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Jewish World Review July 7, 2003/ 7 Tamuz, 5763

Suzanne Fields

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Consumer Reports

What's a granny worth? | "What's a granny worth?" The question, if not necessarily granny, is worth a free lunch on Washington, so the house was packed for a symposium at the American Enterprise Institute. The organizers not only ran out of seats, but out of knives and forks at the buffet table as well as copies of the institute's white papers (the lifeblood of Washington wonkery).

"You can read them on our Web site," I was told ( I did, and others should, too, but if you're not familiar with the arcane vocabulary of think-tank economics, they're difficult. "Little Red Riding Hood" this is not.

The question, however, is important for lots of reasons. It tells us a lot about how Washington works, how politics plays into decisions, the way the bean counters influence information and the way special interest groups spin - and distort - information.

An estimate of Granny's worth is important to policy-makers in a cost-benefit analysis of the "Clear Skies," or clean-air, legislation. The "worth" of someone over 70 was reckoned by somebody in the government to be $2.3 million, compared to $3.7 million for someone younger than that. This demonstrates the effects of inflation, I suppose, since someone in Tin Pan Alley once found his million-dollar baby in the five-and-ten cent store, but the government's estimate was anything but music to the ears of organized Americans of 70.

Seniors labeled the estimates the "senior death discount" and environmental groups joined them in decrying the financial formula. The environmentalists were less interested in valuing granny than in fighting "polluters." Less value ascribed to the elderly lowered the estimated cost "benefits" accrued from clean air. The environmentalists printed up leaflets accusing the Environmental Protection Agency of valuing seniors as "worth 3/5 of a Person" - "Senior Discount - 37 Percent Off."

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Christie Whitman, administrator of the EPA, saw a public-relations debacle inherent in the spin, and scooted away from it: The EPA had never reviewed it; it came from the White House Office of Management and Budget, and probably over the transom. The spinning was a shame, because the issue is something most of us don't understand and ought to learn more about. A lucid discussion over how the men in green visors who influence specific legislation get their numbers would be very useful.

I was prepared to see the defenders of the formula as beasts in black, armed with long-handled scythes, eager to cut down the elderly losers in the lottery of life. Instead, Robert Hahn, executive director of the AEI-Brookings Joint Center, which sponsored the symposium, was soft spoken and reasonable. He was a bit miffed that Christie Whitman succumbed to pressure exerted by the American Association of Retired Persons.

"She shouldn't have, even if tangling with the AARP can be more dangerous to a politician than blocking the entrance to the Boca Raton Sizzler when it opens for the early bird special," he said (demonstrating that he's not a congressmen with a lot of retired folk in his district). "The unavoidable truth is that good policy often can't be made without deciding what factors matter in calculating the value of a life, including the age of the people at risk."

We need such information so we can change the formula if we don't like it. The formula should be compared to other formulas for credibility and accuracy if we're to understand the costs and benefits of government regulations.

Federal regulations often put a price tag on lives to determine the cost and benefits of life-saving investments. The granny formula, whoever devised it, maintains that "Clear Skies" legislation regulating soot emissions from power plants could prevent up to 6,400 premature deaths, 4,000 cases of chronic bronchitis, 6,300 hospital visits and some 8 million respiratory symptoms or illness. These are benefits for Americans of all ages, reckoned by many measurements, including age.

We cheerfully accept age, for example, as a legitimate factor to determine the price of life insurance. Formulas are merely tools for gathering information, important to the customer as well as to the corporation.

Robert Hahn poses a chilling scenario that goes to the heart of the argument. If a nursing home with 11 residents catches fire in the middle of the night and a nursery with 10 toddlers catches fire at the same time and the mayor has only one fire truck, where should he send it? "If senior groups had their way, it would be a no-brainer," he said. "All lives would be worth the same regardless of age, so 11 nursing home residents would always trump 10 toddlers."

Cost-benefits must be based on good science, sound economics and precise language. Maybe the mayor should find the money to buy another fire truck. Granny knows that, and so do the rest of us.

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© 2001, Suzanne Fields. TMS