June 4, 2014

Stealth Regulation: Addressing Agency Evasion of OIRA and the Administrative Procedure Act

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In theory, the regulatory system in the United States is a bi-lateral relationship between the will of Congress, as expressed in authorizing statutes, and the actions of agencies, ordered to implement the statutory mandates they receive.8

Assuming a statute is constitutional, the judiciary’s role is to ensure that the agencies’ actions are faithful to the statutes. The reality of the regulatory state is more complicated because of additional checks and balances imposed by Congress and the President. The APA and the OIRA review process are perhaps the two most important checks and balances added since the Progressive Era.

Both the APA and OIRA review touch on the themes of democratic accountability and technical competence. Democratic accountability asks regulators to be sensitive to the wishes of the people the regulatory system is supposed to serve, as reflected in the legislation their elected representatives pass and the comments citizens submit to agencies.

Technical competence refers to the proper use of scientific, engineering, and economic information, including the expectation that rules will accomplish their statutory objectives while, whenever feasible and lawful, meeting basic standards of economic efficiency.

The Administrative Procedure Act, passed in 1946,was designed to ensure democratic checks on regulatory agencies (e.g., the requirements for public participation in rulemaking) but has evolved to place substantive, technical checks on regulatory actions (e.g., the requirement for substantial evidence in support of regulatory actions). The APA emerged to resolve conflicts associated with New Deal regulatory policies.10

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