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Reports to Congress on the Costs and Benefits
of Federal Regulations

Table 7: Summary of Agency Estimates for Final Rules
4/1/96 - 3/31/97

(As of the date of completion of OMB review)

Agency/ Rule Benefits Costs Other Information
Department of Agriculture
1996 Farm Bill Farm Program Not
"Net farm income (including crop and livestock sectors) during the 1996-2002 calendar years is expected to be about $15 billion higher under the 1996 Act than under the FY 1997 President's Budget baseline. This largely reflects higher Government payments to farmers under the 1996 Act as production flexibility contract payments exceed projected deficiency payments. Additionally, changes in the timing of payments to farmers provide an additional boost to farm income in the first year of the program--pushing 1996 net income up about $4 billion. However, net farm income is up by less than the increase in Government payments due to changes in the dairy and peanut programs. Crop sector receipts are down slightly under the 1996 Act due to lower plantings and production of the eight major commodities. Livestock sector receipts are lower due primarily to lower dairy sector receipts. Cash production expenses are up slightly due to increases in net cash rents, which offset lower crop production expenses from lower plantings.
"Farmland values are higher under the 1996 Act compared with the FY 1997 President's Budget, reflecting the capitalized value of higher income. Land values average about 3 percent higher under the 1996 Act compared with FY 1997 President's Budget estimates.
"Consumer costs are expected to be only slightly lower under the 1996 Act. Because grain prices, on average, are expected to be essentially unaffected, no appreciable change in grain-based food product costs, such as cereal and meat products, is expected." 61 FR 37544-5.
"Alternatively, the 1996 Act can be compared to a no program'' baseline. Under the 1996 Act, contract commodity payments represent a large portion of the benefits received by producers and there are few planting restrictions. The major differences between a no-program scenario (if the CRP and export programs were continued) and the 1996 Act are that producers would no longer receive contract commodity payments of about $35.9 billion and would no longer be subject to farm conservation and wetland protection requirements. The loss in farm income would likely entail substantial short-term adjustments and financial stress. However, over the longer term, a no-program scenario is expected to have little or no impact on supply, demand, and prices compared with the 1996 Act for most commodities except for peanuts, sugar, and, in the initial years of the period, dairy.
"Plantings would be expected to decrease marginally with little or no change in market prices. Farm income would likely be lower, but lost revenue from eliminating contract commodity payments would be partially offset by lower cash rents. Land values would be lower if there were no program. In the aggregate, compared with a no-program scenario, impacts of the 1996 Act on the livestock industry, input industry, consumers, and the general economy would be minimal in the long run. However, impacts in some sectors, such as those dependent on the peanut program and sugar program, may be more significant.." 61 FR 37545-46.
Conservation Reserve Program $2 billion/yr,
1997- 2002
$900 million/yr,
1997 - 2002
Other miscellaneous (unquantified) benefits: swimming, boating, wetland conservation, human health impacts, and reduced nutrients in habitats; $5.8 billion/yr in transfers from consumers and taxpayers to farmers.
Karnal Bunt Not
"This rule is being published on an emergency basis in order to give affected growers the opportunity to make planting decisions for the 1996-97 crop season on a timely basis...This rule may have a significant economic impact on a substantial number of small entities. If we determine this is so, then we will discuss the issues raised by section 604 of the Regulatory Flexibility Act in our Final Regulatory Flexibility Analysis, which we will publish in a future Federal Register." 61 FR 52206.
Hazard Analysis and Critical Control Points $0.71-$26.59 billion present value discounted over 20 years $0.97-1.16 billion present value discounted over 20 years "The benefits are based on reducing the risk of foodborne illness due to Campylobacter jejuni/coli, Escherichia coli 0157:H7, Listeria monocytogenes and Salmonella. ... these four pathogens are the cause of 1.4 to 4.2 million cases of foodborne illness per year. FSIS has estimated that 90 percent of these cases are caused by contamination occurring at the manufacturing stage that can be addressed by improved process control. This addressable foodborne illness costs society from $0.99 to $3.69 billion, annually. The high and low range occurs because of the current uncertainty in the estimates of the number of cases of foodborne illness and death attributable to the four pathogens. Being without the knowledge to predict the effectiveness of the requirements in the rule to reduce foodborne illness, the Department has calculated projected health benefits for a range of effectiveness levels, where effectiveness refers to the percentage of pathogens eliminated at the manufacturing stage..." 61 FR 38956.
"The link between regulatory effectiveness and health benefits is the assumption that a reduction in pathogens leads to a proportional reduction in foodborne illness. FSIS has presented the proportional reduction calculation as a mathematical expression that facilitates the calculation of a quantified benefit estimate for the purposes of this final RIA. FSIS has not viewed proportional reduction as a risk model that would have important underlying assumptions that merit discussion or explanation. For a mathematical expression to be a risk model, it must have some basis or credence in the scientific community. That is not the case here. FSIS has acknowledged that very little is known about the relationship between pathogen levels at the manufacturing stage and dose, i.e., the level of pathogens consumed." 61 FR 38945-6.
Department of Commerce
Encryption Items Transferred from the U.S. Munitions List to the Commerce Control List Not
$834,000 (govt admin cost FY97), $591,850 (paperwork burden costs) Unquantified benefits in terms of improved national security, law enforcement and public safety benefits, and economic benefits for industry: "This initiative will support the growth of electronic commerce; increase the security of the global information infrastructure; protect privacy, intellectual property and other valuable information; and sustain the economic competitiveness of U.S. encryption product manufacturers during the transition to a key management infrastructure. 61 FR 68573.
Department of Health and Human Services
Food Labeling/ Nutrition Labeling:Small Business Exemption $275-360 million/yr $4 million in first year, expected to decline thereafter None reported.
Restriction on the Sale and Distribution of Cigarettes and Smokeless Tobacco $9.2-10.4 billion/yr at 7% discount rate; $28.1-43.2 billion/yr at 3% discount rate $180 million/yr at 7% discount rate Unspecified costs of mandatory consumer education program.
"These totals do not include the benefits expected from fewer fires (over $160 million annually), reduced passive smoking, or infant death and morbidity associated with mothers' smoking...."
"In addition, while FDA could not quantify the benefits that will result from the projected decline in the use of smokeless tobacco, they would be considerable." 61 FR 44396ff.
Medical Devices: Quality Systems Regulation $29 million/yr; 44 deaths avoided/yr;484 to 677 serious injuries avoided/yr $82 million/yr "The medical device industry would gain substantial economic benefits from the proposed changes to the [Comprehensive Good Manufacturing Practices, "CGMP"] regulation in three ways: Cost savings from fewer recalls, productivity gains from improved designs, and efficiency gains for export-oriented manufacturers who would now need to comply with only one set of quality standards.
"These estimates of the public health benefits from fewer design-related deaths and serious injuries represent FDA's best projections, given the limitations and uncertainties of the data and assumptions. The above numbers, however, do not capture the quality of life losses to patients who experience less severe injuries than those reported in [medical device recalls, "MDR's"], who experience anxiety as a result of treatment with an unreliable medical device, or who experience inconvenience and additional medical costs because of device failure.
"Medical device malfunctions are substantially more numerous than deaths or injuries from device failures and also represent a cost to society. Malfunctions represent a loss of product and an inconvenience to users and/or patients. Additionally, medical device malfunctions burden medical personnel with additional tasks, such as repeating treatments, replacing devices, returning and seeking reimbursement for failed devices, and providing reports on the circumstances of medical device failures. No attempt was made to quantify these additional costs." 61 FR 52602ff.
Department of the Interior
Migratory Bird Hunting (Early Season Frameworks) Not
Reports that duck hunters spend an estimated $416 million/yr; unquantified economic stimulus benefits derived from spending on duck hunting; unquantified benefit of value to hunters (consumer surplus) from more than 11 million hunting days per year; unquantified benefit to bird population by reducing overcrowding and ensuring continued use of resource in future.
Migratory Bird Hunting (Late Season Frameworks) Not
Reports that duck hunters spend an estimated $416 million/yr; unquantified economic stimulus benefits derived from spending on duck hunting; unquantified benefit of value to hunters (consumer surplus) from more than 11 million hunting days per year; unquantified benefit to bird population by reducing overcrowding and ensuring continued use of resource in future.
Department of Labor
Exposure to Methylene Chloride (MC) 31 cancer cases/yr avoided; 3 deaths/yr avoided from acute central nervous system effects and carboxyhemo- globinemia $101 million/yr "MC exposures above the level at which the final rule's STEL is set--125 ppm--are also associated with acute central nervous system effects, such as dizziness, staggered gait, and diminished alertness, all effects that can lead to workplace accidents. OSHA estimates that as many as 30,000 to 54,000 workers will be protected by the final rule's STEL from experiencing CNS effects and episodes of carboxyhemoglobinemia every year. Moreover, exposure to the liquid or vapor forms of MC can lead to eye, skin, and mucous membrane irritation, and these material impairments will also be averted by compliance with the final rule. Finally, contact of the skin with MC can lead to percutaneous absorption and systemic toxicity and thus lead to additional cases of cancer that have not been taken into account in the benefits assessment. " 62 FR 1567-68.
Department of Transportation
Airbag Depowering 83-101 fewer fatalities, 5,100 - 8,800 fewer serious injuries over lifetime of one full model-year's vehicles $0 50 - 431 more fatalities and 171 - 553 more serious/severe chest injuries over lifetime of one full model-year's vehicles; substantial unquantified reduction in minor/moderate injuries.
Light Truck CAFE Model-Year 1999 Not
None reported.
Roadway Worker Protection $240 million present value discounted over 10 years $229 million present value discounted over 10 years Possible increased capacity of rail lines and improved morale.
Environmental Protection Agency
Accidental Release Prevention $174 million/yr $97 million/yr Unspecified value of information made available through disclosure/reporting requirements; efficiency gains, increased technology transfer, indirect cost savings, and increased goodwill; possible damage reductions attributable to offsite consequence analysis and to a reduction in routine emissions.
Financial Assurance for Municipal Solid Waste Landfills $105 million/yr $0 None reported.
Deposit Control Gasoline Avg Emission Reductions per Year, 1997-2001:
25,000 t HC,
474,000 t CO,
95,000 t Nox
Avg Cost/Yr, 1997 - 2000:
$138 million/yr
Fuel economy benefits are also expected as a result of the detergent program, amounting to nearly 450 million gallons during the 1995-2001 period. The savings associated with this fuel economy benefit are expected to partially offset the costs of the program. This rule should result in increased sales and business opportunities within the fuel additive industry. EPA anticipates that this program may result in significant vehicle maintenance benefits. However, due to uncertainties in their magnitude, and for other reasons, they were not considered quantitatively in the analysis.
Acid Rain Phase II Nitrogen Oxides Emission Controls Emission Reductions per Year:
890,000 t Nox
$204 million/yr None reported.
Federal Test Procedure Revisions Emission Reductions:
In 2005:

30,994 t NMHC,
1,937,114 t CO,
164,112 t NOx
In 2010:
54,892 t NMHC,
3,430,769 t CO,
290,655 t NOx
In 2015:
72,025 t NMHC,
4,501,555 t CO,
381,372 t NOx
In 2020:
81,977 t NMHC,
5,123,565 t CO,
434,068 t Nox
$199-245 million/yr Analysis does not include potential fuel savings of $13.45 discounted over the lifetime of the average vehicle, or about $202 million/yr.
Voluntary Standards for Light-Duty Vehicles Emission Reductions (tons/ozone season- weekday):
In 2005:

279 t NMOG,
3,756 t CO,
400 t NOx
In 2007:
399 t NMOG,
5,302 t CO,
600 t NOx
In 2015:
778 t NMOG,
9,723 t CO,
1,249 t Nox
$600 million/yr None reported.
Lead-Based Paint Activities in Target Housing Not
$1.114 billion present value over 50 years discounted at 3% Will provide consumers with greater assurance that they will be able to purchase abatement services of reliable quality.
Abbreviations: CO = carbon monoxide, HC = hydrocarbons, Kt = kilotons, NMHC = non-methane hydrocarbons, NMOG= non-methane organic gases, NOx = nitrogen oxides, t = tons.