STRATEGIC LIMITATIONS.

Regulatory nukes also have their corollary to strategic limitation and disarmament. 34  We have seen that very often a regulatory nuke that seems light anything more than a paper dragon faces two fates:  we either find a way to tame the beast or we kill it.  Limitations in this context can come from a number of sources.  This Part discusses three of them:  Congress, agencies themselves, and regulated entities.

3.6.1 Strategic Limitation By Congress

A potential consequence of the political fallout surrounding the launching or threat of launching a regulatory nuke is that Congress might opt to try to make a regulatory nuke less threatening or take away the agency’s big stick.     

There are a number of examples of Congress watering down a regulatory nuke or demarking territory that safe from an agency strike.  When the EPA began buckling down on Los Angeles and announced its plan to implement gas rationing, Congress ended up revising the Clean Air Act to give Los Angeles more wiggle room and also took away some of the power of the EPA to implement gas rationing and to control land use planning through the Clean Air Act.  The controversy that featured the Fish and Wildlife Service putting a halt to the Tellico Dam resulted first in Congress creating the Endangered Species Committee (more wildly known as “the God Squad”), which empowered various government officials to make the decision that a particular species was not worth saving, and later when the Endangered Species Committee refused to give the Tellico Dam a pass Congress exempted that project from the Endangered Species all together.  The Internal Revenue Service’s bar against a charitable organization aiming a “substantial part” of its activities to influencing legislation was later replaced with legislative precisely defined “safe harbor” that allows organizations precise warning of where the line is and what to do in order to avoid stepping over it.  

In other instances, Congress has stripped an agency of its regulatory nuke all together.  For example, when the EPA attempted to hold the auto industry to Congress’s timeline to develop the catalytic converter, Congress subsequently cut the agency out of the picture and monitored the industry itself.  Similarly, the Fish and Wildlife Service controversial use of the Endangered Species Act nearly lead to the repeal of the Act when Newt Gingrich became Speaker of the House in the early 1990s.    

3.6.2 Strategic Limitation by Agencies

Having a regulatory nuke in its arsenal may cause discomfort for an agency. With such a powerful regulatory weapon, it may find that the agency has also become a target of the regulated industry and faces additional scrutiny. Agencies can deal with this pressure in different ways. One way, of course, is to let the regulatory tool remain dormant. This pressure might be a reason that so many potential regulatory nukes seem more a threat on paper than in reality.

Another way an agency can deal with this pressure is to attempt to limit its own powers. For example, in the 1990s, the Fish and Wildlife Service faced mounting congressional pressure relating to the agency’s handling of the Endangered Species Act (including the threat of congressional revocation of the Act). In order to avoid congressional action, the Fish and Wildlife Service worked diligently to reform the Endangered Species Act from within the agency. It created a number of reforms aimed at reducing uncertainty faced by private entities governed by the Act and in providing those regulated more flexibility as well. The agency did this by finding inventive ways to read the Act’s provisions and (to the extent that it could) leveraging congressional silence to meet the agency’s aims. In this regard, one of the major reforms the agency took on was the creation of large-scale habitat conservation plans that the agency allowed to substitute for what had typically been parcel-by-parcel planning. This gave regulated entities much more flexibility in how they might meet the dictates of the Act and reduced some of the bite of the enactment.

In rare instances, agencies might attempt to convince Congress to limit an agency’s regulatory nuke. There are two examples in this context worth mentioning, both dealing with the EPA. In the 1970s when the EPA began to attempt to force Los Angeles to comply with the Clean Air Act, then-Administrator William Ruckelshaus, public begged Congress to reform the Act so that he would not be in the position where he felt forced to go nuclear on Los Angeles. He went so far, as to holding more public hearings as possible in order to draw attention to his plight and to put pressure on Congress to change.

More recently, the EPA has also pushed on the Clean Air Act with hopes of spurring Congress into action to address climate change. Many commentators have speculated that the reason that the EPA made its endangerment finding and has attempted to promulgate the regulations it has was that the agency wanted to force Congress to preempt the agency’s power by passing legislation.

3.6.3 Strategic Limitation By Potential Regulatory Entities

Regulated entities have a bigger incentive than anyone to try to defuse and moderate regulatory nukes. Even if a regulated entity believes that it is safe, there is no guarantee: “While it is hard for a government, particularly a responsible government, to appear irrational whenever such an appearance is expedient, it is equally hard for a government, even a responsible one, to guarantee its own moderation in every circumstance” (Schelling 2008/1966, 41). Giving an agency a big stick to wield increases the value of potential targets securing control over the agency. Taming a potentially vicious dog provides obvious benefits that are absent from securing control over even the most rabid of gerbils.