The Unmeasured Costs of Federal Agency Liberation from Congress, Self-Funding, and Permanence

By Clyde Wayne Crews of CEI.

"“I will consider myself a success in this job if there is no job when I leave it.”

- Alfred Kahn, former Chairman of the Civil Aeronautics Board, 1978.

In considering the overall costs of regulation and interference in the economy and society, little attention is given to the presence and intractability of the autonomous administrative state itself.
Magnifying the widely bemoaned (by non-progressives) problem of over-delegation by Congress of legislative power to the unelected, Congress shows little appetite for restraining agencies and the administrative apparatus even with the historically recent tools it has created for itself.

The failure on the part of agencies to submit their rules and guidance as required by the Congressional Review Act (CRA) is well known. But even though the CRA stands as one of the primary reaffirmations in modern times of Article I authority (in that it affords Congress the opportunity to pass expedited resolutions of disapproval of costly or controversial agency rules), Congress routinely disregards its own authority and power under the CRA, and rarely exercises what is not merely a right but a duty given regulatory arrogance.

There have been over 87,000 rules issued since 1996 (the year of CRA passage), but Congress has only passed 17 resolutions (one of them a revoked guidance document). Conservatives or classical liberals might bemoan agencies, and with good reason, but this neglect is not agencies’ fault.

The absence of accountability is further escalated by agencies that self-fund their own escapades when, if the Constitution had any say, they should be beholden to the congressional power of the purse. Christopher DeMuth and Michael Greve have addressed this phenomenon of “agencies of independent means,” wherein some agencies bypass and insulate themselves from Congress’ financial constraints via their imposition of fines and fees, effectively creating their own autonomous budgets and agendas.

This phenomenon developed into a contemporary constitutional issue with respect to the Consumer Financial Protection Bureau (CFPB), created by the Dodd-Frank law. This agency does not merely escape congressional control of the purse with hefty fees and fines, but takes autonomy to a new level as it is a beneficiary of on-request funding from the Federal Reserve. That the CFPB boasted a sole director not removable by the president, besides, was icing on the cake.

A final cost of federal agency liberation from Congress is that of the impossibility of eliminating agencies. For all intents and purposes, significant regulatory agencies are permanent. While businesses fail regularly, federal agencies tend to expand turf. It has been nearly a quarter-century—since the mid-1990s—that the last major attempts to eliminate agencies was high on the public agenda. At that time, then-House Budget Committee Chairman John Kasich (R-OH) proposed eliminating the Departments of Commerce, Education, and Energy along, with 14 agencies, 68 commissions, and 283 programs. The effort—obviously—failed. Bodies like the Government Accountability Office have long called for overlap reduction and defragmentation of government programs, but little occurs, let alone agency dismantling.

In recent times, talk of abolishing the Transportation Security Administration by the likes of Sen. Rand Paul (R-KY) have evaporated. Even under Trump and his deregulatory agenda, a high profile, executive order-based “executive branch restructuring” proposal consisted of consolidation, de-duping, and streamlining, but no significant agency eliminations. Unfortunately, once established, Republicans may be more prone to seek to run the agencies than to eliminate them.

Policy makers need to walk the talk and end the phenomenon of untethered, unanswerable, and resistant agencies of the administrative state. They need to address the burdens it imposes and reclaim Article I authority.

Note: This post is part of a series on “Rule of Flaw and the Costs of Coercion: Charting Undisclosed Burdens of the Administrative State,” and comprises an element of A Brief Outline of Undisclosed Costs of Regulation."