Regulatory Sludge: Reducing Paperwork to Preserve Our Time

Julie Balla, MPA Candidate

Time is the most precious commodity – let’s see if we can find ways to give our fellow citizens more of it. – Cass Sunstein

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Cass Sustein speaks at the SBCA Annual Meeting on March 15. Photo courtesy of Julie Balla. 

Cass Sunstein, Robert Walmsley University Professor at Harvard and former Administrator of the Office of Information and Regulatory Affairs (OIRA), delivered keynote remarks at the Society for Benefit-Cost Analysis (SBCA) Annual Conference & Meeting on March 15, 2019. He raised concerns about “sludge,” the friction created by the unnecessary paperwork burdens which can inhibit access to government programs and benefits. Sunstein’s forthcoming Duke Law Journal paper titled “Sludge and Ordeals,” details the problems with sludge, the (sometimes legitimate) reasons it exists, and proposals to reduce it. His passionate remarks urged immediate, but realistic, efforts to reduce this paperwork burden.

Regulatory Sludge Costs Americans Time and Foregone Benefits   

The Office of Management and Budget’s 2015 Information Collection Budget estimates the size of the paperwork burden on the American people at around 9.87 billion hours per year. Sunstein mentioned that the current estimate is closer to 11.3 billion hours, but noted that even this number is likely conservative.

Time isn’t the only thing lost to paperwork, though. Sunstein argues that there are psychological costs as well, like frustration and humiliation, that can lead to procrastination and resignation. A combination of these factors might cause perfectly eligible (and rational) people to give up on complicated forms that would have granted them access to beneficial government programs and resources.

Sunstein highlighted the “Free Application for Federal Student Aid” (FAFSA), among other sources of sludge, as ironically being not “free” at all if you consider the lost value of time associated with filling out the complicated online forms. In some cases, the benefits that come with receiving Federal student aid are accessible only to those with enough time to learn the procedures and complete them correctly.

Sludge Disproportionately Impacts Vulnerable Populations

It is easy to see how these types of costly time burdens might disproportionately affect the poor, disabled, and elderly, among other vulnerable populations. Government programs, like Medicaid and the Supplemental Nutrition Assistance Program (SNAP), are meant for people experiencing ongoing physical or socioeconomic challenges. Yet, the sludge required for participation may discourage potentially worthy recipients. Extensive application and reporting requirements are often imposed out of a well-intentioned concern for program integrity, but, Sunstein argued, administrations past and present haven’t paid enough attention to the costs involved.

Benefit-Cost Analysis as a Tool for Reducing Paperwork Burdens

Sunstein recommended that agencies establish “institutional sludge audits” to explicitly quantify the time spent on sludge and evaluate whether the benefits of the paperwork burdens justify the costs. He suggested that the Office of Information & Regulatory Affairs (OIRA) is best positioned to oversee “sludge” reduction, and called for the Executive branch to set goals to reduce the current annual paperwork cost by a measurable amount. He recommended that the burdens on the elderly, disabled, and veterans should be prioritized, and that the paperwork reduction should align with administration policy.

Sunstein also encouraged Congress to “require periodic lookbacks at existing paperwork burdens.” While the Paperwork Reduction Act already envisions some balancing of burdens against practical utility, he called on Congress to explicitly require that the benefits of paperwork requirements justify their costs and that agencies use the least burdensome method to achieve their policy goals.

He argued that sludge reduction should generate bipartisan support. In a time of increasingly stark divides along party lines, paperwork reduction offers opportunities for cross-aisle collaboration and an obvious avenue for further quantitative analysis by the policy experts and analysts who make up SBCA’s membership.

Julie Balla is a graduate assistant at the GW Regulatory Studies Center and a Master of Public Administration student at the Trachtenberg School of Public Policy and Public Administration.

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