Reining in Regulation or Delegation?

by Jeff Pojanowski — Friday, Jan. 16, 2015

Greetings from the frozen tundra of Northern Indiana! As a new Congress gets set to work, administrative law aficionados are focusing on the Regulatory Accountability Act (“RAA”), which would substantially amend the Administrative Procedure Act. The bill passed the House with a vote of 250-175 and the President is threatening to veto it on the grounds that it would unduly hamstring the regulatory process.

The heart of the Act is its targeting of “major rules” and “high impact rules.” These rules are generally defined as those that impose significant additional costs, either directly in terms of compliance or indirectly in terms of discouraging economic activity. The Act taxes major rules by bulking up the notice-and-comment requirements for making such regulations. This category of “major rules” will be familiar to those who followed the debate over the REINS Act, which also singled out such rules. Rather than imposing additional procedural burdens, however, the REINS Act rendered such major rules inert unless and until a joint resolution of the House and Senate affirmed them.

I am inclined to think that the RAA is both too weak and too strong. First, the weakness. There is a serious question over whether the REINS Act’s joint-resolution trigger violates the Constitution’s bicameralism and presentment requirement. Jonathan Adler, I think, has offered a good argumentdistinguishing this from the regime the Court struck down in INS v. Chadha. One concern the RAA is targeting, of course, is excessive delegation of lawmaking authority from Congress to agencies, and it is a concern I share. Encouraging, even forcing, Congress to make hard choices about regulatory issues through legislation—as opposed to punting, haranguing administrators in hearings, or tinkering with the regulatory process through nontransparent, informal pressure—is a good thing. The Court has deemed the nondelegation doctrine a dead letter, so it is heartening to see Congress step in and try to force itself to own the big decisions.

The RAA, while avoiding the constitutional question of the joint resolution, picks the weak, cumbersome, and indirect means of drawing out rulemaking procedures and pre-enforcement litigation. Thus, rather than Congress making the calls, an agency makes the same calls, albeit through more cumbersome process—that is unless a panel of judges decides the agency’s explanation is insufficiently fulsome. For people concerned about excess delegation, that status quo is not great and the RAA offers even more of the same. A REINS Act-style intervention would be more effective.

Of course, the cumbersome requirements for high-cost rules are great if your main focus is to reduce the absolute amount of new, big regulations—which is why the President and his supporters oppose it and Republicans are more likely to support it. This is where the RAA strikes me as too strong. There’s something to say for separating hostility to delegation with hostility to regulation. I think it would be plausible to build bipartisan support for the proposition that Congress should be forced to make hard choices rather than the President’s bureaucrats or politically insulated independent agencies. An RAA (and a REINS Act) that only targets new, high cost regulation, however, fractures that coalition.

But is that necessary? It’s possible to imagine a statute that would require two-chamber approval for new regulations that substantially increase cost of compliance and for rules that substantially deregulate. Such a statute would set the present level of regulation as a baseline against which Congress must make further choices. This baseline is imperfect, but there is no regulatory Year Zero or incontestable amount of regulation that everyone thinks is optimal, so this baseline strikes me as the only feasible one for a truce. Once we have this baseline, Congress would have to go on record for any substantial addition to regulation or deregulation and thus truly own major changes in the regulatory state going forward.

Of course, for people who like the RAA and the REINS Act because they want to disassemble the federal regulatory state root and branch, this half-step will be too little. Those in favor of additional regulation will fear a structural disadvantage, as it may be politically more palatable to vote for regulations that decrease costs than for ones that increase them. Perhaps this mutual misgiving is the mark of a sound compromise. Or perhaps it is the mark of an idea that’s bound to fail.

I’m not sure, but I would welcome a structure that shifts regulatory power over big questions from the executive (in conjunction with the courts) to the legislative branch. As a matter of stability, we would not have to worry so much about the whipsaw in regulatory policy that occurs every time the Presidency changes hands. As a matter of accountability, we would narrow Congress’s escape hatch of broad, often meaningless, language in regulatory statutes. And countering the deregulatory bias of such reform statutes would force those who prefer governance by administrators over legislators to publicly stand on that ground alone. That would be fun to see.

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