Legislating for the Future
Public policy must address threats that will manifest in the future. Legislation enacted today affects the severity of tomorrow’s harms arising from biotechnology, climate change, and artificial intelligence. This Essay focuses on Congress’s capacity to confront future threats. It uses a detailed case study of financial crises to show the limits and possibilities of legislation to prevent future catastrophes. By paying insufficient attention to Congress, the existing literature does not recognize the full nature and extent of the institutional challenges in regulating systemic risk. Fully recognizing those challenges reveals important design insights for future-risk legislation.
We first examine Congress as an institution to show that forces are stacked against its ability to enact legislation addressing future harms. Features of Congress’s internal organization and procedures, incentives of legislators and industry actors, the evolving complexity of many regulated industries, and the reality that statutes tend to erode in effectiveness over time collectively mean that lawmakers will tend to underproduce legislation aimed at preventing future harms. The stars will occasionally align for landmark legislation, like after the financial crises that generated new regulatory statutes in the 1930s and 2010. But as a general matter, the playing field is tilted against Congress taking action.
This tilted playing field, we argue, points toward a roadmap for how Congress should seek to regulate the risk of major crises when it periodically does have the opportunity to do so. We posit several possible answers to this question, each informed by the institutional features that will generally make it hard for Congress to adjust or strengthen certain future-risk legislation once passed. Congress ought to use automatic triggers so that its legislation updates itself in response to changing conditions; extend expansive authority to agencies with explicit discretion for agencies to address threats that may have been unforeseen at the time of earlier legislation; create strong regulatory minimums that agencies can increase but not decrease, as a safeguard against agency capture or inaction; and encourage enforcement efforts by a diverse range of federal, state, and private actors. Better understanding Congress’s institutional limitations, in short, can provide a roadmap for how to enact more effective regulatory legislation in the future.