PRESS RELEASE
-For Immediate Release-
September 10, 2014

Contact: Brian Gumm, bgumm@foreffectivegov.org, 202-683-4812

Cooking the Books on Standards and Safeguards
a Great Disservice to All Americans, Public Discourse

The Center for Effective Government Responds to New Report
from the National Association of Manufacturers

WASHINGTON, September 10, 2014—Today, the National Association of Manufacturers released a new report on what it claims are the costs of federal rules. Authored by economists Nicole V. Crain and W. Mark Crain, the report is based on past studies that have been thoroughly discredited.

"The new report, written for an anti-regulatory lobbying shop, presents a slanted view of the standards and safeguards designed to keep us safe, protect our health and environment, and level the playing field among businesses," said Ronald White, Director of Regulatory Policy at the Center for Effective Government.

The report is largely built on the widely discredited methodology used in a study on regulations that the Crains authored for the Small Business Administration's Office of Advocacy back in 2010. The result is another overblown cost estimate that has little basis in reality and flunks the most basic standards of believability.

"The previous Crain and Crain study was so rife with faulty assumptions and methodological problems that even the Small Business Administration distanced itself from its conclusions and the cost figure the authors came up with," White said. "There's no reason to think that the new cost figure is any more believable than the last."

Though they use updated data from the Office of Management and Budget and other federal sources, the Crains also get a significant amount of their cost information from an odd source: data from an opinion poll of manufacturers. That shaky ground is further undermined by the fact that nearly 80 percent of those polled didn't suffer any penalties under federal rules, and most of them weren't targeted with enforcement or compliance activities.

Nearly 40 percent of the poll respondents did say they bought new equipment or other items to meet standards set in rules, but such activity can boost the economy and could help preserve or create jobs. This is not acknowledged in the National Association of Manufacturers' report.

Notably, the report also omits any mention of the benefits of federal rules, leading to a heavily slanted view of the impacts of regulations on our society and economy.

In contrast, the Center for Effective Government released a study in July, The Benefits of Public Protections: Ten Rules That Save Lives and Protect the Environment (see http://www.foreffectivegov.org/benefits-public-protections-2014), which analyzed ten proposed or adopted federal standards related to health, safety, and the environment. That study looked at both the benefits and costs and found that the ten rules will:

• Save 10,000 American lives annually
• Prevent 300,000 cases of disease, illness, and injury every year
• Create net economic benefits of between $46 billion to $122 billion each year

"Once again, an industry-funded study has completely ignored the health, environmental, and economic benefits that standards and safeguards provide to the American people. This presents an incomplete picture of what rules do, how they operate, and who they benefit," said White. "That does a great disservice to the ongoing national dialogue over the role of government in American society."

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