In the recent paper “Why Congress Must End Regulation by Guidance Document,” I described the rise of federal agency regulatory dark matter and proposed solutions to deal with it.
In this brief article I survey a few prominent examples of agencies regulating with “guidance” rather than the normal notice-and-comment regulatory process, and provide links to them.
As it happens, several congressional task forces are engaging overlapping issues of the expansion of executive branch power, restoration of congressional authority under the Constitution, and oversight and control of the federal regulatory enterprise.
If legislation passed by Congress and signed by the president in plain view sometimes strains doctrines of limited government, then the sub-rosa decrees and guidance documents of bureaus most assuredly do. President Barack Obama’s unilateral executive actions are the prominent examples of rule without Congress, but federal agency guidance documents, memoranda and other regulatory dark matter swell ominously.
While their costs remain largely unmeasured or debated, we can count the number of agency proposed and final rules, and even of presidential executive orders and memoranda. But agency memoranda, guidance documents, notices, bulletins and the like have become intractable. Purportedly not legally binding, they intimidate. It has been recognized for decades that guidance binds “as a practical matter” given that “failure to conform will bring adverse consequences, such as an enforcement action or denial of an application.” A July 2012 U.S. House of Representatives Committee on Oversight and Government Reform report voiced the effect of guidance documents:
Guidance documents, while not legally binding or technically enforceable, are supposed to be issued only to clarify regulations already on the books. However… they are increasingly used to effect policy changes, and they often are as effective as regulations in changing behavior due to the weight agencies and the courts give them. Accordingly, job creators feel forced to comply.
Prominent recent executive agency guidance includes:
- Housing and Urban Development guidance decreeing landlord and home-seller denial of those with criminal records a violation of the Fair Housing Act;
- Department of Labor blog post and “Administrative Interpretation” informing the public that most independent contractors are henceforth employees;
- Treasury Department delay (first by July 2013 blog post, then by IRS guidance) delaying the Patient Protection and Affordable Care Act’s employer mandate and accompanying tax penalty for non-compliance, without public feedback or mandatory economic analysis;
- The November 2013 declaration (in a presidential Obama press conference, and subsequently in Department of Health and Human Services guidance) that non-ACA compliant health policies could continue to be sold;
- Environmental Protection Agency Clean Water Act interpretive guidance on “Waters of the United States.” While this directive solicited notice and comment, the agency illegally lobbied for supportive comments, manufacturing endorsement;
- Federal Aviation Administration “Notice of Policy” interpretation on drones that temporarily outlawed commercial activity in violation of the APA, before reversal by the National Transportation Safety Board;
- Education Department guidance affecting colleges and schools with new mandates at the rate of one issuance per business day;
- Increased National Labor Relations Board of memoranda affecting non-union employers.
Congress’ over-delegation to agencies and neglect of Administrative Procedure Act (APA) strictures created rulemaking and guidance abuse. Over a third of agency rules issue without a Notice of Proposed Rulemaking, often exploiting the APA’s so-called “good cause” exemption. Further, most final rules have no Office of Management and Budget-reviewed cost benefit analysis (13 rules in the 2015 report, out of thousands or rules that actually issue any given year).
Such rule abuses are problematic enough, but guidance dispenses with even the pretense of APA’s sub-constitutional requirement for formal advance public notice. The APA conveniently doesn’t apply to “interpretative rules, general statements of policy, or rules of agency organization, procedure, or practice” (P.L. 79-404. Section 553). How agencies decide whether some new initiative will be a rule or guidance is a “black box” to lawmakers.
Next we’ll look at the scope of guidance; and following that, at some recommendations for Congress.