Deregulation Run Riot

By Judis, John B. | The American Prospect, September 1999 | Go to article overview

Deregulation Run Riot

Judis, John B., The American Prospect

After winning control of Congress in November 1994, the Republican leadership, working closely with business lobbyists and policy groups, launched an ambitious effort to roll back a century of reform legislation--from the food and drug laws of the Progressive Era to the New Deal's Social Security Act to the workplace and environmental regulation of the first Nixon administration. Congressional Democrats blocked most of these efforts in the House and Senate, and the Clinton administration vetoed others, but conservatives have continued to press their agenda--in committee hearings, in mysterious riders attached to appropriations bills, and in the courts, some of which are still dominated by Reagan and Bush administration appointees.

One key battle has taken place in the U.S. Court of Appeals for the District of Columbia--the Court that handles most challenges to federal regulation. This May, a three-judge panel handed down a ruling that prevented the Environmental Protection Agency (EPA) from implementing clean air standards it had established two years ago. That would be significant in itself, but the Court's bizarre reasoning in this case, adapted from a conservative think tank, could be used to cripple virtually any regulatory agency--from the Occupational Safety and Health Administration (OSHA) to the Federal Communications Commission.

The EPA standards the Court overturned date from a July 1997 ruling. The agency, which is mandated by law to review its standards for protecting public health every five years, announced new, tighter regulations for the amount of ozone and small soot particles (particulate matter, or PM) that states could have in their atmosphere. Based on new scientific findings, the EPA predicted that the revised standards would result in 1.5 million fewer annual cases of significant breathing problems from ozone and 15,000 fewer deaths each year from particulate air pollution. Congress failed to exercise its authority to strike down the EPA's standards within 60 days, reflecting widespread public support for environmental protection. But the American Trucking Associations Inc., whose diesel trucks would be directly affected by the new standards, sued to overturn the standards and was soon joined in its effort by the cream of K Street, which had lobbied against the standards on behalf of automobile companies, steel producers, mining and oil companies, utility companies, and other affected industries.

The petitioners made the usual arguments against the EPA's ruling. They charged that the costs of compliance exceeded the benefits to public health, even though the Clean Air Act stipulates that the EPA can only consider what is "requisite to protect the public health." But they also introduced a novel argument that had been developed by the Cato Institute, a free market think tank funded by corporations that oppose government regulation. In testimony three years ago before the House Judiciary Committee, Jerry Taylor, Cato's director of natural resource studies, unveiled this new line of reasoning, which was based on work done for the think tank by New York University Law Professor David Schoenbrod.

Taylor argued that by granting the EPA authority to set specific rules about environmental standards Congress was violating Article I of the U.S. Constitution, which vests "all legislative powers" in the Congress itself. "Statutes that express goals, even specific ones, but leave it to the executive branch to generate the rules binding on private conduct, delegate the power to make law, and are thus illegitimate," Taylor said. As his authority, Taylor cited the Supreme Court's 1935 ruling in A.L.A. Schechter Poultry Corp. v. United States, in which the Court overturned the National Industrial Recovery Act partly on the grounds that Congress's delegation of power was far too sweeping. But in that particular case, the delegation of power was too sweeping and vague and even extended to purely private bodies such as trade associations that were mandated to set enforceable codes of conduct.

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