Ralph Nader
            P.O. Box 19312, Washington, DC 20036

                         James Love
               Consumer Project on Technology
            P.O. Box 19367, Washington, DC 20036

November 18, 2002

Mitchell E. Daniels, Jr.
Office of Management and Budget
Executive Office Building
17th Street & Pennsylvania Avenue NW
Washington, D C 20503

RE:  Cost benefit analysis

Dear Director Daniels,

This is a request for a meeting with you and your staff to
discuss two important issues concerning cost benefit

  1.   Homeland Security and other programs relating to
       threats of terrorism.

There have been enough reports already about excessive and
wasteful spending within agencies charged with tightening
security for programs against terrorism as well as a
widening anticipation of rapid bureaucratic budget
expansions in the near future to ask a fundamental question.
Unlike other regulatory areas where there is a strict cost
and risk analysis at OMB under John Graham--eg. food, drug,
autos, pollution, occupational hazards, etc., there seems no
such system of oversight in the burgeoning programs loosely
denoted as furthering homeland security.   As Mr. Graham has
pointed out--often to an extreme--tight cost-benefit
analysis is designed not just to save the taxpayer money but
to spend these monies within their program objectives and
intermodally vis-a-vis other risks the federal government
needs to manage.  Given the philosophy of the Bush
Administration, there should be no off limit areas of the
executive branch to decision-making processes that ensure
public sector resources are being used prudently and wisely
within an honest framework of risk, cost and benefit.  We
ask to discuss the framework for what tools should be used
to further the optimal allocation of resources in this new
growth sector for public expenditures and regulatory
programs.  When highly charged government programs attain an
ambience of insularity from public debate, review and
challenge, it is all the more important for OMB to be
systematically alert, given the tens of billions of dollars
that are pouring into these programs, often without having
the requisite degree of absorptive capacity in place.  We
also note there will be both tangible and intangible costs
from these associated regulatory measures.

  2.   Patent Scope.

The United States and other parties are negotiating a new
Substantive Patent Law Treaty (SPLT).  One important area
for this treaty concerns patent scope.  There are proposals
to require every treaty member to issue patents on "any
field of [commercial] activity."  This is specifically
designed to force most countries to issue patents on methods
of doing business, as well as a general trend to broaden the
scope of what can be patented.  In addition to the proposed
SPLT treaty, US trade officials have advocated for broad
patent scope in a number of important multilateral1,
regional and bilateral treaties, requiring for example,
Jordan, a country with a limited resources to evaluate
patent quality, to issue patents on software and business
methods.   And in recent years, the US Patent and Trademark
office has been increasingly aggressive in terms of the
scope of what can be patented (albeit with some limited
attention to inappropriate awards of patents in the field of
genetic research).

Under the current Administration, the Federal Trade
Commission (FTC)  and the US Department of Justice have been
holding joint hearings on Intellectual Property law and
competition.  These hearings have assembled a large amount
of evidence that suggests that the costs of issuing patents
are larger than the benefits to the public, particularly in
areas such as patents on software, business methods or gene
research. There is also considerable evidence the US PTO
routinely issues patents that do not meet their own
standards for novelty and utility, and that there are
enormous subsequent costs to resolve disputes over patent

Because these are quite different topics, we would like to
schedule two separate meetings, and to invite a few experts
who can provide helpful advice on both topics.


Ralph Nader

James Love

1 Article 27.1 of the TRIPS requires member countries to
issue patents in all fields of technologies, with few
limited exceptions.