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Do We Need Greater Congressional Oversight of Agency Rulemaking?

by Sherzod Abdukadirov on September 13, 2013

in Regulation

Katherine McFate, president of the Center for Effective Government, writes in the Hill that all regulations are based on congressional law, implying that efforts aimed at greater oversight of agency rulemaking are unnecessary. Technically, she is correct – agencies cannot regulate unless they are authorized to do so by congressional statutes. But her assertion is highly misleading. In fact, agencies have considerable discretion to determine policy and to publish rules that fit their as opposed to Congress’s agenda. Thus, Congress is fully justified in its efforts to push for greater agency accountability.

Scholars have long realized that the traditional rulemaking model (or the “transmission belt” model as Richard Stewart called in his seminal article) in which Congress determined policy through legislation and agencies simply filled in the details was far from reality. While constrained by congressional statutes, agencies nonetheless can substantively shape the policies within their jurisdiction.

Agencies have two sources of power in the rulemaking process: the first mover advantage and expertise. Congress over time delegated considerable policymaking powers to agencies through broad open-ended statutes, which meant that agencies did not need to seek congressional approval in order to regulate. In many cases, they can point to existing statutes as a source of their authority. Rather than initiate policy, Congress ends up reacting to the bureaucracy’s regulatory actions. Yet, given how difficult it is for Congress to agree on any legislation, it may be an uphill battle for Congress to overturn a regulation, letting agency decision stand by default.

Expertise is the second source of agency power. Congress defers to agency expertise on many complex regulatory issues. However, agencies engage in what Wendy Wagner called “the science charade” – masking policy decisions as matters of science. As she explains in her article and an edited volume, scientific analysis often drives policy decisions. Through selective use of evidence or assumptions, agencies can push the scientific analysis towards the answer that would yield their preferred policy alternative.

The EPA’s and DOE’s use of social cost of carbon (SCC) in their rulemaking estimates demonstrates the point. The SCC is an estimate of economic damages caused by greenhouse gas emissions. Agencies use the SCC to estimate the benefits of rules aimed at reducing greenhouse gas emissions and consequently to decide whether the rules’ benefits justify the costs. Higher SCC estimate would justify more expansive and costly regulations.

Even though the agencies claim that they derived the SCC through scientific analysis, critics point to policy choices embedded within the analysis that pushed the estimated cost higher. For example, the agencies chose to estimate global rather than domestic impacts of carbon. Similarly, they omitted from their analysis the recent scientific literature, which pointed to a lower impact of greenhouse gases on climate. These and other choices pushed the SCC higher (almost double the previous estimate), allowing agencies to push for more stringent and costly regulations.

Despite the major policy impact of the SCC’s use in rulemaking, the agencies did not have to consult Congress. They could chose to use the SCC estimates under the powers already delegated to them, even in the face of stiff opposition from Congress. In the meantime, congressional efforts to reassert its authority on the major environmental policy issue have stalled. The GOP-led House passed a bill that would prevent the EPA from factoring in the SCC in its economic analysis. Yet, the measure’s fate in the Senate is uncertain and it would still face the presidential veto.

Contrary to McFate’s assertion, agencies do not simply implement congressional policy. As the SCC example demonstrates, agencies can drive major policy decisions without congressional approval. Thus, Congress needs better tools for more effective oversight of agency regulations.

  • Kent R Crawford

    The problem with the idea is that even with more Congressional oversight, the regulatory agencies would still exist. Yet one must wonder at the Constitutionality of such agencies in the first place. Can Congress abrogate their responsibility to a bunch of bureaucratic political hacks and ‘true believers?’ I think not.
    A far better approach would be to shrink those agencies to mere advisory boards, who would in turn propose legislation to Congress, to be examined on their merit.
    Removing the stench of the regulatory agencies, not to mention the cost and waste, would be good for the economy and the Country.

  • bscook111

    This article speaks to the second greatest problem in America today, the first being crony capitalism. The insidious nature of government bureaucrat regulators occurs at state levels as well. Possibly the people selected for these positions are by inclination more socialist. Perhaps they are also biased against business. Likely their ranks are also swelled by the increases in liberal college education biased toward social leveling. At any rate, oppressive regulation is far more damaging to america presently than even our ridiculous tax structure.

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