Notice & Comment

Resuscitating Political Rationality, by Rachel Potter

*This is the eleventh post in a series on Michael Livermore and Richard Revesz’s new book, Reviving Rationality: Saving Cost-Benefit Analysis for the Sake of the Environment and Our Health. For other posts in the series, click here.

A serious affliction requires potent and targeted medicine. And the situation that Livermore and Revesz so deftly describe in Reviving Rationality is clearly serious. The authors recount nothing short of a siege undertaken by the Trump administration to undermine the institution of cost-benefit analysis (CBA). They carefully and convincingly detail the administration’s tactics, ranging from manipulating the social cost of carbon to adopting policies that focus on costs and ignore regulatory benefits. This is a book that should be read widely by academics and practitioners alike.

The solutions the authors propose largely involve doing CBA better. Improving retrospective review, evaluating the distributional effects of regulations, and developing methods to better consider unquantified benefits and costs would certainly improve the practice of CBA as we know it. However, the problem is even deeper than the efficiency of the technocratic enterprise—it is that politics has intruded upon it. Reforms that bolster CBA as we know it are a good start, but the patient may need even stronger medicine.

Readers of Reviving Rationality will note that several chapters of the book and many of the examples are about the Environmental Protection Agency. This is not surprising since, when it comes to CBA, the EPA has no peer. The agency’s analyses are among the most complicated—and often the most controversial and litigated—in the federal government. The EPA also showcases how the problems with CBA that emerged during the Trump years were political and not necessarily the product of scientific indifference or technical capacity.

First, career EPA staff did not take Trump’s assault on CBA lying down. They actively engaged in what the New York Times has called “open staff resistance.” At the outset of Trump’s term in 2017, EPA bureaucrats took to the streets, protesting Trump’s choice of Scott Pruitt to lead the agency and proposed cuts to the agency’s budget. Agency careerists asked the inspector general to investigate violations of scientific integrity at the agency. Staff also embedded data in technical documents supporting regulation that opened Trump’s rules up to potential legal challenges. And, in response to the Trump administration’s infamous “Secret Science” rule—the subject of Chapter 6 of Reviving Rationality—a leading career EPA scientist issued a scathing dissent memo. This unprecedented move was indicative of the staff’s antipathy toward Trump’s attacks on CBA. Yet, even despite these concerted counter-efforts, the administration’s campaign against CBA persevered.

Second, while the EPA suffered some attrition during the Trump administration, it still had the personnel to conduct CBA. The figure below shows the number of economists—employees that are usually heavily engaged in conducting CBA—employed by the EPA. Of course, economists are just one category of employee that works on CBA, but they are an important one and help to illustrate the broader point. During Trump’s tenure, their number dropped to its lowest point –138 in 2019 —in over 20 years. However, by 2020 the number of economists rebounded to 152, still low by historical standards but within the range of prior administrations. Even in the depths of the Trump years, the technical ability to conduct CBA remained intact.

Note: Figure shows the annual number of employees at the Environmental Protection Agency with the occupational title of “Economist.” Data are from the Office of Personnel Management’s Central Personnel Data File (CPDF). The red line indicates the start of the Trump administration.

Even with these tools in the toolbox, the EPA could not stop a White House political effort focused on eviscerating CBA. Making matters worse, the EPA was a best-case scenario: a highly capable agency with a firm sense of what science and good CBA entail and the capability to pursue it.

I suspect the economists and analysts at the EPA—and other agencies for that matter—would welcome the opportunity to improve the rigor of CBA along the lines of Livermore and Revesz’s proposals in the concluding chapter. I’m less convinced that they would find them sufficient to hold the line on CBA against another iteration of a Trump or Trump-like administration.

What kinds of reforms can help limit political interference into CBA moving forward? It is difficult to envisage anything with real bite that does not involve statutory changes made by Congress. Only statutory changes are likely to endure across presidents and therefore bind future administrations. Anything less is little more than a speedbump for a future Trump-like administration. Such reforms might involve changes to agency structure that increase insulation in core areas or that strengthen oversight by OIRA in a meaningful way. Now that Livermore and Revesz have diagnosed the situation, the precise nature of these changes is the next task for scholars to undertake – perhaps a third installment in the Retaking Rationality / Reviving Rationality series?

Numerous scholars—including Stuart Shapiro in this symposium—have documented how the Trump administration sidelined bureaucratic expertise across the executive branch. The assault on CBA was just one part of this broader campaign. Reforms must be equally expansive—it will not be sufficient to bolster CBA to revive rationality, we must also consider how our political system gives rise to such attacks in the first place.

Rachel Augustine Potter is associate professor of politics at the University of Virginia. She is the author of Bending the Rules: Procedural Politicking in the Bureaucracy (University of Chicago Press, 2019).