Magazine | April 25, 2016, Issue

Leviathan Rising

Liberty’s Nemesis: The Unchecked Expansion of the State, edited by Dean Reuter and John Yoo (Encounter, 576 pp., $32.99)

At the conclusion of the Philadelphia Convention of 1787, a certain Mrs. Powel is said to have asked Benjamin Franklin whether the delegates had ended up with a republic or a monarchy. “A republic,” he answered, “if you can keep it.”

Keeping it has proved difficult. Most of President Barack Obama’s critics believe that he has been trampling on the Constitution since his first days in office. Even the most hardened critics, however, will be taken aback by the sheer scale of the damage he has inflicted on the Constitution, in ways large and small. A new book edited by the Federalist Society’s Dean Reuter and law professor John Yoo of the University of California, Berkeley, puts the damage in historical perspective.

The book brings together contributions from a sitting senator, a former congressman, a former attorney general, a former White House counsel, and a host of prominent scholars and former senior officials to catalogue the excesses of the Obama era. “These scandals may have traveled different vectors before they landed on the White House,” writes Yoo, “but they all flow from the same source — the overgrowth of the administrative state.” The presentation of their contributions in one volume reveals the underlying institutional dysfunction, a process 100 years in the making.

The Constitution was carefully designed to fetter the federal government, and the presidency in particular, to prevent the republic from turning into anything like tyranny. The federal government was vested with powers that were strictly limited and enumerated, and there was to be a strict separation of powers between federal and state governments and among the branches of the federal government.

Alas, starting with Woodrow Wilson, the presidency has burst virtually every one of those constitutional fetters. Wilson rose to fame (and, eventually, power) as a paragon of the German philosophy of government by administrative-agency experts, then all the rage in academic circles. The idea, which called for bringing all government functions together “scientifically” within the executive branch, was diametrically opposed to the separation of powers prescribed by the Constitution, a document for which Wilson expressed open contempt.

It was Wilson who midwifed the modern administrative state. The Federal Reserve, the Federal Trade Commission, the U.S. Tariff Commission, the U.S. Shipping  Board, the Federal Power Commission, and what eventually became the Commodity Futures Trading Commission were all born during his administration. They set the pattern for the independent agencies we know today, from the Securities and Exchange Commission to the Consumer Financial Protection Bureau created by Dodd-Frank.

This was not only, or even principally, Wilson’s doing, or that of any president. It was Congress that created the agencies, empowered them through increasingly open-ended delegations of rule-making and adjudication authority, and — starting in the era of Franklin D. Roosevelt — let the Constitution give way to what Walter Lippmann called “the absolutism of the majority.” Perhaps even more shameful has been the part played by the Supreme Court, which, out of desire for self-preservation, and in false deference to the vox populi, has systematically aided and abetted the rise of the administrative Leviathan by leaving crucial constitutional constraints undefended.

It was in the midst of World War II that the Supreme Court undid the fetters on Congress’s power to regulate interstate commerce, in Wickard v. Filburn (1942), and then let Congress delegate all that authority to the executive branch, in Yakus v. United States (1944). In Chevron v. NRDC (1984), it gave agencies the power to determine the meaning of their enabling statutes, including the scope of their delegated legislative authority. And, back in 1935, in Humphrey’s Executor, it was actually a conservative Supreme Court that let Congress shield agencies with “quasi-legislative or quasi-judicial functions” from presidential control — which is how many agencies (including the Federal Trade Commission, the Federal Communications Commission, and the Consumer Financial Protection Bureau) became “independent” and accountable to nobody.

As Linda Chavez makes clear in a chapter on Obama’s “executive amnesty” of illegal immigrants, Obama has transformed prosecutorial discretion into an unfettered rule-making power. The action went too far in creating new rights for immigrants, such as work permits, so federal courts have stayed the amnesty for not following the Administrative Procedure Act. But the amnesty at its core might prove unassailable if courts are not willing to enforce the president’s constitutional obligation to “take Care that the Laws be faithfully executed.”

That “executive amnesty” was not, it turns out, an “executive order,” nor have Obama’s most controversial executive actions taken that form. In virtually every case, Obama has used administrative agencies to push the envelope of administrative overreach. The executive amnesty, for example, was a series of informal memoranda within the Department of Homeland Security.

In terms of consequences, the most dangerous Obama actions have stayed well within the Administrative Procedure Act, relying on vaguely worded enabling statutes and the courts’ deference to do just as they please. One example is the Environmental Protection Agency’s regulation of greenhouse gases: As Patrick Morrisey and Elbert Lin, respectively the attorney general and solicitor general of West Virginia, write, the EPA, in enacting those regulations, “apparently viewed the law merely as an inconvenient hurdle on the way to its preferred policy outcome.” To defend against such overreach, they argue, “states, private regulated entities, and individual citizens must be willing and prepared to sue.”

That is certainly true, but unfortunately the federal courts have cut the legs out from most such suits in just about every possible way. Incredibly, according to the courts, U.S. citizens have no general standing to sue to keep the government within the law. Instead they must show particularized injury — so if an agency harms everyone at once, it’s off the hook. Just as bad is the deference that courts give to agency interpretations of their enabling statutes — the doctrine of the Supreme Court decision in Chevron.

The redeeming virtue of the Supreme Court’s worst constitutional decisions is that they sometimes make so little sense that it’s impossible even for judges to find a way around their flaws. Thus, there is increasing consensus among conservative jurists — and a few liberal ones — that Chevron is unsustainable and must be reversed. Ronald Cass, former dean of Boston University’s law school, makes a compelling case that Chevron should be scrapped and the power of judicial interpretation restored to the federal courts.

The combination of limitless regulatory power and limitless delegation is compounded by a fracturing of both the executive branch and Congress. Every sector of industry seems to have its own version of the “military-industrial complex,” in which congressional committees collude with the agencies they superintend to serve the most powerful special interests. (These relationships are often referred to as an “iron triangle.”) As tempting as it might be for a Republican Congress to shield administrative agencies from the control of a Democratic president, the fracturing of the unitary executive leaves critical lawmaking functions on autopilot, accountable to nobody. To make matters worse, as former FCC commissioner Harold Furchtgott-Roth reveals in a chapter on the FCC, the fact that an agency is nominally independent doesn’t mean the president isn’t controlling things from behind the scenes. If the agency’s leadership is committed to the president’s agenda and values his approbation, a statutorily independent agency is easily subverted by an unscrupulous president, leaving us with the worst of both worlds — power without accountability.

As C. Boyden Gray and John Shu make clear in their chapter on Dodd-Frank, the Consumer Financial Protection Bureau, whose mission is apparently to persecute on an almost purely random basis companies that engage in innovative financial practices, operates beyond any effective democratic control. With an independent revenue stream and leadership shielded from removal by any president, the CFPB was intentionally designed to be as rogue and unaccountable an agency as the Supreme Court would stomach. Killing the CFPB should be on the list of actions the next president and Congress will take on Day One.

If fixing all these problems at once is too much to ask of this generation, it is absolutely urgent at least to stop and pull back the unfettered delegation of legislative authority to the executive branch. In the ivory tower of constitutional law, an interesting debate has been swirling of late about the non-delegation doctrine. At one end of the spectrum, Columbia law professor Philip Hamburger takes the position of the ancient Romans: Delegatus non potest delegare (the delegate shall not delegate, period). On this theory, the entire apparatus of executive-agency rulemaking is unconstitutional. On the other extreme, law professors Adrian Vermeule and Eric Posner (of Harvard and Chicago respectively) take the exotic position that Congress could delegate all legislative power to the president, and we wouldn’t need constitutional constraints to keep him in check, because political constraints are enough — as close as American law professors can get to a revival of Benito Mussolini’s conception of government. Closer to the center, such left-leaning academic voices as now–Supreme Court justice Elena Kagan and Cass Sunstein, former head of the White House Office of Information and Regulatory Affairs under Obama, are a force to be reckoned with. They often have effective answers for traditional conservative critiques of the administrative state. So far, an effective center-right riposte to those answers has been lacking. Liberty’s Nemesis goes a long way toward filling that void. It mixes moderation with bold conservative positions that, taken together, amount to an agenda of constitutional reform.

“If conservatives are ever to reverse unaccountable government,” writes Yoo in the conclusion, “they must fundamentally change their approach to constitutional law and the Executive Branch.” In that effort, Liberty’s Nemesis will be an indispensable guide. It should be an essential part of any vetting process to fill the seat vacated by the departed Justice Antonin Scalia. The steady erosion in the Constitution’s separation of powers has been made possible above all by the Supreme Court’s abdication of its essential role as guardian of the Constitution’s constraints on government power.

The time has come for the Supreme Court to assume that responsibility once again. As this book demonstrates, fixing these problems will be impossible unless the Court is willing to undo the damage of its hundred years of servitude to the absolutism of the majority. Americans are blessed with a wonderful Constitution, if they can get it back.

— Mario Loyola is a senior fellow of the Wisconsin Institute for Law and Liberty. 

Mario LoyolaMr. Loyola is a senior fellow at the Competitive Enterprise Institute and the president of Loyola Strategies Research and Consulting. From 2017 to 2019, he was the associate director for regulatory reform at the White House Council on Environmental Quality.

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