ATTACK ON FAA’S COST/BENEFIT ANALYSIS ON AVIATION SAFETY PROPOSAL IS UNWARRANTED

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attackonfaaphotoARTICLE: Airline Crash Deaths Too Few to Make New Safety Rules Pay


The Office of Management and Budget is the President’s organization assigned to evaluate whether any proposed action by an Executive Branch meets the Administration’s policy agenda. In 1992, when President Clinton occupied the White House, his neighbor to the west (pictured above) revised a policy which had been in effect since 1972. The document, issued under the moniker Circular No. A-94 Revised, addressed the process by which most proposed regulations would be analyzed before being published as a final rule. The subject of the policy pronouncement was “Guidelines and Discount Rates for Benefit-Cost Analysis of Federal Programs” and issued under the Congressional authority of 31 U.S.C. Section 1111 and the Budget and Accounting Act of 1921, as amended. This pronouncement prescribes uniform standards to assess the costs and benefits of each proposal.

Almost every Notice of Proposed Rulemaking (NPRM) and Final Rule (FR) issued by any federal agency is assessed by this rigorous economic policy review. These standards have been used for twenty years, have been challenged on more than one occasion and have not been reversed. That record suggests that the underlying policy is sound.

OMB Circular No. A-94 is the basis of the review of the FAA’s flight and duty time rules to be applied to cargo airlines as it is the criterion for all FAA NPRMs. The calculation of the rules benefits versus their costs is part and parcel of EVERY FAA and all other Executive Branch decisions, contrary to the insinuations of a former NTSB executive quoted in the article.

Without some evaluation of the financial impact of a proposed rule, it would be possible for an Administrator to issue a rule that would achieve absolute nirvana aviation safety-zero aircraft accidents-by grounding all of the US aircraft. Lawyers call this sort of argument as reductio ad absurdum. The term does not need to be translated to explain the validity of the assertion that cost has not been a critical consideration in the OMB OIRA review of any previous FAA rules.

The article makes it clear that the FAA’s history of regulations has resulted in a 96% decrease in risk. In the past, the review process, to which FAA rules have been subjected, has been criticized as causing undue delay in the issuance of safety rules, but an attack, upon the OMB Circular No. A-94 standards applied universally to Executive Branch proposals, is at best, a novel one.

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