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Using Delegation to Promote Deregulation

I recently published an essay in Regulation magazine proposing a reform that would promote deregulation.  The idea is to establish an administrative agency with the power to deregulate – to identify undesirable regulations passed by other agencies and to repeal those regulations.

Here is the intro:

For those who favor strong limits on regulation, the last 100 years in the United States have been disappointing. During this period, regulation grew almost continually. One of the reasons for that growth is the delegation of legislative power to administrative agencies, which allows those agencies to who write regulations with little oversight from elected lawmakers. To rein in regulation, advocates of limited regulation argue that Congress’s delegation of its legislative authority must be restrained.

Unfortunately, reforms that attempt to eliminate or limit delegation are unlikely to be enacted. The practice of delegation has become a basic aspect of our political system. Its prevalence in the modern world is no accident. It occurs because delegation is popular with so many of the prevailing powers, including Congress, the president, the agencies, and those who favor regulation.

But proponents of limited regulation need not despair. While delegation certainly promotes regulation, it can also be used to promote deregulation. Congress could create an administrative agency that is given the power to pass deregulations – rules that either eliminate regulations or move the country back to a system of property and markets. By employing delegation in an effort to reduce regulation, proponents of limited regulation will not be fighting against one of the fundamental forces of our modern political system, but instead be employing that force for a beneficial purpose.

For example, this deregulatory agency could identify an environmental regulation that is particularly problematic and attempt to repeal it.  Ultimately, the EPA might object to this action and the President would have to decide the matter.  If Presidents, including pro-regulation Presidents like Obama, get to decide the issue, would the deregulatory agency have any effect?  Here is my discussion from the essay:

There are strong reasons to believe that the deregulatory agency would have an important effect. Administrative agencies have significant influence on administrations, causing presidents to approve or allow actions that they seemingly would not have permitted otherwise. Just as such agencies have been able to promote regulation under presidents who purport to favor less regulation, so they are likely to further deregulation under presidents who generally favor additional regulation.

How would this happen? Even the most pro-regulatory president does not necessarily oppose all deregulation. President Obama, for example, issued executive orders promoting the elimination of undesirable regulations and appointed cost-benefit analysis advocate Cass Sunstein to head the Office of Information and Regulatory Affairs (OIRA). Whether a president will support a particular deregulation will depend on the policy arguments and the political support for the deregulation.

The deregulatory agency will seek to identify the deregulations that make the most sense from a policy and political perspective. By proposing deregulations that pursue policies that the president supports, the agency would greatly increase the chance that the president will approve the deregulation. The agency would also have an incentive to use its knowledge of the political environment to develop deregulations that will have political support or at least will avoid significant political backlash. Overall, then, the deregulatory agency’s expertise, time, and incentives would result in it proposing many more deregulations that are likely to be approved by the president than would be proposed in the absence of the agency.

The deregulatory agency will not turn a proregulatory administration into a deregulatory one.  Instead, it will make a proregulatory administration a bit more – perhaps a good bit more – deregulatory.  Similarly, the deregulatory agency will also make a less regulatory administration or a deregulatory administration more deregulatory.

Reader Discussion

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on December 17, 2015 at 10:52:57 am

Wow – it’s not every day I read Rappaport advocating the creation of a new federal agency. Many details, many devils.

1. What process would the agency need to follow to repeal a rule? Must it notice and take public comment? Must it publish its rationale justified in terms of the rationale of the statute that enabled the regulation in the first place? Would those decisions be subject to challenge in court? And if so, would this Rule Zapping Agency really accomplish anything that the original adopting agency couldn’t?

2. What kinds of action would qualify as “deregulation”? Imagine the EPA prohibited a certain kind of pollution. Could the Administration then selectively repeal the rule for the benefit of the President’s friends and campaign contributors, while leaving the rule in place for everyone else? Or would the agency be limited to simply eliminating words from the Code of Federal Regulations, without adding any?

13. In contested rulemakings, sometimes parties and an agency will strike a bargain: the agency will modify or eliminate some aspects of a proposed rule, and the disputants will withdraw their objections to other aspects. Arguably this Rule Zapping Agency would destroy that practice because it would enable an administration to effectively re-write a package of policies after the rule has been adopted.

4. Is this just redundant of granting variances/declining to enforce?

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nobody.really
on December 17, 2015 at 11:58:30 am

I tend to agree with nobody on this issue. I recognize that Rappaport is attempting to use current administrative / political realities to engender some basic (and worthwhile?) change to an already overextended Executive branch.
I am not certain that it would be effective. In addition to the reasons / issues cited above by nobody, I am also concerned about the "original" (pun, here boyos) problem with the APA and its progeny.

While we may not like the myriad regulations emanating from the AdminState, still we must recognize (barring some Supreme Court decision advancing Phillip Hamburger's (correct) views) that all such regulations are currently "legal" and have the force of law. Are we now, in our efforts to defeat the Admin monster, to add to the practice of executive Agency "law" making that we so frequently argue against. In effect, will not nobody's Rule Zapping Agency (RZA) be making law by eliminating what heretofore has been construed as law. will not the RZA be acting as a Legislative body - even if undoing something improperly done in the first instance. Ought this not to be the role of the Legislative.
My fear is that such an agency as RZA could soon reinvigorate the old concept / construct of the Crown prerogative with its suspension and waiver privileges. Given recent behavior of the Executive, would we really want to provide the Executive with "Administrative Cover" and expertise?

Kind of scary, I think.

Rappaport is correct in this regard: There does appear to be any number of actors (miscreants?) who favor and clearly benefit from this arrangement. I ain't optimistic about this.

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gabe
on December 17, 2015 at 23:40:35 pm

Read Robert Heinlein much? He proposed much the same thing in his story Starship Troopers, wayyyyy back when.

Kurt

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Kurt
on December 18, 2015 at 10:50:31 am

Kurt,

I did not know that. I have had Starship Troopers on my reading list for a while, but it just moved up quite a bit. Thanks.

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Mike Rappaport
on December 18, 2015 at 15:58:31 pm

Yeah, now I'm really curious: How does this come up in Starship Troopers?

At a minimum, this could enliven the footnotes in some future policy papers....

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nobody.really
on December 19, 2015 at 11:51:03 am

Sorry - my Alzheimers is acting up again. It's not Starship Troopers (though that has a lot of interesting ideas on law/liberty also), it's The Moon is a Harsh Mistress.

Here's the quote:
"I note one proposal to make this Congress a two-house body. Excellent — the more impediments to legislation the better. But, instead of following tradition, I suggest one house of legislators, another whose single duty is to repeal laws. Let the legislators pass laws only with a two-thirds majority... while the repealers are able to cancel any law through a mere one-third minority. Preposterous? Think about it. If a bill is so poor that it cannot command two-thirds of your consents, is it not likely that it would make a poor law? And if a law is disliked by as many as one-third is it not likely that you would be better off without it?"

Here's another quote from the novel, to stimulate your minds:
"Suppose instead of election a man were qualified for office by petition signed by four thousand citizens. He would then represent those four thousand affirmatively, with no disgruntled minority, for what would have been a minority in a territorial constituency would all be free to start other petitions or join in them. All would then be represented by men of their choice. Or a man with eight thousand supporters might have two votes in this body. Difficulties, objections, practical points to be worked out — many of them! But you could work them out. . . and thereby avoid the chronic sickness of representative government, the disgruntled minority which feels — correctly! — that it has been disenfranchised."
https://en.wikiquote.org/wiki/The_Moon_Is_a_Harsh_Mistress

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Kurt

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