Controlling Federal Agency Guidance Documents: A To-Do List for Congress and Reformers

When I wrote about the proliferation of federal agency guidance documents and other regulatory “dark matter” that skirts Congressional oversight and even normal notice and review procedures down in agency bowels, I noted I’d lay out some actions Congress can take to deal with off-the-books rulemaking.

One already happened. Sen. Mike Lee’s new Article 1 Regulatory Budget Act, introduced in late May, promises to “Eliminate the abuse of regulatory ‘dark matter’” in part by requiring notice-and-comment for guidance costing $100 million plus, and to allow civil actions for individuals affected by non-compliant guidance.

Congress’s To-Do List: Congress must affirm that every agency decree matters, not just those agencies unilaterally subject to formal notice and comment or deem economically significant. Circumstances have deteriorated such that Congress has no idea of what today’s thousands of agency proclamations consist. Usually, despite the common refrain, there ought not be a law.

Without downsizing the federal government and strengthening democratic accountability, regulation and guidance cannot be controlled, period. This was made clearer than ever to me in a Cato Unbound exchange on “Questioning the Administrative State” in which I recently participated. Some simply do not wish the regulatory state controlled: progressives and democratic socialists with both liberal and conservative stripes have for over a century praised economic and social controls, and established colossal bureaucracies and rule by unelected experts. Trivial reversals come generations apart, such as the 1970-80s phase of partial economic liberalization. (For insight, see Chapter 3, “Why the Regulators Choose to Deregulate” in Roger E. Meiners and Bruce Yandle, editors, Regulation and the Reagan Era: Politics, Bureaucracy and the Public Interest; and Chapter 4, “The Strength of Reform Forces In Congress,” in Martha Derthick and Paul J. Quirk, The Politics of Deregulation. Yandle was the recipient last week of the Competitive Enterprise Institute’s Julian Simon Award.)

In the mid-1990s, led by then-Budget Committee Chairman John Kasich (R-Ohio), Congress proposed eliminating entirely the Departments of Commerce, Education and Energy along with 14 agencies, 68 commissions and 283 programs. The effort failed and apart from Republican primary campaign pledges, little actual downscaling gets proposed anymore; rather, the public hears the “waste, fraud and abuse” refrain.

Yet, confronting possible obsolescence of decades old statutes is a necessary, fundamental task, even the primary role of ongoing governance. Meanwhile, ending guidance abuse is becoming urgent in frontier sectors like telecommunications and infrastructure expansion, drones, and driverless car communications where decades-old agencies are already targeting new technologies, business methods and contractual arrangements without congressional authorization. If intervention is warranted, Congress should directly legislate rather than sit by idly tolerating open-ended agency regulation, or, worse, “informal” guidance.

The primary assignment for Congress is to: (1) Abolish, downsize, cut budgets of and deny appropriations to aggressive, overly regulatory agencies, sub-agencies and programs; and (2) Repeal or amend enabling statutes that sustain the regulatory enterprise’s excesses in the first place.

There are other, lesser steps Congress can take until it actually downsizes government.

  • Costly or controversial guidance and other dark matter decrees should remain null pending congressional affirmation;
  • Proposals to address agency proclamations often entail applying the Administrative Procedure Act’s control to guidance, but these may not appear in the Federal Register or even feature prominently on an agency website. This can be tried, but the caveats here are extreme given the extent of lawmaking outside congressional authority. Complications with APA as a solution include APA neglect even for normal rules, and the existence of so many manifestations of agency proclamations including not writing anything down at all, that agencies will escape already imaginary APA restraint. We don't even know how many agencies exist. These will be the more common proposals for dealing with guidance, however.
  • Regulatory dark matter should be subjected to more intense E.O. 12291-style OMB review, as well as subjected to several other executive orders on regulatory review. Like exposing guidance to the APA, however, this is weak, and primarily provides a public record for future reform efforts by documenting the lack of cost-benefit analysis and the overall lack of supervision and accountability anywhere in the regulatory enterprise. 
  • The 60-day hold and “resolution of disapproval” provisions of the Congressional Review Act’s (CRA) application to guidance should be taken seriously. Not many realize the CRA applies to guidance, but the legislative history indicates that it does. So if guidance grows, the public can know that Congress could have frozen or called attention to it, but did not. A double-barreled approach including withholding appropriations is appropriate for limiting agency actions.
  • Regulation and guidance need concise official presentation to Congress comparable to the federal budget’s Historical Tables. Under President Reagan and the first Bush, there existed a lookalike document to the Budget called the Regulatory Program of the United States Government with a lengthy appendix titled “Annual Report on Executive Order 12291.” This could provide a template along with requiring that guidance appear the Federal Register in an accessible way.

Economically significant guidance: Policymakers should force streamlined, one-location disclosure of economically significant guidance, augmenting what a few executive agencies voluntarily do based on the 2007 OMB memorandum to agencies on “Good Guidance Practices.”

Secondary guidance and notices: Scattered under numerous monikers and across various websites, if publicized at all, these proclamations urgently need centralized disclosure. 

Law against laws: It has been a generation since Congress proposed major downsizing of the federal bureaucracy. Along with a distinctive statement of principles in the 2017 House budget proposal concerning regulatory budgeting, this year’s congressional Task Forces, set to release conclusions over the coming weeks, are prominent in articulating the principle of congressional authority over lawmaking and of containing the federal government within some boundaries.

Guidance documents are nothing new, but given conspicuous, even taunting, executive branch assertions of power and boasts regarding unilateral action without Congress, are more salient than ever. The solution for executive overreach in all its manifestations is for Congress to deny. That is, a bloated, authoritarian Washington bureaucracy is tolerated and endures only because Congress has not said no to it, and chooses not to say no. The public should understand that.