Environmental, Health, and Safety Tradeoffs: A Discussion of Policymaking Opportunities and Constraints

CRS Report for Congress
Environmental, Health, and Safety Tradeoffs:
A Discussion of Policymaking
Opportunities and Constraints
Updated February 27, 2004
John E. Blodgett
Deputy Assistant Director
Resources, Science, and Industry Division

Congressional Research Service ˜ The Library of Congress

Environmental, Health, and Safety Tradeoffs: A
Discussion of Policymaking Opportunities and
A policymaker making a decision on approving a program may face the
questions, What are the tradeoffs? What alternatives are foregone by committing
resources to that program? This issue has been sharpened in environmental, health,
and safety policy because studies indicate that some programs are more cost-effective
than others, suggesting that redirecting resources from less efficient to more effective
programs would increase overall national economic welfare.
Actually making implied tradeoffs has proved difficult, however. One reason
is continuing controversy over methods for evaluating the risks, costs, and benefits
of alternative programs — leaving uncertainty about exactly what would be gained
and lost in a tradeoff. Other constraints affecting tradeoffs include variations in
regulatory standards among environmental, health, and safety statutes and political
responses to nonquantifiable values such as equity. Legislative efforts to revise the
statutes or to establish more comprehensive reviews of tradeoffs have moved slowly.
Two further factors constrain the ability to make a tradeoff at a particular time
and in a particular institutional context. One consists of institutional structures and
procedures that impose limits on possible ranges of decisions within the legislative
and executive branches. For example, an appropriations subcommittee typically
weighs spending tradeoffs only among programs within its jurisdiction, but not
tradeoffs with programs in the jurisdiction of other subcommittees even if the
programs are related. Similarly, statutes authorizing environmental, health, and
safety regulations may be written by separate committees, leading to variations in
cost-effectiveness standards for protecting the public health and environment.
A second complicating factor occurs when a program’s alternative(s) would
require a shift in who can decide on the use of the resources involved, as when a
regulatory program is considered in lieu of a tax-supported program. Deciding to
regulate industrial air pollutants mandates spending by industry and consumers;
choosing not to regulate leaves those monies available to the industry’s executives
and consumers, who can invest/spend them according to their own preferences.
Having little control over alternative expenditures, a decisionmaker tends to focus on
each program as self-contained, not to compare options.
The actual tradeoff faced by a legislator or policymaker at a particular time and
place is constrained by institutional structure and rules, and by the fact that most
decisions are up-or-down, not between program options. Many putative tradeoffs
exist only in a theoretical sense: they are tradeoffs not then and there available to that
policymaker. Making environmental, health, and safety tradeoffs on the basis of
cost-benefit analyses implies restructuring decisionmaking processes, but such
restructuring is very difficult in itself, and it is unclear whether the results would
more accurately reflect the informed preferences of the Congress — or the citizenry.
This report is unlikely to be updated.

Preface ..........................................................1
Institutional and Structural Limits on Choosing among Tradeoffs............4
Appropriations for Federal Programs..............................4
Authorizations for Federal Programs...............................6
Coordinating or Centralizing Decisionmaking for Tradeoffs............9
Federal Decision Criteria, State and Local Choices, and Private Sector Preferences:
When Tradeoffs Change Decisionmakers Controlling Resources........11
Weighing Tradeoffs: Where Does It Lead?.............................15
List of Figures
Figure 1. Environmental, Health, and Safety Tradeoffs...................18
List of Tables
Table 1. Congressional Committee Jurisdiction for Selected Environmental, Health,
and Safety Statutes.............................................8
Table 2. Decisionmakers and Decisionmaking Criteria
Determining Regulatory Expenditures to Abate Pollution.............13

Environmental, Health, and Safety
Tradeoffs: A Discussion of Policymaking
Opportunities and Constraints
Government programs are no exception to the constraints of opportunity costs:
that is, investing resources in any one program means that those resources cannot be
used for some other program. A policymaker deciding whether to support a new
action; a legislator deciding whether to vote for a new program; a regulator deciding
whether to impose a stringent standard: each decisionmaker faces the question,
What will be foregone if I decide to commit the resources for this activity?
Especially with respect to environmental, health, and safety programs,
increasing sensitivity to the costs of regulations has led some pundits, analysts, and
stakeholders to challenge initiatives on the grounds that alternative choices are
available that would provide more risk reduction or other benefits at lower cost.
When Congress voted on the Clean Air Act Amendments of 1990, columnist
George F. Will wrote, “Policy makers face difficult tradeoffs. Comparative returns
to health must be considered. The $21 billion spent on cleaner air cannot be spent
on immunization, infant mortality, care for poor pregnant women.”1
At a 1997 hearing concerning the Environmental Protection Agency’s (EPA’s)
proposal to tighten the National Ambient Air Quality Standards (NAAQS) for ozone
and particulate matter, a Congressman commented, “What are the alternatives to the
... rulemaking? There are clearly better investments that can be made to promote
public health. Eight billion dollars could save 3 or 4 times as many women from2
breast cancer by paying for mammograms.”
In a “viewpoint” article in Exxon’s magazine for shareholders, its author states
that sound science and sound economics could lead to smarter regulation by
reallocating regulatory expenditures: for example, “it may be smart to invest more

1 George F. Will, “Your Money and Your Life,” Washington Post (March 8, 1990), p. A27.
2 Hon. David McIntosh, in U.S. Congress, House, Subcommittee on National Economic
Growth, Natural Resources, and Regulatory Affairs, Committee on Government Reform and
Oversight, EPA’s Particulate Matter and Ozone Rulemaking: Is EPA above the Law?thst
Hearing, 105 Congress, 1 session, April 16, 1997 [Serial No. 105-37] (Washington, D.C.:
U.S. Govt. Print. Off., 1997), p. 36.

in smoking-cessation education for pregnant women and less in making the
groundwater in a Michigan rail yard cleaner than drinking water.”3
In a debate counterposing environmental and economic tradeoffs, Paul Portney
of Resources for the Future said, “A hundred dollars spent on environmental
protection is $100 that can’t be spent on housing, or space, or health, or other
alternatives .”4
In the early 1990s the then-head of the Harvard Center for Risk Analysis, John
D. Graham together with his student and colleague Tammy O. Tengs went beyond
the rhetoric and studied these potential tradeoffs. They analyzed the cost-
effectiveness of 185 life-saving interventions (including, for example, laws,
regulations, and building codes) for which national cost and benefit estimates were
available. They found that these interventions cost $21.4 billion per year and averted
56,700 premature deaths and saved 592,000 years of life annually; but there was no
relationship between the cost-effectiveness of the interventions and their
implementation. Tengs and Graham concluded that if the $21.4 billion per year were
devoted only to the most efficient interventions, approximately twice as many lives
and years of life could be saved. Alternatively, they found that the nation could
maintain the current level of survival benefits — averting 56,700 deaths per year —
and “save $31.1 billion over the status quo, because there are many untapped
investment opportunities that save both lives and money. That is, not only would we
save the $21.4 billion that we are currently spending, but another $10 billion — all
the while maintaining our present level of survival benefits.”5
Graham asserted that failing to follow through on the implications of studies
showing that tradeoffs could improve the cost-effectiveness of health, environmental,
and safety regulations was a “perverse pattern of investment [that] amounts to
‘statistical murder’ of American citizens.”6 Graham concluded —
Legislators should pass broad-based legislation requiring the use of risk analysis
and cost-benefit analysis in government decisions. The President and Congress

3 “Bringing Reason to Regulation,” The Lamp (Winter 1997-1998), 13.
4 Paul R. Portney, representing the economist’s perspective in a debate Does Environmental
Policy Conflict with Economic Growth? Two Views, Resources for the Future (1 December
1993); a printed version is David Gardiner and Paul R. Portney, “Does Environmental
Policy Conflict with Economic Growth?” Resources (Spring 1994, no. 115), pp. 19-23
5 Tammy O. Tengs and John D. Graham, “The Opportunity Costs of Haphazard Social
Investments in Life-Saving,” in Robert W. Hahn, ed., Risks, Costs, and Lives Saved: Getting
Better Results from Regulation (Washington, D.C.: The AEI Press, 1996), pp. 173-174;
Tammy Tengs, et al., “Five-Hundred Life-Saving Interventions and Their Cost-
Effectiveness,” Risk Analysis, Vol. 15, no. 3 (1995), 369-390. For an explicit critique of
the analysis, see Lisa Heinzerling, “Five-Hundred Life-Saving Interventions and Their
Misuse in the Debate Over Regulatory Reform,” Risk Vol. 13, no. 1/ 2 (Spring 2002), 151-


6 John D. Graham, “Comparing Opportunities To Reduce Health Risks: Toxin Control,
Medicine and Injury Protection,” National Center for Policy Analysis, Policy Report No.

192 (June 1995), p. 2.

should reexamine annual appropriations to public health and environmental
agencies to determine how reallocations of dollars could offer more health
protection and no greater costs to the taxpayer or private sector.
This view has been broadly accepted among those promoting risk assessment and
cost-benefit analysis as ways of rationalizing regulatory activities. For example,
summarizing a volume analyzing risk-benefit tradeoffs, Robert W. Hahn, a long-time
student of regulatory costs, concluded: “We could save a substantial number of lives
and money by reallocating resources from ineffective domestic regulations to other7
life-saving interventions in the United States or the developing world.”
Thus, going beyond rhetoric, analysts like Hahn and Tengs and Graham see
quantitative analysis of tradeoffs as a practical way of achieving greater societal
efficiency for health, safety, and environmental protection investments. Graham, in
particular, has been a strong advocate of using risk and cost-benefit assessments of8
tradeoffs to improve decisionmaking – a view which since 2001 he has been in a
position to further as Administrator of the Office of Information and Regulatory
Affairs in the White House’s Office of Management and Budget.
Certainly, risk assessment and cost-benefit analyses of health, safety, and
environmental policies have advanced substantially over the past several years,
leading to efforts at quantifying tradeoffs to identify the most efficient/least efficient
ones. But legislators and other policymakers have found it difficult to effect overt
tradeoffs among environmental, health, and safety programs. One reason for this
difficulty, and perhaps the one most often cited, is the perceived inadequacy of the
assessments themselves. Problematic issues include incomplete assessment of costs
and, especially, benefits; discounting future benefits; monetization of noncommercial
benefits such as health and environmental amenities; the resources and time
necessary to conduct analyses; a utilitarian bias to the technique; among others.9

7 Robert W. Hahn, “Regulatory Reform: What Do the Government’s Numbers Tell Us?” in
Robert W. Hahn, ed., Risks, Costs, and Lives Saved: Getting Better Results from Regulation
(Washington, D.C.: The AEI Press, 1996), p. 239.
8 E.g., Graham, “Edging Toward Sanity on Regulatory Risk Reform,” Issues in Science and
Technology (Summer 1995), 61-66; Graham, “Legislative Approaches to Achieving More
Protection Against Risk at Less Cost,” University of Chicago Legal Forum (1997), 1-47;th
testimony on provisions of H.R. 9 [104 Congress] that would create a system of risk
assessment and cost-benefit analysis for Federal agencies engaged in health, safety, and
environmental regulations: Committee on Science, U.S. House of Representatives, Riskthst
Assessment and Cost Benefit Analysis (104 Cong., 1 sess.) January 3, 1995 [No. 3]
(Washington, D.C.: U.S. Govt. Print. Off., 1995), pp. 69-71.
9 E.g., for a review of the difficulties in applying these techniques, see Lester B. Lave,
“Benefit-Cost Analysis: Do the Benefits Exceed the Costs?” in Robert W. Hahn, ed., Risks,
Costs, and Lives Saved: Getting Better Results from Regulation (Washington, D.C.: The
AEI Press, 1996), pp. 104-134; Lisa Heinzerling, “The Perils of Precision,” The
Environmental Forum (September/October 1998), 38-43; and Frank Ackerman and Lisa
Heinzerling, Priceless: On Knowing the Price of Everything and the Value of Nothing (New
Press, 2004).

But leaving aside a more detailed discussion of how accurately it is possible to
evaluate potential tradeoffs or how fair such tradeoffs might be, this paper examines
two institutional reasons why policymakers may be disinclined to make tradeoffs –
or may even find it impossible. For even if the tradeoffs can be defined and
defended, difficulties in effectuating them remain. One institutional barrier is the
limited authority of policymakers to affect decisions across institutional boundaries.
For example, in part because of independent decisions made at different times by the
relevant congressional committees of jurisdiction, the various health, safety, and
environmental statutes manifest differing standards of acceptable risk and differing
criteria for assessing them.
The second barrier arises from the divergence in decision criteria applied by the
different institutional decisionmakers involved in tradeoffs. Health, safety, and
environmental policies can involve both public financing (e.g., grants or loans) and
regulations that require private sector investments; they can involve a range of
federal, state, local, and private decisionmakers. As tradeoffs change those
responsible for making decisions, the bases for acting or financing programs shift as
well. A decisionmaker can rarely if ever prescribe that resources freed up by his or
her not supporting an environmental protection program or not choosing a regulatory
option – or a more stringent option – will go to a more beneficial alternative.
These constraints that arise from institutional contexts in which legislators and
other policymakers address tradeoffs both limit alternatives that can usefully be
considered, and push decisionmakers to make up-or-down, case-by-case decisions.
rather than to choose among tradeoffs. Typically, a decisionmaker’s only option is
to approve or disapprove an action, to vote for or against a program, or to implement
or delay a regulation — with little power to redirect the resources to a more cost-
effective alternative if the choice at hand is rejected.
Institutional and Structural Limits on Choosing
among Tradeoffs
The rules and structures of organizations channel decisions in ways that limit
the options of decisionmakers. In the Congress, rules of procedures and committee
structures can limit tradeoffs available to Members. In particular, jurisdictional
limitations affecting congressional subcommittees’ and committees’ choices and
procedural requirements governing floor actions — including especially the
“germaneness” rule of the House — impede treating comprehensively the many
environmental, health, and safety statutes. These procedural and structural limits
play key roles in determining the availability of potential tradeoffs both among
program goals and among alternatives for federal expenditures of treasury funds.
Similarly, procedures and the bureaucratic structure of the Executive Branch limit
choices of administrators and program managers.
Appropriations for Federal Programs
The process by which Congress considers annual appropriations illustrates how
structure can constrain tradeoffs. While the President, the Congress as a whole, each

Chamber, and the full Committees on Budget and on Appropriations, have the ability
to view comprehensively funding priorities and consider tradeoffs, only in
exceptional cases can those with comprehensive authority devote attention to the
level of detail at which most environmental, health, and safety tradeoffs occur.10
The House and Senate Appropriations Committees11 each divide the total
amount of funds available for discretionary spending among their 13 subcommittees.
As a practical matter, most tradeoffs among programs — whether to spend dollars
here or there — occur within each subcommittee’s jurisdiction.12 For example, the
Subcommittee on the Department of Veterans Affairs (VA), Housing and Urban
Development (HUD) and Independent Agencies has combined responsibility for VA,
HUD, Environmental Protection Agency (EPA), National Aeronautics and Space
Administration (NASA), and several other independent agencies. The subcommittee
may make judgments on the best use of a dollar within an agency’s appropriation, or
across agencies within its domain — so that EPA’s dollars may be affected by
appropriations decisions concerning HUD or NASA, for example. But there is
essentially no opportunity to judge whether funds to be spent on water quality, for
example, would be best spent by EPA, by the U.S. Department of Agriculture, or by
the Department of the Interior, since each is under the jurisdiction of a different
appropriations subcommittee. Thus the unchosen option of spending money through
the USDA for water pollution control is only theoretically an opportunity cost of a
choice to spend money on sewage treatment grants through EPA: those choosing to
spend the money through EPA did not have the option of spending those dollars
through USDA.
To illustrate, in 1997 the Administration proposed a Clean Water Initiative to
improve and strengthen water pollution control efforts. EPA and USDA, working
with other agencies, developed a coordinated action plan. To implement the plan, the
President proposed a total of $568 million in increases for various water programs
in the FY1999 budget. However, these programs were under the jurisdictions of five
separate subcommittees of each Chamber’s Appropriations Committee, so “there is
no single opportunity for making funding tradeoffs where the several agencies are
concerned, e.g., more for USDA, less for EPA.”13 In the end, each subcommittee
weighed its component of the plan against its own priorities, so each agency’s
program was treated separately. EPA’s programs got most of its proposed increases,

10 At many steps of congressional (and administration) decisionmaking, Members implicitly
or explicitly tradeoff programs, issues, and/or funding. But, as measured by cost benefit
analyses and risk assessments such as Tengs and Graham’s, some environmental, health, and
safety programs empirically seem relatively inefficient compared to other programs. The
question addressed here, then, is why has the purported identification of superior tradeoffs
not led to changes resulting in a potentially more efficient array of programs.
11 For more details, see Richard Munson, The Cardinals of Capitol Hill (New York: Grove
Press, 1993).
12 The Office of Management and Budget, which constructs the President’s Budget, is
analogously split into compartments, each of which focuses on tradeoffs within its allotment
of the full budget.
13 C. Copeland, Clean Water Action Plan: Budgetary Initiatives, CRS Report 98-745, p. 4.

while most of USDA’s programs did not. The “coordinated action” of the plan was
The competition among alternatives is not just on the basis of relative costs and
benefits: there is also political reality. In an interview about Federal research and
development, Senator Bennett Johnston was asked about R & D tradeoffs among
departments. Johnston observed:
There is no research budget as such. So what happens at National Science
Foundation, the National Institutes of Health and the Department of Energy are
not connected to each other. You know, those silly scientists who said kill the
SSC [Superconducting Super Collider] so there would be more money for
something else. They did not fail economics 101, they failed freshman high15
school arithmetic. I mean [the budget process] just does not work that way.
These bounded tradeoffs become explicit in floor amendments to add funds in
an appropriations bill: as net dollars within the bill cannot exceed a ceiling,
offsetting funds must be found elsewhere in the bill. For example, during
consideration of H.R. 4194, the FY1999 appropriations bill for the Departments of
Veterans Affairs, Housing and Urban Development, and Independent Agencies
[including EPA and NASA], an amendment was approved by the House to increase
VA grants to construct state extended care facilities by $21 million and offset the
increase from the Housing Opportunities for Persons with AIDS program funding.
An alternative amendment, which was withdrawn, would have offset the $21 million
increase for VA extended care facilities with a decrease in Space Station funding.
Thus funds originally allocated to a HUD AIDS program were traded off to VA, in
lieu of an alternative proposal that they come from funds originally allocated to the
Space Station. In this way tradeoffs are typically contained within each of the 13
appropriations bills.
Authorizations for Federal Programs
The situation is analogous for authorizations of programs — i.e., the statutes
that establish their intent, rules, and limitations: jurisdictions are divided among
committees (and their subcommittees). For environmental, health, and safety
statutes, tradeoffs are largely determined by the statutes/programs of the16
subcommittee/committee of jurisdiction. Opportunities for tradeoffs across
committee jurisdictional lines can be limited, especially in the House.
At one level, legislative constraints hinder consideration of tradeoffs between
regulatory impacts of programs; an example is the separate jurisdictions in the House
for air pollution (Committee on Energy and Commerce) and water pollution
(Committee on Transportation and Infrastructure). At the level of choosing between

14 In theory, either full Appropriations Committee could have addressed the funding
comprehensively, but more often would defer to subcommittee decisions.
15 The Energy Daily (Jan. 25, 1994), p. 4.
16 David C. King, Turf Wars: How Congressional Committees Claim Jurisdiction (Chicago:
University of Chicago Press, 1997).

policy instruments, jurisdiction also has implications. Although most economists and
many other policy analysts believe pollution reductions could be more efficiently
achieved through economic mechanisms, such as pollution taxes, than through
“command and control” regulations, the latter have been most often chosen. This
tradeoff is constrained in large part because of split jurisdictional authorities. The
committees establishing pollution control programs and policies can authorize
regulations but cannot levy taxes. Adoption of pollution taxes would depend on
favorable action by another committee — an added step with uncertain outcome that
the authorizing committee can avoid by employing regulations only.17 Jurisdiction
can also affect choices between regulatory programs and federally funded programs.
Authorizing committees can authorize regulatory programs themselves. But when
they authorize federally funded programs, the final funding decisions reside with the
appropriations committees, whose priorities on such programs may differ from the
authorizing committees’ priorities.18 One way authorizing committees have effected
their view of the appropriate funding priority for their programs is to establish
entitlement programs, which are not subject to annual appropriations.
Tengs and Graham tried to take institutional constraints into account in their
assessment of cost-effective alternatives. They analyzed savings achievable if five
government agencies19 each independently invested its regulatory efforts most cost-
effectively. The analysis examined 134 agency rules that result in about $4.11 billion
spent per year by those regulated and save 94,000 life-years. In the analysis, the
marginal cost per life-year saved by each agency’s regulations varies from
$1,510,000 for the Consumer Product Safety Commission to $11,300 for the National
Highway Traffic Safety Administration, but the more cost-effective application of
those dollars within each agency’s regulatory authorities would mean that the $4.11
billion in resource consumption would nearly double the life-years saved, to about


But even this agency-by-agency assessment of tradeoffs does not fully reflect
the limitations on tradeoffs — especially for EPA. EPA’s authorities derive from
over a dozen statutes. Jurisdiction over these statutes is divided among several
committees in the House; while jurisdiction over environmental laws is considerably
more concentrated in the Senate, jurisdictional splits remain. Table 1 presents the
House and Senate Committees that are among those with jurisdictions over selected
environmental, health, and safety statutes. While this list may not capture all relevant
committees with jurisdiction, it illustrates that programs often cited as candidates for

17 See Steven Kelman, What Price Incentives? (Boston: Auburn House Publishing Co.,


18 Authorizing committees frequently specify annual appropriations for a program; for the
appropriations committees, however the authorization for appropriation is in effect a ceiling
with actual funding subject to available monies and competing programs.
19 The Consumer Product Safety Commission, the Environmental Protection Agency, the
Federal Aviation Agency, the National Highway Traffic Safety Administration, and the
Occupational Safety and Health Administration.
20 Tengs and Graham, p. 176.

Table 1. Congressional Committee Jurisdiction for Selected
Environmental, Health, and Safety Statutes
Environmental, Health, andHouse Committee ofSenate Committee of
Safety StatutesJurisdictionJurisdiction
Clean Air ActEnergy and CommerceEnvironment and Public
Clean Water ActTransportation andEnvironment and Public
I nfr astr uc tur e Works
Safe Drinking Water ActEnergy and CommerceEnvironment and Public
Solid Waste DisposalEnergy and CommerceEnvironment and Public
Act/Resource ConservationWorks
and Recovery Act
SuperfundEnergy and Commerce;Environment and Public
Transportation andWorks; Finance (taxes)
Infrastructure; Ways and
Means (taxes)
Federal Insecticide,Agriculture; Energy andAgriculture, Nutrition &
Fungicide, and RodenticideCommerce (food tolerances)Forestry; Commerce,
ActScience, and Transportation
(food tolerances)
Toxic Substances Control ActEnergy and CommerceEnvironment and Public
Occupational Safety andEducation and the WorkforceHealth, Education, Labor and
Health ActPensions
Food and Drug ActEnergy and CommerceCommerce, Science, and
T r ansp o r tatio n
NOTE: This table simplifies many jurisdictional complexities. The identified committees
may not have exclusive jurisdiction over the indicated statutes, and some committees with
jurisdiction extending over environmental, health, and safety statutes may not be included.
Subcommittee jurisdictions are omitted. Also, specific provisions in a bill may lead to
multiple referral to other committees for consideration of those provisions. Finally, some
programs have elements that may be affected by separate legislative enactments, such as
mass transit programs under transportation legislation having consequences for Clean Air
Act programs.
tradeoffs are subject to separate legislative panels. One result is that each Act
containing regulatory programs has its own criteria for decisions on setting standards,
cleanup, etc. With strong leadership, negotiations may lead to cross-committee deals
to coordinate program authorities, but this is the exception, not the rule.
Thus both legislators and EPA officials have limited opportunities to compare
and make consistent standards and decision criteria among statutes. The resulting
fragmented regulatory structure precludes EPA from proceeding with many tradeoffs
and from weighing the costs and benefits decisions under different authorities on the

same scales. Hence, at least for EPA, Tengs and Graham’s analysis showing that
regulatory actions could be more cost effective appears to be more conceptual and
hortatory than implementable. EPA has some power to comprehensively assess the
effectiveness of its programs, but the existing statutory patchwork that shapes EPA’s
administrative structure21 goes far to explain the variability in the cost-effectiveness
of its many programs — at least as measured by available cost-benefit analyses and
risk assessments.
Coordinating or Centralizing Decisionmaking for Tradeoffs
Both the Congress and the White House have tried to bring more coherence and
rigor to the regulatory decisionmaking. A series of Executive Orders over the past
20 years have led to a process for assessing the impacts of regulatory proposals (most
recently, President Clinton’s E.O. 12866, with new implementing guidelines issued
by the George W. Bush Administration). Congress has sought, with mixed success,
to impose risk assessment and cost-benefit analysis requirements on the regulatory
agencies, and to provide some centralized oversight of the process: the Unfunded
Mandates Reform Act (P.L. 104-4) requires agencies to prepare cost-benefit analyses
for regulations costing $100 million or more — in effect codifying a part of E.O.
12866. However, in some cases statutory language prohibits the consideration of
costs in regulatory decisions.22 Agency-by-agency attention to the effectiveness of
regulations has been heightened by the Government Performance and Results Act
(GPRA, P.L. 103-62), as well.
Writing in 1995, Graham, along with Jonathan Baert Wiener, discussed possible
reforms “to enable and impel decisionmakers to pursue a more comprehensive
analysis of risk.”23 They made proposals concerning the Congress,24 the judiciary,25

21 Concluding that coordinated decisions among the programs can scarcely be achieved
without changes in the authorizing statutes and their diverse standards for decisionmaking,
some analysts have proposed combining EPA’s diverse statutory authorities into one
comprehensive “organic act.” This idea was explored in “Integrated Pollution Control: A
Symposium” — but while the contributors raised the issue of EPA’s structure in
constraining consistent decisions across media, they did not consider the implications of the
committee structure of the Congress. The multiple committee jurisdictions make integrating
risk reductions, as envisioned by an EPA “organic act,” difficult. See Frances H. Irwin, “An
Integrated Framework for Preventing Pollution and Protecting the Environment” and David
Clarke, “Chasing Rainbows: Is an Integrated Statute the Pot of Gold for Environmental
Policy?” Environmental Law, Vol. 22, no. 1 (1992), 1-76 and 281-300.
22 E.g., in the setting of National Ambient Air Quality Standards; decision by the Supreme
Court, Whitman v. American Trucking Associations, Inc. 531 U.S. 457 (2001).
23 In Jonathan Baert Wiener and John D. Graham, eds., Risk versus Risk (Cambridge, Mass:
Harvard University Press, 1995), p. 243. For the ensuing discussion, see pp. 246-265.
24 For example, they proposed that a risk tradeoff analysis be required at some stage of the
legislative process; it would be conducted by staff of a relevant committee or by one of the
congressional support agencies. See also Timur Kuran and Cass R. Sunstein, “Availability
Cascades and Risk Regulation,” Stanford Law Review, vol. 51 (April 1999), p. 752, for a
proposal that Congress “create a [congressional] risk regulation committee that would be

and the executive branch. The last have taken on particular salience since Graham
was appointed by President George W. Bush to head up the Office of Information
and Regulatory Affairs of the Office of Management and Budget.
For the executive branch, Wiener and Graham suggested more forceful
implementation by the Office of Information and Regulatory Affairs of the Executive
Orders requiring cost and risk analysis (E.O. 12866). They noted that a more radical
reform would be to reorganize “the executive branch to integrate the array of health
and environmental protection agencies.” Further, they observed that a centralized
oversight unit for risk assessments, perhaps located in the White House or the U.S.
Public Health Service, could enhance coordination.
Graham has focused particularly on making more transparent the regulatory
decisionmaking process, on ensuring the soundness of the science underlying
decisions, and more rigorous cost- and risk- benefit analyses.26 These are essential
parts of making not only better decisions, but also could lead to consciously made
tradeoffs. So far, however, there is no example of an explicit, practical tradeoff
across programs on the basis of the cost-effectiveness of lives saved. Even with the
overarching authority of the White House behind Graham in his role as Director of
the Office of Information and Regulatory Affairs, his efforts are constrained by
institutional boundaries and statutory dictates.
Despite Executive Orders and legislated requirements for cost-benefit studies,
advances in evaluating potential tradeoffs have not resolved the issue of how
requiring risk assessment and cost-benefit analysis can be applied coherently across

24 (...continued)
entrusted with compiling information about a wide range of risk levels and helping to
produce priorities. This committee would have authority over both substantive statutes and
the appropriations process.” th
In the 105 Congress, legislation (H.R. 1704) was proposed in the House that would
have created a congressional office “to provide the Committee on Government Reform and
Oversight ... information that will assist the committee in the discharge of all matters within
its jurisdiction, including information with respect to its jurisdiction over authorization and
oversight of the Office of Information and Regulatory Affairs of the Office of Management
and Budget.” This office would also have taken over congressional review of agency
rulemaking and prepared an annual report on an estimate of the total costs and benefits of
all existing federal regulations.
25 For example, they argued for the interpretation that even for statutes that forbid
considerations of cost, that risk tradeoff assessments should be required under these laws,
“because risk tradeoffs are part of the effectiveness of the rule in attaining its risk-reduction
goals, rather than a financial cost of the rule.” They also suggested that those who are
disadvantaged when an agency fails to consider tradeoffs in promulgating a rule be given
standing to challenge such agency action.
26 Press releases of the Office of Information and Regulatory Affairs provide a partial
scorecard of actions: see
ht t p: / / www.whi t e house.gov/ omb/ i nf or e g/ r e gpol -pr e ss_r e l eases.ht ml
See also, U.S. General Accounting Office, Rulemaking: OMB’s Role in Reviews of Agencies
Draft Rules and the Transparency of Those Reviews [GAO-03-929] (Washington, D.C.,


the many environmental, health, and safety programs, given the differences among
the statutes. The decision to diminish resources and effort in one area is usually
separate from a decision and authority to apply those or related resources and effort
in another area. Reconstituting congressional and/or administrative structures to
integrate risk reduction — so that programs now handled more or less independently
would go onto the same table for possible tradeoffs — would imply legislators
reallocating their authorities and responsibilities.27 This is a rare undertaking of
uncertain outcome.28
Federal Decision Criteria, State and Local Choices,
and Private Sector Preferences: When Tradeoffs
Change Decisionmakers Controlling Resources
In choosing among alternative tax-supported federal programs (e.g., grants,
Superfund cleanups), federal decisionmakers decide where to direct resources from
monies they control. In choosing among alternative federal environmental, health,
and safety regulatory programs, federal decisionmakers mandate expenditures by
state and local governments, the private sector, and/or individuals. It can be tempting
to pose tradeoffs across these two situations — between federally funded programs
and federal regulatory programs. Thus, among the examples cited in the preface,
immunization, infant mortality, and care for poor pregnant women are rhetorically
proposed as tradeoffs against clean air; mammograms against stricter air regulations;
smoking-cessation education of pregnant women against groundwater cleanup; and
housing, or space, or health against environmental protection. The putative tradeoffs
counterpose public programs paid for primarily by federal (sometimes state) tax
dollars with environmental protection programs paid for primarily by dollars
mandated to be spent by individuals, state and local governments, and/or the private
business sector.
The conceptual commingling of federally funded programs and of federal
regulatory mandates ignores a fundamental obstacle to making tradeoffs. This
obstacle arises from the distinct identities and interests between those who establish
the mandate and those who control the use of the money necessary to meet the
mandate. In the case of tradeoffs among established federally funded programs, the
decisionmaker for spending monies remains the same for selected alternatives: the

27 This was most recently evident in the difficulties experienced by the House and Senate
as they realigned responsibilities in order to address the newly created Department of
Homeland Security.
28 Congress recognizes these difficulties, and at times has tried to overcome them. For
example, noting the difficulties that Congress experienced in changing governmental
structures, which shifted Member and committee responsibilities, Congress granted the
President limited authority to reorganize the government (98 Stat. 3192). When exercised,th
this power, which existed during much of the middle of the 20 Century, often created
conflict between the President and the Congress, and ultimately the authority was allowed
to lapse. See Louis Fischer and Ronald C. Moe, “Presidential Reorganization Authority: Is
It Worth the Cost?” Political Science Quarterly, vol. 96, Summer 1981, pp. 301-318.

appropriator and, ultimately, Congress. If the Congress decides not to spend the
money on option A, it can spend it on option B, subject to institutional constraints.
In the case of tradeoffs between federally funded programs and regulatory
programs (or between regulatory programs), however, the legislative decisionmaker
mandating the program and the appropriator ultimately responsible for expenditures
to meet regulations are separated. And the administrator responsible for drafting
regulations may find his or her options constrained not only by the statutes and by
funding, but also by explicit congressional directions, which can include statutory
authorizing language specifying deadlines and the inclusion or exclusion of certain
options; appropriations language that earmarks or withholds monies for certain
options; and report language that gives guidance that, even if not binding, may have
considerable sway. Finally, the party which must meet a health, safety, or
environmental regulation has to consider the consequences for the business and
owners or stockholders. Each decisionmaker thus faces a set of incentives and
options constrained by the institutional context
As a result, the alternative of spending tax monies on a federal program versus
establishing a regulatory program not only trades off program benefits, but also
changes the payer who decides on the alternative use of the dollars. From the
different settings, each decisionmaker can be expected to employ different criteria in
judging the return on the use of the monies. A federal program decisionmaker
presumably makes tradeoffs on the basis primarily of national values and needs; a
state or local program decisionmaker presumably makes tradeoffs on the basis
primarily of state or local values and needs; a private sector business decisionmaker
presumably bases tradeoffs primarily on profit and loss considerations; and an
individual presumably bases tradeoffs on personal needs and preferences. These
differences are shown in Table 2.
To propose tradeoffs between an environmental regulation and a potential
alternative federal program disregards the different circumstances of the
decisionmakers involved. For the regulatory mandate, the federal decisionmaker
knows what purpose the dollars will be spent on; if the federal decisionmaker decides
not to impose that mandate, those dollars remain available to the state/local, private
sector, or individual decisionmaker to spend. If the regulatory mandate is not
imposed or is rescinded as not cost-effective, there is little reason to assume that the
state/local, private sector, or individual decisionmaker controlling those dollars will
view an alternative public service program as a preferred destination for the monies
freed up. As a practical matter, the alternative to a specific federal regulatory
mandate is some unknown option(s) on which other decisionmakers responding to
other values or pursuing other goals will spend those unmandated dollars.
It is certainly possible — some would say highly likely, even indisputable —
that the some portion of dollars spent to meet federal requirements could be better
spent otherwise by state and local governments, private businesses, or individuals
Underlying this tradeoff is the debate over the share of incomes that most effectively
and efficiently advances national interests by being spent by government (federal or
state or local) rather than privately (individually or corporately). Compare the

Table 2. Decisionmakers and Decisionmaking Criteria
Determining Regulatory Expenditures to Abate Pollution
RegulatedDecision-Criteria forDecision-Criteria for
Partymakerrequirementmaker foralternative
mandatingto spendalternativeexpenditure
regulatory mo n e y expenditu re
Consumer Congress, public consumer personal
EPA, interest, preference
st at e/ l o cal national/state
governments welfare
S t at e/ l o cal Congress, public st at e/ l o cal public
mandates EPA interest, pol i cym aker interest,
national st at e/ l o cal
st at e/ l o cal wel f are, welfare
Private Congress, public corporat e corporat e
industry EPA, interest, management interest
regulations st at e/ l o cal national/state
/local welfare
following viewpoints (referring to taxes, but the principles expressed apply
analogously to regulation, often called a “hidden tax”):
“... Given a choice between keeping taxes high so the government has more
money to spend and ... reducing the tax burden so families can put more money
aside to invest in their own child-care needs, retirement needs, health-care needs
or whatever needs they choose, my preference is the latter....
“Letting people keep their money is the best way to address the social29
problems that confront us, now and in the future.”
“Sen. Pete Domenici (R-N.M.) publicly tells me I ‘ought to pay less taxes, ought
to keep more’ of my money because I ‘can make better decisions than we [our
elected leaders in Washington] can.’
“Thank you, Sen. Domenici, but I emphatically and sincerely disagree. My
federal government does well hundreds of things I want done and which I would
not have any idea of how to do by keeping every cent to myself. Because of the
taxes we pay, the Great Lakes, the Chesapeake Bay, the Charles River, the
Chicago River and the Potomac River are all cleaner, healthier and more alive30

than they were just a generation ago.”
29 Bill Archer, “Paying Down the Debt,” The Washington Post (2 Feb. 1998), p. A18.
30 Mark Shields, “Taxes Well Spent,” The Washington Post (4 August 1997), p. A19.

What seems clear is that even if state and local, corporate, or private investments in
alternatives to pollution control mandates would contribute equally — or even more
— to net national welfare, there is little reason to assume the alternatives would be
selected from more cost-effective environmental, health, or safety programs such as
immunization, education, or care for poor pregnant women.
As Thomas O. McGarity, a student of the legal implications of regulations, has
Even under the highly contestable assumption that a cost-benefit criterion would
eliminate waste, no vehicle exists for channeling the savings to the most
deserving social programs. The savings will invariably go to the regulatees, who
may or may not spend them on activities that benefit society. Absent some
governmental vehicle for directing how regulated entities spend the resources
saved by less stringent regulation, they will devote resources to things that make31
their shareholders happy.
The other side of the argument that money necessary to meet regulations could
be spent more effectively on alternatives32 is that the beneficiaries of a regulation also
have more money to spend. For example, if because of an air pollution regulation
people avoid adverse health effects, any monies that would have been spent on
consequent visits to doctors or hospitals are saved and available for alternative uses.
But again, even if these beneficiaries can be identified, how they will use the savings
is unknown.
In short, there are tradeoffs for each dollar paid out to abate and control
pollution. But it is not $1 for pollution control versus $1 for some comparable or
superior public good. Rather, it is $1 for pollution control on the one hand, or $1 for
an unknown purpose on the other — with the probability that the criterion for
deciding on how otherwise to spend the money will not be national welfare. (Which
is not to say that the alternative expenditure would necessarily fail to equally or better
serve national wellbeing: one just cannot know.) As a practical matter, it is not
usually possible to specify tradeoffs for dollars expended on regulatory programs.
Tradeoffs exist, but except through imposing alternative mandates, the policymaker
seeking to protect the environment, health, or safety, is not in a position to direct

31 Thomas O. McGarity, “A Cost-Benefit State,” Administrative Law Review, Vol. 50, no.

1 (1998), pp. 34-35.

32 The disposition of the monies may have another implication for risk. Income levels
correlate negatively with mortality, presumably because lower income means people have
less to spend on health. If regulations lead to slower economic growth, the lower income
levels imply there will be statistical loss of life. Isolating this tradeoff has proven highly
problematic. The idea of incorporating an income-mortality tradeoff in actual policymaking
has been broached but so far remains largely academic. See W. Kip Viscousi, “The Dangers
of Unbounded Commitments To Regulate Risk,” in Robert W. Hahn, ed., Risks, Costs, and
Lives Saved: Getting Better Results from Regulation (Washington, D.C.: The AEI Press,

1996), pp. 159-162.

those funds to particular options.33 Consequently, the policymaker is motivated to
achieve whatever is possible through the program at hand.34
Weighing Tradeoffs: Where Does It Lead?
In the end, comparative assessments of costs (and benefits and risks) of
alternative programs benefitting the public welfare, or of alternative regulatory
mandates, provide information to policymakers and the public.35 The information
can promote better understanding of risks, costs, and benefits. It may allow
policymakers, within their constraints, to focus resources on the most cost-effective
environmental, health, and safety interventions. But comparative risk information
does not mean that a tradeoff can be or will be accomplished. A study of state and
local comparative risk projects to establish environmental priorities concluded that–
Successes to date include increasing environmental awareness among
participants; building consensus and establishing collaboration among diverse
stakeholders; and establishing novel means of public involvement. However, no
project that we evaluated has, as yet, documented achievement of a system for
developing and implementing environmental priorities in order to mitigate their36
most significant environmental problems [italics added].
For the decisionmaker, a dollar is being spent on ‘this’ rather than on
‘something else.’ While the ‘this’ is in the decisionmaker’s purview, the ‘something
else’ may well be either outside his or her purview, or it may be completely open-
ended, in the realm of the marketplace. The debate over enactment of the Clean Air
Act Amendments of 1990 was not over whether the $21 billion tab37 should be spent
on clean air or on immunization, infant mortality, care for poor pregnant women, or
something else; it was over whether to require $21 billion to be spent on clean air or
more or less (or not at all).38 Similarly, the mid-1990s debate over proposed National

33 I.e., Congress enacting in lieu a comparable mandate, or an administrator imposing in lieu
a comparable regulation.
34 “... [R]egulators are not empowered to maximize collective welfare by allocating public
funds among all manner of social problems. They face discrete issues that demand concrete
responses. Even legislators, with their broad lawmaking authority, must work within the
constraints of the political process.” Douglas A. Kysar, “Some Realism About
Environmental Skepticism: The Implications of Bjorn Lomborg’s The Skeptical
environmentalist for Environmental Law and Policy,” Ecology Law Quarterly, Vol. 30, no.

223 (2003), p. 258.

35 Tengs and Graham, op. cit., pp. 191, 193.
36 David Lewis Feldman, et al., “Environmental Priority-Setting Through Comparative Risk
Assessment,” Environmental Management, vol. 23, no. 4 (1999), 483.
37 These are not federally appropriated dollars provided by taxpayers; these are (estimated)
costs of regulations and arise from foregone profits from alternative investments, lost wages
or rents, and/or consumer expenditures to cover higher prices of goods.
38 During the 1990 debate on the Clean Air Act Amendments, a working agreement

Ambient Air Quality Standards for ozone and particulate matter was not over
whether the multibillion dollar tab should be spent on cleaner air or on mammograms
or some particular thing else, it was over whether to set standards that would result
in those regulated to spend more (or less) money on cleaner air.
For a legislator who faces a vote on imposing costs — e.g., the Clean Air Act
Amendments of 1990 — or a policymaker who faces a decision on a regulation —
e.g, the ozone and particulate matter standards — the choice is basically up-or-down
and more-or-less, not on tradeoffs with other programs. To turn down the
amendment or defer the regulation does not mean more cost-effective environmental,
health, or safety alternatives will take its place: it is a question of following through
or starting the policy process anew. With choices tending be up-or-down and limited
only to alternatives germane within relevant jurisdictional boundaries, proponents of
environmental, health, and safety initiatives are loathe to forego or reduce any
program, even if its cost-effectiveness is questionable, because they so seldom can
ensure reinvestment of any saved resources in more cost-effective alternatives.
Only in the abstract, then, is any and every alternative an opportunity cost of
each federal dollar spent and of every federal regulation imposing costs. In reality,
the actual tradeoff faced by a policymaker at a particular time and place —
subcommittee, committee, or the floor of Congress; or Commission or Agency — is
effectively limited by institutional structures and rules and by the incommensurable
criteria brought by different decisionmakers who would ultimately decide on the
actual alternatives for spending any dollars the tradeoffs make available.
The question, How much of “this” could you buy if one didn’t impose
regulation “x,” can therefore be answered in two divergent ways:
One way is to take an estimated cost of regulation “x” and divide by the unit
cost of “this,” resulting in the equivalent number of mammograms, inoculations, or
whatever. That number is information that may help to give perspective on the
magnitude of the cost of regulation “x” – but at the same time it may give a sense that
a tradeoff is feasible when it is not.
The second way of answering the question is to put the compared costs into
context, examining whether the monies involved in “x” and “this” are really fungible.
Whether those expenditures are truly alternatives depends on the options posed, the
decisionmakers involved, and the institutional setting. There may be definite options,
as when an appropriations subcommittee allocates dollars among programs in its

38 (...continued)
emerged that the bill could impose some $25 billion in costs per year after 2000. Some
legislators argued that this was too much and others that this was not enough; but as a
practical matter, the majority accepted this as a reasonable pricetag for the program. Given
the difficulties in assessing costs and benefits, it is not surprising that estimates of costs of
the legislation ranged greatly, from the low 20s to 90 billion dollars per year. E.H. Pechan
& Associates, Clean Air Act Amendment Costs and Economic Effects: A Review of
Published Studies (Prepared for National Clean Air Coalition, National Clean Air Fund,
Washington, D.C.), in Congressional Record (October 27, 1990), S16963-S16969 [daily
ed.] The test of the bill’s adherence to $25 billion in costs was EPA’s “official” estimate.

jurisdiction; but in other cases the tradeoff may be between an intended outcome and
the nebulous consequence of not opting for that outcome. Putting the label
“statistical murder” on the failure to make tradeoffs is rhetorically powerful,
connoting a wilful choice to choose a less protective or more costly option. But in
reality, legislators and administrators rarely if ever are in a position to select among
the implied options as they authorize, fund, and implement health, safety, and
regulatory programs.
The problem is depicted in Figure 1: Putative tradeoffs among environmental,
health, and safety expenditures presume that all programs (represented by cones) are
on the table, as shown in Figure 1-A, where the sizes of the cones reflect potential
cost-effectiveness; but the voting legislator typically has only one program on the
table at a time, the result of a deliberate, formal process of agenda setting, as shown
in Figure 1-B; and the administrator of several programs generally finds each
program on a separate table, with the boundaries of each defined by a separate statute
that gives little or no authority to an administrator to compare and reallocate
resources across them, as illustrated in Figure 1-C.
In the end, the underlying issue of environmental, health, and safety cost-
effectiveness is how to foster decision processes and structures that enable tradeoffs
that reflect the informed preferences of the citizenry. Evidence indicates that
programs vary in cost-effectiveness. However, given that there is more to comparing
programs than just costs, one could argue that the current environmental, health, and
safety program mix — the result of the present decisionmaking structure — may in
fact reflect citizen preferences.
Where tradeoffs would appear to result in more consistent, cost-effective
protection of health, safety, or the environment, better information may in the short
run contribute to improved decisions in allocating resources, but legislators’ and
administrators’ options are limited. There is a big gap between identifying a
potential tradeoff and being able to make the tradeoff. The stakes are high for
winners and losers, especially for those who gain or lose authority to make decisions
about expenditures. In the long-run, better information about desirable tradeoffs may
suggest realignments of decision structures — leading to a different, complex, and
difficult set of institutional decisions.
In the meantime, if an existing or a proposed program is identified as
insufficiently cost-effective and therefore appropriate for trading off, there is rarely
any way to actually terminate it while concomitantly creating a more cost-effective
one. The most likely result of a “tradeoff” would be either to kill one program
without gaining the more cost-effective alternative; or to create a new more cost-
effective program while also maintaining the program with inferior cost-
effectiveness. For either option, there is a stakeholder with a natural resistance –
depending on whether one is more concerned about costs or benefits.

Figure 1. Environmental, Health, and Safety
Figure 1-A. Theoretically on the Table — all
environmental, health, and safety programs.

Figure 1-B. Legislative Agenda — Figure 1-C. Administrative
typically, one item at a time, othersImplementation — each on a
latent or in queue.separate table.