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Aug 12, 2014

EPA Not Adequately Analyzing Regulatory Job Costs, GAO Finds


Senior Editor, U.S. Chamber of Commerce

The Hill reports that EPA fails to adequately analyze the economic effects of regulations it issues, a Government Accountability Office (GAO) report finds:

The Government Accountability Office report concluded that information incorporated into the EPA's Regulatory Impact Analyses (RIA) was sometimes murky.

Additionally, the GAO found that the agency did not always monetize the costs and benefits of proposed actions and that the EPA had estimated effects of its regulations on employment by, in part, using a study that is more than two decades old.

"Without improvements in its estimates, EPA's RIAs may be limited in their usefulness for helping decision makers and the public understand these important effects," the GAO concluded.

This report confirms EPA's track record of either not scrutinizing the job effects of its regulations or doing poor analyses.

In 2009 when she held a lower level role with the agency, current EPA Administrator Gina McCarthy told Senators that EPA didn't have to conduct a job analysis of the effects of proposed or finalized greenhouse gas emissions regulations (like the Clean Power Plan).

In 2011, an official told the House Energy and Commerce Committee that EPA doesn't directly look at job effects when analyzing its regulations.

When EPA has done job analyses, it distorts the job impacts of its regulations, a 2013 report from the U.S. Chamber found. Bill Kovacs, Senior Vice President for Environment, Technology & Regulatory Affairs explained:

Instead of using the most complete models to provide a true forecast of how regulations impact employment, EPA instead used either incomplete computer models, or in other cases, chose to perform no analysis at all.

This has been confirmed by the GAO report, which states:

EPA estimated effects of its regulations on employment, in part, using a study that, according to EPA officials, represented the best reasonably obtainable data when they conducted their analyses. However, the study was based on data that were more than 20 years old and may not have represented the regulated entities addressed in the RIAs.

During this economic recovery, we've seen unacceptable levels of job growth. When EPA regularly imposes billions of dollars in regulatory costs onto the economy, it has an obligation to adequately analyze how they'll affect jobs. This impacts too many Americans who are still out of work. 

Follow Sean Hackbarth on Twitter at @seanhackbarth and the U.S. Chamber at @uschamber.

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About the Author

Sean Hackbarth standing in front of oil pumps near Baker, Montana.
Senior Editor, U.S. Chamber of Commerce

Sean has written for various Chamber properties since 2012. In 1999, Sean launched a "weblog" and never looked back, becoming a self-proclaimed pioneer of the medium.

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