A conservative coworker of mine has been trying out some new Talking Points.
Something about how the US Economy is burdened by an extra $2 Trillion a year in "Unnecessary Regulatory Expenses" ... and TP 2) somewhere buried in Romney's 59 Point Plan, Mitt promises to do away with those trillions in burdensome regulations.
Stunned by the largess of the claim, I calmly asked him:
"Is that a fact-based number? What was the source of that number?"
After a few moments of searching his mental rolodex, my coworker told me he thought it was from "a study by the SBA."
I thanked him for the info, and told him I would check it out later.
Well "later" is now ...
First the "SBA Study" ...
Red Tape Rises Again: Cost of Regulation Reaches $1.75 Trillion
James Gattuso, Heritage.org -- Sep 22, 2010
How much does federal regulation cost Americans each year? The question is not an easy one.
While the revenues and expenditures of the government are budgeted and accounted for each year, the costs of regulation are largely hidden from view, paid for indirectly via higher prices, fewer choices, and less innovation. The best estimates of the total cost, however, have come from a series of reports commissioned by the Small Business Administration (SBA). The latest such report was released today by the SBA’s Office of Advocacy, and the results are startling.
Rules and restrictions imposed from Washington now cost Americans some $1.75 trillion each year. That is sharply higher that the $1.1 trillion in costs reported in 2005 in the SBA’s last such study.
Next I found the rebuttal to that commissioned "SBA Study" ... initially summarized and promoted by the conservative Heritage organization.
SBA Study Claiming $1.75 Trillion Cost of Regulations Was Based on Series of Significantly Flawed Calculations, Says CPR Report
by Center for Progressive Reform (CPR) progressivereform.org -- Feb 8, 2011
[...]Nothing like a "cost/benefit" analysis, eh?
"This $1.75 trillion dollar number has been thrown around a lot, but when we actually looked into it, we found that it’s based on questionable assumptions and fuzzy math," said Sidney Shapiro, coauthor of the CPR report. "The SBA report makes no effort to account for the benefits of regulation, even though benefits typically exceed the costs. In addition, more than 70 percent of the SBA figure is based on public opinion polling about the regulatory climate in different countries, numbers that were never meant to be spun off into an absurd guess about the total effect on the U.S. economy.”
The "$1.75 trillion" study was commissioned by the SBA's Office of Advocacy, and completed by economists Nicole Crain and Mark Crain in 2010. Crain and Crain did not show the full calculations they used to arrive at their cost estimates, and declined to furnish their raw data to CPR despite several requests. Remarkably, an SBA representative told CPR his office did not have access to the underlying data, since SBA had only contracted to receive the final report. Thus, SBA entered into an agreement to spend taxpayer money on a report whose findings it could not then have verified in any significant way -- not even checking the arithmetic.
The Crain and Crain study is at odds with estimates of the White House Office of Management and Budget. A 2009 OMB report, based on data from federal agencies under the Bush and Clinton Administrations, found that in 2008, total regulatory costs ranged from $62 billion to $73 billion, with total benefits of $153 billion to $806 billion (adjusted from 2001 to 2009 dollars). (CPR has in the past demonstrated that OMB reports underestimate benefits and overestimate costs.)
So next time, I'm armed with "rest of the story" when the topic comes up again, with the water-cooler crowd.
I'll also be armed with another definition-factoid, which I just might share as well:
1. An unfounded or false, deliberately misleading story.
... A 2 Trillion Dollar Canard. That Romney promises to fix.
In other words, just more GOP vaporware. A non-issue, according to the non-partisan OMB.