Susan Rose-Ackerman: Administrative Law, the Common Law, and the US Presidential System: The Republican Party Assault on Regulation

Most “common law” countries are parliamentary democracies, often with a history of British colonialism. The United States is an exception— a presidential system with a separation of powers between the legislature and the executive. In the United States the powerful role of case-by-case adjudication in both public law and private law reflects the common law tradition.  However, US administrative law is distinct from the public law of parliamentary systems. Its regulatory statutes go beyond substantive delegations to the executive and also mandate rulemaking procedures inside cabinet departments and independent agencies. These procedures, most importantly the notice and comment provisions of the Administrative Procedure Act § 553, aim to increase the transparency and public accountability of regulatory policymaking. They do not primarily protect individual rights against state overreaching; rather they are tied to the democratic legitimacy of the modern regulatory state.

As Stefanie Egidy, James Fowkes and I argue in a recent book, the US separation of powers gives the legislature an incentive to enact statutes that hold both the president and the independent regulatory commissions to account. Because different political parties may control the executive and one or both houses of congress, the legislature may seek to oversee executive actions through procedural controls and judicial review rather than micro-manage its substantive decisions. The risk, of course, is that US judges trained in the common law will build on the statutory language to further their own views. The interplay between judicial decisions and legislative action, however, ameliorates that risk. Unless constitutional values are at stake, the Congress and the President can override runaway judicial decisions by amending statutes. (Congress can even act alone if it can muster sufficient super-majorities.)  Thus, if the system works well, an active judiciary helps to control the bureaucracy and the presidency in the interest of the elected legislature, and, ultimately, the citizens. However, if it works poorly, the judiciary can stray quite far from congressional goals and interfere with effective administration. Of course, commentators may view the same judicial opinions as either positive or negative depending upon their own ideological and political viewpoints.

At present, the US system of checks and balances—broad delegations constrained by the democratic safeguards of notice and comment rulemaking—is under threat from the White House and Congress. Two proposed statutes that cut back on the policymaking discretion of executive departments and independent agencies have passed the House, and they may pass the Senate and be signed by the President. They are Regulations from the Executive in Need of Scrutiny Act of 2017 [REINS] and the Regulatory Accountability Act of 2017 [RAA]. These acts, if enacted into law, would as Peter Shane states, “virtually shut … [the rulemaking] process down”.

The REINS act requires Congress to pass joint resolutions approving costly major rules. That provision completely undermines arguments for delegation based on the value of expertise and the limited time available to legislators. The law also has a draconian sunset provision requiring Congress, over time, to enact all existing rules as statutory provisions – a further recipe for gridlock. Furthermore, new rules that impose costs must be balanced by the repeal of existing rules imposing the same or greater costs. This provision, called “regulatory cut-go”, is a revival of old proposals for a Regulatory Budget, and has the obvious flaw that the overall benefits of rules and their distributive impacts are not part of the calculation. The RAA, in turn, makes the rulemaking process more procedurally difficult and limits judicial deference to agencies’ statutory interpretations and their use of delegated powers.

One might expect any president to veto statutes that restrict his or her power, but these legal initiatives may be so in line with President Trump’s own views of government that he would enact them into law. After all, President Harry Truman signed the Administrative Procedure Act in 1946 even though it imposed costs on the executive.[1] In addition, the President has issued an Executive Order on Reducing Regulation and Controlling Regulatory Costs that requires executive departments and agencies to repeal two rules for every new one they propose. The costs of new regulations must be are balanced by the cost savings from the eliminated rules.  The EO contains many ambiguities, but, like the similar provision in REINS, its fundamental weakness is the complete lack of interest in the social benefits of new or existing regulations.

If REINS and RAA become law, the contrast with the common law parliamentary systems will be immense. I have argued for increased transparency, public participation, and reason-giving for the rulemaking processes in parliamentary systems.[2] The goal of these recommendations is to increase the democratic legitimacy of delegation consistent with the practical necessity of shifting some policymaking to the executive and to independent agencies. Of course, any procedures take time and resources, but the goal is to legitimize, not stymie, executive policymaking.  Some argue that even the existing US system “ossifies” rulemaking.[3] I think that claim is overblown, but it will become accurate if REINS and RAA become law. My own view is that American notice and comment requirements, overseen by the judiciary, strike a reasonable balance between democratic accountability and policymaking discretion. Both the restrictive Republican agenda, on the one hand, and the broad delegation permitted in many parliamentary systems, on the other, risk swinging too far. The former makes expertise-based policymaking increasingly difficult. The latter, risks excluding the voices of citizens from fundamental policy choices, or, as with the Brexit referendum, encouraging choices that are not based on a thoughtful balancing of the options.

Susan Rose-Ackerman is the Henry R. Luce Professor of Law and Political Science at Yale University. She has published widely in the fields of law, economics, and public policy, with a particular focus on corruption and administrative law.

[1] Studies of the passage of the APA in 1946 contrast its fate with the earlier Walter-Logan bill of 1939-1940. The latter, supported by conservative Republican opponents of the President was vetoed by President Roosevelt. The APA passed by a voice vote. McNollgast, The Political Origins of the Administrative Procedures Act, 15 J. of Law, Economics & Org. 180 (1999), argue that the APA obtained broad support because both Republicans and Democrats obtained part of what they wanted. The Democrats’ concerns were borne out later in 1946 when they lost control of the House, and by Truman’s narrow victory in 1948. Joanna Grisinger, Law in Action: the Attorney General’s Committee on Administrative Procedure 20 J. of Policy History 379 (2012) argues that many of the practices eventually codified in the APA were in use in various parts of the bureaucracy, but rulemaking practices were not subject to judicial review before the passage of the APA.
[2] My scholarship focuses on parliamentary systems in the civil law world, but my basic argument applies to all parliamentary systems that lack notice and comment requirements for rules. See Susan Rose-Ackerman, Controlling Environmental Policy: The Limits of Public Law in the Germany and the United States (New Haven: Yale University Press, 1995). Rose-Ackerman, Egidy and Fowkes, see here, and Susan Rose-Ackerman and Thomas Perroud) “Policymaking and Public Law in France” Columbia Journal of European Law 19(2): 225-312 (2013).
[3] The usual critique, however, is overly aggressive judicial review, not restrictive statutory language. See Thomas McGarity, Some Thoughts on ‘Deossifying’ the Rulemaking Process, 1992 Duke Law J. 1385, Richard Pierce, Seven Ways to Deossify Agency Rulemaking, 47 Administrative Law Review 59 (1995).

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