Regulatory Oscillation

In the wake of the Reagan deregulation, America experienced twenty-eight years of regulatory progression, with precious little retrogression. That trend came to a crashing halt during the four years of Donald Trump’s presidency. As a candidate, Trump campaigned on a series of pledges to reverse and undo as much of the work done by Barack Obama as possible. The Trump EPA was particularly active in this effort. In addition to reversing the Clean Power Plan, under Trump the EPA repealed or substantially weakened a number of other important Obama-era regulations, including a substantial increase in fuel economy standards and strict curbs on mercury and other emissions from coal-fired power plants. These regulations would have affected air quality and pollution more generally, but they also would have had a substantial effect on greenhouse gas emissions and thus on climate change.

President Biden has promised to reinstate or even strengthen most if not all of the Obama-era regulatory initiatives that Trump eliminated. The EPA and other agencies are already at work on these new regulations. But Biden does not represent the end of history. Barring some seismic shift in political tectonics, some day in the future a Republican will again be elected president on a platform of ignoring climate change, protecting the fossil fuel industries, and reversing the regulatory progress of his or her Democratic predecessors. That president will likely undertake a program of deregulation, much as Trump did.  Subsequently, a Democrat will again someday be elected president. That president will likely undertake a program of re-regulation, much has Biden has promised to do. From administration to administration, across terms, regulations will blink into and out of existence. They will become more and less stringent on four, eight, or twelve-year cycles. We are now living in an era of regulatory oscillation.

At its core, the possibility of regulatory oscillation is driven by deference to agencies under the framework established in Chevron v. NRDC. Chevron deference, as it is known, is canonically viewed as pro-regulatory, in that it provides agencies with interpretive freedom to implement policy as they see fit.  Under Trump, however, agencies learned to use Chevron to create deregulatory flexibility. Conversely, the strongest bulwark against regulatory flexibility may well be cost-benefit analysis, a decision procedure most frequently castigated as anti-regulatory. In an era of regulatory oscillation, these roles are reversed: Chevron and its model of deference open the door for regulatory oscillation; cost-benefit analysis and its model of constraint could shut it.

This Symposium issue is made possible in part by our Platinum Symposium Sponsor Wilson Sonsini Goodrich & Rosati.