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Mapping Washington's Lawlessness 2016 Mapping Washington’s Lawlessness 2016 A Preliminary Inventory of “Regulatory Dark Matter” By Clyde Wayne Crews Jr. December 2015 ISSUE ANALYSIS 2015 NO. 6 CEIAnalysis-Crews-Lawless-rec:Layout 1 11/30/2015 7:46 PM Page 1 Mapping Washington’s Lawlessness 2016 A Preliminary Inventory of “Regulatory Dark Matter” by Clyde Wayne Crews Jr. Executive Summary Congress passes and the president signs a few dozen by Congress. Most prominent recently was the July laws every year. Meanwhile, federal departments and 2013 Treasury Department’s unilateral delay, first by agencies issue well over 3,000 rules and regulations of blog post, then by IRS guidance, of the Affordable Care varying significance. Aweekday never passes without Act’s (ACA) employer mandate and its accompanying new regulation. Beyond those rules, however, we lack tax penalty for non-compliance. Then came the a clear grasp on the amount and cost of the many November 2013 declaration—first by the president thousands of executive branch and federal agency during a news conference and subsequently in proclamations and issuances, including memos, guidance Department of Health and Human Services guidance documents, bulletins, circulars, and announcements material—that insurers could continue to sell non-ACA with practical regulatory effect. There are hundreds compliant health policies. of “significant” agency guidance documents now in It has long been the case that there are far more effect, plus thousands of other such documents regulations than laws. That is troublesome enough. that are subject to little scrutiny or democratic But with tens of thousands of agency proclamations accountability. annually, agencies may articulate interpretations and Congress passes a few dozen laws every year, while pressure regulated parties to comply without an actual federal agencies issue several thousand “legislative formal regulation or an understanding of the costs. No rules” and regulations. The Administrative Procedure one knows how much the regulatory state “weighs,” Act (APA) of 1946 established the process of public or even the number of agencies at the center of our notice for proposed rulemaking, and provided the bureaucratic “big bang.” But for We the Regulated, opportunity for public input and comment before a ignorance of the law is no excuse. final rule is published in the Federal Register, and a The upshot of regulatory dark matter is that, without 30-day period before it becomes effective. But the Congress actually passing a law or an APA-compliant APA’s requirement of publishing a notice of proposed legislative rule or regulation being issued, the federal rulemaking and allowing public comment does not government increasingly injects itself into our states, apply to “interpretative rules, general statements of our communities, and our personal lives. This report policy, or rules of agency organization, procedure, is a preliminary effort at outlining the scope of this or practice.” phenomenon. It concludes with steps for Congress to In addition to non-congressional lawmaking, the address dark matter and to halt the over-delegation of executive branch often declines to enforce laws passed legislative power that has permitted it. Crews: Mapping Washington’s Lawlessness 1 CEIAnalysis-Crews-Lawless-rec:Layout 1 11/30/2015 7:46 PM Page 2 Table of Contents Introduction: From Rule of Law to Rule by ... Whatever 3 The Unknown Number of Federal Agencies Issuing Rules 6 How Many Rules Do Federal Agencies Issue that We Know About? 7 Even When We Can Measure Ordinary Regulatory Matter, Public Projections Lag 7 APartia l Inventory of Regulatory Dark Matter 12 Executive Orders 13 Executive Memoranda 15 Agency Guidance Documents 17 Significant Executive Agency Guidance 22 Significant Independent Agency Guidance 25 Notices and Other Things that Are Not Quite Regulations that May or May Not Bind the Public 26 The Dark Energy of the Regulatory Process: When Fewer Regulations Mean Less Freedom 31 Conclusions and Recommendations 33 All agency decrees matter, not just the “rules” 35 Congress must subject dark matter to enhanced APA-like procedures and more intense OMB review 36 Congress must vote approval of costly or controversial dark matter decrees 37 Notes 39 About the Author 47 2 Crews: Mapping Washington’s Lawlessness CEIAnalysis-Crews-Lawless-rec:Layout 1 11/30/2015 7:46 PM Page 3 Introduction: From Rule of Law to requirement of publishing a notice of Rule by…Whatever proposed rulemaking and allowing public I’ve got a pen and I’ve got a phone. comment does not apply to “interpretative And that’s all I need.1 rules, general statements of policy, or —President Barack Obama, to applause rules of agency organization, procedure, from the U.S. Conference of Mayors Agencies or practice.”4 There are varying degrees of both clarity of language and adherence and bureaus Astrophysicists have concluded that to rule of law for pronouncements that sometimes ordinary visible matter—the Sun, the may bind or change behavior: Moon, the planets, the Milky Way, the regulate (1) When issuing rules and regula- multitudes of galaxies beyond our own, tions, agencies are legally required without and their trillions of component stars, to adhere to the APA and subsequent planets, and gas clouds—make up only writing down strengthening legislation, but many a tiny fraction of the universe. How tiny do not. Further, most regulations’ anything. a fraction? Less than 5 percent. Instead, costs and benefits are unknown, dark matter and dark energy make up so even much of the ostensibly most of the universe, rendering the APA-compliant body of rulemaking bulk of existence beyond our ability to lacks transparency. directly observe.2 (2) “Dark matter” such as agency Here on Earth, in the United States, there and presidential memoranda, is also “regulatory dark matter” that is guidance documents (“non- hard to detect, much less measure. legislative” or interpretive rules), notices, bulletins, directives, news Congress passes a few dozen public laws releases, letters, and even blog posts every year, but federal agencies issue may enact policy while flouting the several thousand “legislative rules” and APA’s public notice and comment regulations. The post-New Deal requirements for legislative rules.5 Administrative Procedure Act (APA) of They also can escape judicial 1946 established the process of public review. Agencies and bureaus notice for proposed rulemaking, and sometimes regulate without writing provided the opportunity for public down anything. Explicit or veiled6 input and comment before a final rule is threats achieve this, as can adverse published in the Federal Register, and a publicity, whereby an agency issues 30-day period before it becomes effective.3 unfavorable news releases to force We have ordinary public laws on the compliance from private parties, one hand, and ordinary allegedly above- who are left with no recourse to the board, costed-out and commented-upon courts.7 regulation on the other. But the APA’s Crews: Mapping Washington’s Lawlessness 3 CEIAnalysis-Crews-Lawless-rec:Layout 1 11/30/2015 7:46 PM Page 4 “Sub rosa” regulation has long been an guidance document may yield issue, and scholars have studied it exten- another and then another and so on. sively. In his 1989 book, Regulation and … Law is made, without notice and the Reagan Era, economist Robert A comment, without public participa- Rogowski explained: tion, and without publication in the Federal Register or the Code of Regulatory bureaucracies are able Regulations.9 to accomplish their goals outside the realm of formal rulemaking. … An The upshot of regulatory dark matter is impressive underground regulatory that without Congress actually passing a infrastructure thrives on investiga- law or a “normal” APA-compliant tions, inquiries, threatened legal legislative rule or regulation being issued, actions, and negotiated settlements. the federal government increasingly … Many of the most questionable injects itself into our states, our regulatory actions are imposed in communities, and our personal lives on this way, most of which escape the matters such as health care, retirement, scrutiny of the public, Congress, labor policy, education policy and and even the regulatory watchdogs funding, finance, critical infrastructure, in the executive branch.8 land access and usage, resource management, science and research Agency guidance documents and funding, energy policy, and frontier directives do not go through ordinary APA manufacturing and technology. processes and are technically supposed In addition to non-congressional to be non-binding, but one ignores them lawmaking, the executive branch often at peril. As the D.C. Circuit famously declines to enforce laws passed by noted in the 2000 case, Appalachian Congress. Most prominent recently was Power Co. v. Environmental Protection the July 2013 Treasury Department’s Agency: unilateral delay, first by blog post, then by Congress passes a broadly worded IRS guidance, of the Affordable Care Act’s statute. The agency follows with employer mandate and its accompanying regulations containing broad tax penalty for non-compliance.10 Then language, open-ended phrases, came the November 2013 declaration, first ambiguous standards, and the like. by the president during a news conference Then as years pass, the agency and subsequently in Department of Health issues circulars or guidance or and Human Services guidance material, memoranda, explaining, interpreting, that insurers could continue to sell defining and often expanding the non-ACA compliant health policies.11 commands in regulations. One Similarly, the Department of Homeland 4 Crews: Mapping Washington’s Lawlessness CEIAnalysis-Crews-Lawless-rec:Layout 1 11/30/2015 7:46 PM Page 5 Security’s policy, “Exercising Prosecutor- has experienced some backlash over his ial Discretion with Respect to Individuals exercise of executive power, the current Who Came to the United States as dynamic in Washington is still one of Children and with Respect to Certain Congress responding to the president’s Individuals Who Are the Parents of legislative agenda rather than the president Congress’ U.S.
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