You are here

Regulatory Dark Matter

What Is Regulatory Dark Matter?

As detailed in compilations by CEI’s Clyde Wayne Crews, Jr., “regulatory dark matter” refers to the thousands of executive branch and independent agency actions including guidance documents, proclamations, memoranda, bulletins, circulars, letters and more that are subject to little scrutiny or democratic accountability but carry practical, binding regulatory effects.

It’s bad enough that there are far more regulations than laws. In 2016 alone, there were 18 regulations issued for each law passed by Congress. But, with regulatory dark matter, there are literally tens of thousands of documents that agencies can use to circumvent Congress, and the Administrative Procedure Act’s (APA) public notice and comment requirements, allowing the federal government to inject itself more and more into our businesses, states, communities, and personal lives. Some real-world examples include:

  • The Department of Labor Wage and Hour Division’s blog post stating that many independent contractors may now be classified as employees.
  • The Consumer Financial Protection Bureau’s bulletin on auto lending that limits automobile lenders’ abilities to offer discounts to consumers
  • Department of Justice’s intimidation campaign, “Operation Chokepoint,” that targeted legal but politically disfavored businesses, like pawn shops, and their banks 
  • Even the Environmental Protection Agency’s “Waters of the United States” (WOTUS) rule began life as interpretive guidance.

Without formal regulations or even a requirement to compile guidance and such in easy to find ways, no one knows how much the regulatory state “weighs,” understands the costs. Even the number of federal agencies in existence is not known with certainty.


Does Regulatory Dark Matter Affect You?

This phenomenon is dangerous for democracy. Regulatory Dark Matter threatens democratic accountability and the rule of law because the public has little or no role. Without Congress actually passing legislation or an agency issuing a regulation, Regulatory Dark Matter allows law to be made without public participation. This means Americans lose their say over how the federal government affects our lives from our health care and retirement to our education and energy sources.

It makes our lives harder. Regulatory Dark Matter harms American consumers, entrepreneurs, and job creators. Regulations created in this manner are difficult to understand, impossible to count, hard to find, and some aren’t even written down. Although Regulatory Dark Matter shouldn’t be legally binding., if you’re a small business person awaiting a permit or approval, these proclamations are hard to ignore—assuming you know or can find where they are published. Many small business owners still agree: regulations are one of the biggest problems holding them back today. 

No one knows how much it costs. Regulatory Dark Matter is hard to track and little is known about its costs. Regulatory compliance costs are often referred to as a $2 trillion hidden tax, but even these costs are easier to calculate as these rules are at least written out and can be found. Regulatory Dark Matter must be accounted for. It we cannot measure, or compare costs and benefits of a new rule, how are we to know if agency efforts are achieving a goal?

How Did We Get Here?

Over the years, Congress has allowed its legislative authority to slip away, delegating it to executive branch agencies. It is Congress’ duty to address the Regulatory Dark Matter problem and take back its constitutional authority that it has abdicated over the years.

It doesn’t help that there are a lot of shortcomings in oversight of the ordinary, everyday regulations. The central review process the Office of Management and Budget established to assure that rule benefits exceed the costs is incomplete. The process was never thorough. It leaves out independent agencies, which account for a large portion of modern rulemaking, so today central review captures only a fraction of rulemakings.

Additionally, the Administrative Procedure Act’s rulemaking process is broken. Citing an exemption, agencies continue to fail to issue a Notice of Proposed Rulemaking for a substantial portion of their rules. And finally, until this year, Congress rarely used its most powerful accountability tool, the Congressional Review Act (CRA), to disapprove of costly or controversial agency rules. Guidance are subject to the CRA, but have yet to be dealt with in that manner.


 

What Can Be Done? 

Congress must reassert its lawmaking authority under Article I of the U.S. Constitution and discipline agency officials who engage in arbitrary behavior. Congress can do this by using the CRA and enacting the Regulations from the Executive in Need of Scrutiny (REINS) Act, and along with applying it to major rules, also address controversial rules and Regulatory Dark Matter, like guidance.

Congress must pursue increased disclosure and review efforts of all agency decrees, not just rules. It is important that Congress requires consistency in reporting Regulatory Dark Matter and not always leave it up to agencies to decide when rules and guidance are significant. Dark matter must also be subject to enhanced review such as the Regulatory Accountability Act and the ALERT Act (All Economic Regulations Are Transparent). More review is not enough though; not much will change until Congress routinely votes to approve expensive and controversial agency decrees from rules to dark matter.

It has been a generation since Congress last proposed a major downsizing of the federal bureaucracy. Congress and future administrations need to assert that all decrees by federal agencies matter, and Regulatory Dark Matter needs to receive at least the same amount of review and scrutiny as ordinary rules—even though they require far greater oversight as well. The solution to executive overreach is for Congress to say no to it, and the public should hold their elected representatives accountable for surrendering their authority and shirking their duties.

RESOURCES

Studies:

  • Mapping Washington's Lawless: An Inventory of Regulatory Dark Matter 
  • Ten Thousand Commandments: An Annual Snapshot of the Federal Regulatory State
  • Toward a Federal Regulatory Budget (June 2016)
    • There are pitfalls to calculating the cost of regulation. How do we avoid them?
  • Why Congress Must End Regulation by Guidance Document (April 2016)
    • Congressional task forces need to address executive branch overreach and agency rulemaking undertaken without congressional authority.

Commentary:

>> For more on regulatory reform and "dark matter" check out all of Wayne Crews' work here.