Astrophysicists have concluded that ordinary visible matter—the Sun, the Moon, the planets, the Milky Way, the multitudes of galaxies beyond our own, and their trillions of component stars, planets, and gas clouds—make up only a tiny fraction of the universe. How tiny a fraction? Less than 5 percent. Weakly interactive but pervasive dark matter and dark energy make up most of the universe, rendering the bulk of existence beyond our ability to observe directly.
Here on Earth, in the United States, where the government spends $4 trillion annually and regulatory compliance and economic interventions cost nearly half that amount, there is “regulatory dark matter” that is often hard to detect, much less measure, that’s coming to dominate in similar fashion.
Congress passes several dozen public laws from every year, but federal agencies issue several thousand regulations. The Administrative Procedure Act (APA) of 1946 (P.L. 79-404) established the process of public notice for proposed rulemakings, and provided the opportunity for public input and comment before a final rule is published in the Federal Register, plus a suitable breathing period before it becomes effective.
So we have ordinary public laws on the one hand, and ordinary allegedly above-board, costed-out and commented-upon regulation on the other.
But the APA’s requirement of publishing a notice of proposed rulemaking and allowing public comment does not apply to “interpretative rules, general statements of policy, or rules of agency organization, procedure, or practice” (P.L. 79-404, Section 553). There are varying degrees of both clarity of language and adherence to the rule of law for agency pronouncements that may bind or change behavior:
- When issuing rules and regulations, agencies are legally required to adhere to the APA and subsequent strengthening legislation, but often do not. Further, most regulations’ costs and benefits are unknown, so even much of the ostensibly APA-compliant body of rulemaking lacks transparency.
- “Regulatory dark matter” such as agency and presidential memoranda, guidance documents, notices, bulletins, directives, news releases, letters, and even blog posts may enact or influence policy while flouting the APA’s public notice and comment requirements for legislative rules. These proclamations also can escape judicial review. There are at least 617 “economically significant” guidances from executive departments and agencies, and an unknown number from independent agencies. But there are many thousands of guidances and other proclamations not deemed (by the agencies) as economically significant.
- Agencies and bureaus sometimes “regulate” without writing anything down. Explicit or veiled threats achieve this, as can adverse publicity, whereby an agency issues unfavorable news releases to force compliance from private parties.
Sub-rosa regulation has long been an issue, and scholars have studied it extensively. In the 1989 book, Regulation and the Reagan Era, economist Robert A Rogowski explained (in his chapter, “Sub Rosa Regulation: The Iceberg beneath the Surface”):
“Regulatory bureaucracies are able to accomplish their goals outside the realm of formal rulemaking. … An impressive underground regulatory infrastructure thrives on investigations, inquiries, threatened legal actions, and negotiated settlements. … Many of the most questionable regulatory actions are imposed in this way, most of which escape the scrutiny of the public, Congress, and even the regulatory watchdogs in the executive branch.”
While agency guidance documents and directives do not go through the APA notice-and-comment process and are technically supposed to be non-binding, one ignores them at peril. As the D.C. Circuit famously noted in the 2000 case, Appalachian Power Co. v. Environmental Protection Agency:
“Congress passes a broadly worded statute. The agency follows with regulations containing broad language, open-ended phrases, ambiguous standards, and the like. Then as years pass, the agency issues circulars or guidance or memoranda, explaining, interpreting, defining, and often expanding the commands in regulations. One guidance document may yield another and then another and so on. … Law is made, without notice and comment, without public participation, and without publication in the Federal Register or the Code of Federal Regulations.”
The upshot of regulatory dark matter is that, without Congress actually passing a law or an APA-compliant legislative rule or regulation being issued, the federal government increasingly injects itself into our states, our communities, and our personal lives on matters such as health care, retirement, employment, education, finance, infrastructure, land use, resource management, science and research funding, energy, manufacturing, and even frontier technologies.
In addition to non-congressional “lawmaking,” the executive branch sometimes declines to enforce laws passed by Congress, effectively rewriting law unilaterally. Prominent during the Obama administration was the July 2013 Treasury Department’s unilateral delay, first by blog post, then by IRS guidance, of the Affordable Care Act’s (ACA, or “Obamacare”) employer mandate and its accompanying tax penalty for non-compliance (see Jonathan H. Adler; and John D. Graham and James W. Broughel on this example). Then came the November 2013 declaration—first by the President in a news conference and then in Department of Health and Human Services guidance material— that insurers could continue to sell non-ACA compliant health policies.
President Obama was opportunistic, but hardly wholly to blame for the erosion in separation of powers. The problem persists.
Congress’ over-delegation of its own authority over decades has seriously undermined checks and balances and the principle of separation of powers. Our government’s branches seem not to so much to check-and-balance as to leapfrog one another, to ratchet the government upward rather than constrain it to a constitutionally limited role. Cronyism is one thing, but the annihilation of rule of law and its replacement with officials’ whim is the essence of usurpation and ultimately tyranny.
As it happens, Trump’s executive actions aimed at reducing regulation (all presidents since Reagan have had them) do uniquely include the “significant guidance document” subset of regulatory dark matter. But for permanence, Congress will need to act.
Otherwise over time, as representative lawmaking continues being delegated to untethered bureaucrats, the dark matter decrees of those autonomous administrators will displace and eventually outweigh normal lawmaking.
This will matter a lot everywhere, but especially for new sectors such as an expanding Internet of Things, robotics, artificial intelligence, and autonomous vehicles. Let’s not become, “One Nation, Ungovernable.”
This article is adapted from the introduction of the 2017 edition of the author’s report series “Mapping Washington’s Lawlessness: An Inventory of ‘Regulatory Dark Matter’.”
Originally posted on Forbes Online.