Magazine | February 11, 2019, Issue

Legislation without Representation

The U.S. Supreme Court in Washington, D.C., November 13, 2018 (Al Drago/Reuters)
Judicial Fortitude: The Last Chance to Rein In the Administrative State, by Peter J. Wallison (Encounter Books, 240 pp., $23.99)

It was among the most imperious moments of the Obama presidency. With the House of Repre­sentatives firmly in Republican hands and the slim Democratic majority in the Senate soon to vanish, the public had ended the prospect of sweeping lawmaking akin to Obamacare and Dodd-Frank, the signature progressive health-care and financial-sector “re­forms” of the president’s first term. Not to worry, the president declaimed, “I’ve got a pen and I’ve got a phone.” With them, he intended “to sign executive orders and take executive actions and administrative actions.” No longer was he “just going to be waiting for legislation”; Americans were going to get “the kind of help they need” — whether they wanted it or not.

The vow to govern in difference to, even against, the will of the people by ignoring their representatives in Congress should have been surprising only in its brazenness. It has been the liberal project since the dawn of the 20th century, instantiated by the metastatic growth of administrative agencies, particularly during the presidencies of Woodrow Wilson and FDR. This counter-constitutional tendency of the “administrative state” to rule without democratic legitimacy is the subject of Peter J. Wallison’s clarion call Judicial Fortitude: The Last Chance to Rein In the Administrative State.

Wallison, a co-director of financial-policy studies at the American Enterprise Institute, has been grappling with the administrative state for decades — notably, as a Reagan Treasury Depart­ment general counsel promoting the administration’s deregulation efforts. His book is a powerful indictment of modern government’s undermining of the checks and balances that the Framers put in place to prevent accretions of politically unaccountable power.

There is, however, irony in the title. In Federalist No. 78, Alexander Hamilton argued that judges must be given life tenure. It would require “an uncommon portion of fortitude in the judges,” he explained, for them to carry out their duty as “faithful guardians of the Consti­tution.” This would be an unreasonable expectation if judicial office hinged on popular or political approval.

In Hamilton’s mind, though, the role of “courts of justice . . . as the bulwarks of a limited Constitution” was set against the inevitability of “legislative encroachments.” In the Framers’ construct, the three branches were not, as common parlance puts it, “coequal.” The Article I branch, Congress, would be supreme, its lawmaking power a constant threat to usurp executive authority and invade the province of the judiciary to interpret the laws.

Alas, the thrust of Wallison’s book is that our actual challenge is the antithesis of Hamilton’s concern. The problem is not “encroachment” but instead congressional delegation of the legislative power to administrative agencies, largely of the executive branch. The courts, in turn, have adopted a doctrine of deference to these agencies’ interpretations of both the scope of their authority and the sprawling, often ambiguous statutes that purportedly enable them to act. Inexorably, the agencies impose policy that Congress may not even have contemplated, much less approved.

As Wallison recounts, constitutional governance worked well for over a century, promoting liberty, prosperity, and growth even through the tumult of civil war. Nevertheless, industrialization brought about radical demographic and economic change. Leading progressive thinkers came to see the Constitution as an outdated charter for a simpler society, inhibiting the capacity of government to address the complexities of modern life — to be an instrument for good, not a necessary evil. Unable to cashier the Constitution, progressives reimagined its structure of government as organic and evolving. The result was the effective transfer of regulatory authority from Congress to specialized bureaucracies in which theoretically apolitical technocrats would manage the day-to-day activities of various industrial sectors.

This arrangement is contra-constitutional in fundamental ways. While, at least in theory, what we now call the administrative state promotes efficiency and the public good, the Constitution was actually designed to promote liberty — government would be limited in what it could do to citizens rather than empowered to direct them, with society flourishing through the initiative and ingenuity of free individuals.

The Framers, moreover, were students of history who saw the concentration of too much power in too few hands as the road to tyranny. Their framework for government relied on the separation of powers: in particular, dividing lawmaking from law-enforcement authority and giving each branch the incentive and ability to check the excesses of the other two. Though Congress’s power to legislate would make it the most powerful, it was also the most politically accountable to the voters.

In stark contrast, administrative agencies amass rulemaking and en­forcement authority under one roof, in the hands of unelected bureaucrats who can be reined in only if Congress jealously guards its legislative authority rather than abdicates it and if the judges do their jobs. For lawmakers, however, the administrative state be­came a seductive way to duck the hard work of legislating — making difficult policy choices, deciding between competing constituencies. Worse, in Wallison’s account, the judiciary has perfected Congress’s abdication by rationalizing the delegation of congressional powers and deferring to agency decision-making.

The defining exemplar of such judicial default is the Chevron doctrine, derived from the Supreme Court’s 1984 rejection, in Chevron v. Natural Re­sources Defense Council, of a claim that the Reagan-era Environmental Pro­tection Agency was too lax in enforcing the Clean Air Act. As a matter of policy this outcome was reasonable, but in justifying the Court’s decision Justice John Paul Stevens made the breathtaking suggestion that administrative agencies exist in part to “reconcile conflicting policies” that Congress “in­tended [but failed] to accommodate.” Of course, choosing between policy options is the essence of lawmaking. Yet Justice Stevens blithely excused this legislative dereliction, opining that when Congress is “unable to forge a coalition on either side of the question,” it may freely punt to “the scheme devised by the agency.”

Doesn’t that subvert the republican assumption that the people’s decisions are made by its elected representatives? No, Stevens reasoned: “While agencies are not directly accountable to the people, the Chief Executive is, and it is entirely appropriate for this political branch of the Government to make such policy choices.”

Needless to say, it is not much of a leap from Chevron to Obama’s pen and phone. And the former is as much a defiance of the Constitution as the latter. Even if it were true that all administrative agencies were under executive direction, it would remain a fundamental break with the separation of powers to bless presidential usurpation of legislative authority. The Constitution empowers the president to make policy only within areas specified as executive in nature — e.g., in commanding the military (subject to Congress’s powers to declare war and regulate the armed forces) and in conducting foreign policy (subject to the Senate’s power to approve treaties). Beyond that, the president lacks the power to legislate (just as Congress lacks the power to execute); this power may not legitimately be conferred by broad congressional license to make policy judgments and prescribe rules — the essence of legislating.

Furthermore, several administrative agencies are not under executive control. For example, the Securities and Exchange Commission, the Federal Communications Commission, and the Consumer Financial Protection Bureau (whose abuses Wallison details to great effect) are “independent” bodies, functioning in practice as an unaccountable fourth branch of government. (On that point, I respectfully disagree with Wallison’s contention that Dodd-Frank brought these independent agencies under executive control through the Financial Stability Oversight Council, which the secretary of the Treasury supervises. That merely drafted agency leaders into the dubious work of the FSOC; it did not enable the Treasury Department or the president to manage the work of the agencies.)

Wallison explains that he is not as pessimistic about the prospects for rolling back the administrative state as his AEI colleague, the estimable Charles Murray. In his 2015 book By the People, Murray contended that a restoration of Madisonian limited government is unrealistic because the people expect the state to do more for them than did Americans in the early 20th century. Wallison counters that the system is still responsive to the wishes of voters — we are not yet, for example, in a crisis of legitimacy of the sort that drove British voters to seek exit from the European Union. While he believes an express reinvigoration of the Su­preme Court’s nondelegation jurisprudence (which would have the effect of invalidating congressional transfers of legislative authority) may be a bridge too far for the justices, Wallison sees hopeful signs of an emerging Court majority to overrule or gut Chevron — particularly with the addition of Trump-appointed justices Neil Gorsuch and Brett Kavanaugh.

Agencies of the administrative state have issued a staggering 101,380 rules in the quarter century since President Bill Clinton was inaugurated. Even with President Trump championing deregulation, agencies still issued 3,281 rules in 2017 (by comparison, Congress enacted just 97 laws). There remains great support for the progressive conceit that Congress merely promulgates general goals, with agency experts sanctioned to work out the concrete details — even if that involves rewriting the laws or issuing vague directives backed by the intimidating prospect of Justice Department en­forcement actions. The threat to our republican democracy is profound, and Peter Wallison has done yeoman’s work in sounding the alarm.

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