White House Confirms EPA Using Bogus Benefits in Rulemaking

Press Release

U.S. Sen. David Vitter (R-La.), top Republican on the Environment and Public Works Committee, today made the following statement regarding reports that the Environmental Protection Agency (EPA) drastically exaggerated on its economic benefits prediction in a formaldehyde emissions rule. The White House Office of Management and Budget (OMB) dropped multiple categories of financial benefits from the proposed rule that the EPA sent them for review.

"The EPA has been gaming the system by grossly exaggerating economic benefits to justify its costly regulations," Vitter said. "This recent review by an office within the Obama White House goes to show that even his Administration cannot support EPA's practice. It's not just a minor exaggeration: the EPA's lowest range of benefits is ten times greater than it should be."

The proposed formaldehyde emissions rule, as originally sent to OMB's Office of Information and Regulatory Affairs (OIRA), was estimated by EPA to have a benefits range of $91 million to $278 million. Once a thorough review was done by OIRA, they calculated a benefits range of $9 million to $48 million.

Vitter and the EPW Republicans have criticized the EPA's method of conducting economic analyses, and have made it part of the five transparency requests made in the context of the confirmation process of Gina McCarthy. Two of the outstanding transparency requests are specifically related to cost-benefit analysis, and in both cases the Agency has yet to adequately or substantively respond. One particular request asks for the data EPA refuses to make public - which is then used to calculate the costs and benefits for a series of major regulations. The EPW Republicans have requested a commitment from the EPA to conduct economy-wide economic analysis as required under various executive orders and current law. Click here to read more about the EPW Republicans' request.

In 2009, Senator Vitter demanded that the EPA have the National Academy of Sciences (NAS) conduct a peer review of their scientific assessment of formaldehyde. Once completed, the NAS review showed EPA was mismanaging the scientific process. The OIRA review found and confirmed that EPA mismanages the economic analysis, as well.

Source