Why Congress is failing at the GMO labeling fight

In recent years, Republicans have argued that Congress is a more responsible policymaker than the executive branch. But when it comes to regulation, Congress is often much worse, and for just one reason: Executive agencies almost always focus on both costs and benefits, and Congress usually doesn't.

As a case in point, consider the Senate's recent vote, by a margin of 63-30, in favor of a new law to require national labels for foods containing genetically modified organisms. The House is expected to pass the bill in the near future. However popular it might be, the coming law would almost certainly fail the minimal requirements that American presidents — from Ronald Reagan to Barack Obama — have imposed on federal regulators before they can finalize similar rules.

Since 1981, federal agencies have been required to do two things: quantify the costs and benefits of regulatory requirements and demonstrate that the benefits justify the costs. Congress did neither — which is typical.

For the GMO labeling requirement, lawmakers made no serious effort to quantify the costs for companies and consumers. A Consumers Union study concludes that the annual expense would be $2.30 per person. That doesn't sound like a lot (and Consumers Union strongly supports mandatory labeling, giving it an incentive to lowball the costs). But its estimate still entails a total annual cost far in excess of $100 million — the executive branch's threshold for 'economically significant' regulations, which must be accompanied by detailed investigations of economic consequences.

Reliable data are hard to find: A study funded by Corn Refiners Association, which opposes mandatory labeling, estimates the total cost to be $3.8 billion. Before imposing a nationwide mandate on food producers, Congress should be expected to come up with some numbers of its own.

Whenever they require labels, regulators are ordinarily also required to project significant benefits for consumers, usually in the form of economic savings or reduced mortality or morbidity. But in terms of human health, labels are expected to produce no benefits at all. Nor is anyone seriously arguing that consumers will save money.

True, some people believe that genetically modified crops will cause environmental damage, but many scientists have contested that belief. In any case, no congressional committee has made a serious effort to show that labels are justified on environmental grounds.The bill's proponents argue that the American people want labels. They're right. But the public desire for labels seems to be based on the unfounded belief that GM food is harmful to human health. On that count, presidents from Reagan to Obama have agreed: Regulation should be based on concrete evidence of benefits, not baseless fear.

There is a larger lesson here. When it imposes expensive regulatory mandates on the private sector, Congress often acts on the basis of interest-group pressures, anecdotes and the emotions of the moment. The executive branch is hardly perfect, but it is far less likely to do that.

Having said all that, there's a good argument that the House should vote for the Senate's bill and that the president should sign it. The reason is simple: federalism.

On July 1, Vermont became the first state to require GM labels in grocery stores. Alarmed by the new law, food manufacturers have gone to both federal court and to Congress to eliminate it. Without national action, they worry that different states will require different labels, with different texts and fonts, producing a patchwork quilt of labeling requirements, hopelessly ill-suited to a national market.

In these circumstances, the bill that passed the Senate is probably a sensible compromise. For one thing, it would explicitly preempt state laws on the subject. For another, the labeling requirement has the advantage of flexibility: Food producers can comply with a symbol or with text, but also with a barcode consumers can scan to get information on ingredients.

Producers of genetically modified food think that this flexibility means that the federal law will be far less costly than what Vermont has done, not least because most consumers won't even bother to scan. To them, the bill makes the best of a bad situation. But if labels are indeed coming, let's hope that consumers don't pay a whole lot of attention to them. Much more than that, let's hope that whenever Congress imposes costly mandates in the future, it will borrow from the established practice of the executive branch — and insist on some kind of accounting of both costs and benefits.

Cass Sunstein, a Bloomberg View columnist, is director of the Harvard Law School's program on behavioral economics and public policy. From Bloomberg View.