Trump’s New Auto Rollback Is an Economic Disaster
The previous sentences, like the job-killing stats, are facts printed within the rule itself. (They can be found, respectively, on pages 1,414; 723; 1,524; and 1,589.) Altogether, according to the Trump administration, the rollback will inflict as much as $22 billion of net damage on the American economy.
This is not how things are supposed to work. Since the Reagan administration, new federal regulations have had to pass some kind of cost-benefit analysis. Their value to the American economy, measured in a holistic but monetary sense, must exceed the cost of implementing them. It was once a major goal of Republican governance that every federal regulation should pass a cost-benefit sniff test. But this rollback has cut the cheese.
“Accepting the administration’s own numbers—and some of them are highly suspect, and most are just wrong, but accepting the numbers upfront—the rule is net costly,” Richard Revesz, the Lawrence King Professor of Law at NYU, told me. He is director of the university’s Institute for Policy Integrity. “This rule is actually causing deaths, even under their analysis.”
The Trump administration says the rollback’s effects are not all bad. “Striking the right balance on fuel economy standards ensure Americans have the freedom to select from a wide range of safe, clean, and fuel-efficient vehicles to find the one that best meets their needs,” Sean Rushton, a spokesperson for the Department of Transportation, said in an emailed statement. (The U.S. Environmental Protection Agency did not respond to a request for comment.)
Under federal law, the government can run its cost-benefit analysis under a few different discount rates, so named because they discount costs levied on people in the future. The administration prefers a 7 percent rate, because it claims that this figure more adequately reflects real-world market behavior. “At a 7 percent discount rate, the rule projects more than $16 billion in net benefits,” Rushton said. This is true, as it goes: That number is in the rollback. It is one of four cost-benefit analyses in the rollback. If you average them together, they come to negative $3 billion.