The RED TAPE Act prioritizes easily measured monetary benefits in regulatory decisions, requiring agencies to quantify and publish the economic impacts of regulations while prohibiting the consideration of non-monetized factors in benefit-cost analyses.
Pete Sessions
Representative
TX-17
The RED TAPE Act aims to ensure that federal regulations are based on clear, measurable monetary benefits by amending Title 5 of the United States Code, Chapter 6, to add new rules regarding regulatory and benefit-cost analyses. It requires agencies to prioritize easily measured monetary benefits when making decisions, and prohibits the use of non-monetized or unquantified factors in regulatory impact or benefit-cost analyses. The Act mandates agencies to publish detailed analyses of proposed rules in the Federal Register, and allows affected parties to challenge rules that do not comply with these requirements in court. Ultimately, the RED TAPE Act seeks to promote transparency and accountability in federal regulation by ensuring that regulatory decisions are grounded in sound economic analysis.
RED TAPE Act: New Rules Force Agencies to Focus Only on Dollar-Based Benefits, Starting Now
The RED TAPE Act significantly changes how federal agencies weigh the costs and benefits of new regulations. Officially titled the "Regulations Evaluated to Determine The Anticipated Price and Effect Act," this law, effective 30 days after enactment, mandates that agencies only consider quantifiable, monetary factors when analyzing the impact of regulations. This means things that can't easily be assigned a dollar value are out of the picture.
Real-World Rollout
This isn't just a future concern – it applies retroactively to any agency rule issued on or after November 9, 2023. The law amends Title 5 of the United States Code, Chapter 6, adding specific definitions for "benefit-cost analysis" and "regulatory impact analysis" based on existing Office of Management and Budget (OMB) circulars and executive orders. Agencies are now prohibited from considering any non-monetized or unquantified factors in these analyses (SEC. 3). Think about it: things like the value of clean air for someone with asthma, or the peace of mind from knowing your drinking water is safe – if you can't put a precise dollar amount on it, it doesn't count under this law.
Who Feels the Change, and How?
This shift could have a big impact on everyday life. Imagine a factory that wants to increase production, which would also increase pollution. Under the RED TAPE Act, the increased profits are easy to calculate. But the potential health impacts on nearby residents, or the long-term environmental damage? Those are much harder to put a dollar value on, and therefore, wouldn't be considered in the decision-making process. The law also requires agencies to publish a summary and the full text of each regulatory impact analysis and benefit-cost analysis, including their methodology and specific analyses used for estimating economic impacts (SEC. 3). While this sounds like transparency, it could also create a situation where only easily quantifiable benefits are prioritized.
Lawsuits and Loopholes
Here's where it gets even stickier. The RED TAPE Act allows anyone affected by a rule to bring a civil action in a U.S. district court if they believe the agency relied on non-monetized or unquantified factors (SEC. 3). A court must invalidate the rule if this is found to be the case. This could open the floodgates for lawsuits challenging regulations, potentially tying up agencies in court and creating uncertainty for businesses and individuals alike. The OMB is required to issue revised guidance within 90 days to ensure agency compliance (SEC. 3). The practical challenge? Figuring out how to make decisions when you're legally forbidden from considering factors that, while real and impactful, don't come with a neat price tag.