When it comes to taxpayers’ money, decisions based on guesswork are not sufficient. In an opinion piece for POLITICO, Nancy Nord argues that cost-benefit analysis is an essential (and often neglected) step of the regulation proposal process. Nord, who is a commissioner at the Consumer Product Safety Commission (CPSC), points out that cost-benefit analysis allows a regulatory agency to appraise the consequences of its actions, and to ensure that that costs are assumed by the correct party:

Critics say health and safety regulators do not need cost-benefit analysis because we do not add costs, we just redistribute them from consumers to industry. This flawed theory assumes the overall costs are unchanged by regulation. But in the real world, overall costs almost never stay the same. If what businesses spend to comply with a rule is more than consumers save, we necessarily add net costs. Increased costs threaten both sellers and buyers, because companies pass on higher prices to consumers, who may see little or no return for their larger bills.

As Nord points out, inefficient and costly regulations can threaten jobs and jeopardize entire industries. Systematically incorporating cost-benefit analysis into regulation review will help eliminate these drastic consequences. 

Nord also praises the work of Rob Portman (R-OH) and Mark Pryor (D-AK) in pushing for mandatory cost-benefit analysis with the Regulatory Accountability Act. Versions of this bill, Nord says, will "protect consumers and small-business owners from regulations that cost the country more than they are worth." Her goal is "an agency driven by thoughtful analysis — not hunches, guesswork and wishful thinking."