Put the REINS on EPA

EPA’s end-run around democracy — the agency’s hijacking of climate policy via the backdoor of Clean Air Act regulations — is meeting stiff resistance on Capitol Hill.

The House Energy and Commerce Committee has already held a hearing on the Energy Tax Prevention Act, which would overturn EPA’s Endangerment Rule and an assortment of related rules imposing Clean Air Act permitting requirements on power plants, refineries, and other emitters of greenhouse gases. Passing the bill — sponsored by Sen. James Inhofe (R-OK), Rep. Fred Upton (R-MI), and Rep. Ed Whitfield (R-KY) — is reportedly a top priority of House Speaker John Boehner (R-Ohio).

Sen. John Barrasso (R-WY) and Rep. Tim Walberg (R-MI) have also introduced the “Defending America’s Affordable Energy and Jobs Act.” This even stronger legislation would prohibit all agencies from “legislating’”climate policy under any existing statute, none of which was ever designed or intended for that purpose.

Not so long ago cap-and-trade advocates, such as Rep. Ed Markey (D-MA), warned that if Congress did not enact “comprehensive energy and climate legislation,” opponents would end up with something they’d like even less — a cascade of Clean Air Act climate regulations promulgated by EPA. Cap-and-traders clearly implied that using the Act as a framework for climate policy would be worse for business — less efficient, less predictable, and potentially more costly.  They tried to scare industry, Republicans, and coal-state Democrats into supporting cap-and-trade as a lesser evil.

But this just means that if EPA’s climate regulations were put to a vote, they’d have even less chance of passing in the 112th Congress than cap-and-trade did in the 111th Congress. It also means that non-elected bureaucrats are “enacting” an economically riskier version of the same agenda that Congress recently rejected.

As noted, Congress may put the kibosh on EPA’s power grab. But things should never have gotten to the point where the friends of affordable energy on Capitol Hill have to hold hearings, build coalitions, and endure vicious calumny just to stop EPA from implementing policies Congress never voted on or approved.

The Rot Runs Deep

EPA’s power grab is, alas, only the most egregious example of a more pervasive disorder undermining our Constitution and endangering our prosperity.

Americans live under a regime of regulation without representation. In the modern regulatory state, elected officials enact broad regulatory statutes, such as the Clean Air Act, the Occupational Health and Safety Act, or the Telecommunications Act. However, Congress and the president then delegate to non-elected officials the tasks not only of developing and proposing but also of enacting the implementing rules.

Administrative agencies such as EPA end up wielding powers that the Constitution reserves to Congress. Article I, Sec. 1 of the Constitution vests “all legislative powers” in the Congress of the United States, and Article I, Sec. 8 gives to Congress the power to lay and collect taxes. Agencies have no constitutional authority to make law or raise taxes. Yet they issue thousands of regulations each year, all having the force and effect of law, and many functioning as implicit taxes that increase the cost of goods and services.

If asked whether bureaucrats should have the power to make laws and raise taxes, most Americans would unhesitatingly say no — and with good reason. In the political theory underpinning the U.S. Constitution, governments “derive their just powers from the consent of the governed.” This means that all powers — legislative, executive, and judicial — originate with the people, and legitimate government arises from a compact whereby the people agree to delegate certain powers to certain offices or institutions. This means officials are the stewards, not the owners, of power. Just as legislatures have no right to seize powers the people have delegated to the executive, so they also have no right to transfer to the executive branch powers that the people have delegated to them.

John Locke, an English philosopher admired by Jefferson and many other Founders, succinctly explained what later came to be called the non-delegation doctrine:

The legislative cannot transfer the power of making laws to any other hands, for it being but a delegated power from the people, they who have it cannot pass it on to others.

Similarly, the Supreme Court, in the 1892 case of Field v. Clark, declared:

That Congress cannot delegate legislative power to the President is a principle universally recognized as vital to the integrity and maintenance of a system of government ordained by the Constitution.

None of this is to say that Congress should not create regulatory agencies. Obviously, laws cannot anticipate all the circumstances to which they apply, and specialized knowledge is often required to apply laws even to foreseen or well-known circumstances. It is also obvious that Congress cannot review all the thousands of rules that scores of agencies promulgate each year.

Nonetheless, when an agency issues a rule with major potential impact on society, or when it issues a rule that would initiate a major change in public policy, the people’s representatives should have to approve the rule before it takes effect. Otherwise, we are no longer a self-governing people but a people ruled by bureaucratic elites.

Congress’s excessive delegation of lawmaking authority to agencies not only undermines the separation of powers, it is also a root cause of big, costly, activist government. When Congress and the president deputize agencies to legislate, elected officials escape responsibility for the compliance costs and economic impacts of the laws they enact. “We only approved the statute, not the regulation; don’t blame us!” Those who bear the costs of regulation — ultimately, all of us — are unable to reward or punish anyone at the ballot box for good or bad regulatory decisions.

In short, when elected officials take no responsibility for regulatory decisions, they have little incentive to consider costs when drafting regulatory statutes, and almost none to insist that regulators develop economically sensible rules.

As if that were not bad enough, delegation also enables lawmakers to talk out of both sides of their mouths. They can tout their support for regulatory statutes when addressing corporate rent-seekers and anti-market activists. They can also castigate out-of-control bureaucrats when addressing businesses squeezed by red tape and mandates. And from both groups they can collect big fat campaign contributions!

Restore the Separation of Powers

The good news is that Congress is considering a real solution: the “Regulations from the Executive in Need of Scrutiny” or REINS Act, introduced by Sen. Rand Paul (R-KY) and Rep. Geoff Davis (R-KY). REINS would require Congress to pass, and the president to sign, a joint resolution before a major agency rule can take effect. If either one or both chambers of Congress do not approve the resolution, or if both approve but the president vetoes, or if he vetoes and Congress does not muster the two-thirds majority required to override, then the regulation does not take effect.

REINS would, in short, end the regime of regulation without representation. For those interested in a detailed explanation of how the bill would work, see the excellent testimony of former CongressmanDavid McIntosh.

Somewhat surprisingly, not all limited-government advocates support REINS. Some worry that making Congress accountable for regulations would preclude judicial review of agency actions and preempt litigation to overturn or modify defective rules. New laws trump old laws. Consequently, these critics warn, if Congress enacts not only the regulatory statute but also the implementing rules, then any rule Congress approves must be legal even if the agency’s actions were arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law. REINS, they fear, would legalize agency lawlessness.

This concern is certainly worth debating but I think it is unfounded. A joint resolution of approval would simply lift the Act’s pre-existing prohibition on agencies issuing rules of a certain scope or magnitude, namely, major rules. The resolution would not negate or suspend any statutory requirements under which the rule might be challenged in court.

Section 802 (g) of the REINS Act is quite clear on this point:

The enactment of a resolution of approval does not serve as a grant or modification of statutory authority by Congress for the promulgation of a rule, does not extinguish or affect any claim, whether substantive or procedural, against any alleged defect in a rule, and shall not form part of the record before the court in any judicial proceeding concerning a rule.

The concluding words would seem to settle the matter: The joint resolution allowing a rule to take effect “shall not form part of the record” judges may consider when reviewing that regulation.

EPA’s greenhouse regulatory surge may be the most extreme case ever of regulation without representation. Stopping EPA will not be easy, because to succeed, opponents must assemble legislative majorities and, perhaps, veto-proof majorities.

Moreover, while Messrs. Inhofe, Barrasso, Upton, Whitfield, and Walberg must appeal to their colleagues’ uncertain respect for constitutional principle, EPA’s apologists are free to appeal to colleagues’ all-to-human desire to have one’s cake and eat it. Many in Congress want EPA to enact the virtual energy taxes they dare not vote for.

It’s time to un-stack the decks. Administrative agencies should not be able to make the big policy decisions that “We, the People” elect Congress and the President to make. Under the REINS Act, EPA would have to pursue its Kyoto-inspired agenda the old fashioned, small “r,” republican way: through public discourse and persuasion, not regulatory fiat.