[A version of this article first appeared at Notice & Comment (Yale Journal on Regulation) on August 19, 2026]
The textbook description of federal administrative law goes as follows:
Since all lawmaking authority is vested by the Constitution in Congress, Congress first passes a law. If the law requires some element of administration (e.g., the law prohibits marijuana possession, subject to fines or imprisonment carried out by federal investigation and prosecution) it can delegate a particular authority to the executive for this purpose.
That authority may include some determination of particulars to make the law actionable, which they often do through issuance of a regulation: something that looks much like a law, and is understood to be binding on the public like a law, but is executed without direct congressional involvement (including voting).
In the case of many of these regulations they must be issued subject to prescribed procedural manners which can include availability to the public and ability for any person to provide input.
This is the broadest, simplest description of how a binding policy decision goes from legislative consideration to executive implementation. What follows focuses on the last stage, which for the most significant category of regulations involves a misunderstood internal administration process, drawing on longtime direct experience in the federal regulatory production function, especially time in the executive branch office overseeing much of it.
An actual rulemaking example case study helps to lay out the competing forces which broadly explain the path of travel from inception to finalization for federal regulations.
Claim:
All federal regulations (above some threshold of significance) are subject to the following variables which together determine the specific policy: policy preferences, political incentives, and legal defensibility. Statutory text alone is never sufficient to adequately characterize the resulting regulatory output.
Without consideration of these variables within the regulatory production function, those interested in administrative law and reforms of administrative state institutions are limited to at best a partial understanding and at worst an incorrect understanding.
Do a Better Job, Congress
There’s an inevitable interpretation problem the executive branch needs to solve with almost any law. In theory, Congress could pass a law involving Article II administration that is so specific there is no decision space to which discretion is applicable.1
For example, say a statute prohibits private fishing of a particular type of fish: it specifies the individual species using its scientific name and proscribes weight in tenths of grams, below which the law applies.
Questions will still remain unanswered – such is law - for three reasons:
In prudential terms, specificity is inversely correlated to likelihood of passage. Ambiguity is the handmaiden of compromise and therefore passage.
There is always some parameter or aspect that is unforeseeable. You might think that would not be the case for some things, but even niche policy issues end up running up against some unknowable aspect of the future—new technologies, the effect of weather, or indeed just a future law or regulation.
Even earnest attempts at precision fall into imprecise application, especially in unavoidable questions of enforcement discretion, that can even run in the complete opposite direction of the policy aim.
Pass the Farm Bill ‘pon the Left Hand Side
Take the “Hemp Rule.” The 2018 Farm Bill (Agriculture Improvement Act of 2018) directed the USDA to establish a regulatory framework for legal domestic production of the crop hemp, which they eventually did (largely) through a regulation the following year (Establishment of a Domestic Hemp Production Program). One can stipulate there’s a lot there in the law’s directive. But limiting focus on a particular part will not sacrifice the generality of the point.
On the first day in the White House office tasked with overseeing the administration’s regulatory output, there sat on my desk a several-hundred page draft of the proposed USDA hemp program. As I would quickly learn, it turns out what people refer to as “hemp” is actually “cannabis,” which is illegal to grow under other laws and regulations. This new law simply established a legal definition of hemp (as a subset of cannabis) and deemed that legal.
The congressional authors and advocates of this law were responding to an increasing commercial interest in growing, processing, and manufacturing of products made with hemp, and wanted to encourage a growing market by providing an explicit legal structure. But not wanting to fully legalize weed, they established the following federal definition:
The term ‘hemp’ means the plant Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis.2
(ed. The Salts of Isomers sounds like a lost P.G. Wodehouse novel)
That is a remarkably precise definition. Whatever judges, scholars, and wonks bemoan about congressional dereliction in statutory construction, they can’t possibly expect more than this:
a scientific name of the supercategory from which the subject is subcategorized
a long list of adjacent and derivative elements
most importantly a cutoff down to the tenth of a percent. An extreme level of precision by any measure
The problem is that even here there is still room for discretion. Because the structure of the law is carving out a subset of an article, possession of which remains illegal often at great legal risk, margins of error are important here. Does “0.3 percent” possibly include anything greater than 0.3? Say, 0.4? If not, what about 0.39? 0.31? Is it proper to assume 0.3 means 0.3000…?
Wherever you draw that line, keeping in mind the significant sanction applicable to anything above it (so-called “hot hemp”), is it reasonable to presume full unwavering enforcement of anything above it?
Say a farmer, knowledgeable and diligent in the techniques of controlling plant growth and their production of certain chemicals, nonetheless grows crops that just barely cross the threshold. Maybe due to unseasonable weather (because plants don’t read statutes).
What if they could show it was unintentional? should they have a defense?
What if on the entire farm, one small portion is noncompliant?
In any case, does every plant or stalk need to be tested to demonstrate compliance (possibly hundreds of acres)?
If not, what’s the sampling methodology?
What's the disposal procedure for hot hemp?
These are not hypothetical questions, but actual ones that came up.
Executive discretion inexorably enters administration of the law somewhere. Political considerations as well, but it is worth noting that the primary congressional advocates for the law preferred as capacious and flexible an implementation as possible.3
In short, even seemingly clear direction and granular consideration leaves unanswered questions for the executive branch.
How, then, do those questions get answered?
The Three Axes of Administration
A naïve explanation of how administrations land on various policy decisions will either imbue: (1) the president with comprehensive decision-making direction, or (2) individual agencies/offices internally directing decisions in their limited sphere of authority. Instead, the canons of Presidential Administration tell us that it is much more complicated, involving various internal leverages, authorities, and competing interests. This process is usually referred to as the “interagency process” but it’s not very descriptive.
For regulatory outputs there are broadly three variables, variously constraining and driving decisions. A meaningful understanding of these interdependent elements is a necessary condition for productive influence and effective reforms of federal regulatory policy–the realm of federal policy making up the lion’s share of all of Washington’s policy production.
Policy Preferences
This may seem circular: how can policy preferences be merely amongst other variables driving policy? At the highest, broadest level, one presumes a given administration has a concordant policy agenda. The president ran on a particular agenda, distinct from their opponents, and at various stages the campaign followed by the transition team added specifics to the rhetoric, and so on. Even if that’s true to some extent, as one goes further into policy specificity into narrower and narrower questions, there will be disagreement.
EXAMPLE
The broadest campaign plank of “lower taxes” will find unanimous support among advisors and appointees. But when wrestling with the particular mechanics of “reasonable needs” under 26 CFR §§ 1.531-1 – 1.537-3 (corporate income “accumulated earnings” tax), that consensus reveals its limits.
In the context of the hemp rule, one could fairly characterize the Administration’s overarching policy direction as one of deregulation—directionally, lower costs imposed by the government and more room for the market to operate. But that is not enough to unify everyone in an Administration, because it still permits different ideas of what that means, competing ways to go about it, and ultimately (as is always the case) how to manage competing priorities.
The aforementioned interest in establishing as wide a berth for the emerging industry ran up against law enforcement concerns. Cultural acceptance of cannabis and other psychoactive substances was perhaps reaching a peak, but the Administration also bore a strong interest in appearing tough on crime and strict enforcement of the law, especially drug laws. The concern wasn’t so much on criminal behavior around hemp itself, but rather its adjacency and unavoidable interaction with drug interdiction efforts. Regardless of whether one is sympathetic to these concerns, it is a credible issue that is not obviously dispensed with.
Even though a single agency (more accurately a sub-agency office within an agency) is nominally responsible for authorship of the rule in question, multiple agencies can come to the drafting table with pertinent concerns and questions (as well as their own expertise). And really even within an agency, there can be unresolved disagreements that are illegible to everyone but for a few people. All of this has to be resolved one way or another before the rule goes out the door. The ultimate outcome might subordinate some disputes, but the goal is to find a compromise.
For illustrative purposes, assume that everyone involved generally agrees on the preferred direction of the policy. They can still disagree on how best to achieve it—on the specific wording and structure that more or less effectively accomplishes the shared goal.
Political Incentives
The second variable which enters the regulatory production function is political in nature. Every public policy choice implicates tradeoffs. Some are explicitly representable through comparative statics revealing welfare gains and losses for different groups, demographics, industries, or regions. Even a universal uniform tax cut will affect inequality in some way; modify incentives leading to long term changes in growth; and, of course, under certain conditions, benefit current populations at the expense of future ones.
The way these tradeoffs are negotiated in the American system, controlling for ideological priors (themselves not entirely exogenous to the policy production function), is through what we broadly call politics. At the macro level, it’s through elections that decide which coalitions of groups will be given preferred treatment in the tradeoff showdown. At the micro policy level, in Congress it is sorted out through negotiation between individual members and caucuses subject to institutional structures. Something similar happens in the executive branch, but with different electoral constraints. But many of the same coalitional dynamics are at play in both.
Farmers (I use that word loosely) are an organized interest group in a small number of districts. They play an outsized role in shaping policy preferences in some key states, and a somewhat peripheral role in most other states. So for that small number of agriculture-heavy districts and states, accommodation of agriculture interests are a necessary part of a winning coalition. Additionally, the long history of the industry, and to a degree the bipartisan favorability of the group’s “brand,” has led to a federal agency pretty much oriented toward it across administrations, even across partisan shifts. To be sure, between partisan shifts, rebalancing of incentives occurs between sub-groups within the larger agriculture industry: large industrial vs. smaller producers, export-dependent vs. localized sellers, newer “natural” growers vs. pesticide users, ethanol vs. everyone.
So with the hemp rule, it being a somewhat nascent node in the larger special interest, there was not much of the more mature intra-interest frictions to speak of. The congressional provision had wide bipartisan support, and the agency was glad to facilitate the aim.
But many rules pose tradeoffs between highly opposed groups even within the same industry: incumbents vs. startups, alternative energy vs. coal-based, etc. Even if a Democratic administration will reflect different rank-ordering of interests than a Republican one, those interests will almost all be reflected somewhere across the government in some way.
Timing is also a political variable in two ways:
There may be political benefits for issuing a rule quicker or slower—say, closer to an election when it will be most salient—or timed to come out on the day of the State of the Union.
Prioritization is partly a timing question. Multiple agencies may agree on the substance, but if it requires resources to implement, that comes at some opportunity cost of other initiatives. One cabinet secretary will say to another: “I’m very supportive of this thing you’re doing and we can definitely be helpful in making it successful, but I just can’t take our people off this other top priority of the President. Better we hold off for a bit.”4
Relatedly, the president may be the final decider between differing viewpoints, but several offices within the White House, many with very wide and undefined remits, will have an opportunity to weigh in. Some of these explicitly focus entirely on political concerns, not as an adjunct concern to other considerations. Because of the often ambiguous scope of these offices and individuals, combined with their literal proximity to the Oval Office, they play an important role in shaping policy, including siding with one position or the other in an interagency disagreement.
Here again, as in the earlier case of competing policy preferences, Congress is a participant in negotiating among political interests. While having no formal role in the interagency process exactly, Congress does maintain a line of communication. In particular, chamber leaderships and committee chairs want to ensure that their statutory handiwork becomes a regulatory showpiece. White House and other agency staff have an incentive to listen and, in some circumstances, push for those congressional views. At any given time, there are ongoing negotiations around other legislation, appropriations, nominations, etc., providing political leverage for those outside the interagency process to push their way in.
The same goes for outside stakeholders: industries and their trade associations, advocacy organizations, and individuals. They each may have their own direct connections with various nodes in the bureaucracy. But they also have a formal mechanism at specific stages to lobby on the record through so-called 12866 Meetings and public comment.
Successfully mediating the various policy questions and negotiating between the various political constituencies is the objective of this sometimes messy interagency process and drafting. For any published regulation of significant importance, assume an extensive deliberation occurred in the background.
Yet there’s one more variable influencing the shape of the final regulatory output left to solve
But is this legal?
So various forces push on the pending policy product this way and that, policy arguments go back and forth and sometimes run into political constraints…what else is there?
The rule has to be defended in court. This is the trickiest of the three variables to cleanly conceptualize, since it is fairly interactive with the other two in a way they are not with each other.
The legality question is not a matter of “yes” or “no.” The idea of legality rarely if ever exists as a binary state. This is why we have scores of lawyers and hundreds of courts. As in the hemp example, reasonable people, including litigating attorneys, can disagree about exactly what is allowable or not based on the legislative text. Various canons of statutory interpretation all focus on how to go about drawing meaning from laws. So let’s stipulate this variable is not about deciding whether to intentionally break the law or not.
Instead, it is about determining what the law means. And that is a variable, because there will inexorably be different answers all plausibly describable as “legal.”
This legality question is intertwined in a complicated way (as opposed to in a simple way like Nigel Tufnel’s piano etude in D minor) because choosing among the answers is both a policy question and a political question.
Formally, there are offices in DOJ, the White House, and across agencies possessing relevant expertise to help determine the bounds of legality of a potential regulation. This question – what is and isn’t legally defensible – is all about discovering the scope of the decision space. Without eventually outlining this dimension, you won’t know where you’re aiming. Knowing the limits of what policies are allowable (which is not a predefined or determinative outcome) sets the boundaries on what policy options are “on the table.”
With hemp, who’s to say the Farm Bill language presumptively excludes 0.99 percent? We might base our answer on a layman’s common sense framing. And that’s one possible mode of interpretation: the reasonable person standard. But does it apply in this context? Are there other statutes providing an applicable example? Court opinions which, say, rounded up to an integer in an instructive context? Other precedents imposing a standard methodology? In the same way that no statute can answer every possible question, now someone has to make a decision to answer at least some of the questions, and to do that we first need to lay out the boundaries within which we can draw.
This can include a party to the interagency process making the case that the decision space should be much bigger than conventional wisdom. To be clear, this is not a means to invite illegality. Every Administration, every agency, at some point has put forward novel applications of authorizing laws. There are high-profile examples where those novel applications are explicitly deemed illegal by a court, but most go unnoticed except for niche specialists in one field or another. The idea of applying a law in a way that lacks a clear antecedent is not by itself an extralegal assertion. This is how old laws can undergird rules on new technologies and circumstances.
Defensibility
The most direct way these analyses inform the deliberations is through determinations of defensibility. The DOJ attorneys in particular are the front line in defending administration actions in court. They have specific experience and context informing “defensibility.”
Note: defensibility is not equivalent to legality. A compelling argument can be made for why an action is clearly permissible via valid authority. But in court asserting that conclusion requires different elements, because of civil procedure and the like, which may not be easily available.
On a different rule, we ran into another type of legal constraint: treaties. I am not an expert on the obligations of the U.S. government with respect to treaties vis-a-vis domestic law. But treaties serve as a kind of law. And if a policy action appears to run up against any of those obligations, someone from the government will let you know. You would be surprised how often and on what topics this comes up.
A related issue is national security. Certainly the actual statutes pertinent to that, but internal practices governing government practices are not always so directly correspondent to a specific law. For all intents and purposes, these practices function as implicit law and if a policy action threatens to “violate” them that will carry weight.
Finally, there’s a pointedly political aspect that is nonetheless subject to a legal question. Embedded within defensibility are other questions: How likely is this rule to be challenged? Who is likely to undertake the cost and be able to show standing to challenge? When is a possible adverse judicial action likely to happen?
The COVID Emergency Case
A sui generis example illustrates how the answer to these defensibility questions manifest in the eventual action, and how inextricably interdependent the three broad variables are—and therefore how resistant they are to discrete categorization.
COVID-19 constituted an emergency, requiring many novel deployments of existing laws not specifically constructed for this purpose. Not just pandemic preparedness and national emergency laws, but everything from interstate highway operations, to pharmaceutical manufacturing inspections, to tax incidence on alcohol. They all implicated adjustments in regulatory schemes in no obvious way extended from underlying laws.
In one case, a fairly significant potential action presented a large policy benefit as well as a political one. The authority to undertake it was shaky at best, and a near-consensus formed that if challenged, it would not be defensible. However, there was no obvious party likely to demonstrate standing in any expeditious way. But beyond that, to the best of anyone’s ability to predict, there was no one with any compelling political incentive to challenge. And further, the temporal impact of the policy meant the outcome of a future challenge would be moot by the time of a final decision.
Conclusion
Matthew Stephenson’s 2006 Harvard Law Review article provides “a positive theoretical analysis of the relationship between the textual plausibility of an administrative agency’s statutory interpretation” and strategic agency decision-making. Likely the first to do so (and elsewhere in his 2006 Administrative Law Review article), he posits an agency with a single goal of withstanding judicial review (the objective function). The agency acts strategically to meet this threshold condition by optimizing across two endogenous instruments: statutory interpretation and procedural formality.
Further in their response to Stephenson, Emerson Tiller and Frank B. Cross contend there are further considerations in the decision function of both the agency and the court, that more properly accounted for would more accurately reflect observed regulatory policymaking behavior.
That work is largely the inspiration for this essay, in particular the formalization contained in the appendix. That is, trying to describe structurally the within-agency (or within-administration) optimization and interaction of potentially competing decision margins. Whereas Stephenson focuses on the extra-administrative game between agency and court, I limit the regulatory result as emerging from three intra-administration factors. Both consider margins that are costly to each other. His court is a strategic actor in the reduced-form game. Here I remove that actor, but add a political dimension to the internal optimization. And where Tiller & Cross require some consideration for policy durability, I permit for a term-limit parameter which changes the relative weights of the three dimensions.
In 2006, I lacked the necessary experience to describe a plausible structural model of agency rulemaking. But in what precedes I hope I can finally build on testable claims about the production function of administrative laws.5
Future direction would for instance identify the sub-games which themselves determine the policy preference function, explicitly incorporate Congress as an independent but interdependent player in the normal form game, and ultimately work toward a unified Constitutional theory of administrative law (Congress + Agencies + Courts).
The author is a writer and musician in the Bay Area, and currently a harvest intern at a winery.
Appendix: Formal Model
The following formalizes the agency’s decision problem described above, with the exception that we stipulate the administration’s policy preference as exogenous to allow for a closed-form solution. Endogenizing U(P) would preclude a closed-form solution, consistent with the “three-body problem” framing.
Parameters.
L – administration’s distance from ideal policy position, toward greater legal defensibility (choice variable)
A – administration’s distance from ideal policy position, toward greater political payoff (choice variable)
xP, xA, xL – realized policy, political, and legal payoffs
xP0, xA0, xL0 – baseline levels at ideal policy position (i.e., L = A = 0)
wP, wA, wL – the administration’s relative weights on each variable
cL, cA – marginal cost to policy of legal and political payoffs
γLL, γAA – slope of marginal cost on each margin alone
γLA – slope of cross-marginal cost (positive means pursuing one makes the other more expensive, negative means cheaper, zero means no interaction)
t – elapsed time, increasing as gets closer to term-limit (t ∈ [0,1]; 0 = start of term, 1 = end of term)
wL(t), wA(t) – weights as functions of term-limit (wL’ > 0; wA’ < 0)
Objective Function. The administration chooses L and A to maximize the weighted sum of the three goals, net of constants:
First-order conditions. Differentiating with respect to each margin and setting equal to zero:
Regularity condition. For an interior maximum, the cost curves must be convex:
Closed-form solution. Solving the FOCs jointly, the optimal legal and political accommodation are given by:
Independent margins. When the two margins don’t compete for the same policy room (γLA=0), this collapses to the standard tangency condition (optimum defined as where marginal rate of substitution equals the “price” ratio of the two tradeoffs), applied separately to each variable:
Term-limit dynamic. Letting the weights vary with time horizon, the independent-margins case gives the rate of change of realized policy achievement as the term limit approaches:
The two terms pull in opposite directions: rising importance of legal durability drags on policy intensity; diminishing political concerns works the opposite way. If we observe policy maximalism towards the end of the term-limit, the model explains this as freed up political capital increasing faster than legal moderating.
Threshold Condition. This holds if and only if:
If this inequality fails, the prediction reverses: administrations become more legally conservative and less policy-ambitious as a term limit nears. Determining direction is an empirical question about the relative rates at which political urgency fades and legacy urgency rises, testable across administrations’ final years. Neither outcome is determinative a priori.
Ahem, like the John F. Kennedy Center Act (20 U.S.C. 76h et. seq.).
7 USC 1639o.
It’s possible that others wanted the opposite, and that because they were unable to defeat the law outright, they negotiated it down to the final compromise language.
This is a somewhat facile example, but a version of it happens all the time. Invoking the president of course displaces blame, which also frequently happens, but more importantly points to the place where irreconcilable differences—substantive or otherwise—ultimately are decided.
In fact for some five years I had Stephenson’s equilibrium conditions written on my Senate office white board:
