Obama Regulatory Czar Backs Off Call for Gov't to Attach Lower Value to Older People

June 3, 2011 - 3:38 PM

Cass Sunstein

Cass Sunstein, director of the Office of Information and Regulatory Affairs in the Office of Management in Budget, in the Eisenhower Executive Office Building on March 16, 2011. (AP photo)

(CNSNews.com) - President Barack Obama’s regulatory czar has retreated from a 2003 academic report in which he advocated that the government assign a higher monetary value to the lives of young people than to senior citizens.

Cass Sunstein, administrator of the Office of Information and Regulatory Affairs, on Friday testified in front of the House Energy and Commerce Subcommittee on Oversight and Investigations about the Obama administration’s plans for reviewing and reducing federal regulations.

“I’m a lot older now than the author with my name was, and I’m not sure what I think about what that young man wrote,” Sunstein, 56, told the House panel. “Things written as an academic are not a legitimate part of what we do as a government official. So I am not focusing on sentences that a young Cass Sunstein wrote years ago. So the answer is no.”

Sunstein wrote the paper when he was a professor at the University of Chicago. It was titled “Lives, Life-Years, and Willingness to Pay.”

“Many analysts, however, have suggested that the government should rely instead on the ‘value of a statistical life year’ (VSLY), in a way that would likely result in significantly lower benefits calculations for elderly people, and significantly higher benefits calculations for children,” the 2003 paper said.

“I urge that the government should indeed focus on statistical life-years rather than statistical lives. A program that saves young people produces more welfare than one that saves old people,” it added.

Rep. Michael G. Burgess (R-Texas) expressed concerns about how the philosophy of the paper Sunstein wrote would affect his input into the establishment of the Independent Payment Advisory Board, part of the health care overhaul law targeting cost reductions for Medicare.

Burgess read a comment from the paper as he held up a blown up version on cardboard in the committee hearing room. “‘Older people are treated worse for one reason, they are older. This is not an injustice.’

“I guess the question here some people have described this as sort of the senior death discount,” Burgess said to Sunstein. “Your office that oversees regulations, you’ve been doing an analysis of the upcoming Health and Human Services rule for Independent Payment Advisory Board in light of this philosophy.”

Sunstein said the 2003 paper no longer reflects his view, as he is now older. Further, he said his views as a law professor don’t reflect his views as a government official.

“I’m a lot older now than the author with my name was, and I’m not sure what I think about what that young man wrote,” he said. “Things written as an academic are not a legitimate part of what we do as a government official. So I am not focusing on sentences that a young Cass Sunstein wrote years ago. So the answer is no.”

Burgess said he would take him at his word, “But still, it does point out an important philosophical approach, and many of us are concerned about the Independent Payment Advisory Board right now.

“I was a physician. The difficulties I have with an Independent Payment Advisory Board was now for the first time some central planner, maybe a very benevolent central planner, but a central planner who’s pushing data points around on a big spread sheet in Washington, D.C. is going to be able to tell me where to get my care, when to get my care, but most important, is when I’ve had enough,” Burgess said.

“That is based on when I’m old, and we are dealing with a health care program that deals with senior citizens, that’s a troubling relationship,” Burgess added.

The 2003 Sunstein report, “Lives, Life-Years, and Willingness to Pay,” said, “In protecting safety, health, and the environment, government has increasingly relied on cost-benefit analysis. In undertaking cost-benefit analysis, the government has monetized risks of death through the idea of ‘value of a statistical life’ (VSL), currently assessed at about $6.1 million.”

“Many analysts, however, have suggested that the government should rely instead on the ‘value of a statistical life year (VSLY), in a way that would likely result in significantly lower benefits calculations for elderly people, and significantly higher benefits calculations for children. I urge that the government should indeed focus on statistical life-years rather than statistical live,” Sunstein’s 2003 paper continued.

“A program that saves young people produces more welfare than one that saves old people. Nor does a focus on life-years run afoul of ethical limits on cost-benefit analysis. It is relevant in this connection that every old person was once young, and that if all goes well, young people will eventually be old,” Sunstein added.

“In fact, a focus on statistical lives is a more plausibly a form of illicit discrimination than a focus on life-years, because the idea of statistical lives treats the years of older people as worth far more than the years of younger people,” the 2003 paper continued.

“The hard question involves not whether to undertake this shift, but how to monetize life-years, and here willingness to pay (WTP), despite its many problems, is generally the place to begin. Discussion is also devoted to the uses and limits of the willingness to pay criterion in regulatory policy, with reference to the underlying welfare goal and to the nature of moral and distributional constraints on cost-benefit balancing,” it added.

The 2003 paper goes on to say, “Under the life-years approach, older people are treated worse for only one reason: They are older. This is not an injustice. Every old person was young once, and every young person will be old too (if given the chance). In fact an important form of reciprocity is built into the life-years approach. If regulatory policy is based on life-years, every person will, in a sense, be both benefited and burdened, and in exactly the same way. Indeed, every person will be both a beneficiary and a victim of the relevant discrimination. People—the same people—will be benefited when they are younger and burdened when they are older.”