Hoeven Secures Commitment from OMB Regulatory Nominee to Address Benefit-Cost Ratio, Give Credit to Non-Federal Funding Sources in Army Corps Projects

Senator Continues Efforts to Ensure Fair Treatment of Public-Private Partnerships

WASHINGTON – At a hearing of the U.S. Senate Committee on Homeland Security and Governmental Affairs this week, Senator John Hoeven secured a commitment from Neomi Rao, nominee to head the Office of Information and Regulatory Affairs (OIRA) at the Office of Management and Budget (OMB), to work with the senator to address the inconsistencies in the benefit-cost ratio used by OMB for U.S. Army Corps of Engineers projects. OIRA serves as the chief regulatory authority for the executive branch and oversees the implementation of policies like the benefit-cost analysis.

Currently, OMB does not give due credit to projects that secure non-federal funding, like comprehensive flood protection in the Red River Valley. The agency compares project benefits to the project’s total cost, rather than just the federal project costs. This understates the value of the federal investment, which can put such projects at a disadvantage. 

“Public-private partnerships can serve as an important tool to reduce costs to the federal government and help the Army Corps work through its backlog and complete more projects,” Hoeven said. “Red River Valley flood protection is a great example of this model, however OMB’s standard calculation of costs and benefits doesn’t properly account for the state and local contributions to this project. That doesn’t make sense. The White House, the OMB Director and the Corps have committed to address this, and I look forward to working with Ms. Rao to ensure public-private partnerships are given fair treatment.”

Hoeven has repeatedly spoken with OMB Director Mick Mulvaney and Army Corps Chief Lt. Gen. Todd T. Semonite to ensure that innovative funding methods are accounted for in OMB and Corps calculations. The senator recently joined a bipartisan letter to Mulvaney asking him to reevaluate the process for calculating the benefit to cost ratio for Army Corps projects.