Regulatory Rollback

We’ve witnessed a dramatic expansion of the use of administrative rulemaking to set national policy on major issues. There is an appropriate role for administrative rules, but it is a dereliction of congressional duty to allow the executive branch to fill in important details of legislation after it is passed, and it is an executive overreach to use the rulemaking process to circumvent the will of the people. This problem is exacerbated by the trend of appointing unelected czars that are not subject to Senate confirmation or the scrutiny of congressional oversight. This legislation would implement important changes in the rulemaking process to limit the scope of rulemaking authority, and to ensure that Congress passes judgment on major rules that could affect our economy.

Senator Sessions’s plea fell on deaf ears; upon its introduction, that year’s version of the REINS Act was referred to the Senate Committee on Homeland Security and Government Affairs, never to return.

But seven years later, Sessions has the opportunity to play a much more significant role in securing enactment of legislative reforms that he has long advocated. Now, as attorney general, Sessions can focus national attention on these issues. To borrow a favorite phrase from a predecessor, Eric Holder, the Justice Department can convene a “national conversation” on the modern administrative state.

Indeed, if the attorney general fails to shine a spotlight on this issue, then it risks languishing once again in the Senate. Even with a bipartisan coalition of senators now promoting regulatory reforms, there remains significant risk that this year’s regulatory reform bills will ultimately share the same sad fate as previous years’ versions. The attorney general and the Justice Department are uniquely well-suited to inform this national debate and energize the reform effort—just as their predecessors did seven decades ago, at the dawn of the modern administrative state.

When former White House adviser Steve Bannon told the audience at the 2017 Conservative Political Action Conference that the new administration was committed to “deconstruction of the administrative state,” the CPAC crowd burst into applause. Bannon and the Trump administration were preaching to the choir. Conservatives have long clamored for thorough reform of modern administrative governance. Year after year, the House has passed significant legislation to reform, modernize, and restrain the agencies. In recent years, conservatives drew additional intellectual energy from the judicial opinions of Justice Clarence Thomas and several federal judges (including Neil Gorsuch), and from books like Philip Hamburger’s Is Administrative Law Unlawful? And the reformist mood only intensified as the Obama administration grew increasingly aggressive and creative in asserting administrative power, unilaterally setting national policies on health care, energy markets, immigration, and even the Internet, either in lieu of statutory authorization or in outright defiance of Congress’s statutes.

But while recent efforts to reform regulatory agencies have been led by conservative Republicans, they have found support among some Democrats, too—especially Senators Heidi Heitkamp, Joe Manchin, Claire McCaskill, and others.

Such bipartisan interest might surprise contemporary observers, but it is hardly unprecedented. In his speech accepting the Democratic presidential nomination in 1976, Jimmy Carter insisted that “Democrats believe that competition is better than regulation, and we intend to combine strong safeguards for consumers with minimal intrusion of government in our free economic system.” In the four years that followed, the Carter administration set precedents for some of the Reagan administration’s most important regulatory reforms; Carter’s Executive Order 12044, for example, asserted significant White House oversight of the scattered agencies’ rulemaking efforts. In the 1980s, Senator Dale Bumpers pressed unsuccessfully for legislation intensifying judicial review of agency actions.

And after the Reagan-Bush years, President Clinton continued his predecessors’ practice of overseeing administrative agencies. “The American people deserve a regulatory system that works for them, not against them,” he announced in Executive Order 12866: “a regulatory system that protects and improves their health, safety, environment, and well-being and improves the performance of the economy without imposing unacceptable or unreasonable costs on society” and “regulatory policies that recognize that the private sector and private markets are the best engine for economic growth.”

Today, that spirit of good-government reform among progressives is carried on first and foremost by North Dakota’s Heitkamp and West Virginia’s Manchin. Heitkamp, a former state attorney general and state tax commissioner, worked to reduce the regulatory burden in North Dakota. She recounted this experience in a 2016 address to a Federalist Society conference: “With the right kind of scalpel, with the right kind of innovation, with the right kind of direction,” she said, “we can in fact pare down this morass of regulations that we have.” Heitkamp is no libertarian; in her Federalist Society talk, she reiterated the basic need for government to use smart regulation to set reliable ground rules to protect the public and undergird functioning markets. This requires government to strike a balance: “It’s a tricky balance in regulation; it’s a tricky balance in trying to figure out at what point [you] do not try and regulate a perfect world, but at what point do you walk away and say, ‘buyer beware’?”

To that end, Senator Heitkamp has sought common ground with Senate Republicans. At a September 2016 hearing, she observed that Democrats skeptical of regulatory reform in the Obama years might come to appreciate the need for greater agency accountability under a different president. Regulatory reform “should not be controversial,” she said, “because I just keep asking my colleagues, you could have a president that is not a Democrat. What oversight, what accountability do you want for the decisions that are going to be made in that case?” And so she stressed the need for bipartisan cooperation on regulatory reform. “When we can sit down,” she told one witness called by the Republican majority, “and you and I nod our heads in total agreement about kind of where we are, recognizing that we may not agree on everything as a matter of politics, we know that we have some fertile ground here to actually get something done.”

One particularly fertile piece of ground for bipartisan reform is the modernization of the Administrative Procedure Act of 1946. That 70-year-old piece of legislation remains the most important body of law governing federal agencies’ regulatory actions. At the time of its enactment, it was a realistic, practical set of laws that reflected the daily work of administrative agencies. Seven decades later, however, the APA reflects a world that no longer exists—a “lost world of administrative law,” as two professors recently put it. Administrative agencies long ago learned how to sidestep or minimize the APA’s septuagenarian standards. When the APA’s breezy process for “informal rulemaking”—that is, notice-and-comment rulemaking—can be used to impose far-reaching and disruptive national policies ranging from the EPA’s Clean Power Plan to the FCC’s Open Internet Order on broadband Internet services, it is clear that the APA and other parts of administrative law are due for reform and modernization, to better reflect the realities of today’s overweening administrative state.

The House has repeatedly passed legislation to bulk up the APA’s procedural requirements and judicial-review standards, in a bill known as the Regulatory Accountability Act. This spring, Senators Heitkamp and Manchin joined Republican colleagues Rob Portman and Orrin Hatch in cosponsoring a Senate version of the bill. Because it is bipartisan, it reflects some moderation of the House’s bill. But it remains a significant improvement upon the status quo.

At least it would be an improvement, if the Senate and House were to pass it and the president were to sign it.

President Trump already has signed many documents to reform and improve the modern administrative process. But to date they all have been executive orders, not legislation, and thus they stand little chance of outlasting the inauguration of the next Democratic president. President Trump has ordered executive agencies to rescind two old regulations for every new one and to cap the total costs imposed by regulations. He has ordered agencies to review and reduce regulatory burdens upon the development of U.S. energy resources. He has issued orders directing agencies to reform their regulation of private lands, financial markets, education, and other subjects. And to carry out these executive orders and Congress’s statutes, President Trump has appointed a number of cabinet secretaries and officials, including EPA administrator Scott Pruitt, Energy Secretary Rick Perry, and White House “regulatory czar” Neomi Rao, who bring a reform-minded approach to their offices.

These are all welcome achievements. But long-lasting reform requires legislation. And that may not happen without the aforementioned Jeff Sessions.

Attorney General Sessions already has reiterated President Trump’s calls for regulatory reform. Pursuant to Executive Order 13777, Enforcing the Regulatory Reform Agenda, the Justice Department has established a task force for identifying regulations to be repealed or reformed, and in late June the department issued a request for public comment on “specific regulatory actions previously taken by the Department that should be repealed, replaced, or modified, consistent with applicable law.”

But the attorney general can go much further. The Justice Department is uniquely positioned to inform and help to lead the legislative effort to reform and modernize administrative law. The Justice Department litigates regulatory cases every day, defending administrative agencies’ actions in the federal courts and even in the Supreme Court. No one knows better than the Justice Department the fault lines and leverage points of administrative law, and thus no one in government can speak more credibly on the best ways to improve administrative law than Justice officials.

This is not a task that can be accomplished within litigation itself. While in theory the Justice Department can forswear reliance upon judicial doctrines that tilt too far in favor of the agencies, in practice lawyers cannot simply refuse to invoke precedents and statutes in their favor. But if the Justice Department cannot change the rules in the middle of a particular game, the department can ask Congress to level the playing field for everyone going forward.

Indeed, this is precisely the role that the Justice Department played in the years leading to the development of the Administrative Procedure Act in the 1940s. For the first part of the 20th century, the nascent field of administrative law spurred intense debate among lawyers, scholars, and government officials. Eventually, in 1939, Attorney General Frank Murphy (a future Supreme Court justice) appointed a special committee to study the law of federal administration and propose reforms. In appointing the committee, Murphy observed that rapid expansion of the New Deal-era administrative state had “centered the attention of the Bar and of the public at large upon the vital role played by the administrative process.” Given the criticisms that “have from time to time been directed at certain features of administrative procedure,” he concluded that it “would tend toward a clarity of thinking to ascertain in a thorough and comprehensive manner to what extent, if any, these criticisms are well founded and to suggest improvements if any are found advisable.” To aid his special committee in its work, Attorney General Murphy created an advisory committee with representatives from all federal agencies, to contribute their own expertise.

Murphy recognized that this work fell squarely in the Justice Department’s wheelhouse. “The Department of Justice has played a vital part in the recent reform of Federal civil procedure,” he recalled. “It owes a duty to render similar service in respect to administrative procedure.”

In the years that followed, the Justice Department did not shrink from that duty. In 1941, under Attorney General Robert Jackson, the Justice Department’s committee produced a landmark report on the need to reform administrative law. And in 1947, a year after President Truman signed the Administrative Procedure Act into law, the Justice Department (then led by Tom Clark) issued a final report explaining the new law’s standards. This work proved to be so influential and credible that the Supreme Court and other courts continue to turn to it deferentially, to better understand how the APA’s terms should be construed and applied.

That is the best possible service that the Justice Department could possibly render now toward the goal of reforming the administrative state and modernizing administrative law. The Regulatory Accountability Act, the REINS Act, and other bills pending in the House and Senate would be immense improvements on our outdated administrative statutes. But if these measures get stuck in the gridlock of health care and tax reforms, then the Justice Department can seize the opportunity to expand upon Congress’s work.

Indeed, the Justice Department could convene a much broader national conversation, bringing together the state attorneys general who, led by Texas’s Ken Paxton, recently sent the White House a letter offering further suggestions for structural regulatory reform. Such an effort by Sessions would echo the legacy of his predecessors—such as Attorney General Ed Meese, who led the Reagan-era project of returning American constitutionalism to its proper roots in the Constitution’s text. And it would echo the legacies of attorneys general Frank Murphy and Robert Jackson, who dedicated years to the project of understanding the administrative state and proposing legislative reforms, an effort that produced invaluable benefits to the legislative process then and in the decades that followed.

Attorney General Sessions should follow their example and assert the legislative role for which the Justice Department is singularly well suited.

Adam J. White is a research fellow at the Hoover Institution and director of the Center for the Study of the Administrative State

at George Mason University’s Antonin Scalia Law School.