The primary responsibility of federal agencies is to enforce federal law through regulation. While agency officials often have latitude in choosing a particular approach, they do not have the option of not regulating when Congress has mandated they do so.

Because of the scope and importance of agency decision making, it follows that presidents, in their role as chief executive, attempt to exert control over the decision process. A common way of doing that has been to impose broad, administration-wide measures to control how agencies interpret and enforce federal statutes. One of the most damaging of these prescriptive tactics has been the imposition of cost-benefit analysis.

Every president since Richard Nixon has required agencies to perform some kind of assessment of the costs and benefits of regulations before they are finalized. Under President George W. Bush, the White House Office of Management and Budget has expanded the role of cost-benefit analysis in regulatory decision-making and dictated to agencies exactly what they should assess and how they should assess it. These policies threaten to undermine each and every policy decision agencies make.

Detractors of regulation can use cost-benefit analysis to force decision makers to overemphasize economic impact. Executive branch officials often meddle with the economic assessments allowing critics to reinvent the debate over a policy and use economic scare tactics to demonize the policy among the public.

This dilemma has been plainly evident with the U.S. Environmental Protection Agency’s current revision to the national ambient air quality standard, or NAAQS, for ozone.

The Clean Air Act directs EPA to make science the preeminent criterion at every stage of the NAAQS standard-setting process. In setting a standard, EPA is to consider only an air pollutant’s effect on public health and is prohibited from considering economic factors. Nonetheless, EPA had to prepare a detailed cost-benefit analysis in advance of its recent proposal to tighten the ozone standard.

Opponents of EPA’s proposal, namely the White House and anti-regulatory lobbyists like the National Association of Manufacturers, have had some success in using the cost-benefit analysis to reinvent the debate over whether EPA should tighten the standard and to distort the debate into an economic one.

Using a favorite strategy, the White House edited the cost-benefit analysis in an attempt to question the scientific evidence behind EPA’s proposal. Although the link between ozone exposure and premature mortality is well documented, OMB forced EPA to include benefit estimates which assume no causal relationship, according to publicly available documents. By coercing EPA to include scientific uncertainty in the cost-benefit analysis, OMB achieves its goal of undermining the scientific argument behind the agency’s proposal.

The anti-regulatory crowd has also resorted to a familiar strategy: setting up a false tension between environmental protections and economic vitality. Media accounts of the proposed revision frequently cite potential economic impact as a point of contention between supporters and opponents of the tighter standard, and EPA provided ample time for industry representatives to air their complaints during public hearings. Within hours of the release of the cost-benefit analysis, an Associated Press article quoted a National Association of Manufacturers spokesman who called the rule “very expensive.”

(Whether the rule would actually be expensive is questionable. For one of the policy options EPA is considering, the agency estimates possible costs to the economy of $20 billion, possible benefits of $23 billion, or anything in between.)

Federal laws often give agencies the responsibility of reducing the risk of hazards like air pollution, contaminated food or lead paint-covered toys. When considering policy options, regulators estimate the number of lives each option would save.

Even when enforcing laws that allow regulators to consider economic costs, current policies, namely Circular A-4 issued by OMB in 2003, force agencies to go to extremes when monetizing the potential benefits of regulation. For many worker safety, consumer protection and public health regulations, the requirements of cost-benefit analysis put regulators in the dubious position of having to place a value on a human life.

Circular A-4 requires agencies place a price tag on each of those lives saved. For example, the cost-benefit analysis for EPA’s standard on ozone used the estimate that each life the regulation would save is worth $6.6 million. To abide by cost-benefit analysis is to simply compare the “value” of lives saved with estimates of compliance costs. Monetizing human life forces policy makers to consider the economics – not the virtue – of dozens, hundreds, or thousands of lives saved as a result of public policy.

Other benefits are lost entirely. Regulations often seek to improve ecological health, preserve environmental majesty, stop discrimination or protect civil liberties. Agencies cannot value such inherently invaluable benefits. Using cost-benefit analysis as the preeminent tool in decision making relegates those benefits to mere footnotes.

By using cost-benefit analysis and forcing regulators onto an economic playing field, detractors of government regulation have perverted its image into one of job loss and higher consumer prices.

Instead, we should look for the virtue in regulation – the ability of the government to keep workers safe, clean the environment, protect civil liberties, and save lives. The barrier to good government is not the fear of economic degradation but the refusal to view it as anything else. If we choose to focus on the positive side of government intervention, we may quickly witness a self-fulfilling prophecy.