NARRATOR: Thanks for joining this episode of the No. 86 lecture series, where we discuss Administrative Law, including the history of the administrative state and modern debates about its powers. Today’s episode features Christopher J. Walker, who is a Professor of Law at the University of Michigan Law School. As always, the Federalist Society takes no position on particular legal or public policy issues; all expressions of opinion are those of the speaker. PUBLIUS: Professor Walker, why do we need administrative agencies? What do they do that Congress can’t? CHRIS WALKER: The purpose of federal agencies is to help implement laws. Congress identifies these issues that are of importance that they want to have fixed like seat belts or air pollution. Federal agencies are the ones that are there to address those issues. So, when you're thinking about what federal agencies do, I think there are three main buckets. They make rules or regulations, most of the time through notice and comment rule making. They adjudicate disputes over government benefits, over licensing and permitting. And they bring enforcement actions to enforce the law that Congress has given us. And so you have these tensions between agencies as an Article I institution that they're making laws, as an Article II institution that they're enforcing those laws, and as an Article III institution in that they're actually judging, adjudicating disputes. In fact, most of the law making, most of the laws that we have today are not made by Congress. They're made by federal agencies, and that's an uncomfortable tension. Federal agencies aren't technically part of Congress. They're not part of Article I. They don't legislate. And yet the vast majority of laws that are made today are made by federal agencies, not by Congress. For instance, in the two year period of 2015 and 2016, federal agencies promulgates over 7,000 final rules compared to Congress that passed just a little over 300 public laws. So, the vast majority of restrictions of laws that we face today as an everyday citizen we find and we get from federal agencies, not from Congress We're facing new problems and new challenges when you have unelected bureaucrats doing most of the lawmaking that you have today and the political branches and Congress in particular reaping the rewards of that administrative lawmaking. They take the credit when the agencies do something good, but they're not accountable when the agencies do something bad. They just blame the agencies for the failure. So, this creates a system where the democratic checks don't play their proper role. PUBLIUS: Should Congress be exercising greater oversight? What mechanisms are available to them to monitor agencies? CHRIS WALKER: You'll often hear the federal agencies, they get power from Congress and they just run wild. They do whatever they want. That's a really simplistic and misleading view of the interaction between federal agencies and Congress. Congress plays a substantial oversight role of federal agencies. Congress has committees, standing committees over every agency, where they review what the agency's doing. If they hear concerns from constituents or on the news about an agency doing something they think is not the proper policy approach or isn't following the law, they call to hold a hearing. Or Congress subpoenas documents from the agencies. Or they depose agency officials. Congress plays this very important oversight role of looking at what federal agencies are doing, of responding to constituent concerns. Another way that Congress plays an important oversight role is that every year they go through an appropriations process. They negotiate with the president a budget, and they pass appropriations legislation that gives the funding to federal agencies to continue to do what they're commanded to do by statute. Congress also plays a role in confirming the heads of agencies. The president nominates individuals, the leader of each agency. Congress, or better said, the Senate, confirms them. They hold confirmation hearings. They make sure that that candidate is qualified, is responsible, and you'll see that through the confirmation process they actually extract compromises from the agency. When we think of the role between federal agencies and Congress, it's a partnership. They're working on a daily basis. Staffers and member of Congress are communicating often with federal agencies to address what they're doing, and they have the power of the purse and the power of confirmation in order to kind of rein in how federal agencies act. PUBLIUS: In what other ways does Congress hold administrative agencies accountable? CHRIS WALKER: In addition to the Administrative Procedure Act, there are a number of other laws that Congress has implemented to rein in federal agencies. A couple come immediately to mind. One is at almost every federal agency, Congress by statute has created an inspector general. The Inspector General's Office at each agency is a watchdog for Congress. It investigates any improprieties or alleged improprieties by the agency. It issues reports. It comes and testifies before Congress. Inspector generals play an important role in providing Congress and the public with information about agencies acting arbitrarily or contrary to the law. Another institution, a federal agency within Congress, is the Government Accountability Office. This office studies federal agencies, collects information from federal agencies, and publishes reports for Congress so that Congress can know if there are abuses or inefficiencies or lack of federal agencies. One statute, one obscure statute that has seldom been used until the election of President Trump is the Congressional Review Act. The Congressional Review Act allows Congress to override regulations that agencies have enacted within a certain time period. The idea behind the Congressional Review Act is it was in response to this problem of midnight rule-making. It turns out that when a president is wrapping up his term in office, he often times commands federal agencies to do a lot of rule-making to lock in some policy preferences that the president had so that when the new president comes in, that new president has to fight against those policies and undo them. One potential reform of the administrative state that's emerging out of Congress is the REINS Act. Now, the REINS Act would flip how regulation happens today, at least with respect to high stakes regulation, any regulation that costs more than $100 million. For regulations that cost more than $100 million, today the agency proposes the rule, it has comment period, and then it publishes its final rule. Under the REINS Act, instead of that rule becoming effective the day it's published, it goes back to Congress and Congress would have to actually vote through a simple resolution for that rule to become effective. It would dramatically change how federal agencies work. It would require Congress to prospectively and expressly embrace regulations, at least those that cost $100 million or more. PUBLIUS: Are most agencies driven by a political agenda to implement certain policies? CHRIS WALKER: When we think of federal agencies, a federal agency is not an it. It's a they. It's composed of numerous and different types of agency officials, and to kind of oversimplify things, you can think of a federal agency as including kind of two main types, political appointees and career civil service. The political appointees, the highest level are nominated by the president and confirmed by the Senate. The lower levels are just appointed by the president or by the heads of that agency. Those individuals represent the very, very small minority of the agency's personnel. The vast majority of agency officials are career civil servants. Career civil servants today enjoy a fair amount of protection from removal. They can only be fired for cause or for inefficiency, and so they're not as controlled by the president as you might expect from a federal agency. The fact that the vast majority of agency officials are career civil servants may make you worry that there's not political accountability, that you've got these unelected bureaucrats running around making all these decisions, and the president doesn't have any control over the final decision-making. That's a little bit misleading. At the end of the day, the head of the agency has final decision-making authority over most agency actions, and you have other political appointees at the agencies that play an important role. You might think of it as the career civil servant is the ones that are powering the agency, but ultimately the head of the agency, a political appointee, is the one that actually steers it. That's at least the conventional understanding. You might run into problems, however, when you have an agency that's very mission-driven, and that mission is not in line with the new presidential administration. In those circumstances you have what we call bureaucratic resistance, where the federal civil service may find ways to slow down or otherwise resist the changes in administration. You might think of this example, at the Securities and Exchange Commission when it switches from a Republican administration to a Democratic administration. The Republican administration might have reviewed its interaction with the business community very differently than a Democratic administration. You might see some resistance from the career civil service in that shifted mission PUBLIUS: How did administrative agencies become so powerful? CHRIS WALKER: In the New Deal, Congress enacted numerous statues, creating new agencies, giving agencies power to address numerous issues that affect us on a daily basis. We saw similar action by Congress in the 1970s with respect to health and safety. Think the Clean Air Act, the Clean Water Act. Again, Congress identified these issues, passed legislation, gave even more power to federal agencies to address those issues. The growth and the growth of the modern administrative state can originally be traced back to the Congress passing laws, giving more power to federal agencies, growing federal power in comparison to states and to individuals. More recently, however, the growth of the administrative state has happened because Congress does not act. It's because Congress does not pass laws. We have this enormous administrative state controlled by the president, and so for the president to respond to public opinion and to the president's own agenda, the president's had to use these stale, older laws to address new issues. Now part of the problem with this is that Congress is quite polarized. We don't have a compromising Congress like we did before. We have a Congress that is not passing laws on a regular basis, and that allows for federal agencies' power to grow and grow. PUBLIUS: Earlier you mentioned The Administrative Procedure Act as one way to rein in agency power. Has it served that purpose well over time? CHRIS WALKER: The Administrative Procedure Act attempted to strike a compromise for administrative action. On the one hand, Congress wanted to require agencies to go through sufficient process. They wanted them to use procedures that were fair, that were transparent, that sought public input, to account for the democratic deficit agencies have. On the other hand, they didn't want to require too much process because too much process would lead to what we call ossification. If it's too hard for an agency to regulate, the agency won't regulate and we'll be stuck with regulations that are outdated, that are stale, that can't be updated to changing times. Congress in 1946 struck a balance. Tried to provide for enough process so there would be transparency and public input and fairness, but not too much process that the agency would be paralyzed, it wouldn't be able to act, it would be ossified. That's one of the important balances struck by the original enactors of the Administrative Procedure Act. The Administrative Procedure Act is what we call a quasi-constitution of the administrative state. As the New Deal rose, and more and more federal agencies began to make laws and regulate us on a daily basis, members of Congress on both sides of the aisle struck a compromise to pass the Administrative Procedure Act to provide for more process, more transparency, to make federal agencies more democratically legitimate and responsive. And so when we think about the Administrative Procedure Act, it's this grand compromise, a quasi-constitution that controls how the federal administrative state works today. Since the Administrative Procedure Act was enacted by Congress in 1946, Westlaw tells us that it's been amended 16 times in over 70 years. In other words, we have barely touched the rules, the ground rules for the federal administrative state. NARRATOR: Thank you for listening to this episode of the No. 86 Lecture series. The spirit of debate of our Founding Fathers animates all of the No. 86 content, encouraging discussion and critical reflection relative to how each subject is widely understood and taught in law schools and among law students. Subscribe to the No. 86 Lecture series on your favorite podcast platform to have each episode delivered the moment it’s released. You can also go to fedsoc.org/no86 for lectures and videos on Federalism, Separation of Powers, the Judiciary and more. Thanks for listening. See you in class! TRANSCRIPT - VERBATIM FOR YOUTUBE Thanks for joining this episode of the No. 86 lecture series, where we discuss Administrative Law, including the history of the administrative state and modern debates about its powers. Today’s episode features Christopher J. Walker, who is a Professor of Law at the University of Michigan Law School. As always, the Federalist Society takes no position on particular legal or public policy issues; all expressions of opinion are those of the speaker. Professor Walker, why do we need administrative agencies? What do they do that Congress can’t? The purpose of federal agencies is to help implement laws. Congress identifies these issues that are of importance that they want to have fixed like seat belts or air pollution. Federal agencies are the ones that are there to address those issues. So, when you're thinking about what federal agencies do, I think there are three main buckets. They make rules or regulations, most of the time through notice and comment rule making. They adjudicate disputes over government benefits, over licensing and permitting. And they bring enforcement actions to enforce the law that Congress has given us. And so you have these tensions between agencies as an Article I institution that they're making laws, as an Article II institution that they're enforcing those laws, and as an Article III institution in that they're actually judging, adjudicating disputes. In fact, most of the law making, most of the laws that we have today are not made by Congress. They're made by federal agencies, and that's an uncomfortable tension. Federal agencies aren't technically part of Congress. They're not part of Article I. They don't legislate. And yet the vast majority of laws that are made today are made by federal agencies, not by Congress. For instance, in the two year period of 2015 and 2016, federal agencies promulgates over 7,000 final rules compared to Congress that passed just a little over 300 public laws. So, the vast majority of restrictions of laws that we face today as an everyday citizen we find and we get from federal agencies, not from Congress We're facing new problems and new challenges when you have unelected bureaucrats doing most of the lawmaking that you have today and the political branches and Congress in particular reaping the rewards of that administrative lawmaking. They take the credit when the agencies do something good, but they're not accountable when the agencies do something bad. They just blame the agencies for the failure. So, this creates a system where the democratic checks don't play their proper role. Should Congress be exercising greater oversight? What mechanisms are available to them to monitor agencies? You'll often hear the federal agencies, they get power from Congress and they just run wild. They do whatever they want. That's a really simplistic and misleading view of the interaction between federal agencies and Congress. Congress plays a substantial oversight role of federal agencies. Congress has committees, standing committees over every agency, where they review what the agency's doing. If they hear concerns from constituents or on the news about an agency doing something they think is not the proper policy approach or isn't following the law, they call to hold a hearing. Or Congress subpoenas documents from the agencies. Or they depose agency officials. Congress plays this very important oversight role of looking at what federal agencies are doing, of responding to constituent concerns. Another way that Congress plays an important oversight role is that every year they go through an appropriations process. They negotiate with the president a budget, and they pass appropriations legislation that gives the funding to federal agencies to continue to do what they're commanded to do by statute. Congress also plays a role in confirming the heads of agencies. The president nominates individuals, the leader of each agency. Congress, or better said, the Senate, confirms them. They hold confirmation hearings. They make sure that that candidate is qualified, is responsible, and you'll see that through the confirmation process they actually extract compromises from the agency. When we think of the role between federal agencies and Congress, it's a partnership. They're working on a daily basis. Staffers and member of Congress are communicating often with federal agencies to address what they're doing, and they have the power of the purse and the power of confirmation in order to kind of rein in how federal agencies act. In what other ways does Congress hold administrative agencies accountable? In addition to the Administrative Procedure Act, there are a number of other laws that Congress has implemented to rein in federal agencies. A couple come immediately to mind. One is at almost every federal agency, Congress by statute has created an inspector general. The Inspector General's Office at each agency is a watchdog for Congress. It investigates any improprieties or alleged improprieties by the agency. It issues reports. It comes and testifies before Congress. Inspector generals play an important role in providing Congress and the public with information about agencies acting arbitrarily or contrary to the law. Another institution, a federal agency within Congress, is the Government Accountability Office. This office studies federal agencies, collects information from federal agencies, and publishes reports for Congress so that Congress can know if there are abuses or inefficiencies or lack of federal agencies. One statute, one obscure statute that has seldom been used until the election of President Trump is the Congressional Review Act. The Congressional Review Act allows Congress to override regulations that agencies have enacted within a certain time period. The idea behind the Congressional Review Act is it was in response to this problem of midnight rule-making. It turns out that when a president is wrapping up his term in office, he often times commands federal agencies to do a lot of rule-making to lock in some policy preferences that the president had so that when the new president comes in, that new president has to fight against those policies and undo them. One potential reform of the administrative state that's emerging out of Congress is the REINS Act. Now, the REINS Act would flip how regulation happens today, at least with respect to high stakes regulation, any regulation that costs more than $100 million. For regulations that cost more than $100 million, today the agency proposes the rule, it has comment period, and then it publishes its final rule. Under the REINS Act, instead of that rule becoming effective the day it's published, it goes back to Congress and Congress would have to actually vote through a simple resolution for that rule to become effective. It would dramatically change how federal agencies work. It would require Congress to prospectively and expressly embrace regulations, at least those that cost $100 million or more. Are most agencies driven by a political agenda to implement certain policies? When we think of federal agencies, a federal agency is not an it. It's a they. It's composed of numerous and different types of agency officials, and to kind of oversimplify things, you can think of a federal agency as including kind of two main types, political appointees and career civil service. The political appointees, the highest level are nominated by the president and confirmed by the Senate. The lower levels are just appointed by the president or by the heads of that agency. Those individuals represent the very, very small minority of the agency's personnel. The vast majority of agency officials are career civil servants. Career civil servants today enjoy a fair amount of protection from removal. They can only be fired for cause or for inefficiency, and so they're not as controlled by the president as you might expect from a federal agency. The fact that the vast majority of agency officials are career civil servants may make you worry that there's not political accountability, that you've got these unelected bureaucrats running around making all these decisions, and the president doesn't have any control over the final decision-making. That's a little bit misleading. At the end of the day, the head of the agency has final decision-making authority over most agency actions, and you have other political appointees at the agencies that play an important role. You might think of it as the career civil servant is the ones that are powering the agency, but ultimately the head of the agency, a political appointee, is the one that actually steers it. That's at least the conventional understanding. You might run into problems, however, when you have an agency that's very mission-driven, and that mission is not in line with the new presidential administration. In those circumstances you have what we call bureaucratic resistance, where the federal civil service may find ways to slow down or otherwise resist the changes in administration. You might think of this example, at the Securities and Exchange Commission when it switches from a Republican administration to a Democratic administration. The Republican administration might have reviewed its interaction with the business community very differently than a Democratic administration. You might see some resistance from the career civil service in that shifted mission How did administrative agencies become so powerful? In the New Deal, Congress enacted numerous statues, creating new agencies, giving agencies power to address numerous issues that affect us on a daily basis. We saw similar action by Congress in the 1970s with respect to health and safety. Think the Clean Air Act, the Clean Water Act. Again, Congress identified these issues, passed legislation, gave even more power to federal agencies to address those issues. The growth and the growth of the modern administrative state can originally be traced back to the Congress passing laws, giving more power to federal agencies, growing federal power in comparison to states and to individuals. More recently, however, the growth of the administrative state has happened because Congress does not act. It's because Congress does not pass laws. We have this enormous administrative state controlled by the president, and so for the president to respond to public opinion and to the president's own agenda, the president's had to use these stale, older laws to address new issues. Now part of the problem with this is that Congress is quite polarized. We don't have a compromising Congress like we did before. We have a Congress that is not passing laws on a regular basis, and that allows for federal agencies' power to grow and grow. Earlier you mentioned The Administrative Procedure Act as one way to rein in agency power. Has it served that purpose well over time? The Administrative Procedure Act attempted to strike a compromise for administrative action. On the one hand, Congress wanted to require agencies to go through sufficient process. They wanted them to use procedures that were fair, that were transparent, that sought public input, to account for the democratic deficit agencies have. On the other hand, they didn't want to require too much process because too much process would lead to what we call ossification. If it's too hard for an agency to regulate, the agency won't regulate and we'll be stuck with regulations that are outdated, that are stale, that can't be updated to changing times. Congress in 1946 struck a balance. Tried to provide for enough process so there would be transparency and public input and fairness, but not too much process that the agency would be paralyzed, it wouldn't be able to act, it would be ossified. That's one of the important balances struck by the original enactors of the Administrative Procedure Act. The Administrative Procedure Act is what we call a quasi-constitution of the administrative state. As the New Deal rose, and more and more federal agencies began to make laws and regulate us on a daily basis, members of Congress on both sides of the aisle struck a compromise to pass the Administrative Procedure Act to provide for more process, more transparency, to make federal agencies more democratically legitimate and responsive. And so when we think about the Administrative Procedure Act, it's this grand compromise, a quasi-constitution that controls how the federal administrative state works today. Since the Administrative Procedure Act was enacted by Congress in 1946, Westlaw tells us that it's been amended 16 times in over 70 years. In other words, we have barely touched the rules, the ground rules for the federal administrative state. Thank you for listening to this episode of the No. 86 Lecture series. The spirit of debate of our Founding Fathers animates all of the No. 86 content, encouraging discussion and critical reflection relative to how each subject is widely understood and taught in law schools and among law students. Subscribe to the No. 86 Lecture series on your favorite podcast platform to have each episode delivered the moment it’s released. You can also go to fedsoc.org/no86 for lectures and videos on Federalism, Separation of Powers, the Judiciary and more. Thanks for listening. See you in class!