Reducing Regulatory Burdens – One Step Forward & Two Steps Back?

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The President’s 2014 Budget commits to “reducing regulatory burdens” asserting that the President’s “historic Government-wide review, or ‘look back,’ of existing rules” has “produced over 500 reform proposals across all Executive agencies,” and will “save more than $10 billion in the near term, with more savings to come.”

As GW Regulatory Studies Center Policy Analyst, Sofie Miller, has pointed out, one of these reforms, featured prominently in the Environmental Protection Agency’s January 2013 progress report on its look back initiative, is the “Tier 3” vehicle and fuel standard that EPA announced last month. The results of this particular review should give pause to anyone hoping to see real burden reductions emerge from the President’s look back initiative. In its search for ways to “reduce burden on industry with no expected adverse environmental impact,” EPA instead decided to impose new regulations that by its own estimates will cost Americans $3.4 billion per year when fully implemented.

The Tier 3 rule would establish new automobile tailpipe emission standards and reduce allowable sulfur content in gasoline, increasing the costs of new vehicles and the price of gasoline. Despite the rule’s $3.4 billion per year price tag, the administration claims burden reductions from this review, because “EPA intends to review … areas where recordkeeping and reporting obligations can be modified to reduce burden.” In other words, the new standards will add billions of dollars to the cost of cars and gasoline, but the silver lining is that energy companies may have to keep fewer records and be able to report information electronically.

The “Reducing Regulatory Burdens” section of the Budget concludes by promising that “in the coming year, agencies will continue to pursue the regulatory reforms identified in the review process, producing more in savings by simplifying rules, eliminating redundancies, and identifying more cost-effective ways of completing their mission and serving the American people.”