Checks, Balances, and What Happens When Congress Punts

 

Takeaway

  • Democrats and Republicans are more divided now than ever, which directly affects environmental and energy policy in the U.S.
  • Congressional gridlock makes it difficult for regulatory agencies to address modern social, scientific, economic, and technological developments. 
  • For the business sector, particularly those companies operating in heavily regulated industries, Congressional inaction leads to tremendous uncertainty.

The Environmental Protection Agency (EPA) made headlines in August when a federal district court in North Dakota granted a preliminary injunction to block implementation of the Clean Waters of the United States Rule (WOTUS) in dozens of states. The new rule would have expanded the agency’s reach to include small streams and wetlands, the environmentally sensitive headlands that flow to larger bodies of water already under the EPA’s jurisdiction. Those plaintiffs argue the new rule is unfairly burdensome because it requires a case-by-case analysis of every questionable (and even temporary) water source — a logistical nightmare if not an impossibility.

The injunction arrived just weeks after the EPA announced its final rule to regulate emissions from power plants, known as the Clean Power Plan, which was also met with lawsuits and landed on the Supreme Court’s docket before being implemented.

Professor David Spence, who holds dual appointments with the McCombs School of Business and The University of Texas Law School, says that for the EPA, these lawsuits have become “part of the job” and will only increase in number as Congress’ inability to update languishing statutes persists.

Spence, together with Harvard Law School’s Jody Freeman, who served as Counselor for Energy and Climate Change in the White House from 2009-2010, has published new research that examines Congress’ ideological polarization. They note that Democrats and Republicans are more divided now than ever and explore the implications for energy and environmental policy.

The House, says Spence, used to be comparatively moderate. That middle-of-the-road mentality meant it was easier for both sides to come together and pass legislation. Over the last 30 years, however, party platforms have shifted. “Most of the movement that has driven the parties ideologically farther apart comes from the Republicans moving right, which has resulted in stronger opposition to federal regulation because they believe it distorts the economy,” he explains. “Agencies now have to act without much help from Congress.”

Congressional gridlock, Spence and Freeman note, makes it increasingly difficult for regulatory agencies to address modern social, scientific, economic, and technological developments. The majority party controls the legislative agenda, and the minority threatens to filibuster. As a result, key statutes like the Clean Air Act that guide energy and environmental policy haven’t been touched in 25 years.

But when the EPA attempts to redefine its scope of enforcement without Congressional participation, it gets hit with a barrage of complaints, the researchers observe.

Take WOTUS for example. The rule was written in response to new environmental studies that show wetlands and small streams have a greater impact on water quality than was previously understood and, therefore, require federal regulation. The current statute, which doesn’t sufficiently clarify the EPA’s scope of jurisdiction, hasn’t been updated since the Water Quality Act of 1987.

Even so, Texas Farm Bureau President Russell Boening called the rule “a classic example of regulatory overreach.”

Melinda Taylor, executive director of UT’s Kay Bailey Hutchison Center for Energy, Law, and Business, disagrees.

“The basis for administrative law is that these are expert agencies populated by scientists, economists, and lawyers who — theoretically, at least — are not highly political creatures. They are charged with making regulatory decisions that are based on facts,” Taylor says. “The WOTUS rule is the EPA’s attempt to clear up years of uncertainty that arose from a confusing Supreme Court decision issued in 2008. In this country, we made a choice to allow expert administrative agencies to make decisions on the issues they’re entrusted with.”

For the business sector, particularly those companies operating in heavily regulated industries, Congressional inaction leads to tremendous uncertainty, says Spence. “When agencies have to fit old statutes to new problems within their jurisdictions, litigation is inevitable. But if Congress were to address new problems and agencies had clearer authority to act, businesses would have more confidence that those revisions would be upheld,” he adds.

A case in point: The Clean Air Act. Spence and Freeman’s work highlights the EPA’s 2007 refusal to regulate greenhouse gases (GHGs) as pollutants. The Bush Administration EPA claimed, in part, that it didn’t have the authority to reclassify GHGs without a mandate from Congress, but the Supreme Court ruled in 2007 that it did. Still, many legal scholars anticipated that the court’s ruling would compel Congress to reclaim legislative control of the process and amend the Clean Air Act itself for the first time in nearly 20 years. But after a series of failed bills, it became clear in 2010 that Congress was at a permanent standstill.

After Congress’ failure to address the issue, the Obama Administration EPA began regulating greenhouse gas emissions by retrofitting parts of the Clean Air Act to comply with the Supreme Court’s ruling. Legal challenges persist, however, and according to Spence, there’s no practical way around them.

“I think everybody would prefer if Congress were to address the problem, and that’s why the administration tried that route first. But in terms of who is more likely to choose a policy in line with the preferences of the average voter, it’s probably the agency, not elected officials,” he says. “The EPA knows the lawsuits are going to come. They just have to keep their eye on the ball and focus on the main goal, which is taking care of the environment.”

“Old Statutes, New Problems” appears in the University of Pennsylvania Law Review.

 

Faculty in this Article

David Spence

Professor, Business, Government & Society

Professor Spence's research and teaching focus on business-government relations with emphasis on energy and environmental regulation. He received his...

David Spence teaches in the Texas Executive Education program, featuring open enrollment, custom and certificate classes for executives and organization teams.

About The Author

Mark Collins

Mark Collins is a third-generation journalist living in Austin, Texas with his wife and two dogs. He&...

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