatory review, that is a clear signal. i will be watching to any extent the agency has not accounted for cost, hence the cost emphasis. when one looks at what the epa is doing on climate regulation, it is clear the emphasis is overwhelmingly on cost. i've refer you to an interview that chris wallace had with scott pruitt on fox news where

prewitt was talking about taking down the clean power plan. what about the" tens of thousands of asthma cases he year that will be prevented by the clean power plan? what were you due to make up for those lost benefits?" i'm putting words in his mouth, i am not sure he said lost benefits. he didn't have an answer. that signals i'm not looking at benefits, i am looking at cost. we will be entering a costs, ane will see a lot of of rules pull down because of cost. the thing to watch for is insufficient and inaccurate accounting for very genuine benefits. >> thank you. thank you for inviting me. i also really enjoy the paper. thought it was a nice outlining of the world we are in right now. a lot of the rhetoric that has accompanied.

many things today i want to pick accompanied many things today. these executive orders do not make that big of a difference. that is not an unlikely scenario. quite frankly, given what howard said, if you tell scott pruitt he has to get rid of two regulations for every one he enacts or has to give costs and regulations within a budget, that is like telling my kids they have to either candy before they can have their vegetables. to put that in political science terms, the existing means of ,ontrol of agency actions particularly the appointment power and the fact that they republicans controlled congress right now i think is sufficient in the short term to ensure that there is not much regulatory accumulation and there is an emphasis on deregulation and eliminating regulatory costs. the real impact of this order is what happens after the

short-term, what happens in a longer-term period, where like gorsuch being replaced, scott pruitt eventually moves on and is replaced by whitman or someone like that. when congress goes to the democrats rather than being in the hands of the republicans. longer,tion then is no are the executive orders needed? but rather, are they sufficient to try to close regulatory. and this is more guesswork. once political forces align in favor of regulation, when judges tell the administration they have to issue regulations, those exceptions are going to loom very large in implementation of the executive order. in the longer term, when we have a democratic administration, i have to think these executive orders are among those that get revoked on the proverbial day

one of the new administration. i don't think these would be like executive order 12291, which was then modified by bill andton and accepted regulatory impact analysis became a permanent part of the regulatory framework. i don't think 2-for-1 regulatory budgets are the same, and i am happy to elaborate on that later. >> thanks. forever. to take i just want to emphasize i disagree with stuart. i think israel ambition behind this design -- i think there is real ambition behind this design. i think the business community that, let's face it, is largely behind the push for this, it did

not come out of president trump's head, they think regulatory accumulation is a really serious problem. this is designed to get agencies to use some of their energy to tackle accumulated regulation that have built up over many decades now over a very active regulatory state. that is so something off the wall, right? administration, undertook a regulatory look back program designed to get some existing rules and say, let's assess these, let's get out of the deadwood where we can. most people will say it was a fairly modestly sized effort, and this is designed to supercharge it. the point i want to make is that will be a real disappointment to a lot of people who have been

instrumental in designing these executive orders it all that amounts to, the all right amount to is just no more new regulations. it is designed to get agencies to get back into the closets and figure out what can be thrown out. .> i also really like the paper i was not a co-author. i think it is a very nice job of what most front economists would agree, and that is that benefit cost analysis, the benefits test is the right measure, the right way to go about introducing new regulations and evaporating existing regulations. there is a paragraph i will says, theatedly that reason for doing the constraint like this is not economic, but it is political economies. because there are problems with

way benefit cost analysis is done. , agencyentioned briefly incentives to look at and evaluate any regulations and measure benefits and costs, but also to look back and evaluate the effect of existing regulation. the fact that often regulated places want regulation in . not removing them or evaluating them. just plain hard to do. i think there are a lot of arguments. i think the paper makes an excellent case for why despite the fact that we all think things can be done perfectly, cost analysis should be the governing rule. having this as an overlay, and i think that is a key point, it is not replacing or should not be.

this is something that stewart or howard mentioned. should not be replacing that requirement for net benefits, but an overlay on top of it. that the paper does a nice job of saying there are a lot of nice challenges, which is why the is a different sense of what might the outcome be. measure -- itd to is hard to do the measurements, and measuring just costs is harder than measuring net cost or net benefits. i also like the way they laid out several scenarios. stuart has added a fourth. the best case scenario does depend on this new requirement being something that is overlaid on top of the existing requirements for net benefits and that it actually stimulates and incentivizes real evaluation

of existing regulations, which despite every president since carter and even before have told agencies don't only look going forward at the benefits and cost of future regulations, but look at the regulations on the book. see whether they are achieving their intended objective. there really has never been an incentive, and i hope this incentivizes that and in so doing provides the tools we do not have right now to look back at existing regulations and look at their benefits and costs. >> great. thank you. so, moving on, the title of this ambitiouscan trump's deregulatory agenda succeed?" but before we can determine if he can succeed, i have to ask, what is president trump's regulatory agenda? does anyone have a good sense of his goal here, what he is trying to do?

is it really to cut regulations by 75% or what have you? what would that look like? if anyone has a view on where he is going. [laughter] i don't have a view on where he is going, but a couple of things that might help us to see where he might be going, what is likely to happen, i would draw a distention between retrospective review of regulations and the regulations. retrospective review of regulations, as some of the crop executive orders -- trump executive orders say, can be reforming a rule or strengthening a rule or repealing a rule. it can be any of those things. beyond when one looks some of the superficial language of the executive orders to the system it is setting up, it is not really a retrospective as it is designed to find

out what is not working well, what could work better, how should we change things. it is a deregulatory effort. it is an effort to get rid of rules. when one looks at 13777, which is the thing that sets up these regulatory task forces within agencies, they are deregulatory taskforces. look at their mandate. so i think the objective is to look at rules that can be removed more so than rules that can be reformed. so that is one place he is heading. i think that is the biggest interest there. there are limited resources within agencies. you have a choice to strengthen a rule or get rid of one and live up for the two-for-one executive order. you will get rid of the rule. that will be the ultimate objective. i think they are starting with rules that they perceived to and big political payoff, whether it stops after that and becomes effectively just a moratorium remains to be seen.

but i do think there is good evidence that what we will see where this is all really heading is getting rid of a bunch of big rules that have political payoff and then settling into what is really a roadblock to new rules. part of the reason that is true is there is actually much less of a constituency for deregulation than people think, and this is what you discover when you get out there and try to get rid of rules. president obama asked the business roundtable publicly. i think 25% of rules might be able to be cut. give me your suggestions. suggestions from the business roundtable. i waited. i got zero. not one. not one from business roundtable. not one from the u.s. chamber of commerce. business has a few rules that have yet to be incremented like clean power and some others that they want to get rid of, but

beyond that, they don't have a broad agenda that susan mentioned for getting rid of the stock of long existing rules because they absorbed the fixed cost of accommodating to them. they serve as frankly barriers to any new firm that wants to enter because they have to comply, so you actually do not have a big constituency from business knocking on the door to get rid of that old stock of rules. who else is going to come to ask for that? certainly not the public interest communities. certainly not the unions. certainly not agencies because they would rather go forward and backward. than backward. against is very limited want to get beyond a few high-profile rules, ones were industry has mostly not yet had to absorb the compliance cost. what i think -- where i think trump is heading is a big

statement of, its get rid of everything we can, let's give it of these big high-profile rules, and then let's really stick to the budget. i think we will see a blip of deregulation and the real emphasis is to be able to save at the end of whatever period of time, look how much lower we are on regulatory activity than half the administrations. on past administrations. the obama administration issued or the reaganan administration or the bush administration. the obama administration issued fewer. it should more economically significant regulations, but when you strip away the congress, require the administration to do, this myth

that regulatory activity under obama was a market departure from the historical norm is nonsens. trump does not have some big inflated stock of terrible rules that this administration can just go in and sweep away. they are working off of a pretty well curated set of rules on the books. once they get beyond the ones they do not like, even if they are good rules, they are going to have a harder time than they think sweeping away the stock. >> susan, you look like -- >> yes, i agree. i think the rhetoric is definitely deregulatory. that is certainly the language, more than we have seen in decades. i also agree that we will always -- iat there will always also agree that there will always be entrenched interests. foranies with the most citrus opponents of a new regulation and what it was in

place and the agency realized that was not effective, they were opponents of removing the same regulation. but i think if we look at the evidence from other countries, which this paper does thaty, they illustrate there is some low hanging fruit, that there are ways to modify regulations so that they are easier to comply with, less redundant so there is less duplication and redundancy. again, i am hoping for the best case scenario that the paper presented because it is in no great interest to get rid of regulations that have large net benefits and keep the regulations that don't, so i hope this focus is on, what are these regulations that we think can be done more efficiently? i will make a quick point. there are two parts to the executive order.

rule, but the outcome be trivial. the authors are calling the budget part, that is going to be more binding. that is very explicitly about modifications at reduced costs as well as eliminations. i think that is important. >> i will largely agree with what howard and susan said. goal wask that trump's almost certainly not be 70%, which was a rhetorical flourish on the campaign trail, of which tore were a few, but rather do what howard said, which is to trophiesregulations that he can go ahead and say, look what we did.we got rid of the clean power plan , a couple of the other very

controversial obama administration rules, and then possibly to slow the pace of regulation. i will add there is a constituency for deregulation. it is small businesses that want to expand possibly and people that want to start small businesses, but despite all the rhetorical attention given to small businesses, they are not a powerful political constituency compared to the large businesses that are generally happy with things the way they are. >> did you want to -- >> i think the administration would certainly make the point, and this will empower people like that because we need their budget. meet the we are not just saying that. like, we really need that. we will be out looking for it. i think ideally, you know, that is what the administration would say it would be empowered by

this rule. >> now i would like to turn because we have touched on a couple of topics here that i was going to ask about, but an important question to me is the length between regulation and economic growth and job creation. really, when you hear this administration talking about deregulation, they say they are doing it to grow the economy, to increase jobs, to spur innovation. is, ismy question to you like the does regulation kill jobs? what is the link between regulation and economic growth?does regulation d press economic -- suppress economic growth? does deregulation grow the economy? >> i will first answer the question you did not ask, and that is the regulation and jobs.

it is not a good consensus on that.that is a very good talking a political point, but it is a harder one. the effect of regulation on economic growth, there is a general sense that excessive regulation definitely will constrain economic growth because it prevents innovation, it prevents new businesses from starting up, as stuart said, and it does protect entrenched interests. empirically, it is so hard to measure in part because measuring -- how do we measure regulation? how do we measure the cost? is in the number of pages, the number of command words? we don't have a good estimate of the cost. we have estimates of economic growth, but less so on innovation and some of the things we care about. that is some stuff we are working on at the gw regulatory study center, and other groups have done some admirable

efforts, but to me what to say empirically, yes, it does, and he was the point which is the right amount of regulation to be optimal for economic growth, i think a lot of people with agree that we are over that point. mayre in the point that it be inhibiting growth, but what is the optimal point, there is no empirical evidence that would tell you one number. >> i will add to that. susan gets it absolutely right. i think the reason that this question has continued political resonance is some people lose their jobs because of the regulation. some people gain jobs as of the regulation. but the people that either lose their jobs because of the regulation or who believe they lost their jobs because of the regulation remember it and vote and donate accordingly. people who gain jobs because of

regulation are probably very unlikely to credit the regulation with them getting the job. so there is an asymmetry that. an addition to the issues talked about, which makes it hard to estimate the impact, there is clearly an imbalance political incentive. >> it is a great point. it is often the same person who loses their job or who gets you were hours may have actually gained a greater health benefit or something, but they discount that. you don't know about the illness not suffered. so there really is a difference that is extremely important, but when it comes to the link between growth and regulation, there is a sense that at some point, there is a link. it is better not to have rules that you do not need because we do not know what that point is. an analogy loosely speaking is something like the curve with

economic growth and taxation. the laffer curve in brookings is like bringing a deep-fried twinkie to a three-star restaurants. when you think about a curve that would show growth increasing as a curve of growth with regulation, at some point, growth is going to drop off when the regulatory load gets too high, but we do not know where that is. there is a very imported question when regulatory costs are a tiny fraction of gdp whether that can be really tagged with dragging things down. over time, that turns out to be relatively little correlations between measures of economic growth and measures of regulatory cost. so people can talk about regulatory costs going up in the obama administration, and i would urge people to look

carefully and closely at that data and the shape of that trend, but remember, job growth expanded through the whole administration. admittedly, one has to be very careful when talking about job growth. what job? what is the quality of the work people are getting? is regulation downgrading that quality? those are all serious and difficult issues to take into account and we do not know about the jobs not created. would we be at 3% unemployment without the regulation? no, i don't think so. nobody thinks so. it is a very difficult stories to assess -- story to assess. our regulatory burden on the economy, and there are sectors where there may be exceptions, but as a whole, cannot really be tied very closely to our growth rate or struggles to get above a 2% growth rate. susan, you touched on this a little bit about the idea

of excessive regulation, and that is a question i often have. this plays into some of what we have already said, but of course, this administration says it only wants to eliminate those rules that are unnecessary, outdated, duplicative, burdensome, excessively costly, or unlawful. who can argue with that? much isestion is, how too much regulation? how many of these monster regulations are out there? why have we not been able to get rid of them before? just sort of back to the basics, president clinton's executive order 12866 that we are still operating under start with the premise that market forces and competition are pretty good regulators. that can regulate behavior. you are not going to cheat your customers because people will know about it.

new technologies that were not around in 1993, 1990 61 clinton's executive order -- 1 when clinton's executive order make that even easier so it is only when we find some material failure of those markets that it may be worthwhile intervening in regulating, and it is only then that we start a benefit cost. if we can get ourselves back to that requirement that every president has agreed on since 1981, that may be the way we can start to weed out the things that are excessive because too legislators and regulators, too, in any crisis happens and that anecdote is enough to drive new regulatory have notven if we identified what the core problem was and how we can best address it. i think there are clearly

some regulations out there that are problematic for any of a number of reasons that were listed there. research ang, in my couple weeks ago, with somebody who makes cider in the midwest, and they were complaining about how alcohol content gets too high, it gets regulated to wine, but the conservation content gets too low, it is regulated a different way. it has caused a great deal of burden for them, and all they want to do is make cider and sell it to a number of people, so there are examples out there like that. they are challenging to find. what you really need, and previous administrations have tried this and been successful only to a limited degree, is to be able to get out there and asked people, what are the problems? but if you do not have a good way of doing that, there is no easy way of doing that, it is hard to find the right answers to that question. >> ok.

yes, we are getting closer to the time when i will turn to audience questions, but i want to ask a couple more here of you. what i would like to turn to now is the issue of cost benefit analysis and whether that is at risk right now of turning political in this administration. both omb director mulvaney and naomi ross have questioned some of the legitimacy of the obama administration's assumptions. perhaps undervaluing cost and overestimating benefits. so i'm wondering, is it there isn't standard way -- there a standard way of evaluating cost and benefits? for how much flexibility is there? how much front can we put in cost-benefit analysis? analysis, cost-benefit

is not some golden path to the truth. is a way of clarifying assumptions and clarifying thinking that really serves very vital accountability purpose, but assumptions can be made , and a lot of what we are seeing in some of the very high profile rules is the trump administration will make very different assumptions than the obama administration did. an example i know is the clean power plan. on onestion there is hand, should we count just benefits to the u.s. citizens or benefits throughout the world? traditionally, we have just looked at benefits to u.s. citizens. the obama administration counted them globally. trump administration will not. similarly, do we count code

o-benefits?- c it has done what it is designed to, but it has these ancillary benefits. benefits.the >> thank you. much bigger than the benefits. mercury. >> yes. >> basically, if your rule forces: our plans to shut down, that has lots of health benefits even if nominally that is not -- those benefits are not what the rule was designed to secure. there is a lot of that. it probably should not be overlooked just how much of these struggles are about the future of coal. that really is a running theme through a lot of these debates. i think we should understand what cost benefits analysis can

get us and can't. it cannot solve political questions for us, but it ought to be a disciplining mechanism that really forces you to put your cards on the table. >> i will paraphrase winston churchill. cost-benefit analysis is the things forl possible policy except for everything we have done, and i think it is exactly to a point that what it your best laying out of the alternatives and the best information you have on the likely consequences, positive and negative. but there are so many assumptions in that.i will put in a plug right now for a paper that stuart and i are among 19 co-authors. consumer's guide to regulatory impact analysis. that kind of walks through 10 look at ahen you

regulatory impact analysis or benefit cost analysis, what are the questions you should ask, and what should you be spectacle o skeptical of? what different outcomes you would get if you make a different possible assumption. philip'shuge as a example showed. >> there is always a little bit of politics to cost-benefit analysis in the sense that you there areegitimate -- different legitimate assumptions that one can use. it is not just a single right way of doing things. and so the choice of which of what isodological paths going to follow is somewhat dictated by policy preferences. i think that is natural and normal. there is a difference between cooking the books and a different set of methods and assumptions.

i think what is ultimately all, not is, first of to confuse the two an optical the difference in methodology cooking the books. but i also think what is critical is the assumptions and methods be carefully spelled out in regulatory impact analyses so they can be commented on, so they can be challenged. it might well be legitimate for somebody to decide that we should not include certain coal co-benefits or the evidence on a certain cost is cost, buto count that one should spell out why one is making that determination and what the evidence is. where the concern comes in is not where one gets two different results through two different administrations, but where some very important piece of data is left out or wrongly discounted or miss for trade -- misportrayed.

as long as the analyses are transparent and the methods are spelled out so that it can b see the light of day and experts can comment, that is ok. there will be legitimate pat hs. i want to put in a plug. this is what the staff spends on,r career days focusing whether they are in a democratic administration or a republican administration. they are pushing back on the assumptions that the agencies are making, whether they are pro-regulatory or deregulatory and making sure they are well grounded and legitimate and a reasonable lines truly could truly -- minds coul could differ. as long as the staff is given their free reign and independents to give doing that and as long as the administrator is willing to take the results , the administrator's in the

debates higher up in the the white house, but the administrator has to bring the news to the ultimate decision-makers. as long as they are there to hold people's feet to the fire, the administrator is willing to give the news even when it is i feelher up the chain, like i am not that worried about the fact that different paths through cost-benefit analysis can lead to different results. that.gree with all of that cost-benefit analysis done well is a great aid to policymaking. there are many instances that any of us on this stage can come up with where it has improved policy outcomes, but it is not

finance. it is based on assumption. those assumptions can change, and the difficulty really comes in the way that it is communicated. if the changes are communicated it is going to erode faith in the underlying analysis because it is going to look like we are cooking the books even if it is a legitimate change in assumption. >> there is just one criterium i would urge people to give an eye on going forward. there are certain things that can be well quantified, and if it, one fetishizes without legitimate things that april can achieve that are not subject to classification, so there may be real benefits, but you cannot quantify them. and if one shrinks cost-benefit analysis to a mandate to only count things that can be regular rigorously and properly

quantified, then one rig the game. as a general rule, costs are more quantifiable than benefits. if one reads the executive orders, non-quantifiable benefits are permissible to be counted as in the basket of benefits that will justify costs. and if one moves away from nonquantifiable benefits, dignitary interests, equality, distributional goals, on kinds of things that many rules one windsursue, then up in the situation where some very good rules, very significant social benefits will not pass cost-benefit analysis. not because there are not real benefits, but because we have shrunk the criteria to focus too much on what is quantifiable. that is one change that i think may be occurring and i would watch out for because that really could go beyond different legitimate methods for cost benefits to tilting cost-benefit very much in the direction of

overweighting costs. >> all right. my final question before we turn to audience questions is to bring out your crystal ball productions and how successful ,ill trump be in deregulating as whether you call it manyspective review, administrations have tried often running up against courts. not so many have succeeded. can trump do it? what obstacles will he face? i will reverse it and start with susan. >> i think he will face obstacles, challenges in the courts, challenges in the agencies who are less enthusiastic about his goals. so i think at least in the short arm what we will see is continued slower pace of new regulations.

we have not talked a lot about this, but it is in the paper. removing regulations takes a long time. at least as much time as introducing a new regulation, and part of that is litigation that will come when you have two public records, the one supporting the regulation, and a new one supporting changing that regulation. that is as far as i am willing to go. >> your crystal ball? this part of that the trump administration work has been handled with a lot of professionalism. i do not see it necessarily as indistinctively trumpian the way so many other of the trademarks sort of initiatives might be. i think there are a lot of pros on-the-job

here. a little better at being created as sort of permanent standing committees in each department. it is a clever managerial strategy that could turn out to be effective. i would just say that so far what i have seen from them is a pretty serious effort. >> i think if we set the criteria as we outlined earlier, as howard and i outlined earlier, as being the elimination of a few high-profile rules and a slowdown in regulatory accumulation, i think there is a reasonable chance he will succeed at that. it depends on the litigation of the high-profile rules, which is unpredictable. i think beyond that, i would be surprised to see large-scale changes, but we will see. one measurehat if

success by the number of rules repealed, he will be more successful than past administrations, but probably not dramatically so. so i am probably largely in agreement with the rest of the folks here, but i want to point something out, and this is where the larger effect may be felt. there is a variety of ways to deregulate. one does not merely have to repeal the rule. one can stop enforcing the rule. when one looks at what happens in the agencies, one needs to look beyond the regulatory count to what is happening in the personnel who are experts at monitoring and enforcing. can you sense that we start to see fewer enforcement actions and a depletion of the capacity within agencies perhaps taking people who were good at enforcement and moving them to deregulation task forces or who knows, to accounting? one might start to see some real effect out there that are

andgulatory without repeal, i will speculate, this is. speculation, that that is actually where the larger impact will be felt out there, and that can endure. it is one thing to repeal a bunch of executive orders when a new administration gets into power and to initiate rulemakings to restore rules that were revealed. to rebuild can be a much slower process, so if the goal is to really make regulation less present an effective, he may be dramatically more effective than if we measure simply by the reduction of rules on the books. >> thank you. i have a lot more questions, but i would like to give our opportunity. we do have a microphone. excellent.

lots of interest right up here in the front. if you could speak loudly, say your name and who you are with, and try to keep it to a short-ish kind of question. >> robert with international investor. we heard something mentioned that we would like to hear about the opposing groups. we all know the analysis can be twisted or spun according to who is doing it. the medical community will get involved in a lot of this. we have not heard much from labor yet. i think there is other constituencies as well. certainly food safety advocates, consumer safety advocate advocates. will they become more evident? will that add to the political turmoil trying to assess the actual cost of deregulation in terms of people's health and the

consequences for labor and consumers? >> are you talking about their involvement in cost-benefit analysis or lobbying certain rules? and thein the analysis political turmoil that will follow a lot of this. foil if yourfect would for not just the democrats, but anybody who is going to fight against big business. already a lawsuit filed, and i should differ to lawyers whoefer to say the executive order itself is illegal. >> generally, consumer advocacy groups, environmental groups are extremely well institutionally established as a permanent presence in washington. trump has probably been very good for their fundraisers. [laughter] >> these are all going to be quite contested. those people that

have much influence among the political appointees in the trump administration, but certainly they do among civil service. and they will certainly be contesting everything every step .f the way in court casey with the coalition for regulatory innovation, which is supported by the national association of manufacturing and north america's building trade unions. was curious if brookings intends to study potential legislative frameworks moving forward. >> you mean regulatory reform? yeah. that is definitely one of the focuses of our center. we are keeping a close eye. obviously, nothing is happening imminently. >> if i can just follow, looking at congress and regulatory

reform legislation, do any of the panelists see a particular proposal that you think might make it all the way through this year? >> i mean, it seems like there is the most optimism with the regulatory accountability act, which passed the house. a significantly different version, but senator portman looking for votes in the senate. it is not inconceivable it can count up to 60 votes with certain changes. that is not going to happen in 2017. we will see what kind of progress it can make a 2018. -- in 2018. >> there were a couple of democratic senators. >> ok. in the third row. >> hello. ruiz with a private sector company, which works in

rural revitalization and development. how does the cost benefit analysis take into account the urban, suburban, rural inequalities? in can it avoid being skewed terms of its assumptions on economic development? >> we talked a little about this. cost-benefit analysis itself tends to not look at distributional impacts, but regulatory impact analysis is broader than benefit cost analysis. it uses that but also tries to look at different impact. the executive orders are quite explicit about that. it is an important part of regulatory analysis. >> on this other side of the room. >> i am ken with the competitive enterprise institute.

how it waspoints how i concluding with about the difficulty -- particularly distribution another social benefits. how much difference should courts give the regulatory agencies when it is not spelled out in the statute? on the question of those benefits. >> the chevron difference. >> our difference. >> legal analysis here? [laughter] but one thought i had when howard was making that point, which is an important point, is there are also a lot costs and less quantifiable costs. it is very hard to measure the opportunity cost, which is what we care about. what does this mean about a new business getting started? those are invisible. compliance costs tend to be

easier to measure. i think they are equally difficult things on the cost side. in terms of the co-benefits or the things, co-benefits and global benefits are probably examples of what you are asking about. askinghe clean air act the epa to protect u.s. citizens. should courts question whether the epa should count benefits of protecting or affecting non-us citizens? i am not a lawyer. >> we have lawyers here. >> i mean, look, i think it is a tough question. all of the benefits that flow from a particular action should be counted in the cost-benefit analysis. the fact that you happen to get a benefit that is not exquisitely addressed by the statute, i am not sure. one would have to think hard about what is a legitimate case for saying and then you cannot count it. on the other hand, i think that

if what we think is the primary purpose of the rule really is is to use some kind of shoehorn to get at those co-benefits outside the scope of the statute, then the rule is probably not valid. the fact that i am doing rules that i am authorized to do by mike granted authority from congress, it happens to have an externality from another great set of benefits that will flow to the benefits. if those are really inexistent, my cost-benefit half says, why would i not count them? whether i should be legally prohibited from counting them i think is not so much a difference question as a policy decision to be made in the agencies because we do not want to give agencies incentive to pursue rules that are not really high priority rules themselves under the grant of statutory authority, but you can get at something else you do not have authority at. that is the bigger concern. >> that was in this consumer's

guide 10 tips document. 19 co-authors, and we have very different views on things like how to handle co-benefits. the way we settled on that is making a point that usually it is more cost-effective to target those benefits directly rather than as a side effect of something else, so you should look at your regulation, and if there is some other way to get at those, that is probably the better way so you should question co-benefits that dominate the end, that dominate the benefits, that dominate your analysis because there is probably a better way to get it. >> i would add that cost-benefit analysis is at the end of the day a tool for assisting policymakers to make decisions. the questions about the legal mayriety of those decisions have been impacted by some of the cost benefits, but usually there are other specific questions that are more important.

>> all right. where is the microphone? there it is. in the blue. >> hi. michelle mcintyre. my question is the impact of agency budgets and what is going on with staff in a lot of these agencies, rulemaking, especially in compliance with the one intad two. >> i think howard talked about enforcement. i think the effect will be agency budgets will be dwarfed by the effect. the biggest part of that will be the effect on enforcement. when you talk about the number of people at an agency that are tasked with enforcement compared to the number tasked with rule routing, enforcement is much bigger, so there are large cuts in agency, that is where you will see the largest effect. >> there is a capacity issue.

if you see the executive order really working in the optimistic scenario, it will take a lot of work to do these retrospective analyses well, and so some agencies may have more economists laying around that they can apply to that than others. it will be interesting to see how omb tries to support agencies in that task. that being sort of in the active optimistic scenario. oh, this side. thank you. >> tim. i was from literature of the commodity futures commission to 2000 14 to 2017 -- 2014 2017. i thought it was an excellent paper and discussion. i would like to offer a few observations.

one is a lot of times people may have seen these measurements of how many rules were issued, and they are often talk to pages of the federal register, the problem is in the rule, you first have a proposed rule and you have a final rule. each of those has a lot of things that are not the actual rule like the discussion of cost benefits. in the final, you have to have a discussion of all the comments he received, and you have to respond to all of those comments.otherwise the rule is not valid . i had my staff at one time go back after one of these editorials came out and measure how many pages of rules and rule proposals did we issue? and how many of those pages are the actual rules? the actual rules were less than 10%. more like 5%, i think. to say we should not try to simplify and eliminate some rules. i agree with a lot of the comments that were made.

in the staffing issue i think is a very real one because if you are in an agency and you are doddted to implement frank, you don't have the staff to go back and look at the rules in the books over time even though you know they could be over simple fight or maybe we don't need them anymore. it is a challenge. all the comments on cost-benefit were right on point. this is not a science. this is not a mathematical equation. particularly in the financial regulatory space, the challenge for us was a lot of the rules issuere mandated to were designed to reduce the risks of certain types of activity so that you might reduce the risk of a failure of firms, not because we want to prevent the failure of a particular firm. we want to have an economy where firms can fail, but we are trying to prevent the possibility of the next financial crisis. the impact measure

of that and the probability that this rule will have it reducing that risk. it is a very hard thing. that is why it is not a science. >> so i can assume from that that is a tall stack of pages from the federal register is not a good way to measure regulatory burden. ok. does anyone want to respond to that? >> i would just go out one point, which we have not dwelt on, but i think the way the eo is set right now, things are not covered by it, so that is just worth pointing out. although there is an mou. sam. i guess i would be interested to hear your thoughts on the threat to cost-benefit analysis just as a concept at this point. you have a situation which some people suggest you not

accurately capturing all the benefits. you are overestimating costs, etc. and then you have the obama administration come in and say we will do a really good hard look at this, and we will put forward rules that have significantly more benefits than costs. howard probably knows this off the top of his head. 8.5 times more? the trump decision come in and say, ok, let's ignore benefits and focus on the cost, which gives a sense that the object here is not to find net beneficial activity. it is to reduce costs on certain large businesses. just to get your sense of whether this sort of next step really -- to the extent in which withlls to the attention serious concerns about cost-benefit analysis in the first place. that. quick response to saidld note be things phil

about the text of the executive orders. what is interesting to me is somebody did look carefully and think about writing the current trump executive orders because they say a lot of the right things. the devil is in the implementation details. so i do not think cost-benefit analysis, i don't feel cost-benefit analysis itself is under threat. i know there are a lot of people who would like it to be and would be delighted if the system got broken here and people said it is too politicized, we are never going to do it. i think everyone on this panel but certainly at least three of the four of us are serious proponents despite its flaws of the art and science of cost-benefit analysis. maybe my optimism is coloring my response a bit, but i think given that there is some real thought when you read 13777 that

since mvd the deregulatory task force, it says a lot of the right stuff. you could actually have imagined another administration having written that to sincerely set up a retrospective look back at institution within the agency. it is the same people who are thinking about maintaining that legitimacy. it is naomi and the faults of a group that are given a voice that they should have in this process. i think in the end when you will have is as we described earlier a tilting of the scales of the ways toward cost, but not to a degree that threatens or breaks the integrity and the durability of cost-benefit analysis. >> i am a little more pessimistic, i think, t howard on thishan -- than howard on this. >> because you want to be? >> i have a huge advocate of analysis, but i think the threat is not from these orders in

particular, but the threat for analysis and science more broadly when you see complaints about the congressional budget office and proposals to restructure it. when we see the debate over cost-benefit analysis, when we see disputes over the science underlying certain policy issues , i think those are all of one piece, and that is what worries me. whichaddition to 13777, is illicitly references the previous executive order on these guidance, the staff that howard talked about became very important in all of this, their guidance is very explicit about the values of benefit cost analysis, and it is not cost to businesses. i think that is inaccurate and a mistake. cost for opportunity society at large, not just the

business costs, which we see in canada and the u.k. one more thing. maybe i will think about it. >> just one follow-up that i important, and it is similar to the potential degradation of enforcement capability capacity. we are seeing a deliberate and widely reported degradation of the scientific capacity in the agencies, and to build on the point about the broader threat to analysis, the reduction of that capacity will again be very difficult to build back up. that does affect the quality of the cost benefit analysis. i was a particularly the benefit analysis, but actually both sides of it. it may lead to a situation where you have fewer good scientists in the agencies or fewer data orts or less good areas, aspects of science or data you are not allowed to look at.

when that happens, you are short-circuiting the very function, which is why i think one needs to look just as one needs to look at budgets and enforcementlevels, one also neet what's happening with the scientific staffing and the people to do cost-benefit analysis. i do not view the announcement of scott pruitt made earlier this week that scientists who have received any grant from epa cannot serve on epa's scientific advisory boards. that is not an innocuous decision. that means some of the very experts who spent their time studying the issues that epa is looking at are not going to be able to chime in and say what the results are. i don't think the conflict of interest rationale holds a lot of water therefore keeping them out of the process. well, on that note, we have come to the noon hour. now that we have answered all your questions, no more debate here. [laughter] i want to thank brookings, this

panel. it has been an excellent discussion, thank you, audience, for your great questions. [applause] [captions copyright national cable satellite corp. 2016] [captions copyright national cable satellite corp. 2017] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org]

>> if you missed any of this forum on deregulation during the trump administration, you'll be able to watch it shortly online on our website c-span.org. the trump administration has released its first look at eight 02 types for a new border wall. this is video by the u.s. customs and enforcement agency outside of san diego where the

mockups have been installed. they are built with reinforced concrete do they stand about 18 to 30 feet high. these,timated cost for between two mayan dollars and $4 million. congress has yet to approve money for new sections of the u.s. border wall. ♪

, it is a first went in long story, but i was barely able to get back to the surface. then a bunch of them jumped in. there is a picture, which i'm sure you will show, of them pulling me out of the lake and you can see my arm is broken. then of course once they pulled me out, they were not very happy to see me. because i had just finished bombing the place. [laughter] so it got pretty rough, broke my ee again. hurt my kn

but i do not blame them. we were in a war. i did not like it, but at the war time, when you are in a and you are captured by the enemy, you cannot expect, you know, to have tea. >> 50 years after his capture arizona senator john mccain talks about the impact of the vietnam war on his life and the country, sunday at 6:00 and 10:00 eastern on c-span3. former president obama was in virginia this week to campaign for lieutenant ralph northern, the democratic governor for governor. he spoke at the greater richmond convention center for about 30 minutes. he touched on the current lyrical climate. -- political climate.