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					Dan
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Dan
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benefits, we’re way ahe…            “Over the Obama administration’s first three years, the net benefits of regulations
                                   reviewed by OIRA and issued by executive agencies exceeded $91 billion — 25 times the
Dan
Today, 3:18 PM                     corresponding number in the [George W.] Bush administration and more than eight times
Deleted: White House               the corresponding number in the Clinton administration.”
regulatory chief Cass

Dan                                “In the last 10 fiscal years, the highest costs were imposed in 2007. The last three years
Today, 3:18 PM                     of the Bush administration saw higher regulatory costs than the first three years of the
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                                   Obama administration. If you're looking for the year with the highest regulatory costs on
Dan                                record, you'll have to go all the way back to 1992, under President George H.W. Bush.”
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                                   — From an op-ed in the Chicago Tribune by White House regulatory chief Cass
Dan
Today, 3:18 PM                     Sunstein, March 19, 2012
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Obama administration’s fi…

Dan                                “In terms of just the facts, the Obama administration’s issued fewer final rules in the first
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                                   three years than the [George W. Bush] administration did in the first three years.
alleging everything from a

Dan
                                    — Sunstein during Politico breakfast, March 20, 0
                                   0 0                                               2012
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Dan
Today, 3:18 PM                     The president’s opponents have accused him of stunting the economic recovery with a
Deleted: -                         barrage of 0harmful new regulations ranging from a supposed “permatorium” on offshore 0
Dan                                oil drilling to stricter rules 0                             —
                                                                   aimed at reducing farm dust 0 neither of which has actually
Today, 3:18 PM                     taken 0effect during Obama’s term.
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                                   0
Dan                                Cass Sunstein, 0who heads the Office of Information and Regulatory Affairs in the White
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                                   House budget office, argued 0against these critics in a Chicago Tribune opinion article
                                   titled “Why regulations are good — again.” He wrote that the number of new rules has
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                                   decreased under President 0Obama and that estimated net monetary 0   benefits of major rules
Deleted: --                        has reached a staggering level in comparison with the first three years of the previous two
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                                   administrations.
Today, 3:18 PM
Added Text                         We don’t take issue with Sunstein defending the president’s regulatory policies. He has
Dan                                every right to do that, especially if he provides valid data to back up his claims — which
Today, 3:18 PM                     he did in this case. But his op-ed, along with all the numbers he mentioned, suggest that
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                                   the current administration has achieved far greater results than those of the past 20 years.
Dan                                He was especially hard on the Bushes in this regard.
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                                   0                                                   his
                                    We reviewed Sunstein’s claims to find out whether 0 figures tell the whole story. (Note:
Dan
Today, 3:18 PM                     all figures are inflation-adjusted 2001 numbers and the years mentioned are fiscal years
Deleted: Paragraph Break           that end on Sept. 30.)
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Today, 3:18 PM                The Facts
Deleted: telling federal
agencies to avoid redunda…    Obama has issued several executive orders 0 directing federal agencies to avoid redundant,
Dan                           conflicting and excessively burdensome regulations, presumably to avoid any chilling
Today, 3:18 PM                effect that such rules would have on an already mild economic recovery. The past three
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                              presidents have issued similar orders.
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Deleted: Obama                The 0current administration has taken heat from both sides on this issue. In September, the
administration has taken h…   House Committee on Oversight and Government Reform, headed by Republican Darrell
Dan                           Issa (Calif.), reported that Obama had unleashed a “regulatory tsunami.” Among the
Today, 3:18 PM                information sources listed in that study were the Competitive Enterprise Institute and the
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                              Heritage Foundation, both of which are conservative think tanks. We debunked some of
                              the faulty data from that report in a previous column after House Speaker John Boehner
                              (R-Ohio) used some of the numbers to slam the president.

                              On the opposite end of the spectrum, the left-leaning consumer-advocacy group Public
                              Citizen criticized Sunstein last Tuesday for “taking a page out of the anti-regulatory
                              playbook” after he issued a memo telling government agencies to reduce the cumulative
                              costs of regulations.

                              In a news release, the group said the memo “reinforces the false claim that regulations
                              cost jobs, and distorts the crucial role that public protections play in improving and
                              safeguarding the lives of Americans.” The Coalition for Sensible Safeguards, which
                              includes groups like the AFL-CIO and Natural Resources Defense Council, joined the
                              chorus of disapproval with similar statements.

                              The administration is obviously angering people on both sides of the regulatory debate.
                              Considering all the criticism, it’s no surprise that Sunstein has gone on the offensive,
                              talking about cost reductions and benefit increases — something everyone can appreciate.

                              But Obama’s gaudy statistical advantage appeared too good to be true at first glance. We
                              decided to examine the numbers using data from the White House budget office, since
                              that’s where Sunstein found his information.

                              According to the budget office’s regulatory review database, the Bush administration
Dan                           issued 931 rules during its first three years compared to 886 for Obama. This supports
Today, 3:18 PM                Sunstein’s claim during the Politico breakfast, and it disproves suggestions that overall
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                              regulations have increased in recent years.
Dan
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Deleted: But some experts     0Still, it’s worth noting that the number of “economically significant” regulations —
argue that those numb…        meaning those that are expected to have a positive or negative impact on the economy of
Dan                           at least $100 million — has increased from 126 during Bush’s last three years to 177
Today, 3:18 PM                during Obama’s first three.
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Sunstein mentioned net benefits for major rules during first terms, suggesting that
Obama’s numbers are superior in this regard. The budget office’s draft 2012 report to
Congress shows the current president’s total at $91.3 billion from the start of his term
through the third fiscal quarter of 2011. That dwarfs the net positives for Bush and
Clinton, whose administrations managed $3.4 billion and $14 billion, respectively,
through the corresponding periods of their first terms.

This comparison appears in a bar graph on page 54 of the report. A similar bar graph
appears in the 2011 report — for just two years instead of three in that case — but we
found it interesting that as far as we can tell, previous administrations never made such
direct comparisons with their predecessors. Instead, they just listed the figures for
individual years, with no names attached.

Sunstein’s op-ed and even the OMB report suggest that this administration has been
especially smart about regs. Here’s one line from the OMB report, just before the bar
graph that compares Bush and Clinton with Obama:

In the past three years, agencies and OMB have worked together to issue a number of
rules for which the benefits exceed the costs and by a large margin. Consider the
following figure and tables (see Appendix D for more detailed information).

Then we get the new bar graph that makes past administrations look lazy on issuing
beneficial regulations. But the truth is that a few heavily weighted regs boosted Obama’s
numbers during his first three years, while the other administrations didn’t issue such
rules during their early years.

While reviewing the data, we discovered that George W. Bush’s numbers were far greater
than those of his successor during certain stretches. Sunstein didn’t acknowledge this in
his opinion piece or in his breakfast comments.

For good measure, we decided to compare both presidents’ best regulatory periods,
looking at three-year periods. Obama is obviously limited in this regard, since he only has
three years on the books.

The Bush administration achieved its highest net benefits from 2005 through 2007 with a
total of $195 billion. That’s well above the $114 billion for Obama’s first three years in
the White House. (We calculated these numbers using the midpoints for annual cost and
benefit ranges, which are found on page 20 of the budget office report. Budget office
officials cautioned this would not be directly comparable to some of their data.)

In terms of the costs for major rules during consecutive years, the estimated total for the
first three yeas under Obama is $20 billion compared to $22 billion for the last three
years of the Bush era. That proves another one of Sunstein’s points, although a $2 billion
difference hardly makes for a real advantage in this case, especially considering the
dubious nature of calculating regulatory costs and benefits. We’re yet to find an expert
who describes this as an exact science; many, in fact, disregard it altogether as a
technique for achieving political gain.

Sunstein mentioned that the highest regulatory costs in the past 10 fiscal years occurred
in 2007. The budget office’s 2012 report suggests he was right, showing that the costs
totalled about $10 billion.

But Sunstein failed to add context: 2007 marked the highest benefit total in the past
decade with $106 billion. The net benefit that year was $96 billion, which trounces any
year to date for the Obama administration.

The Bush administration also achieved the best net benefit for a single year in the past
decade with $98 billion in 2005. The high mark for the current president is $59 billion in
2011. (Again, see page 20 of the budget office report to Congress).

We should note that certain types of regulations produce massive benefits under the
government’s calculating methods. This is especially true of air-quality rules and
corporate average fuel economy (CAFE) standards.

A good example is the Environmental Protection Agency’s revised cross-state air-
pollution regulation, which is estimated to produce a net benefit of $39 billion. That rule
by itself accounts for more than a third of Obama’s total.

Former Bush regulatory chief Susan Dudley, who now serves as director of the George
Washington University Regulatory Studies Center, contends that Sunstein should have
mentioned the years when the previous president issued or approved rules carrying
similar weight. “The comparisons don’t reflect the superiority of one administration’s
regulatory strategy over another’s, but merely show that the OMB reports higher benefits
in years in which air and CAFE rules are issued than years in which they aren’t,” she
said.

Dudley makes a valid point. As we already mentioned, the 10-year high for regulatory
benefits came in 2007. Lo and behold, that was the year Bush approved a 40 percent
increase in fuel-economy standards. Even given the limitations of an opinion article,
Sunstein might have acknowledged the benefit-heavy years of the previous
administration.

As for Sunstein’s reference to the elder Bush owning the record for regulatory costs, he’s
talking about 1992, when the total reached $17 million. But net benefits that year reached
Dan
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information only relates to …

Dan
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Added Text                         $64 billion, which is still better than anything the Obama administration has pulled off in
                                   a single year. (See page 34 of the budget office’s 2009 report to Congress).
Dan
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Deleted: in the report similarly   At the end of the day, we question whether anyone should be comparing cost-benefit
cautions against mak…              numbers this way in the first place. A footnote in the budget office’s 2012 report to
Dan                                Congress warns against making comparisons across time, stating that “aggregate
Today, 3:18 PM                                                                                                   and
                                   estimates of benefits and costs derived from estimates by different agencies 0 over
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                                   different time periods are subject to some methodological variations and differing
Dan                                assumptions.”
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                                   A second footnote 0from the budget office’s 2012 report to Congress states that “summing
Dan
Today, 3:18 PM                     across time does not reflect how EPA would calculate the benefits of prior rules today.”
Deleted: Baer defended             Sunstein drew the exact type of comparisons that the budget office has cautioned against.
Sunstein’s comparison, sayi…

Dan                                0The regulatory chief told us rather sincerely that he meant for his opinion piece to
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                                                                                                       a
                                   address critics who say the Obama administration has unleashed 0 torrent of expensive
                                   regulations — 0 data from the budget office suggests the notion is false. He also
Dan
                                   acknowledged that previous administrations have achieved “terrific” numbers at times
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                                                                       00

Dan
Today, 3:18 PM                     Still, Sunstein’s Tribune piece 0made only a glancing reference to the Obama’s critics, and
Deleted: his numbers do            even then it was toward the end of his 870-word article. Meanwhile, he led with a
indeed suggest that this
                                   reference to “Moneyball,” a movie about the Oakland Athletics’ general manager and his
                                                                                              0
Dan                                statistical-genius sidekick who teamed up to create an ultra-successful baseball team on
                                                                                                0
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                                               It’s
                                   the cheap. 0 easy to see the message this could send to the average reader: We are the
                                   Moneyball regulators; 0 past administrations don’t stack up.
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anything about Obam…

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an ultra-s
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of his predecessor,

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president — though even t…

Dan                            The Pinocchio Test
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                               Sunstein 0correctly noted that the Obama administration has 0reduced overall regulations 0
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                               compared to the last years of the Bush era, but he didn’t mention that more rules of the
Deleted: White House           “significant” variety have taken effect 0since then.
Dan
Today, 3:18 PM                 The 0regulatory chief would have you believe that Obama’s executive orders and a series
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Dan                                                     He
                               estimated net benefits. 0 may be right, but he cherry-picked data that cast previous
Today, 3:18 PM                 presidents in a pretty negative light.
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Dan                            0Sunstein said he never meant to disparage previous presidents, but he neglected to give
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                               credit where it was due.
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Dan
                               Overall, Sunstein earns one Pinocchio for omitting important facts. His comments don’t
Today, 3:18 PM                 contain factual errors to the best of our knowledge, but he could have been more careful
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Dan                            administration. He teeters on the edge of making the other administrations look like
Today, 3:18 PM                 slouches — the big-picture data suggests they weren’t.
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importantly, Sunstein che…
                               One Pinocchio
Dan
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Description: Comparison by Dan Riehl