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Blame Congress For Obama’s Carbon Rules

When President Obama announced a new set of energy industry rules on Monday, lawmakers’ reactions did not shock anyone.

To the surprise of nobody, the Republicans who control Congress - not to mention those in charge of a lot of states that are big producers and consumers of energy - were apoplectic about Obama’s announcement that power plants will be subject to even more onerous carbon-reduction requirements than under the original Environmental Protection Agency proposal.

Not only do they oppose it on economic grounds, but a recurring theme in the criticism is that the administration has overstepped. Jeb Bush called the plan “irresponsible and overreaching.” West Virginia’s attorney general, Patrick Morrisey, said the rule was “legally deficient on a number of fronts.” Senate Majority Leader Mitch McConnell of Kentucky has asked governors to refuse to comply with the new rule, The New York Times reported.

The new rules are legislation by executive fiat, opponents argue, with considerable justification. It follows a Democratic Party campaign line that places doubts about climate-change models on a moral plane with denial of the Holocaust, and it will in all likelihood lead to higher energy prices, lower standards of living and a competitive disadvantage against China and other nations that are more outcome-focused in their economic policy choices.

But when all is said and done, if Congress doesn’t like the rules the executive branch is promulgating, Congress should institutionally blame itself.

Since at least the days of the New Deal, and in some respects going all the way back to the trust-busting era at the turn of the 20th century, Congress has routinely written laws that do little more than set overall policy objectives, leaving the executive branch to fill in the details by rulemaking. Those details, however, are what actually tell us what the law demands; thus executive rulemaking is, for the most part, a delegation of legislative powers. The courts recognize this. The Constitution puts Congress in charge of writing our laws, but if Congress wants to do half - or one-tenth - of the job and delegate the remainder of the process to the president and his appointees, the courts will give extensive deference to that decision and to the rules that flow from it.

From time to time Congress has tinkered with the process, such as by requiring the executive to consider the costs of rules as well as the anticipated benefits, but it has shown little inclination to actually take ownership of the legislative sausage factory.

It’s like parents who tells their kids to “be good” without ever defining what constitutes “good.” They pretty much deserve whatever they get.

This system is based on the false assumption that the only alternative to delegating such power to the executive is for Congress to write all the detailed requirements of its statutes directly into the statutes themselves. This is an impossible task, at least if lawmakers hope to pass more than one piece of legislation every decade or so.

But such detailed legislating is not the only alternative to handing things off to the executive. The solution is not for Congress to refuse to delegate power, but for it to be much more specific - and cautious - about which powers it chooses to delegate.

The EPA’s carbon rules are a perfect example. Opponents have questioned whether the EPA has the power to regulate carbon dioxide emissions at all. Carbon dioxide is a natural component of the atmosphere, and so it is not a “pollutant” as such, and thus not part of EPA’s powers under the Clean Air Act. While this position is not irrational, the Supreme Court rejected it last year. The Court held 7-2 that the EPA can require and set standards for issuing carbon permits to power plants that are being built or expanded when those permits are issued in conjunction with approval to release other pollutants. It held 5-4 in the same case that the agency can set carbon standards for such projects even in the absence of permitting for other pollutants, on the grounds that carbon dioxide is a greenhouse gas whose presumed climate effects fall within the Act’s purview.

It is a safe bet that Congress wasn’t thinking about carbon emissions when it wrote and updated the Clean Air Act, most recently in 1990. (The EPA itself didn’t issue a finding about carbon dioxide and other greenhouse gases until 2009.) But rather than list a specific set of emissions that the act was designed to cover, Congress delegated the writing of that list to the EPA. This was tantamount to telling a teenager to set her own curfew.

Of course, Congress could not have anticipated every problem even if it had tried. In short order, the EPA or other parties would have been back in Washington asking lawmakers to expand the law’s scope. This would have been Congress’ chance to keep control of the legislative process. The administration would have needed to come back to Congress for authority to regulate carbon dioxide, and Congress could have said yes or no.

Well, actually, the Obama administration did ask for such authority. Congress said no. But because of the vaguely written law, the administration has claimed the authority anyway. Future litigation will see how far that claim can stretch, but based on last year’s ruling, it will probably stretch pretty far.

You may like this outcome or you may not. But lawmakers should not blame executives for exercising power that lawmakers have, in fact, delegated to them. You can do a job, or you can let someone else do it. If you leave it for someone else, you can’t be surprised when it sometimes gets done in ways you don’t necessarily like.

Larry M. Elkin is the founder and president of Palisades Hudson, and is based out of Palisades Hudson’s Fort Lauderdale, Florida headquarters. He wrote several of the chapters in the firm’s recently updated book, Looking Ahead: Life, Family, Wealth and Business After 55. His contributions include Chapter 1, “Looking Ahead When Youth Is Behind Us,” and Chapter 4, “The Family Business.” Larry was also among the authors of the firm’s book The High Achiever’s Guide To Wealth.

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