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The Administrative State

Steve Bannon, former chief strategist to President Donald Trump, has been a vocal critic of the U.S. federal bureaucracy, often referred to as the "administrative state." In 2017, he articulated a goal to "deconstruct the administrative state," aiming to reduce the influence of federal agencies and regulations. Bannon's critique centered on the belief that the administrative state wields excessive power, operating beyond the control of elected officials and the public. He argues that this bureaucracy undermines democratic principles by imposing regulations without direct accountability. Bannon advocated significant reductions in federal regulations and a restructuring of government agencies to limit their scope and influence. This approach aligns with broader conservative efforts to curtail federal oversight and promote deregulation.

Critics of Bannon's stance warn that dismantling established regulatory frameworks could lead to diminished protections for public health, safety, and the environment. They argue that the administrative state plays a crucial role in implementing laws and ensuring consistent governance.

The administrative state is described by some as effectively a fourth branch of government, given the power that it wields. Critics charge the administrative state violates the principle of the separation of powers by breaking down the divisions between the constitutional branches of government. Power is transferred from Congress to agencies and departments, which are then influenced by all three branches of government but not directly accountable to any, and the effect of checks and balances is reversed.

There are different types of agencies and departments that make up the administrative state.

  • Some of them are located within executive branch departments and are often called “executive agencies.” The Occupational Safety and Health Administration, for example, is located in the Department of Labor, and the Fish and Wildlife Service is located in the Department of the Interior.

  • A few, such as the Environmental Protection Agency, are deemed executive agencies but are not in fact located in any of the 15 executive departments.

  • Other agencies are not understood to be in the executive branch at all and are called “independent regulatory commissions.” Examples include the Securities and Exchange Commission (SEC), the Federal Communications Commission (FCC), and the Federal Trade Commission (FTC).

  • Some believe that in certain cases, entire Cabinet-level departments function as administrative agencies. The Department of Health and Human Services and the Department of Education come to mind.

During the 1960s and 1970s that changes occurred that significantly altered the administrative state. First, rather than delegating powers to “independent regulatory commissions” such as the SEC and FCC, Congress began to create “executive agencies” such as the Environmental Protection Agency. Independent regulatory commissions, the hallmark of the New Deal, are headed by multiple commissioners who are not removable from office by the President. They were deliberately designed to be exempt not only from presidential control, but also from judicial review. Executive agencies, by contrast, are usually headed by a single administrator and are normally housed in one of the executive departments. Unlike heads of independent regulatory commissions, the heads of these executive agencies are typically removable by the President.

The Administrative Procedures Act (APA) is a key element to Congress’ regulation of executive agency work. The APA originally passed Congress in 1946. It prescribes the procedures all executive and independent agencies must follow to make rules. It also designates procedures for adjudication. There are several different methods for rulemaking, the most common of which is the notice-and-comment procedure, an “informal rulemaking process.” It starts with a notice of a proposed rule, followed by a period for interested parties to comment. The agency is required to respond to each significant comment, and then issue a general statement of basis and purpose for the rule. The final rule must be published in the Federal Register at least 30 days before the rule takes effect.

President Franklin Roosevelt, in transmitting to Congress the report of a special commission on administrative management, used the phrase "a 'fourth branch' of the Government". The report he sent up to Capitol Hill in January 1937 (the Brownlow Committee report) included this summary paragraph: "These independent [regulatory] commissions have been given broad powers to explore, formulate, and administer policies of regulation; they have been given the task of investigating and prosecuting business misconduct; they have been given powers, similar to those exercised by courts of law, to pass in concrete cases upon the rights and liabilities of individuals under the statutes. They are in reality miniature independent governments set up to deal with the railroad problem, the banking problem, or the radio problem. They constitute a headless "fourth branch" of the Government, a haphazard deposit of irresponsible agencies and uncoordinated powers ••••The Congress has found no effective way of supervising them, they cannot be controlled by the President, and they are answerable to the courts only in respect to the legality of their activities.

Despite that (and subsequent) indictments, the independent regulatory agencies have not only survived but have proliferated. In fact they sometimes seem to be the instrumentality of choice whenever the decision is taken to establish a new arm of the federal government, perhaps because of (rather than in spite of) their autonomous nature.

Under the doctrine known as Cassell deference, the D.C. Circuit frequently rules that courts will not second-guess a federal agency’s decision to depart from its own precedents, without any need to explain its reasoning. The D.C. Circuit in Cassell v. F.C.C., 154 F.3d 478, 480 (D.C. Cir. 1998) announced that an agency’s interpretation of its own precedent is entitled to deference. The Cassell deference arises when an appellant alleges that an agency has not followed its own precedent, while the agency argues that it distinguished or properly followed that precedent. The Cassell doctrine enables federal agencies not only to set their own scope of power and create legal precedents, but also to re-interpret those precedents at will without any meaningful judicial review. This effectively turns agencies into a fourth branch of government unaccountable to constitutional checks and balances.

Under the Supreme Court’s holding in Chevron U.S.A. v. Natural Resources Defense Council, courts must defer to an administrative agency’s interpretation of a statute so long as the statute is “ambiguous” and the agency’s reading is “permissible.” This has been commonly known as Chevron deference. Similarly, under so-called Auer (or Seminole Rock) deference, “the ultimate criterion” for courts’ interpretation of ambiguous regulation “is the administrative interpretation, which becomes of controlling weight unless it is plainly erroneous or inconsistent with the regulation.” These criteria are vague and often interpreted quite expansively.

In the landmark ruling in Loper Bright Enterprises v. Raimondo in June 2024, the Supreme Court dealt a blow to the power of the administrative state when they ruled that the Court may not defer to a federal agency’s interpretation of an ambiguous law. Chief Justice Roberts explained that, in accord with the APA, the court should use their own judgment to “decide whether the law means what the agency says” and award no “entitled deference” to the agency’s interpretation. This reversed a 1984 Supreme Court ruling known as the Chevron deference doctrine.

On March 27, 2019, the Supreme Court heard oral argument in Kisor v. Wilkie. Justice Kavanaugh said: “In many ways, Chevron is nothing more than a judicially orchestrated shift of power from Congress to the Executive Branch.” “[T]he Chevron doctrine encourages agency aggressiveness on a large scale. Under the guise of ambiguity, agencies can stretch the meaning of statutes enacted by Congress to accommodate their preferred policy outcomes.” Justice Gorsuch: “Chevron seems no less than a judge-made doctrine for the abdication of the judicial duty. . . . Transferring the job of saying what the law is from the judiciary to the executive unsurprisingly invites the very sort of due process (fair notice) and equal protection concerns the framers knew would arise if the political branches intruded on judicial functions.”

U.S. Sen. Chuck Grassley of Iowa, along with Sens. Ben Sasse of Nebraska, James Lankford of Oklahoma, Thom Tillis of North Carolina, Josh Hawley of Missouri, Mike Crapo of Idaho, John Cornyn of Texas, Mike Lee of Utah, Michael Rounds of South Dakota and Jim Inhofe of Oklahoma, on 27 March 2019 introduced the Separation of Powers Restoration Act of 2019. Companion legislation was introduced by Representative Ratcliffe of Texas in the House. This legislation stops bureaucrats from dictating to judges how to interpret laws passed by Congress and their own regulations.

“For years, unelected bureaucrats have relied on judicial deference to expand their own authority beyond what Congress ever intended,” Grassley said. “This has weakened our system of checks and balances and created a recipe for regulatory overreach. The Constitution’s separation of powers makes clear that it is the responsibility of Congress, as the People’s representative, to make the law. And it’s the job of the courts – not the bureaucracy – to interpret the law. This bill helps to reassert those clear lines between the branches. By doing so, it makes the government more accountable to the People and takes a strong step toward reining in the regulators in any administration.”

The Separation of Powers Restoration Act amends the Administrative Procedure Act to require that courts must decide for themselves “all relevant questions of law, including the interpretation of constitutional and statutory provisions, and rules made by agencies.” The bill further establishes that if “the reviewing court determines that a statutory or regulatory provision relevant to its decision contains a gap or ambiguity, the court shall not interpret that gap or ambiguity as an implicit delegation to the agency of legislative rule making authority and shall not rely on such gap or ambiguity as a justification either for interpreting agency authority expansively or for deferring to the agency’s interpretation on the question of law.”





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