Constraining the Adminstrative State in the 114th Congress

Today Republicans will take control of both houses of Congress, and the House of Representatives will have more Republicans than at any time since the New Deal. Given their party’s emphasis on limiting federal government, it is important for these lawmakers to consider transformations of administrative procedure that bring back some limits.  In the long run structural reform can be more powerful than discrete policy changes.

Since the New Deal, administrative government has become a dominant force in political and social life. Executive branch agencies– not Congress– are responsible for most of the federal obligations imposed on individuals and companies. To be sure, executive agencies are operating under statutes Congress passed, but these delegations are often broad and, in some cases, almost unbounded. Moreover, the Supreme Court has permitted agencies to put their own gloss on  the ambiguities in their statutes and even on the regulations that they write. This kind of executive power undermines democratic accountability and liberty,  particularly because bureaucracy generally has inherent tendencies to expand government.

But Congress can cut back on the enormous discretion of the administrative state. Here are four measures that the new Republican Congress should consider:

  1. Enact a version of the REINS Act to prevent agencies from issuing regulations that cost more than a certain amount. Agencies would instead  recommend this class of costly regulations to Congress rather than promulgate them with the force of law. The legislation would also commit Congress to an up or down vote on these costly regulations. Congress, not agencies, then would be directly accountable for these major rules. The threshold amount of cost for requiring congressional consideration of an agency proposed regulation should be set quite high at least initially so we could see how Congress handled such new responsibilities. As problematic as the excesses of the administrative state are, radical and destabilizing change could create a backlash in its favor. Some have criticized the REINS act as simply an underhanded trick to use gridlock to kill regulations. But many of the mechanisms of gridlock, like endless legislative delay and filibuster, would not be available in congressional consideration of regulations. And requiring some legislative consensus before passing rules that impose large obligations on citizens is part of the basic constitutional design that protects freedom.
  2. Require agencies to use cost-benefit analysis in carrying out all statutes. Cost-benefit analysis can constrain executive branch discretion and makes for more efficient regulation.
  3. Extend OMB’s cost-benefit review of agency regulation to independent agencies. OMB is more expert in cost-benefit analysis and their review will keep independent agencies more honest in their analysis and effectively reduce their discretion.
  4. Overturn Auer deference—the doctrine that gives agencies substantial deference in interpreting their own regulations.  Why should one party to the litigation get a thumb on the scale for its  own legal interpretation? Article III judges are likely to provide more unbiased interpretations.  Auer deference also gives agencies incentives to write vague regulations which they can then interpret in their favor.

The President may veto some or all of these proposals. But even if he does, the legislation nevertheless offers substantial advantages. First, this Congress can  then apply some of these ideas to specific agencies as appropriation riders which the President will have difficulty vetoing. Second, subsequent Congresses will have the bills on the shelf ready to be enacted when the next President who is a friend of limited and accountable government takes office. Third, Congress will be sending a signal to the judiciary to tighten up on its own review of agency regulations.