You Won’t Believe All the Ways Federal Agencies Issue Rules
Recently, I’d pointed out that we don’t really know how many federal agencies there are.
That implies we don’t know how many rules and regulations there are.
Yet there’s more. The Homeland Security and Government Affairs Committee (HSGAC), conducted a September 23, 2015, hearing chaired by Sen. James Lankford (R-Okla.) and Sen. Heidi Heitkamp (D-N.D.) on Examining the Use of Agency Regulatory Guidance.
Agencies issue over 3,000 rules every year. But they also unleash thousands of other types of documents and “notices,” the most significant among them often called “guidance documents,” affecting everything from labor policy to higher education guidance on bullying, to finance in the wake of the Dodd-Frank law.
These avoid and bypass the oversight regular agency rules get via the Administrative Procedure Act.
In fact, there is a Federal Regulatory Agency Word Cloud of Things That Aren’t Quite Regulations But That You’d Best Pay Attention To.
Congress has become alarmed. The Government Accountability Office, represented at the HSGAC hearing, released an important review of agency guidance and compliance with a 2007 Office of Management and Budget memo on “good guidance practices,” and offered recommendations for improvement.
And there’s a paradox. All agreed, at the querying of Sen. Heitkamp, that guidance is not supposed to be legally binding. Even the Department of Labor and Department of Education witnesses nodded at this.
The problem though, is that the regulated public, such as farmers and business people, are reluctant to disobey. Who wants to cross the faceless bureaucracy with nothing to lose?
And that’s a big problem, because nobody seemed able to agree on what guidance actually is and is not. Moreover, agency pronouncements are most emphatically not always clearly labeled “guidance document”: there are agency memoranda, bulletins, “dear colleague” letters and much more. In compiling a forthcoming paper on this “regulatory dark matter,” phenomenon, I noticed that agencies issue dozens of kinds of documents outside the normal APA notice and comment process, that can and do affect the public. Check out this word cloud, which I spent some time extracting from regulations.gov:
Denial of Application, Action Memo/Letter, Adjudication, Advisory Opinions, Agreement/Contract, Analysis, Approval, Audit, Brief, Certification, Clarification, Comment Response, Company/Organization Comment, Complaint, Consent Decree, Consent Order, Data, Decision, Decree, Delay of Effective Date, Determinations, Early comment, Economic Analysis, Environmental Assessment, Environmental impact Statement, Evaluation, Exemption, Extension of Comment Period, Fact/Data Sheet, Findings of Fact, Guidance, Hearings, ICR Supporting Statement, Industry Circular, Information Collection Request (ICR), Interagency Review, Letter, Management Directive, Meeting, Meeting Materials, Memorandum, Motion, Notice of Adequacy, Notice of Approval, Notice of Data Availability, Notice of Filing, Notice of Intent, Notice of Receipt of Petition, Order, Permit/Registration, Petition, Policy, Press Release, Public Announcement/Notice, Procedure, Public Comment, Public Hearing Deposition/Testimony, Public Participation, Publication, Report, Request for Comments, Request for Grant Proposals, Risk Assessment, Settlement Agreement, Significant Guidance, Study, Supplement, Technical Support Document, Waivers, Withdrawal, Work Plan
The tenor of the HSGAC investigation—and of recent public policy discussion generally—is that a breakdown in democratic accountability is underway, particularly given our living during the Obama administration’s “pen and phone” era. Unelected agencies are acting unilaterally, pushing technically unenforceable guidance on an unwitting or nervous public and “shortcutting” the ordinary rulemaking process as Sen. Heitkamp put it.
Agencies seem to be issuing guidance when they ought to be issuing formal rulemaking and following the Administrative Procedure Act as a commonsense measure. Sen. Joni Ernst (R-Iowa) kept raising the same concern.
How something becomes a guidance or a rule is a “black box” to Congress, as Sen. Lankford complained. Yet even if requirements to employ APA were stipulated, it wouldn’t fully work since ordinary rulemaking can already flout both the law and executive orders meant to govern rule-making as well.
Trying to isolate so called “significant” guidance will be tough since even for ordinary APA rulemakings that reach that designation (typically an annual economic impact of $100 million), cost-benefit analyses are the exception rather than the rule. So it is not credible that such analyses even exist for guidance documents.
The situation will be impossible to fix until Congress forbids regulatory dark matter, or at least requires that it be subject to more stringent APA-type oversight than currently exists. It will be even better if dark matter is deemed ineffective unless Congress positively affirms it, much as the REINS Act would do for ordinary rules and regulation.
A good start for the guidance document reform agenda is Sen. Steve Daines’ (R-Mont.) S.1487, the “Regulatory Predictability for Business Growth Act,” which would require interpretive rules or guidances that alter previously issued interpretive rules to undergo public notice and comment procedures before they can have any effect.