AnalysisCost-benefit analysis and homeland security
Homeland security decisions involve painful trade-offs and hard reckoning. For example, how much is a human life worth when it comes to a terrorist attack? If we figure that a certain kind of attack would likely result in the loss of 10,000 lives, and we decide to spend $1 billion to defend against such an attack, we have implicitly calculated that the cost of one life is $100,000. Should the public be involved in setting the nation’s safety — and cost-of-life — priorities? President Bush, a Harvard MBA, is said to run the administration in a corporate style. Whether for this reason or not, the administration is aggressively using cost-benefit analysis, risk-based approaches, and market-style mechanisms to formulate many of its policies, leading liberal critics to charge that the result is that many of these policies tend to benefit corporate interests by blocking effective regulation for public health, safety, and the environment.
Can these rigid analytical tools be effectively used for the formulation of homeland security policies? According to BNA’s Daily Report for Executives, John Graham, the outgoing administrator of the White House’s Office of Information and Regulatory Affairs, told a gathering at the AEI-Brookings Joint Center for Regulatory Studies earlier this month that “a more practical and ‘soft’ test” than standard cost-benefit and risk assessment will apply to homeland security rules.
Graam’s words notwithstanding, critics charge that the administration does use rigid cost-benefit analysis in approaching homeland security policy formulation. Here are two examples these critics point to, among many: DHS draft National Infrastructure Protection Plan (NIPP) [see the story immediately above] insists that a hallmark of protective policy must be “cost effectiveness,” meaning that homeland security policies should not be rigorous across-the-board standards but, instead, should contain “market systems,” offer industry the option “to select the measure best suited to the particular need,” and “[r]ely on self-assessments, where appropriate” (38-39).
Another example: What are the safe levels of exposure to radiation in the wake of a nuclear or radiological terrorist attack? According to the New York Times, a leaked copy of upcoming DHS guidance for state and local governments advises that they “should take into account the cost of abandoning or cleaning up contaminated areas when deciding how much exposure to radiation is acceptable.” Nuclear Regulatory Commission (NRC) member Edward McGaffigan added that developing strict protective standards “only aids and abets Al Qaeda or any other terrorists.”
-read more in this OMB Watch report
