Our story begins in December 1980, when President Jimmy Carter signed (over the objection of four Cabinet agencies) a law creating the Office of Information and Regulatory Affairs, or OIRA. The purpose was to establish within the White House budget office a clearinghouse to, in Carter’s words, “regulate the regulators” by reviewing and sometimes jettisoning paperwork requirements that regulatory agencies imposed on the public.
Liberals complained that cost-benefit analysis biased OIRA against protecting health and safety because a regulation’s benefit to society, being widespread, was harder to quantify than its narrow cost to specific businesses. In addition, because calculations of regulatory cost relied on industry input, these were highly exaggerated.
Lo and behold, that started to happen during the presidency of Barack Obama. Obama’s OIRA administrator, Cass Sunstein, broadened cost-benefit’s scope to include, for instance, the calculation of benefits to people living outside the United States, and to assign a (human) cost to the release into the atmosphere of carbon ($21.40 per metric ton). You can guess what happened next. “As economists got better at measuring the benefits of regulation,” Stuart Shapiro, a onetime OIRA analyst and now professor of public policy at Rutgers, observes in The Regulatory Review, “benefit-cost analysis began to be seen as a tool that supported more stringent regulation of the economy.”
The pool of regulations eligible to block was limited to those passed at the tail end of Obama’s presidency, so Farber looked only at those. What he found was that the regulations Congress targeted through proposed CRA resolutions corresponded not at all with OIRA cost-benefit analyses. Indeed, fully one-third of the regulations that members of Congress sought to eliminate had no OIRA cost-benefit analysis at all, because their economic impact was too slight. Among major rules eligible for elimination, most never even got considered, even though they came with cost-benefit analyses. And among those regulations that were considered, minor ones were repealed at twice the rate of major ones.
During his first term, Trump imposed a limit on the regulatory cost of new regulations. This appalled even President George W. Bush’s notoriously pro-business OIRA administrator John Graham, who was a fervent cost-benefit advocate. Prior to Trump, observed a highly critical 2020 article in the journal Regulation that Graham co-authored, “there was no annual cap on the additional cost burdens an agency can impose.” Trump created a cap and set it, of course, at zero. “Thus has cost-benefit analysis,” wrote Georgetown law professor Lisa Heinzerling, “mutated, by executive directive, into cost-nothing analysis.” During his second term, Trump issued an executive order setting the cost of new regulations (with apologies due Elvis Costello) at “significantly less than zero.”
But when the Trump administration came back in, it raised the discount rate from 2 percent to as high as 7 percent, based on some vague notion that societal well-being will be higher in 30 years. Will it be? That’s an interesting but unanswerable question. On one hand, Trump won’t be around, and that’s a definite plus. On the other hand, I think everybody over 35 can agree that societal well-being in December 1995, despite its many deficits, was a damned sight better than societal well-being in December 2025.
In October, Jeffrey Bossert Clark, acting OIRA administrator, issued a memo leveling yet another blow at cost-benefit analysis. Instead of taking 90 days to evaluate some proposed deregulatory action, OIRA will now take 28 days—and 14 if a given rule is “factually unlawful.” That’s not even close to enough time. “If high-quality analysis suggests that deregulation is costly, and it often will,” concludes Shapiro, “the [Clark] memo effectively instructs OIRA to turn a blind eye.”
Increasingly, it’s left to others to calculate the true cost of Trump’s policies. For instance, Trump is promising a $2,000 rebate on his tariffs for low- and middle-income Americans. But according to the nonprofit (and very centrist) Tax Foundation, even if Trump were to distribute every penny of tariff revenue, the result would be a rebate well below $2,000—and that’s assuming a means test with a hard cutoff at $100,000. Partly that’s because total tariff revenue must be discounted by about 25 percent to take into account tariffs’ shrinkage of the tax base. “A better way to provide relief from the burden of tariffs,” the Tax Foundation concluded, “would be to eliminate the tariffs.”
The decline and fall of cost-benefit analysis is in step with the decline of other conservative values under Trump: fiscal conservatism, a united West, free trade, tight money at the Fed, and of course that old standby, dignified leadership at the top. It’s another reminder that Trumpism has almost nothing to do with what Republicans purport to stand for (excepting tax cuts for the rich and deregulation, and even Mitt Romney is having second thoughts about the former). Liz Cheney was right: When the Trump nightmare is over conservatives will need to start a new party because the old one will be too compromised by Trump. It will have no more legitimacy than Vichy after the Allied liberation of Paris. Instead of trying to revive neoconservatism, David Brooks should try to revive the Whigs. Maybe Cheney, who disappeared from view after departing Congress, will come out of hiding to help.
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