Reforming Regulation: Internal Constraints on Agencies

In three prior posts here, here, and here,  I have been exploring possible reforms that Congress could enact to constrain executive power.  The first set of reforms involves shifting power from the agencies to Congress.  The second set of reforms involves shifting power from agencies to the judiciary.  In this post, I will discuss a third set of reforms – reforms that, instead of shifting power to another entity, place limits on the internal operations of agencies.

These reforms have the advantage of not primarily relying on other actors.  Instead, they place obstacles on agencies’ ability to regulate.

One possible reform is to employ more bipartisan commissions.  The independent agencies are typically commissions with a significant number of commissioners from the minority party.  This helps to deter the agency from taking politically partisan acts, because the minority party commissioners are inside the agency.

While such bipartisan commissions have generally been limited to independent agencies, I believe it might make sense to use them even for executive branch agencies.  It is true that the President might direct the commissioners from the opposing party as to how to vote.  But having those commissioners in the inside would still check partisan schemes.

Moreover, one might give a minority of the commissioners the authority to undertake investigations to uncover wrongdoing.  It is less likely that the IRS scandal would have occurred had the agency been operated as a bipartisan commission.  See here.

Advocates of executive power might counter that the executive should not have to include members of the opposite party.  But if legislating is going to occur in the executive branch rather than in the Congress, then there is a strong argument for requiring that the legislative bipartisan structures that have been abandoned should be reinserted within the executive.

Another possible reform is for Congress to impose hybrid rulemaking on the agencies.  Under the Administrative Procedure Act, the agencies are allowed to pass regulations through a rulemaking process called notice and comment that is relatively lenient.  In the 1970s, Congress and the courts decided that imposing stricter procedures on this rulemaking was needed in order to police the agencies from being captured by special interest groups.  While the Supreme Court in Vermont Yankee held that the Courts did not have the power to impose these additional procedures, the statutes that imposed them were perfectly legal and proper.

Thus, Congress could pass a statute that imposed these additional procedures on all agency rulemakings.  For example, Congress could use the Toxic Substances Control Act as a model for rulemaking procedure.  Congress could require that the agency allow not merely written submissions, but also oral submissions where appropriate.  Moreover, Congress could require that agencies allow cross examination in appropriate circumstances.  The agency would have authority to establish rules that would prevent parties from using these procedural rights to unduly delay the development of the rule, subject of course to judicial review.

These procedures are traditionally thought to improve the record and thereby allow for better judicial review, and they probably do.  But even if they did not improve judicial review, they would at least slow down the process of agency rulemaking and in this serve to reduce the amount of regulation.

Would a Republican Congress be willing to adopt these constraints?  It is hard to say.  Hybrid rulemaking was traditionally resisted by Republicans.  And many Republicans have also resisted commissions (at least to the extent they were independent agencies).  But as I have been saying, many Republicans now look at things differently – seeing, for the first time in a long while, an Imperial Presidency.