A regulatory revolution is underway
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While the headlines announce President Trump’s latest provocation, the House has already passed two bills, now before the Senate, that would undermine America’s system of regulatory government. This attempted revolution takes aim at the Administrative Procedure Act (APA) of 1946, which has provided a workable framework for two generations.

Under that system, as developed by the courts and subsequent statutes, Congress responds to market failures and social inequalities by setting out broad principles, but it does not try to resolve all questions of implementation, both because it lacks expertise and because it cannot respond quickly to changing conditions. If Congress tries to micromanage, lobbyists will fill the gap either by inserting preferred statutory provisions ex ante or by urging Congress to overturn rules ex post, without sufficient public input.

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The APA requires the civil service to combine its own professionalism with outside expertise and to engage in meaningful public participation. Before an agency rule can gain the force of law, it must go through a “notice and comment” process, providing for public notice and open-ended hearings. After considering the public’s objections, the agency must justify its proposal in a public statement of reasons. Even then, interested parties can challenge the rule in the courts, with judges reviewing rules in a way that takes the agencies’ special expertise and political legitimacy into account.

 

This system is by no means perfect, and there are lots of proposals to fine-tune its operation. But the first House bill would destroy its essential value. Under the Regulations from the Executive in Need of Scrutiny Act (REINS), even after a rule passes through “notice and comment” procedures, major rules would not be able to go into effect without the explicit approval by a joint resolution of Congress.

The REINS statement of purpose says that the act will result in a “legislative branch that is truly accountable to the American people for the laws imposed upon them.” Supporters state that they will restore balance and democratic accountability, but the real agenda is to bring rulemaking to a virtual halt. It poses as an effort to reduce bureaucracy and increase public accountability, but it will do just the reverse.

Each major regulation would be considered under an expedited procedure with limited debate, and if it does not win a majority in each House, the rule dies and can’t be reconsidered or reissued in the near future. REINS is a parody of the democratic process. Most legislators won’t read the rules before voting on them, and few will have the staff support needed to assess the long-term impact of their votes. While lobbyists will have a field day, ordinary constituents will be left in the dark. Faced with such arbitrary second guessing, agencies may decide to abandon rulemaking in favor of case-by-case adjudications that are likely less fair, less well-grounded in expertise, and less transparent.

REINS also requires agencies to amend or repeal old rules to offset all the costs of new rules, without regard to benefits. Furthermore, Congress must review 10 percent of existing rules each year over the next decade. They will be void unless approved. This provision places an impossible burden on members of Congress who take their jobs seriously. An enormous number of rules will likely fail to gain approval. They will lapse even if they are essential to the implementation of crucial programs with broad public support.

The second House bill — the Regulatory Accountability Act (RAA) — is only slightly less destructive. It replaces the notice and comment provisions of the APA with detailed requirements imposing a very high burden of proof on agencies that enact rules, including burdensome fact-finding and cost-benefit analyses even for rules that do not aim to correct market failures. Oral hearings must use “formal rulemaking” procedures that mimic judicial procedures, requiring cross-examination and “on the record” decisions.

At first glance, those trained in law might support such court-like procedures, but their superficial appeal is misleading. Adversary judicial procedures are a poor way to judge the truth value of technical material. In science, there are no “parties” in the sense of a court case, but rather debates over the quality of evidence and standards of proof based on scientific, not legal, norms. The agency’s expert personnel ought to be involved in that debate, not pose as neutral observers of a “trial” based on a “record.”

RAA would also prevent the agency from communicating with the public concerning the value of its proposed rule, unless it does so “impartially.” That term is not defined, but one supposes that it means giving “equal time” to opponents in the agency’s own documents. At the same time, well-funded industry groups can mount their own advocacy campaigns in a way that civil society groups can’t match.

RAA requires courts to “decide de novo all relevant questions of law.” It mandates very intrusive judicial review — courts shall not interpret “a gap or ambiguity” as an implicit delegation. It would overrule Supreme Court case law that counsels judges to defer to an agency’s “reasonable interpretation” of a statute if the legislation is silent on some key point.

It also expands the scope of review to include compliance with the Information Quality Act, a vaguely worded statute that requires federal agencies to maximize “the quality, objectivity, utility, and integrity of information” that it disseminates. It puts judges in the position of evaluating technical information far from their expertise and tilts the task of statutory interpretation further toward the judiciary. A likely result will be the ineffective implementation of statutory mandates.

The overall result of the two bills would be to paralyze the executive branch and the independent agencies. Unless President Trump’s talk of “draining the swamp” is a complete sham, he should make it clear that he will veto both of these bills if they emerge from the Senate.

Susan Rose-Ackerman is the Henry R. Luce Professor of Law and Political Science at Yale University. She has been published widely in the fields of law, economics and public policy, and has edited nine books on aspects of corruption and administrative law.


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