One of Roosevelt’s most prominent advisors, Harvard law professor James Landis, insisted in 1938 that “[i]n terms of political theory, the administrative process springs from the inadequacy of a simple tripartite form of government to deal with modern problems.”18
These days, each of the federal branches has seized expanded authority over the states and the individual. In addition to Congress’s legislative authority, it is now commonplace for the courts to legislate by judicial review and the executive branch to legislate by regulation and executive order. More to the justification of the proposed amendment, the vastness of the federal bureaucracy—that is, an administrative state or what has become a fourth branch of government—destroys the very idea of a representative legislature and does severe damage to the separation-of-powers doctrine. Departments and agencies created by Congress are attached to the executive branch and exercise lawmaking power that is both delegated and not delegated by Congress. And their myriad regulations and rules have the force of law, including criminal and civil penalties. Under present conditions, the administrative state’s omnipresence makes congressional oversight, political accountability, and rational reform mostly impracticable if not impossible. And Congress seems more than willing to abandon its core function to the executive branch and accept the status quo, having taken rare and minor steps to rein in the bureaucracy.
Ironically, judicial review, which is exercised vigorously and expansively by the Courts, is all but nonexistent in matters involving congressional delegations to administrative agencies. They mostly defer to the discretion of Congress and, with few exceptions, uphold administrative actions to the extent they consider them seriously at all. Moreover, on those occasions when the Supreme Court does exercise judicial review in these matters, it has been known to extend the power of the administrative state beyond Congress’s already broad delegations. For example, in the 2007 case Massachusetts v. Environmental Protection Agency, by a 5 to 4 vote the Court actually expanded the Environmental Protection Agency’s (EPA) authority to regulate carbon dioxide and other greenhouse gases, despite the agency’s long-held determination that these gases are not pollutants subject to regulation. The Court opened the door to an infinite number of agency regulations affecting an endless line of industries, products, and processes.19
The modern administrative state has power, resources, and tentacles that boggle the mind. For example, in 2008, the Small Business Administration estimated that annual regulatory compliance costs amounted to $1.752 trillion.20 In 2012, the Obama administration issued new regulations costing $236 billion. New EPA regulations alone resulted in $172 billion in regulatory costs.21
The 2012 Federal Register, the official federal publication documenting administrative rules and proposed rules, exceeded 77,000 pages. The 2011 and 2010 Federal Registers were 81,247 and 81,405 pages long, respectively. In 2011, regulatory agencies issued 3,807 final rules, yet Congress passed and the president signed 81 laws.22 In 2012, the bureaucracy reportedly issued 212 “economically significant” federal rules, each projected to impose more than $100 million in economic costs. In the last ten years, the issuance of economically significant rules has increased 108 percent.23
Furthermore, the number of criminal offenses spawned by these regulations, for which citizens are liable, is unknown even to the federal government. The Heritage Foundation observed that “[s]cores of federal departments and agencies have created so many criminal offenses that the Congressional Research Office (CRS) [an arm of Congress] . . . admitted that it was unable to even count all the offenses. The Service’s best estimate? ‘Tens of thousands.’ . . . Congress’s own experts do not have a clear understanding of the size and scope of federal criminalization.”24
Most jarringly, presidents will not hesitate to use the administrative state’s rulemaking processes to circumvent Congress when Congress refuses to enact legislation demanded by a president, or does not act quickly enough to satisfy a president’s ambitions. Indeed, President Barack Obama has declared repeatedly, including in his 2013 State of the Union speech, that “if Congress won’t act soon to protect future generations, I will”—threatening to legislate by executive branch regulation in lieu of congressional action.25
The system of federalism is also undermined severely when federal departments and agencies commandeer and preempt state authority, destroying state sovereignty and forcing states into their service—or, conversely, when states surrender their sovereignty in exchange for federal grants and subsidies conditioned on a state’s compliance with the mandates of a federal department or agency.
To shed some light on the process, it is worth a brief primer on administrative law—in plain English, of course. Consider that in 1972, Congress passed the Clean Water Act, a law that empowered the EPA to take steps to reduce water pollution by enacting rules or regulations. Once Congress grants such regulatory authority, the agency has discretion to achieve the stated goal.
The actual process of enacting a regulation is somewhat technical. Regulations often originate with what is called an “Advance Notice of Proposed Rulemaking.” This initial step consists of a proposal of the action the agency is planning. After a given period of time, the agency releases a “Proposed Rule” for the public to consider and, if moved, submit formal comments. Comments pertaining to a given rule are usually filed by those parties or individuals who have a specific interest in the substance of the rule. The EPA will elicit comments from, say, environmental groups or businesses affected by the regulation. Comments are intended to notify the agency of any legal or perceived legal deficiencies in the proposed rule. Interested parties can notify the agency of widespread support or opposition. The standard time frame for submission of comments to a proposed rule is usually sixty days.26
Unfortunately, the process is not always as transparent and professionally objective as might appear on the surface. It can be beset with political and ideological agendas, cronyism, and secret communications, making the comment period a formality, not a serious pursuit of useful information and advice.
The agency has wide latitude in determining when to promulgate a final rule. The Congressional Review Act (CRA) provides that Congress may review these regulations and, if a joint resolution susceptible to a presidential veto passes, the regulation can be overruled.27 Since 1996, Congress has disapproved only a single rule. Clearly, the CRA is not an effective tool for ensuring congressional oversight or curbing regulatory overreach.
Private parties wishing to challenge the legality of a final rule are obligated generally to file a petition in the U.S. Court of Appeals for the District Columbia Circuit within sixty days of the promulgation of the final rule.28 Challenging the legality of a regulation is a difficult and expensive process and succeeds in very limited instances. A number of factors make challenging federal regulations in court particularly difficult.
First, the court hearing the challenge presumes, as discussed earlier, that the rule is valid. The private party challenging the regulation must demonstrate that the agency exceeded its rulemaking authority. The burden is on private parties to show that the regulation is illegal. Under current law, the reviewing court will rule a given regulation improper if it determines the agency acted in an “arbitrary or capricious” manner or if the agency abused its discretion or acted “not in accordance with the law.”29 Therefore, an agency’s regulation will be upheld provided it is rationally based. What constitutes “rationally based” is not always clear, and individuals and groups spend many thousands of dollars on expensive lawyers who attempt to convince courts the agency has acted in an unreasonable manner. It is difficult, if not impossible, for most individuals to husband the resources and expertise to challenge effectively these regulations. Even lawyers who specialize in administrative law often fail. Moreover, most citizens have no idea that rules that may affect their daily lives are being promulgated, given the insular nature of the process, the quantity of regulations being issued, and the news media’s disi
nterest.
Second, courts have dismissed categorically the allegation that a particular agency action constitutes impermissible legislative activity. In other words, courts reject the argument that Congress cannot delegate its core function of legislating to an executive branch entity—known as the nondelegation doctrine. The Constitution’s plain language makes clear that Congress is vested with “all legislative powers herein granted.” But the Supreme Court has declared the doctrine unworkable, which, in turn, damages the separation-of-powers doctrine. The Court, which often exercises judicial review in an activist fashion, believes it is “almost never qualified to second-guess Congress regarding the permissible degree of policy judgment that can be left to those executing or applying the law.”30
Another factor favoring federal agency rulemaking authority is the overwhelming deference paid by the courts to the agency’s positions. When private entities challenge a given regulation, they often allege that the agency acted improperly. Under a Supreme Court–invented legal standard known as the Chevron doctrine, when Congress passes a broadly worded law, the agency’s interpretation of what the law means will be controlling unless such interpretation is unreasonable.31 Thus, for example, Congress passes a generic, benign statute and delegates the authority to work out the details of the law to the federal bureaucracy, which is not accountable to the electorate. Lower courts, which often hear cases involving regulatory challenges, are bound by the Chevron doctrine and will uphold agency regulations in all but the most extraordinary challenges.
There are numerous regulations that exceed their respective statutory mandates—so many, in fact, that they cannot all be discussed here. However, a group of recent environmental regulations—recently upheld as valid by the D.C. Circuit Court of Appeals—illustrate the desirability of the proposed amendment.
In 1970, Congress passed significant amendments to the Clean Air Act (CAA) that were designed to reduce air pollution from stationary sources, such as factories and power plants, and mobile sources, such as cars and airplanes.32 The newly created EPA was tasked with enforcing and administering the law. Congress passed additional amendments to the CAA in 1973 and 1990. Each time, Congress decided to expand the EPA’s authority to regulate a growing number of hazardous substances.
Fast-forward to 2009: carbon emissions, a very small fraction of greenhouse gas emissions (GHGs), became the target of, among others, the environmental movement. But Congress refused to pass new legislation expanding the CAA’s coverage to include greenhouse gases, for they are not pollutants. Nevertheless, then–EPA administrator Lisa Jackson, admitting the CAA was not an “ideal tool,” decided she would use the more than forty-year-old statute for curbing carbon emissions. As such, she and the president were bypassing Congress. Congress chose to do nothing about it.
The CAA’s provisions are not designed for carbon regulation. For example, a program operated under the CAA known as the Prevention of Significant Deterioration (PSD) mandates specific pollution thresholds for triggering regulatory requirements.33 These thresholds are detailed in the statute itself. Therefore, if a power plant emits 250 tons per year of a pollutant, the PSD program obligates that power plant to take costly steps to remediate the pollution.34 Congress considered the merits of setting the threshold numbers and passed a statute setting those numbers. Hence, Congress does have the practical capacity to do such things. When the EPA decided to use the CAA as legal justification for instituting regulations relating to greenhouse gas emissions, the EPA was obligated to comply with that law’s provisions. Greenhouse gases are emitted by stationary sources, even HVAC systems, numbering in the millions.35 All of these sources emit GHGs in excess of 250 tons per year. Since the PSD program was expanded at the instigation of the EPA and not by statute, the EPA would logically have to regulate these millions of stationary sources.
But realizing the impossibility of the task, Jackson noted that the CAA was not the proper law for regulating GHGs. Consequently, she decided the EPA would discard existing statutory law and set new regulatory thresholds for GHGs. When challenged, the D.C. Circuit upheld the changes, deferring to the EPA’s authority.
Another example: On March 22, 2010, Congress passed Obamacare, a bill some 2,700 pages long.36 An analysis by Peter Ferrara of the Heartland Institute concludes the law establishes more than “150 new bureaucracies, agencies, boards, commissions and programs” that “are empowered to tell doctors and hospitals what is quality health care and what is not, what are best practices in medicine, how their medical practices should be structured, and what they will be paid and when.”37 The Congressional Research Service reported, “The precise number of new entities that will ultimately be created . . . is currently unknowable.”38 The regulatory burden and cost will be enormous.39 And during the early stages of the law’s implementation, the executive branch has already issued twenty thousand pages of regulations and thousands more to come.40 Initial Internal Revenue Service regulations alone amount to 159 pages.41
When Congress passed Obamacare it attempted by statute to confer fundamental legislative powers on the executive branch, and even sought to prohibit future Congresses from altering its unconstitutional act. Specifically, Congress created the fifteen-member Independent Payment Advisory Board (IPAB), which ostensibly is responsible for controlling Medicare costs. The board submits a proposal to Congress, which automatically becomes law, and the Department of Health and Human Services must implement it, unless the proposal is affirmatively blocked by Congress and the president. Even then, it can be stopped only if the elected branches agree on a substitute. Obamacare also attempts to prohibit citizens from challenging the board’s decisions in court. Moreover, Obamacare seeks to tie the hands of future Congresses by forbidding Congress from dissolving the board outside of a seven-month period in 2017, and only by a supermajority three-fifths vote of both houses. If Congress does not act in that time frame, Congress is prohibited from even altering a board proposal.42
Apart from all the rest, the abuse of power by one Congress and president in attempting to reorganize the federal government and redraft fundamentally the Constitution outside of the amendment processes, with the intention of binding all future Congresses in perpetuity and leaving citizens with no political or legal recourse, is simply sinister. But it underscores the Statists’ contempt for the Constitution and self-government.
Shortly thereafter, on July 21, 2010, the same Congress passed, and the president signed, the Dodd-Frank Wall Street Reform and Consumer Protection Act, aka Dodd-Frank, supposedly intended to protect the consumer from risky decisions by financial institutions.43 The law is as offensive to the Constitution as Obamacare, again violating separation of powers and insulating broad policy-making decisions from the citizenry.
For example, under Dodd-Frank, Congress established the Consumer Financial Protection Bureau (CFPB), which has open-ended power to prevent certain financial institutions from committing or engaging in “unfair,” “deceptive,” or “abusive” practices respecting a consumer financial product or service. No statutory definition for “unfair” or “deceptive” acts or practices is provided. The CFPB has exclusive authority to prescribe rules, issue guidance, conduct examinations, require reports, or issue exemptions, with little legal recourse by those affected by its decisions.44
Moreover, Congress has no appropriating authority over the CFPB, for the law authorizes the CFPB to fund itself by unilaterally claiming funds from the Federal Reserve Board. The director of the CFPB alone determines the amount of funding the CFPB receives from the Fed. The law also prohibits explicitly the House and Senate appropriations committees from even attempting to “review” the CFPB’s budget. And the director receives a five-year term. He can be removed by the president only “for inefficiency, neglect of duty, or malfeasance in office.”45
In addition, Congress established the fifteen-member Financial Stability Oversight Council and granted it broad executive powers. It has open-ended discretion to designate
nonbank financial institutions “systemically important,” from which flows wide-ranging regulatory authority over these businesses. The law actually prohibits aggrieved parties from challenging the legal sufficiency of the council’s actions and conclusions in court.46
The delegation of colossal power to an administrative state, authority the Constitution grants to individual branches of the federal government, violates the separation-of-powers doctrine, including Congress’s legislative authority and power over the public purse, and presidential prerogatives in determining whether to fire an executive branch employee; it also thwarts the public’s ability to participate in major legal, social, cultural, and economic decisions affecting their lives through the grant and expansion of lawmaking power in bureaucratic fiefdoms largely immune from legislative oversight and input. Plain and simple, this is further evidence of the dissolution of constitutional republicanism.
It would seem counterintuitive for Congress to surrender its own power to executive branch entities of its own making, and for a president to surrender his own decision-making authority to an administrative state. But if the purpose is to centralize and concentrate power in the federal government, in defiance of our founding principles and the Constitution—as the Statists have preached and promoted actively for more than a century—then the frequent and broad delegation of lawmaking power to a permanent, ever-present federal bureaucracy, insulated from public influence, makes perfect sense.