Anti-regulation report riddled with errors
Since taking the gavel of the Oversight Committee at the beginning of the year, Darrell Issa's top priority has been an ongoing series of hearings attacking federal regulations that he believes are choking job growth and economic recovery. Central to Issa's -- and the entire Republican Party's -- argument has been a report by the Small Business Administration with dramatic estimates of the negative economic impact of regulations. Turns out now though that... well... that report is fundamentally flawed:
Is it correct? In February, a CPR white paper found a series of flawed methods in the SBA's study, and showed that most of the SBA's number was derived from a regression analysis that used opinion polling data on perceived regulatory climate.Now the nonpartisan Congressional Research Service (CRS) has published its own report examining the SBA study. CRS looked at a number of aspects of the SBA-commissioned study, and found an awful lot of questionable assumptions.
As it turns out, the problems go straight to the core of the report's findings that Republicans like Darrell Issa have used to justify their dogged pursuit of federal regulations:
Crain and Crain’s estimate for economic regulations (which comprises more than 70% of the $1.75 trillion estimate) was developed by using an index of “regulatory quality.” One of the authors of the regulatory quality index said that Crain and Crain misinterpreted and misused the index, resulting in an erroneous and overstated cost estimate.
What in particular? Specifically, the focus of Issa's largest investigations:
Crain and Crain’s estimates for environmental, occupational safety and health, and homeland security regulations were developed by blending together academic studies (some of which are now more than 30 years old) with agencies’ estimates of regulatory costs that were developed before the rules were issued (some of which are now 20 years old). Although the agency estimates were typically presented as low-to-high ranges, Crain and Crain used only the highest cost estimates in their report. The Office of Management and Budget has said that estimates of the costs and benefits of regulations issued more than 10 years earlier are of “questionable relevance.”
Issa's investigations and hearings have especially focused on practices at the Department of Homeland Security environmental and workplace safety regulations, dating all the way back to the letter he sent to 150 industry representatives soliciting recommended regulations to eliminate. His hearings have been consistently biased and stacked with campaign contributors, but the SBA report was always out there providing some semblance of cover and justification. Not so much anymore though, so we'll have to wait to see what else Issa comes up with to justify his actions.
5 comments
posted by Lucas O’Connor at 9:08 am