EPA’s Formaldehyde Rule: The Mystery of the Shrinking Benefits

Why does the White House take so long to review rules from the regulatory agencies? As I have documented elsewhere, many rules have been stuck at the White House's Office of Information and Regulatory Affairs (OIRA) for years. Some of these remain there to this day. What is the White House doing for the months and years that rules are stuck there? One rule that just escaped from the clutches of regulatory review might provide a clue. Just yesterday, EPA posted documents generated as a result of White House review of its rule on formaldehyde emissions from wood products. These documents show at least one possible answer to the question of why review takes so long: perhaps it takes a very long time to make the benefits of regulation disappear! This, at least, appears to be a primary consequence of the more-than-year-long tenure of the formaldehyde rule at the White House's OIRA. EPA's rule on formaldehyde emissions went to OIRA with an estimate of annual benefits that ranged from $91 million at the low end to $278 million at the high end. The rule left OIRA, however, with an estimate of annual benefits that ranged from $9 million at the low end to $48 million at the high end. (To see a chart showing this change, go here: www.regulations.gov/#!documentDetail;D=EPA-HQ-OPPT-2012-0018-0495 and click on document entitled "2013-05-20_Formaldehyde-Implementation_NPRM_EO12866-Documentation_3-Redlined-Draft EA-A4-table.") The low-end estimate of benefits, in other words, decreased more than ten-fold as a consequence of OIRA's review, while the high-end estimate decreased more than five-fold. What happened?