WASHINGTON – Condemning an Administration policy that places less value on the lives of Americans over 70, Governmental Affairs Committee Ranking Member Joe Lieberman, D-Conn., Tuesday asked that the policy be renounced. In a letter to Office of Information and Regulatory Affairs Administrator John Graham, who devised the policy, Lieberman denounced his method of calculating the costs versus the benefits of environmental and other regulations. This so-called “senior discount” variable was recently used by the Administration to evaluate its “Clear Skies” environmental initiative and a regulation governing pollution control of snowmobiles.
“Selling out America’s grandparents at a discount for the benefit of polluters is immoral and discriminatory,” Lieberman wrote. “Using this cynical tool, the Administration was able to diminish the apparent benefit of life-saving environmental regulations.”
Although Environmental Protection Agency Administrator Christine Todd Whitman has said her agency would no longer use the “senior discount” factor, Graham acknowledged “technical difficulties” with the current formula but said the overall approach was credible and would continue to be used to evaluate environmental and other regulations. Lieberman’s letter sought an explanation of the apparent inconsistency and details on where, when, and why the discount methodology has been used.
“Such an approach would no doubt understate the benefits of regulatory efforts to protect the environment because seniors are among the populations most vulnerable to pollution,” Lieberman wrote. “When coupled with your consistent disregard of the clear and significant value of the qualitative, non-material benefits of environmental regulation, the result appears to be that the Administration is systematically undermining the nation’s efforts at essential environmental and public health protection.”
Following is a copy of Lieberman’s letter:
May 20, 2003The Honorable John Graham
Administrator Office of Information and Regulatory Affairs
The Office of Management and Budget
725 17th Street, NW
Washington, DC 20503
Dear Dr. Graham:
I write to express my deep concern about the Bush Administration’s disrespectful and disturbing attitude toward the lives of America’s seniors in setting environmental policy. Despite statements aimed to quiet protest over the “senior discount” factor – a factor used by this Administration in recent regulatory cost-benefit analyses that literally devalues the lives of Americans 70 and over – it appears, based on your statements, that the Administration intends to persist in the practice of discounting the lives of seniors.
Selling out America’s grandparents at a discount for the benefit of polluters is immoral and discriminatory. I ask that you promptly renounce this troubling policy. In addition, please provide answers to my questions below as to how the Administration has used, and intends to use, this valuation method in setting its regulatory agenda. America’s seniors deserve to know precisely how much they are worth to this Administration. My concern arises from the so-called “senior discount” factor, an alternative valuation methodology used by the Administration recently in connection with its “Clear Skies” initiative and other regulatory proposals.
The Environmental Protection Agency (“EPA”) has traditionally placed an equal value on all lives saved by environmental protection. Under the senior discount valuation method, however, the lives of Americans seventy and over were calculated to be worth 37 percent less than the level at which all other, younger Americans were valued. Using this cynical tool, the Administration was able to diminish the apparent benefit of life-saving environmental regulations. After a firestorm of criticism from angry seniors, Christine Todd Whitman, the Administrator of the EPA, announced on May 7, 2003 that her agency would no longer use this valuation method.
“The senior discount factor has been stopped,” Administrator Whitman was quoted as saying. “It has been discontinued. EPA will not, I repeat, not, use an age-adjusted analysis in decision making.” (Katharine A. Seelye and John Tierney, “EPA Drops Age-Based Cost Studies,” The New York Times, May 8, 2003.) This apparent rejection, however, is belied by remarks you have made, indicating that you remain committed to continued use of such a method of valuation, citing only “technical concerns” about this particular formula.
On May 8, 2003, The New York Times reported that you “insisted that the overall approach was valid and would be a factor in decision making at the EPA and elsewhere.” (Emphasis added.) You said, “OMB remains open to additional evidence that may be published in the future.” Indeed, Administrator Whitman has indicated that this methodology was never something EPA wanted to use, but instead originated with OMB. An OMB spokesman told the Newhouse News Service that OMB would in the meantime continue encouraging agencies to differentiate among beneficiaries based on factors that would skew decision-making against protections for the elderly, such as health and life expectancy. (Jim Barnett, “White House Decries Age ‘Discounts,’ But Similar Analyses Will Continue,” Newhouse News Service, May 12, 2003.)
Such an approach would no doubt understate the benefits of regulatory efforts to protect the environment because seniors are among the populations most vulnerable to pollution. In the end, the discount approach you favor would increase the bias against protective regulation, by significantly reducing the calculated benefit of saving seniors’ lives. The result, insofar as this kind of economic analysis is persuasive to decision makers in agencies or the Congress, will be less protection against harmful pollution, especially in the case of measures that could protect the elderly and other vulnerable populations. When coupled with your consistent disregard of the clear and significant value of the qualitative, non-material benefits of environmental regulation, the result appears to be that the Administration is systematically undermining the nation’s efforts at essential environmental and public health protection.
When your nomination was before our Committee and the full Senate, I expressed fear that, as OIRA Administrator, you would seek to impose an emphasis on cost-benefit principles that sacrifice people’s right to a clean and healthy environment – no matter what their age or state of health – in order to save money for industry. It appears that my fears have been realized. I ask that you respond to this letter with a commitment in writing to abandon this troubling discounting methodology applying a diminished value to the lives of an entire category of citizens, as well as other similar analytical tools that would have the same effect.
Please also provide written responses to the following questions to clarify how the Administration has employed, and intends to employ, such tools in evaluating policy:
(1) You and Administrator Whitman have made inconsistent statements in press accounts as to the Administration’s intentions with respect to the use of a senior discount factor in future regulatory decision making. Will the Administration in the future use this discount methodology, or other techniques like it, which discount certain lives based on factors such as heath or life expectancy, including alternative assumptions in sensitivity analyses? Please describe precisely what methodologies or assumptions will be used and how they will be employed.
(2) Although you appear to support discounting the lives of seniors or those in ill-health in regulatory decision making, you have acknowledged that the particular method of discounting the lives of people 70 and over by 37 percent is flawed due to a “technical concern.” Nevertheless, it was apparently used in connection with the Clear Skies proposal and the snowmobile rules. Why did OMB encourage the use of this method in the first place? With respect to what regulations, in addition to those cited above, was it used? As you have acknowledged the valuation method is flawed, do you now regard all analyses in which it was used as flawed? How will the Administration revise these analyses to correct for the flawed methodology? Under your revised methodology, how much do you now value the life of a person 70 years old and over as compared to a younger person?
(3) Please provide a complete list and description of all analyses performed by the Bush Administration in connection with proposed or final regulations or legislative proposals in the area of environmental regulation that employ a valuation methodology that discounts the lives of some group of individuals, including older people, the sick or the disabled. Please explain how using such a method in each case was used in the analysis of the measure.
(4) With what parties outside the government have you or anyone in your office discussed the use of the discount methodologies listed in response to question number 3 in performing cost-benefit analyses with respect to any particular regulatory or legislative proposals, including those cited above? Please identify the date and content of each such communication. If any communications were in writing, please provide copies of such documents.
I would appreciate your answering these questions at your earliest convenience, and no later than June 3, 2003. Thank you for your prompt attention to this matter.
Joseph I. Lieberman
Ranking Minority Member