Economy & Business

A Conservative Plan to Rein In the Administrative State

(Photo: Jorgenmac/Dreamstime)
Rolling back overreaching Obama-era rules is a good start, but to truly tackle the problem Congress must ensure that such rules can’t be passed in the first place.

Health-care reform has stalled in the Senate, but conservatives can take heart in some other efforts to “drain the swamp” in Washington — especially when it comes to the administrative state. The Trump administration has already rolled back many harmful Obama-era rules and regulations, including at least 30 promulgated by the Environmental Protection Agency. And congressional Republicans have, on several occasions, successfully invoked the Congressional Review Act (CRA) to undo a host of other overreaching Obama administration efforts.

These moves are encouraging, but they are only a temporary solution, because there’s still nothing to prevent the next Democratic administration from engaging in a spate of new administrative rulemaking. The U.S. Constitution is structured to be a bulwark against big government, but judicially created doctrines have ceded more and more authority to administrative agencies over the years, which is what empowered the Obama administration to use administrative rulemaking to pursue its agenda after Democrats lost control of the legislative branch.

The delegation of congressional lawmaking authority to administrative agencies became a focal point in the fight over Judge Neil Gorsuch’s nomination to the Supreme Court — perhaps the high-water mark of the new administration for conservatives. In an opinion issued shortly before the president chose to nominate him to the high bench, Gorsuch observed that delegating vast authority to administrative agencies concentrates power in the executive branch “in a way that seems more than a little difficult to square with the Constitution.” Senate Democrats made much hay of this comment in confirmation hearings, and with good reason: Circumventing the Constitution’s checks and balances to make laws by bureaucratic fiat empowers the “progressive” project.

Fortunately, the CRA gives Congress at least some power to reassert its constitutional authority, if it acts quickly. Although it is too late to apply CRA review to many Obama-era administrative rules, at least some opportunities still remain for Congress to act. Chief among those is a new rule issued by the Consumer Financial Protection Bureau (CFPB) — the agency created by Democrats in the wake of the financial crisis, with a director who cannot be replaced by the president and a budget that cannot be reviewed by Congress. Under the leadership of the CFPB’s hold-over director, Richard Cordray — a politically ambitious Democrat with deep political ties to the plaintiffs’ bar — the agency recently went forward with a proposed rule that would wipe out consumer-friendly arbitration clauses in contracts if they foreclosed lawyer-friendly class-action litigation. Congress should use the CRA to nix this sop to America’s trial lawyers before its current session comes to a close.

Beyond undoing the Obama administration’s flurry of regulations, Congress’s Republican leadership should seriously consider ways to restrain future attempts to govern through unaccountable administrative rulemaking. To that end, they should pass the Separation of Powers Restoration Act, which would restrain the delegation of authority to administrative agencies decried by Justice Gorsuch. In a pair of decisions known well to lawyers but little to the broader public — Chevron and Auer — the Supreme Court prevented courts from overriding agencies’ interpretations of their own rules and the congressional laws that empower them. But there is nothing to stop Congress from stepping in to instruct courts not to defer to out-of-control agency officials.

Congress should also address what we at the Manhattan Institute have dubbed “criminalization without representation.” Of the more than 300,000 criminally enforceable federal rules and regulations, only about 5,000 can be found in statutes voted on and passed by Congress; the rest were created by unelected bureaucrats. Congress should review any new federal regulation with criminal teeth before an administrative agency can finalize it.

The Trump administration’s efforts to roll back the administrative state have already borne fruit, and Republicans should continue to dismantle the legacy of Barack Obama’s pen and phone through executive and congressional review. But there’s more to be done. By enacting the Separation of Powers Restoration Act and legislation that would reserve to the legislative branch its proper constitutional role to create criminal offenses, congressional leaders would also restrain future administrations from side-stepping the political process to enact an agenda. In addition to being good public policy, these efforts might help build the good will and momentum Republicans will need to deliver on their agenda’s more ambitious goals.


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