Date: Mon, 13 Mar 1995 12:55:27 -0500 (EST) From: Competitive Enterprise Institute Subject: CEI-List: Risk Regulations *Press Release* By Sam Kazman, CEI General Counsel Feb. 1995 PUBLIC INTEREST GROUP CALLS FOR CONGRESS TO RECOGNIZE THE RISKY NATURE OF GOVERNMENT RISK REGULATION Testifying before the House Science Committee on regulatory reform and H.R. 9, the Competitive Enterprise Institute today called for recognition of the fact that government agencies often seek to advance their own interests at the expense of the public. Sam Kazman, CEI General Counsel, stated: "Regulatory reform will fail unless we realize that agencies have their own special interests. They seek bigger budgets, bigger jurisdiction, and bigger 'emergencies' to scare the public into calls for more federal programs. Simply telling agencies to do better analysis won't solve this problem." Mr. Kazman outlined three steps for effective regulatory reform: 1) Recognize institutional incentives and take advantage of them, by expanding judicial review and OMB oversight: The peer review mandated by H.R. 9 should not be left up to individual agencies, because they will soon figure out ways to bend this to their advantage. Instead, it should be job of OMB, whose function is to restrain agencies. Moreover, all of the expanded analysis required under H.R. 9 should be reviewable in court challenges. 2) Impose an across-the-board requirement that the benefits of any rule be shown to exceed its risks: A basic principle of government is that every regulation produce a net benefit. In practice, however, this has become the exception rather than the rule. This situation needs to be reversed. If there are justifiable exceptions to this net benefit principle, then Congress can deal with them on a case by case basis. 3) Put an end to "regulation by hypothecation". Rules based on hypothetical threats to human health and safety should be supported by a preponderance of evidence: Some of the worst cases of unfounded regulation have involved rules issued with no direct evidence of human risk at the exposure levels at issue. EPA's residential radon campaign, for example, is based on extrapolations from extremely high mining exposures. Yet the most extensive study of this issue to date--an analysis of over 500 nonsmoking lung cancer cases--found no detectable risk from residential radon. (Alavanja, et al., Residential Radon Exposure and Lung Cancer Among Nonsmoking Women, Journal of the National Cancer Institute, Dec. 21, 1994.) If a rule is not based on direct or epidemiological evidence that the exposure levels at issue pose a risk to people, then it should not receive the deference that courts customarily give to agencies. Instead, we should require that it be supported by a preponderance of the evidence. CEI is a nonprofit free-market advocacy organization that has long been involved in exposing the unrecognized costs of government overregulation. In 1992, CEI won a federal court ruling that the National Highway Traffic Safety Administration had illegally concealed the lethal effects of its new car fuel economy standards. CEI v. NHTSA, 956 F.2d 321 (D.C. Cir.).