Executive Departments, Independent Agencies, Rulemaking Authority, and the 432-Page Document That Will Determine Whether Your Business Exists Next Year
Executive Departments, Independent Agencies, Rulemaking Authority, and the 432-Page Document That Will Determine Whether Your Business Exists Next Year
The Government Nobody Elected and Cannot Easily Fire
There are approximately 440 federal agencies, departments, commissions, boards, and quasi-governmental entities in the United States government. This number is difficult to pin down precisely because the government itself cannot fully agree on how to count them, which is either an administrative oversight or a metaphor, and at this point the distinction barely matters. These entities employ 2.3 million civilians, regulate virtually every sector of the American economy, issue tens of thousands of pages of regulations annually, and make decisions affecting 330 million Americans that receive a fraction of the political attention devoted to the 535 people in Congress who nominally oversee them.
The administrative state is not in the Constitution. The founders established three branches: legislative, executive, judicial. The administrative state is housed in the executive branch but exercises powers that look legislative (making rules with the force of law), judicial (adjudicating disputes through agency proceedings), and executive (enforcing compliance). This combination led Justice Robert Jackson to observe that the administrative process “”has become a veritable fourth branch of the Government.”” The Court has since spent considerable effort deciding whether to embrace or limit this characterization. The agencies have continued operating throughout.
How Agencies Get Their Authority: The Delegation Doctrine and Its Discontents
Agencies derive their authority from statutes passed by Congress. Congress passes a law directing, say, that air quality standards be set at levels “”requisite to protect the public health”” with an “”adequate margin of safety,”” and delegates to the Environmental Protection Agency the task of determining what those levels actually are. The EPA then conducts scientific analysis, engages in public comment, and issues a rule specifying the precise parts-per-million concentration of various pollutants that are permissible in ambient air. This rule has the force of law. Violating it produces civil penalties. Challenging it requires navigating a body of administrative law so complex that it supports an entire subspecialty of legal practice.
The constitutional question – whether Congress can delegate this much lawmaking authority to an executive agency – has been contested since the New Deal. The Supreme Court theoretically requires Congress to provide an “”intelligible principle”” guiding agency discretion; in practice, “”protect the public health with an adequate margin of safety”” has been found sufficient, which means the intelligible principle doctrine is doing less work than its name implies. The Court’s 2024 decision in Loper Bright Enterprises v. Raimondo overruled the longstanding Chevron doctrine that instructed courts to defer to agencies’ reasonable interpretations of ambiguous statutes, shifting interpretive authority back to judges. The practical implications are still being litigated. The agencies are still operating. The regulations are still being issued. The lawyers are billing.
Rulemaking: How Policy Actually Gets Made After Congress Has Left the Building
When Congress passes a statute, it rarely specifies precisely how the statute’s objectives are to be achieved. It delegates to agencies. The agencies then engage in rulemaking – the process by which general statutory authority is translated into specific, binding rules. The Administrative Procedure Act of 1946 requires that agencies publish proposed rules in the Federal Register, accept public comments for a specified period (typically 60 days), consider those comments, and publish a final rule with a reasoned explanation of the agency’s choices. This process takes, on average, between two and seven years from initiation to final rule. The Clean Air Act was passed in 1970. EPA is still issuing rules under it. The process is thorough. It is also slow enough that some of the problems it is addressing have materially changed between the time a rule was proposed and the time it takes effect, producing rules that are legally sound, procedurally impeccable, and occasionally somewhat beside the current point.
The public comment process generates comments ranging from form letters organized by advocacy groups – thousands of identical submissions that agencies must acknowledge while giving each approximately the weight its uniqueness warrants – to highly technical submissions from affected industries that contain the best scientific and economic analysis that several million dollars in consulting fees can produce. The agency reads all of it, considers the significant comments, and must address them in the final rule or face legal challenge. The regulated industry then reviews the final rule, identifies the comments they believe were not adequately addressed, and files suit in federal court. The court reviews the agency’s record, applies whatever deference doctrine the Supreme Court has most recently articulated, and either upholds or remands the rule. The agency then issues a revised rule and the process continues. Justice is done, slowly, expensively, and with more Latin than most people prefer in their environmental policy.
The Enforcement Gap: Rules That Exist and Rules That Are Followed
A regulation has two components: the rule itself, and the capacity to enforce it. Federal agencies are responsible for enforcing their regulations against a regulated universe that vastly outnumbers the regulators. The Occupational Safety and Health Administration is responsible for the safety of approximately 160 million workers at approximately 10 million workplaces. It employs approximately 1,800 inspectors. At current staffing levels, OSHA can inspect each workplace approximately once every 165 years. This is not adequate enforcement. It is the performance of enforcement – the existence of rules, the possibility of inspection, the theoretical consequence of violation – rather than systematic enforcement, which would require a budget and a staffing level that Congress has not provided, in part because the industries that would be most affected by systematic enforcement have made their preferences known to the relevant congressional committees through the traditional mechanisms of campaign contributions and lobbying, and their preferences have been heard.
The enforcement gap means that compliance with federal regulation is, in many sectors, substantially voluntary – maintained by the threat of occasional inspection, the risk of private litigation by injured parties, the potential for reputational damage, and the genuine commitment of many businesses to follow rules they believe are reasonable. Where these factors are weak – where the probability of inspection is low, litigation risk is manageable, reputation is not a concern, and the rules are perceived as burdensome rather than reasonable – compliance falters. The administrative state is a system of rules and the capacity to enforce them. It has more rules than capacity, which is a structural feature rather than a temporary resource constraint, and it produces outcomes distributed accordingly.
SOURCE: The London Prat