CARDOZO LAW REVIEW [Vol. 20:939 1999]

LEGISLATIVE IMPLICATIONS OF
REASSERTING CONGRESSIONAL
AUTHORITY OVER REGULATIONS

William A. Niskanen*

We meet today at the right place to discuss this issue: In his concurring opinion in A.L.A. Schechter Poultry Corp. v. United States,[1] Justice Benjamin Cardozo forcefully described the industrial code provisions of the National Industrial Recovery Act[2] as “delegation running riot.”[3] Would that we had such clear thinking and language from the current United States Supreme Court.

My task is to comment on the implications of reviving the nondelegation doctrine for the legislative process. While my focus is on the federal regulatory process, not the fiscal process, several themes in my remarks are relevant to both fiscal and regulatory issues: (1) the constitutional constraints on delegation seem very confusing; (2) as a rule, the amount and type of delegation is that which serves Congress’ interests and does not indicate an unusual abuse of authority by the Executive; (3) increased delegation by Congress is an inherent result of the increase in the size and scope of government; and (4) most measures to sort out the delegation issue, in one direction or the other, are likely to disappoint the sponsors. To put this issue in context, however, it is important to recognize the legal constraints and the political incentives that bear on this process.

I. THE LAW

A part of the problem, according to the United States District Court for the District of Columbia in the recent line item veto case, Clinton v. City of New York,[4] is that “[t]he line between permissible delegations of rulemaking authority and impermissible abandonments of lawmaking power is a thin one.”[5] As an early court described this distinction: “The legislature cannot delegate its power to make a law, but it can make a law to delegate a power to determine some fact or state of things upon which the law makes, or intends to make, its own action depend.”[6] A later court observed that:

The true distinction ... is between the delegation of power to make the law, which necessarily involves a discretion as to what it shall be, and conferring an authority or discretion as to its execution, to be exercised under and in pursuance of the law. The first cannot be done; to the latter no valid objection can be made.[7]

This seems to be a reasonable basis for distinguishing between making a law and interpreting a law, even if difficult to apply in some cases.

Over time, however, this has become a distinction without a difference. In Federal Radio Commission v. Nelson Brothers Bond & Mortgage Co.,[8] the Court upheld a delegation based on “public convenience, interest, or necessity,” giving the Commission almost complete authority to interpret these terms.[9] In most subsequent cases, such as Mistretta v. United States,[10] the Court has ruled, consistently with the Hampton v. United States decision, that a delegation is constitutional so long as Congress provides the agency with “intelligible principles” to interpret the law.[11] At the other extreme, the District Court for the District of Columbia ruled in the Clinton case that some types of legislative authority are inherently non-delegable,[12] but it is too early to assess the scope of this interpretation. There is ample reason for members of Congress to be confused about what types of authority may not be delegated to executive agencies.

II. POLITICS

On occasion, Congress has charged the President or some other officials in an administration controlled by the other party with exceeding their fiscal or regulatory authority. As a rule, such measures are not a response to an unusual pattern of abuses, but are part of a more general assertion of congressional authority. A Democratic Congress approved the Congressional Budget and Impoundment Control Act of 1974,[13] an act that constrained the President’s impoundment authority, not because Nixon’s use of that authority was unusual, but as part of a general reassertion of congressional fiscal and war powers authority following the Vietnam War and the Watergate scandal. In both the 104th and 105th Congresses, Republicans promoted several rules and procedures to constrain the President’s regulatory authority, again not because President Clinton’s use of that authority was unusual, but as part of a general assertion of the authority of Congress under Republican control for the first time in forty years.

The rhetoric of these occasional efforts to reassert congressional authority is full of charges that officials in the executive branch have exceeded their delegated authority, for which there is often ample evidence. A broader perspective, however, would reveal that these efforts are part of the games that politicians play. The most important insight about this behavior is that substantial delegation of fiscal and regulatory authority usually serves the interests of both Congress and the President by allowing both to play their expected roles. Some selective fiscal control by the Executive permits members of Congress to appear generous to specific constituencies and the President to appear fiscally responsible to the broader constituency. President Reagan characteristically made a point by telling a story: While governor of California, he related, he was often visited by Republican members of the Californian Assembly who would ask him for assurances that he would veto a bill so that they could vote for it.

The behavior of one branch of the government is not independent of the authority of another branch. That is the reason why the differences among states in a governor’s line item veto authority have no significant effect on state spending per capita. That is the reason North Carolina has usually had a responsible state budget, although the governor (until recently) had no authority for any type of veto.[14]

A similar type of game affects regulatory authority. Congress often approves very general regulatory legislation — leaving the regulatory agencies with broad discretion to define the law by the rules they promulgate. This permits members of Congress to play both sides of the street — to take credit for the presumed benefits of the regulation and to blame the agencies for the costs of meeting specific rules. The President accepts the role of regulatory cop in exchange for much more executive discretion on regulations than on fiscal issues.

Another important political condition affects the amount and type of delegation — the scope and scale of the federal government. Federal spending and regulation have increased by several orders of magnitude since the 1920s with the erosion of the constitutional limits on the powers of the government. The size of Congress and the length of a congressional session, however, have been roughly constant. This has reduced the potential for Congress to formulate detailed legislation on many issues or to monitor performance under such legislation. This has led Congress, especially on regulatory issues, to approve “symbolic” legislation, delegating to the administration the power to fill in the details. The wetlands preservation program, for example, was established without any specific authority from the initial Clean Water Act.[15] Similarly, the Americans with Disabilities Act[16] leaves it to the Equal Employment Opportunity Commission and the courts to interpret the definition of disability, reasonable accommodation, and undue hardship. For what, to many, seems like an unconstitutional delegation of legislative authority has been the almost unavoidable institutional response to an unconstitutional expansion of the powers of the federal government. Congress cannot control and monitor a government for which the budget is now over twenty percent of the Gross Domestic Product and imposes regulatory costs of over $500 billion by the same techniques and in the same detail as was the case prior to the 1930s. Undue delegation is a direct consequence of the undue expansion of governmental powers, and it is not obvious that the nondelegation doctrine can be revived without reviving the more important principle that a government may not define its own powers. One should not be surprised that both the limits on governmental powers and the nondelegation doctrine were almost fatally weakened in 1936 by United States v. Butler.[17]

III. CURRENT CONGRESSIONAL PROPOSALS TO ASSERT REGULATORY AUTHORITY

For several years now, Congress has tried to constrain regulation by changing the regulatory review process rather than by revising the major regulatory legislation — for the most part without success. Several minor measures, however, were approved. A 1995 law requires the Congressional Budget Office (“CBO”) to estimate the costs of major new mandates on state or local governments or on the private sector.[18] The regulatory agencies, in turn, are required to prepare a benefit-cost analysis of major new regulations and to either choose the “least burdensome” alternative or explain why this alternative was not adopted. This act generally reenforced the provisions of an executive order issued by President Clinton in 1993.[19] A 1996 act required the Office of Management and Budget (“OMB”) to submit to Congress an estimate of the benefits and costs of all existing major rules.[20] Under another 1996 act, Congress has sixty legislative days to review a major new regulation during which period it may enact a joint resolution of disapproval as a new bill that is then subject to a presidential veto; there has been use of this new authority to date. None of these measures has had any identifiable effect on the scope or character of new regulations. A more comprehensive regulatory reform act, promoted by Senators Robert Dole and Bennett Johnston, failed to pass the Senate, although a somewhat weaker bill had been approved by the House.

As of this symposium, there were three regulatory process bills before Congress that may be addressed in 1999. The Regulatory Improvement Act,[21] promoted by Senators Fred Thompson and Carl Levin, would require agencies to conduct a benefit-cost analysis and, where relevant, a risk assessment on all major new rules, and conduct an independent peer review of these rules. OMB is required to develop broad guidelines for these analyses, and judicial review would be limited to the issue of whether the agency had conducted the required analyses. An amendment to this act, promoted by Senator Sam Brownback, would provide for a sixty-day expedited review of all major new rules with a positive vote by Congress required for the rule to be effective. This amendment would change the default rule, which now makes a proposed new regulation effective unless Congress approves a resolution of disapproval, to a new rule that each major new regulation must be approved by Congress. The Brownback Amendment, in effect, would transform the regulatory agencies into rule-drafting and rule-enforcing agencies but would limit their rule-making authority to minor rules. A third measure, promoted by Representative Sue Kelly, would create a Congressional Office of Regulatory Analysis to support the congressional review of all regulations and the analyses conducted by the regulatory agencies. As of the end of the 105th Congress, there was no final action on these bills.

My expectation is that something like the Thompson-Levin bill will be approved someday, despite the expected grumbling about all the new paperwork that it would impose on the agencies. I doubt that Congress is ready to approve the Brownback Amendment, and I am not qualified to judge whether it would pass constitutional muster. If Congress is serious about reviewing regulations, something like the new office proposed by Representative Kelly would be valuable.

More important, the primary effect of this process legislation, short of the Brownback Amendment, would probably be an increased demand for benefit-cost and risk assessment analysts, with little effect on the scope and character of new rules. A Congress that attempts to substitute process for substantive legislation is unlikely to use the additional analyses and the new process to make substantive decisions. The costly, new Environmental Protection Agency rules on fine particulates and ozone, for example, should have provoked a congressional review under the 1996 legislation but did not.

On the other hand, the 104th Congress approved the most important legislation in sixty years in three areas: agriculture, telecommunications, and welfare. None of these new laws is ideal, and each will have to be revisited. But these important changes were achieved by changing the substantive legislation rather than by requiring the agencies to perform benefit-cost analyses. A similarly important bank regulation reform bill is likely to be approved in 1999. Congress does not seem ready, however, to address most of the substantive legislation on health, safety, and the environment, and I do not expect the possible changes in the regulatory process to affect this body of rules.

CONCLUSION

The delegation of legislative authority to executive agencies is clearly unconstitutional and should offend those who care about the Constitution. Such delegation, however, is an inherent characteristic of big government. I do not expect the attempts to revive the nondelegation doctrine to have much of an effect on the scope and character of the federal budget and regulations. On the other hand, a serious attempt to restore the doctrine of limited, enumerated powers is necessary to reduce the incentive for Congress to delegate its legislative authority. In the meantime, the best that can be expected is to allow the Executive to make a lot of minor fiscal and regulatory decisions, but to insist that a positive approval by Congress is necessary for all major fiscal and regulatory decisions. That is a challenge that merits serious attention, however messy the process.


* Chairman, Cato Institute in Washington, D.C. The author is an economist.

[1] 295 U.S. 495 (1935).

[2] National Industrial Recovery Act of 1933, ch. 90, 3, 48 Stat. 198.

[3] 295 U.S. at 553.

[4] 985 F. Supp. 168 (D.D.C. 1998).

[5]Id. at 180.

[6] Field v. Clark, 143 U.S. 649, 694 (1892).

[7] Hampton v. United States, 276 U.S. 394, 407 (1928) (quoting Cincinnati, Wilmington & Zanesville R.R. Co. v. Commissioners, 1 Ohio St. 77, 88 (1852)).

[8] 289 U.S. 266 (1933).

[9]Id. at 279 (discussing the Radio Act of 1927, ch. 169, 4(c)-(d), 44 Stat. 1166 (repealed 1934)).

[10] 488 U.S. 361 (1989).

[11]Id. at 372.

[12]See 985 F. Supp. 168, 181 (D.D.C. 1998).

[13] Pub. L. No. 93-344, 88 Stat. 297 (codified at 2 U.S.C. 105, 621-688 (1982) and parts of 31 U.S.C. (1976)).

[14]See N.C. GEN. STAT. 22 (1997).

[15] 33 U.S.C. 1251 (1994); see Jeff Civins, Environmental Law Concerns in Real Estate Transactions, 43 SW. L.J. 819, 825 (1990) (“Section 404 of the [Clean Water Act], though a pollution permit program, operates as a de facto wetlands preservation program by restricting development in wetlands areas.” (footnote omitted).

[16] 42 U.S.C. 12,101-12,213 (1994).

[17] 297 U.S. 1 (1936).

[18]See 2 U.S.C. 602 (1994).

[19]See Exec. Order No. 12,857, 58 Fed. Reg. 42,181 (1993).

[20]See 2 U.S.C. 661(b).

[21] Riegle Community Development and Regulatory Improvement Act of 1994, Pub. L. No. 103-325, 108 Stat. 2160 (codified in scattered sections of 12 U.S.C., 15 U.S.C., 31 U.S.C., and 42 U.S.C.).


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