CPR Perspective: The Strategies of Regulatory Underkill

Poll after poll over the decades confirms that a majority of the public strongly supports protection of health, safety, and the environment. American laws reflect that broad citizen support, imposing substantial obligations on industry and government officials to improve their performance. Few politicians overtly attack the goals of these popular laws. To garner majorities and not alienate other key constituencies and swing voters, advocates of deregulation couch their rhetoric in terms of “smarter” regulations, more cost-effective means to regulatory ends, and sound science. President George Bush has never trumpeted his administration’s many efforts to weaken such laws, but instead speaks of “clearer skies,” “cleaner technology,” “healthy forests,” and of being a “good steward of the land.” It remains clear, however, that many elected officials and powerful interests are eager to weaken our environmental and risk regulation laws. The challenge for these partisans is how to do so without antagonizing the electorate.

This perspective discusses an increasingly prevalent series of techniques used to derail and weaken regulatory protections at the administrative level without proposing legislative action. We call these sorts of efforts and strategies “regulatory underkill.” Collectively, these regulatory underkill strategies coupled with the inherent political and legal barriers to combating environmental harms mean that many environmental harms and risks will remain poorly addressed.

The path from identification of a pressing harm, to enactment of measures to address it, to actual implementation of such enactments, to alleviation of the threatened harm, is fraught with uncertainty. Every step in this implementation process is contested terrain, where the same interests that battled in the legislature will seek victory yet again. All laws are vulnerable to underkill dynamics, but the Bush Administration’s regulatory activities between 2001 and 2004 reveal a remarkably adept use of this menu of tools to ensure that regulatory underkill occurs. Program after program has been weakened, shelved, derailed, underfunded or unenforced, yet often without recourse to frontal attacks on this nation’s environmental laws. The far less visible utilization of these many mechanisms allows executive agencies to undercut important regulatory programs, but without highlighting and paying the political costs for their deregulatory efforts.

Budget

The most common method of undermining an enacted law is to fail to provide adequate funds for its implementation. Virtually all environmental and risk regulation laws require substantial sustained action by administrative agencies to achieve their goals. These agencies must take often vague legislative instructions and, ideally, devise means to achieve enacted legislative goals. Agencies require funds to staff implementation efforts, to conduct studies, to move regulatory initiatives through the notice and comment process, and to enforce the laws and associated regulations. Without these funds, the law remains on the book but without force. Sometimes Congress will leave a law standing, but completely gut its funding mechanism. For example, the nation’s toxic waste cleanup statute, known colloquially as Superfund or CERCLA (the Comprehensive Environmental Response, Compensation and Liability Act), has been substantially weakened by eliminating the tax on polluting industries that funded virtually all aspects of the law’s implementation. Such a direct, monetary attack on a regulatory scheme is less likely to be noticed than an effort to eliminate the underlying law.

Appropriations Riders

During the past decade, use of legislative riders has become another particularly popular and low-visibility means of derailing programs. Such riders are typically not freestanding bills that are subject to the congressional committee process, openly debated, and visible for all to see. Instead, they commonly appear without announcement or even an open legislative sponsor. Riders are appended to other bills, often large spending appropriations bills that have broad support and reflect hundreds of fiercely negotiated bargains.

Some riders enact provisions that could not pass as free-standing legislation. The Information (or Data) Quality Act, which allows industry to mount piecemeal attacks on unfavorable scientific research, is a classic example. (See CPR’s Data Quality Act Perspective.) Other riders bar the use of appropriations to implement controversial policies. These “carve-outs” effectively render such policies a nullity for certain periods or in certain areas. Because these riders do not involve a frontal attack on a popular law, and their advocates may remain unknown, the public seldom knows of these proposals in time to mount an effective opposition.

Cross-cutting Regulatory Reform Legislation

Enactment of so-called “regulatory reform” legislation similarly allows a law’s opponents to weaken a law, but without directly attacking it. Both laws and executive orders adopted under the guise of regulatory reform now require agencies to do additional analyses prior to enacting a regulation. Most commonly require agencies to analyze the costs and benefits of a regulation, to consider only peer reviewed science and so-called “sound science.” or to analyze the burdens federal regulations impose on state and local governments. Again, the Information (or Data) Quality Act is an example of this technique. This and other similar add-on procedural requirements further burden already overworked and underfunded agencies. They also give opponents of regulation additional grounds and settings for attack. Wars of regulatory attrition can easily be won by regulatory opponents dragging out these “reform” procedures and analyses.

Weak Implementation

Even with a supportive legislature and well crafted legislation, risk regulation laws frequently founder when their implementation is handed to an agency. The reasons for such agency inaction are many, ranging from excessive regulatory obligations, to insufficient staffing, to problems with employee performance. Laws rarely are self-implementing. Risk and environmental laws typically require agencies to interpret the law, derive effective implementation strategies, and take numerous steps from receipt of a new law’s instructions to actual enforcement against sources of risk. It is inevitable that targets of regulation do not surrender once they are defeated in legislative fora. Instead, the same points of disagreement and grounds for opposition are transferred to the agency setting.

Once agencies are prodded to act, then the rulemaking process provides yet another venue in which unequal resources can skew regulatory outcomes. Targets of regulation will always participate, sometimes as individual companies, but often also through industrial associations and conservative think tanks. Supporters of regulation will also participate but rarely have anywhere near the resources of opponents of regulation. An administration sympathetic to one side in the regulatory process can skew the process and the regulations themselves. The much-publicized Bush Administration efforts in multiple venues to weaken “New Source Review” obligations for modified power plants are a case in point. Regulatory changes promised new loopholes, meetings with industry excluded environmentalists, and enforcement efforts were undercut. The underlying Clean Air Act provisions, however, remained unchanged despite several unsuccessful efforts to weaken the law. (See CPR perspective on New Source Review.) Another example is the failure to implement Maximum Achievable Control Technology for mercury under the Clean Air Act. Once again, the law was not changed by the Congress, as required by the Constitution. (See CPR Mercury perspective.)

Revolving Doors

Agency political appointees are often drawn from the industries they are supposed to regulate. Even without such “revolving door” agency capture by the targets of regulation, agencies will be inundated with data and criticisms by industry. Over time, the agency may become sympathetic to regulatory targets. Even if not sympathetic to industry, agency officials are, like all of us, risk averse and would like to avoid public criticism or rejection in the courts. Skewed pressures can result in no agency action at all, or action that is protective of the targets of regulation.

Restricting Public Participation

Agencies can further derail statutory initiatives and cause regulatory underkill by reducing public input and oversight. Agencies do have some protected latitude to engage in internal deliberative communications, but they are otherwise expected to do their regulating in a highly public and participatory manner. Broad public access and oversight are a critical antidote to the skewed resources wielded by industry, as well as agency inertia. Agencies will, however, sometimes spend huge periods behind closed doors in formulating proposals or deliberating over comments regarding a proposed regulation. During these phases, the public’s access and oversight may disappear, reducing pressure on the agency to act. As more and more regulatory initiatives disappear into a regulatory black hole, the underlying law becomes less real.

Updating Regulatory Requirements

Regulations sometimes become outdated but the responsible agency lacks the resources or political will to renew them. As regulations become outdated, they may end up hurting industry due to the regulations’ poor fit with industrial reality, but they may also fail to address new risks as required by statute.

Updating Permits

Despite the requirement in most laws that pollution permits be updated and made more stringent over time, many permit limits are never revisited once issued. Whether the issuer of the permit is a federal agency or state official under a federal delegated program, the pressure to update permits is often a low priority. Polluters may comply with the terms of their permits, but the permits may be unduly lax due to government inaction. As thousands of permits fall out of date or are not updated as required by law, the cumulative associated harms grow. Only with substantial investments in staffing agencies at the federal and state level will permits actually comply with the law. During periods of funding cutbacks, illegally lax and outdated permits will remain the norm, as has occurred over recent years.

Enforcement

Effective regulatory underkill can also be achieved through executive branch litigation and settlement choices. Courts often remain the crucial forum in which the letter of environmental, health, and safety laws becomes an enforced reality. Administrative agencies are typically given deference by courts, but concerted and one-sided executive skewing of litigation decisions can undermine the law. For example, courts tend to give executive branch settlements with regulatory violators considerable deference. Settlements typically do not need to be punitive or push the law, but can reflect compromise due to litigation uncertainties. Once protected by a final, court-approved settlement, however, industry is often insulated from further attack. Citizen litigation against industry can be supplanted by quick and lax settlements between the government and the industry target. Such settlements can, over time, create a de facto enforced law that differs from what statutory and regulatory texts require.

The government also can participate in litigation by filing “friend of court” amicus briefs even when not an official party. Due to the deference described above, courts tend to give substantial weight to the government’s view of the law even when it is not an actual litigant. Through such an amicus role, for example, the Bush administration recently weighed in to support a devastating weakening of the Superfund law’s enforcement mechanisms. As is frequently the case, the Supreme Court adopted the arguments and logic of the government’s brief. An executive branch that seeks to weaken regulatory protections through its litigation positions will almost certainly achieve much of that goal due to the tradition of judicial deference to the executive branch.

Anyone interested in effective protection of health, safety, and the environment must be aware of the substantial gap between legislative aspirations and actual, implemented reality. The broad array of regulatory underkill strategies frequently operate to derail legislative initiatives. Agencies will at times raise legitimate arguments in favor of allowing them room to tailor priorities in light of often excessive regulatory tasks and virtually certain resource constraints. Modest and occasional levels of underkill are inevitable and often do not present a problem. Pervasive, one-sided use of executive implementation or enforcement discretion that results in failure to carry out legislatively assigned regulatory tasks, however, does remain a problem. Such one-sided utilization of regulatory underkill techniques runs afoul of basic conceptions of the President’s constitutional obligation to “faithfully execute the law.” It also runs afoul of agencies’ obligation to serve not transient political preferences, but the political preferences made manifest in enacted statutory law and promulgated regulations.

Effective progressive regulation depends on awareness of these regulatory underkill strategies and effective countervailing action. Such effective action cannot come in just one form; the diverse array of underkill dynamics, venues and techniques mean that no single answer is possible. Nevertheless, several counterstrategies deserve note.

First, environmental advocates, aligned with advocates of good government and the rule of law, play a critical role in keeping the administrative process transparent and balanced. This means that advocates need to participate in regulatory proceedings, monitor often massive regulatory records, and credibly threaten to commence litigation where the regulatory process is skewed or violates legal requirements.

Successful recourse to the courts is not always an option because of an array of doctrines that limit regulatory beneficiaries’ access to the courts, especially when dealing with inaction and discretionary implementation and enforcement decisions. Once in the courts, the principle of deference further weakens the judiciary as a vehicle to police under-implementation. Increased reliance on appropriations riders to create statutory exemptions and carveouts are now virtually beyond judicial review.

Still, citizen litigation and participation rights remain crucial. Statutes creating “citizen suit” litigation rights have been embattled in recent years, but nonetheless remain a viable means for bringing suits against polluters. Similarly, Administrative Procedure Act participation and litigation rights remain, especially when dealing with agency procedural irregularities. Furthermore, although judicial textualist interpretive techniques and “hard look” review of agency actions have at times been used for anti-regulatory purposes, they also may serve as a brake on excessive use of underkill strategies. Laws that remain unchanged impose limits on efforts to derail regulatory programs, and “hard look” review deters any regulatory change that is inadequately justified. Most underkill counterstrategies, however, do not lend themselves to judicial cure, but require effective political work. So, although courts are part of the response to inappropriate regulatory underkill strategies, citizens and regulatory advocates must remain vigilant in the political arena.

In this regard, sympathetic legislators can play a crucial role long after seemingly protective legislation is passed. Failures to fund agencies, as well as use of legislative riders and regulatory reform measures, can derail administrative implementation and enforcement before it even starts. If advocates can enlist legislators and their staffs to police agencies, that pressure will often be far more effective than later, typically deferential, judicial review.

Finally , environmental advocates need to carefully police even modest changes to environmental statutes, or freestanding reform legislation with a seemingly sound purpose. Supposedly benign amendments can sometimes serve an ulterior purpose that will only be appreciated upon close examination. Legislative efforts to “streamline” the regulatory process, mandate “cost-effective regulation,” or require “sound” or “peer-reviewed” science may sound like measures worth supporting, but they may in fact be designed to undercut citizen roles and protective regulation at the boundaries of scientific knowledge.

Regulatory underkill strategies are pernicious, yet effective. Many areas of risk and environmental regulation exist and have their strength only because of their broad popularity. Anti-regulatory strategies such as underkill techniques threaten to be effective because they so successfully avoid public notice and hence popular backlash. The same flexibility that allows agencies to adjust programs to attend to new needs can, in concertedly anti-regulatory hands, be used to derail and disrupt existing regulatory protections. Unlike legislative reform battles that tend to be highly visible and vigorously contested, many regulatory underkill strategies simply escape attention, undercutting the transparency and accountability typically provided by our legal and political systems.