A Note on Administrative Agencies
Administrative agencies, the hallmark institutions of the modern regulatory state, vary by form and function in accordance with the tasks they are asked to perform. Some are relatively small entities that execute narrowly specified duties; others are sizeable bureaucracies with large budgets and broad discretionary authority. Some are subunits of executive departments; others are free-standing. The latter, in turn, fall into two categories: executive agencies (so called because they are ultimately accountable to the President) and "independent" agencies (which are wholly accountable neither to the President nor to Congress).
The legal status, powers, and purpose of administrative agencies are prescribed by acts of Congress and vary enormously in the breadth and detail of their delegated authority. Many agencies exercise legislative, executive, and judicial powers. They can issue regulations having the same force and effect as statutes, impose fines and penalties for violations of their regulations, and conduct trial-type proceedings that affect the rights and interests of particular parties. Unless otherwise specified in their enabling acts or subsequent legislation, agency operations are governed by the 1946 Administrative Procedure Act (APA), which authorizes a variety of different proceedings, sets rules for each, and establishes criteria for obtaining judicial review following final agency action.
Administrative agencies are usually justified in terms of their ability to redress perceived or actual market failures: for example, controlling monopoly power, "windfall" profits, or "excessive" competition; or compensating for externalities, inadequate information, or unequal bargaining power. Whatever might be said by way of praise or criticism about the mission or behavior of particular agencies, their number and variety testify to the growth of the federal government. Indeed, few subjects are now considered to be beyond the pale of federal regulation.
Although public officials have long since accommodated themselves to administrative agencies as a necessary adjunct of contemporary government, the nature and reach of agency powers remains controversial. This is especially true of independent agencies, comprising the so-called "headless fourth branch of government," which from their very inception have been a constitutional anomaly. In theory, independent agencies are subject to the authority of the constitutional branches in the sense that the President appoints agency leadership (subject to senatorial confirmation), Congress authorizes agency expenditures and conducts legislative oversight, and judicial review ensures agency compliance with statutory and constitutional requirements. But these controls, precisely because they are remote, indirect, and incomplete, tend to mock the principle of accountability that informs the separation of powers.
The anomalous constitutional character of independent agencies has prompted efforts by the political branches to exert greater political control over their behavior. President Franklin D. Roosevelt, for example, unsuccessfully sought to subject independent agency heads to the presidential removal power. Humphrey's Executor v. United States (1935). Congress, in turn, has tried and failed to assert its own authority over both the appointment and removal of agency officers. Buckley v. Valeo (1976); Bowsher v. Synar (1986).
Executive-congressional competition of this sort reflects unresolved ambiguities about the modern administrative state. In a complex society, Congress cannot specify every detail of legislative policy. Room must be left for the exercise of discretionary judgment, which means that legislative delegation is inevitable if Congress decides to regulate many subjects extensively. The separation-of-powers principle, however, necessarily limits the extent to which Congress may delegate its legislative authority. What are the constitutional standards that distinguish valid and invalid delegations? When Congress delegates, does discretion then vest automatically and entirely in the executive? Once it delegates authority, may Congress nevertheless retain control over certain details of policy and, if so, how much and by what means? What happens when congressional efforts to control details run up against the constitutional power of the President to execute the law?
These questions are difficult enough when applied to executive agencies, but they are particularly nettlesome when applied to independent agencies, which by their nature are neither congressional fish nor presidential fowl. As it began to construct the administrative state, Congress slowly acknowledged a growing political dilemma: being unwilling or unable to oversee the fine details of legislative policy, Congress was prepared to delegate broad rule-making authority. At the same time, it was reluctant to vest all discretionary control over details in the executive. Presidents, for their part, initially sought to maximize their own authority over administrative agencies, but yielded over time to the palpable reality of congressional power. After much political experimentation and compromise over many decades, as qualified from time to time by the instruction of the Supreme Court, independent agencies as we know them today came into being. They are, at bottom, the institutional embodiment of a congressional desire to delegate the details of governance and retain authority at the same time. The short and recent history of the administrative state is a story of more or less continual struggle between the political branches for control of agency discretion, with the judiciary playing the occasional role of referee. Prior to the 1930s, the Court sustained piecemeal delegations of legislative authority on varying grounds, Field v. Clark (1892), United States v. Grimaud (1911), and J.W. Hampton, Jr. & Co. v. United States (1928), but later efforts to invest administrative agencies with essentially open-ended authority to make and enforce rules gave the Court pause. Accordingly, it invalidated a number of New Deal regulatory schemes, either because they lacked intelligible standards necessarily implied by the separation of powers (the nondelegation doctrine) or because they failed to comport with requisite due-process requirements. A. L. A. Schechter Poultry Corp. v. United States (1935); Panama Refining Co. v. Ryan (1935); Carter v. Carter Coal Co. (1936).
Although the Justices eventually relaxed their opposition beginning in the late 1930s, their reservations about improperly delegated legislative authority have retained a certain purchase. The enactment of the APA in 1946 quieted many procedural concerns, but the substantive scope of administrative discretion (whether exercised by executive or independent agencies) remains a matter of continuing controversy. As to rule-making, the judiciary at first allowed agencies great leeway in interpreting their own statutory authority. The courts later began to second-guess the interpretative license it had previously granted to agencies, only to revert to a modified version of the older rule. See Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc. (1984). The Justices also seem to be of two minds concerning congressional delegation generally. In some cases, they have upheld extraordinarily broad delegations, but in others they have sought to rein Congress in. Compare Industrial Union Department, AFL-CIO v. American Petroleum Institute (1980); Mistretta v. United States (1989); and Whitman v. American Trucking Ass'ns, Inc. (2001). This oscillation may very well reflect the Court's continuing ambivalence about the constitutionality of delegation.
Although administrative agencies are a given of modern industrial society, the political branches continue to battle for control of agency action. In the 1960s and 1970s, in an effort to curb the executive generally and to tighten its own authority over regulation, Congress imposed various forms of legislative veto, all of which the Supreme Court invalidated in I.N.S. v. Chadha (1983). Presidential efforts to inhibit excessive regulation have been more successful. In 1981, President Ronald Reagan issued an executive order (E.O. 12291) requiring executive agencies to apply cost-benefit analysis to proposed major rules and authorizing the Office of Management and Budget to police their efforts. Despite criticism by certain Members of Congress and interest groups, this approach has been continued with relatively minor modification by Reagan's successors in office.
- Michael Uhlmann
- Professor of Political Science
- Department of Politics and Policy, School of Politics and Economics
- Claremont Graduate University