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President Obama's Executive Overreach Compounded by Regulatory Dark Matter

In recent years the Federal Register has topped out at well over 70,000 pages, two times at more than 80,000. Each year over 3,500 rules issue from federal departments and agencies.

Also published in the Federal Register are presidential executive orders and presidential and agency memoranda and guidance documents with unmeasured impact.

The recently amplified presidential component has been popularized by President Obama as the “pen and phone” approach to policymaking without Congress.

In my own examination, as far as the president’s pen and phone is concerned, the vehicle most regulatory in impact appears not to be executive orders (with major exceptions like a minimum wage requirement for federal contractors and the impending far-reaching order on immigration policy), but instead presidential Memoranda. Congress needs to keep a closer eye on all these.

Presumably, most of what emerges from memoranda would and will need to traverse the Administrative Procedure Act public notice-and-comment phases. But that has not been the case with such major concerns as joint presidential/Internal Revenue Service implementation delays of Obamacare provisions that appeared whack-a-mole style as hybrids of memoranda, notices, press releases and announcements on federal agency blogs.

The Mercatus Center at George Mason University, in the Harvard Journal of Law and Public Policy, put together the most detailed set of reports yet on what they call “quasi-regulatory” activity. Their exploration of “ways federal regulatory agencies circumvent formal procedures during the rulemaking process” appears as a series of five studies published in Harvard Journal of Law and Public Policy.

These abnormal and unconstitutional rulemaking vehicles (“[T]he United States Constitution expressly bars the delegation of legislative power,” says constitutional scholar Philip Hamburger) indicate that, as governmental oversight of various sectors of our economy expands, it will become increasingly less necessary to bother with even formal guidance documents, let alone “stoop” to enacting a law or adhering to APA notice-and-comment procedures.

The agencies have their own pens and phones like the president, in other words. Hester Peirce, also of Mercatus, recently issued a case study on the phenomenon called “Regulating Through the Back Door at the Commodity Futures Trading Commission.” Describing her report, Peirce noted the burden on the helpless regulated parties presented them with no option but to comply with what are not even actual laws:

Too often, however, agencies opt for short-cuts. Rather than bothering with the burdensome rule-making process, they use faster and more flexible means of imposing mandates. To avoid running afoul of the letter of the Administrative Procedure Act, these mandates are often couched in tentative, temporary or voluntary terms. Regardless of the language and the format, the effect is the same for regulated entities. The agency suggests that you do something — even if it says that it might suggest something different later — and you do it.

On the upside with respect to the unfortunate rise of “regulatory dark matter,” is the fact that, if the pen and phone can be used to curtail liberty, it can also be used to expand it.

Re-orientation of the executive branch to better oversee regulation (a stance that has dominated in the past) is an option two years from now, one that needs to be discussed and debated in the interim.

In the coming months, congressional reform of the lawmaking and regulation-making processes themselves await. Congressional options to dealing with the pen and phone and regulatory dark matter include withholding funding most bluntly, but ultimately upon insisting upon congressional approval of all costly, complex or confusing agency rulings before they are law.

Over-delegation in the first instance is at the root of both executive and agency over-reach. Obama and the bureaucracy are eager to take advantage of it.