Combatting Deregulation with Regulatory Horcruxes

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Scholar argues that spreading regulatory authority may insulate programs from future deregulatory pressures.

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A recent report released by the Office of Management and Budget boasts of the Trump Administration’s “regulatory freedom agenda,” which purports to have taken 12 deregulatory actions for every one regulatory action since President Donald J. Trump took office. Although the Trump Administration views deregulation as an accomplishment, Sarah Light, a professor at the University of Pennsylvania, argues that the premature “regulatory exits” resulting from deregulation are worrisome.

Light explains that regulatory exit—a deliberate retreat from government intervention—is especially troubling when the initial problem that a regulation is intended to address remains unsolved. In order to safeguard against these undesirable types of exits, Light suggests that regulatory programs can be insulated through the use of regulatory “horcruxes”—a term used in J.K. Rowling’s Harry Potter novels to represent items into which the main villain of the series would hide pieces of his soul in an effort to achieve immortality.

Just as the villain in Harry Potter split his soul into many pieces so that he could survive even if his physical body were attacked, Light argues that the dispersal and fragmentation of regulatory authority into “regulatory horcruxes” can protect a regulatory program against the threat of attack by a successor administration. Regulatory horcruxes are especially suited for environmental regulations because the environment is a deeply contested partisan issue and one of the more likely targets of deregulatory attacks, says Light.

Light considers the advantages and disadvantages of three different types of regulatory horcruxes which are distinguished by the types of institutional actors involved in the regulatory scheme. These institutions can either take the place of the primary federal regulatory agency—which, for the purposes of Light’s essay, is always the U.S. Environmental Protection Agency (EPA)—or share the regulatory authority with respect to a given program.

Although regulatory horcruxes have many potential advantages, Light admits that these advantages all hinge on the compliance of the secondary institutions with which a federal agency is sharing its power. Light explains that the institutions implicated in the creation of regulatory horcruxes all have their own leadership, constituencies, and stakeholders that influence their decision-making.

The first category comprises horizontal horcruxes, which Light says involve a transfer or sharing of power with other federal agencies whose main regulatory charge is not environmental protection. Light explains that one well-known example of an existing horizontal horcrux is that the Clean Water Act gives EPA and the U.S. Army Corps of Engineers shared authority to define “waters of the United States.”

According to Light, the primary advantage of using a horizontal horcrux is that different federal agencies are often governed by different House or Senate committees, creating more interested stakeholders with an incentive to ensure the survival of the program, rather than have it dismantled at the expense of their own power. Although horizontal horcruxes are well suited for addressing interstate issues because the power is shared by federal agencies, Light argues that these horcruxes will be the least effective at preventing premature regulatory exit because the President can more easily dismantle a regulatory program that only exists at the federal level.

The second category, according to Light, involves the transfer or sharing of power between a primary federal agency and sub-national agencies. These are known as vertical horcruxes. A current example of a vertical horcrux  involves the Clean Air Act, Light says. She explains that the act allows California to exempt itself from federal preemption if its motor vehicle emissions standards are at least as protective as the federal standards.

The advantage of using vertical horcruxes, Light explains, is that they have the potential to “generate multiple constituencies of support” at various levels of government, which are likely controlled by different political parties. The largest drawback associated with vertical horcruxes, however, is that states or local governments do not always have the ability to regulate interstate problems.

The third and final type of regulatory horcrux is a private horcrux. Light explains that private horcruxes involve the sharing of regulatory authority between a federal agency and private actors, such as non-governmental organizations, corporations, and industry groups. Although no longer in use, Light highlights EPA’s Project XL—which provided for comprehensive permitting for firms that gave certain assurances that they would improve their “environmental performance”—as an example of a private horcrux.

The most important benefit private horcruxes provide is that they permit the subjects of a regulation to participate in shaping the regulation in the first place, which according to Light, will provide greater efficiency and expertise. Light also argues that private horcruxes are the most effective at thwarting deregulatory efforts because they are the most fragmented. But they also lack “the scope and enforcement capacity of a centralized regulatory program.”

Light suggests that there are also advantages to using regulatory horcruxes in general. Horcruxes are “more likely to preserve the status quo in the face of short-term opposition to a regulatory program” if for no other reason than that they create more “hoops that must be jumped through,” says Light.

Furthermore, Light argues that regulatory horcruxes promote democratic deliberation because more individuals and institutions play a role in creating regulations. In addition, as regulatory authority becomes more fragmented, lobbying becomes increasingly more expensive for interest groups and lowers the risk of regulatory capture, say legal scholars Jody Freeman and Jim Rossi.

Yet preserving the status quo and entrenching regulatory programs is not always a good thing. Light explains that one major disadvantage associated with regulatory horcruxes is that they can impede or altogether prevent regulatory changes, even when those changes might be desirable—such as when new information is made available or a new administration is elected with a democratic mandate for regulatory reform. Similarly, Light suggests that regulatory horcruxes might reduce the democratic accountability of the regulatory state.

Although she suspects that vertical horcruxes might be the most effective, Light concludes with a call for empirical research to determine which types of regulatory horcruxes can best protect against deregulatory efforts.