Ralph Nader P.O. Box 19312, Washington, DC 20036 James Love Consumer Project on Technology P.O. Box 19367, Washington, DC 20036 http://www.cptech.org November 18, 2002 Mitchell E. Daniels, Jr. Director 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 analysis. 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 validity. 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. Sincerely, Ralph Nader James Love 1.202.387.8030 email@example.com _______________________________ 1 Article 27.1 of the TRIPS requires member countries to issue patents in all fields of technologies, with few limited exceptions.