This report analyzes the impact of the cost of Federally mandated pollution control expenditures on such measures of macroeconomic performance as real GNP, price levels, and employment. Using an elaborate econometric model of the economy, DRI adjusts the appropriate equations to reflect the lower costs associated with the absence of pollution control regulations, resimulates the economy with the adjusted equations, and then derives an estimate of the economic impact of the regulatory costs by comparing the resulting simulations. Only costs due to federal regulations are removed.