Understanding the administrative state

Understanding the administrative state

Power Line - Monday February 27, 2017

by Scott Johnson

(Scott Johnson) 

For the 20-plus years my friend Bruce Sanborn was chairman of the Claremont Institute, we attended the annual meeting of the America Political Science Association over Labor Day weekend. At the APSA convention we attended the panels sponsored by the Claremont Institute. In those panels I heard a lot about “the administrative state,” frequently from Professor John Marini. Professor Marini had written about it in The Politics of Budget Control in 1992 and continued to deepen his understanding of the subject over the years. It took me a long time to understand the reference. Now it has become a thing thanks to the ascendance of Steve Bannon to his perch in the White House and his comments at CPAC last week, discussed by Paul in the adjacent post.

You may have heard that our own Steven Hayward has a new book that is available now on Amazon. I read the book in galley and think it is the best book I have read since Philip Hamburger’s Is Administrative Law Unlawful? of 2014. Steve is a gifted teacher and a born storyteller, qualities that are prominently on display in his new book. The themes of Steve’s book culminate in his account of “the administrative state” (coincidentally, the subject illuminated by Hamburger’s book).

Steve’s book presents a lucid account of the development of the most important strand of contemporary American conservatism. It a brilliant and invaluable book. The story Steve tells culminates in his account of the administrative state as presented in the work of certain students of Leo Strauss and Harry Jaffa in chapter 9. The new issue of Claremont Review of Books adapts Steve’s chapter 9 on “The Administrative State and the End of Constitutional Government” into an essay under the heading “The threat to liberty” that the CRB has placed online at our request. By all means buy and read Steve’s book. If you read nothing else about the administrative state, read Steve’s essay adapted from the book.

Studying administrative law in law school, I don’t think we read anything that raised questions about the legitimacy of the agencies giving rise to to it. We took it as a given and picked up the story with the passage of the Administrative Procedure Act in 1946. We should have taken a look at the question of legitimacy in constitutional law, and probably did, though the standard New Deal account I would have received is extremely misleading.

Exercising executive, legislative and judicial powers, the agencies are a constitutional anomaly. When it comes to a government of limited powers based on the powers allocated and divided among the three branches, the administrative agencies don’t really fit. I am honor bound to add that the Supreme Court doesn’t quite see things my way, although Douglas Ginsburg lucidly spells out elementary principles (and cites some relevant case law) in “Legislative powers: Not yours to give away.”

Judge Ginsburg quoted James Madison in Federalist No. 47 for the proposition that the “accumulation of all powers, legislative, executive, and judiciary, in the same hands, may justly be pronounced the very definition of tyranny.” Having Madison as your authority on the Constitution is not too shabby unless you think that history has rendered his teaching moot and his handiwork obsolete.

In The Constitution and the New Deal(reviewed here by the late Professor Richard Morgan), Professor G. Edward White quotes William Howard Taft eulogizing Chief Justice Edward White for his contributions to the “new field of administrative law.” Taft singled out cases reviewing actions of the Interstate Commerce Commission (RIP), the granddaddy of the supposedly independent regulatory agencies. Taft said that:

[t]he Interstate Commerce Commission was authorized to exercise powers the conferring of which by Congress would have been, perhaps, thought in the earlier years of the Republic to violate the rule that no legislative powers can be delegated. But the inevitable progress in exigencies of government and the utter inability of Congress to give the time and attention indispensable to the exercise of powers in detail forced the modification of the rule. Similar necessity caused Congress to create other bodies with analogous relations to the existing legislative, executive, and judicial machinery of the Federal Government, and these in due course came under the examination of this court. Here was a new field of administrative law which needed a knowledge of government and an experienced understanding of our institutions safely to define and declare.

In the beginning, the Supreme Court distinguished between the administration of a law clearly written by Congress and the wholesale delegation of lawmaking powers to these agencies under the rubric of rule making. But a funny thing happened on the way to the administrative forum. Congress has been more than happy to cede its powers and its legislative responsibilities in exchange for political cover. Now it can’t be blamed for unpopular policies. The agencies, unaccountable or removable, are to blame. Hadley Arkes observes in The Return of George Sutherland: “The political branches…collaborated in creating these odd offices that did not fit the logic of the separation of powers.”

Over time, the scope of agency rule making has become ever broader and less confined. The federal administrative agencies have grown like Topsy, wielding authority over every corner of our lives. Insofar as our rights and liberties are concerned, the administrative state in the Age of Obama has achieved proportions reflecting a crisis. Something, more than something, many things have gone haywire since the Progressive era and the New Deal.

Every year the agencies expand their reach and become less accountable. A Democratic Congress joined with Obama to open up whole new frontiers in administrative governance, starting with Obamacare, but Obamacare was only the beginning. Consider, for example, the Consumer Financial Protection Bureau and its administrative structure, as described by Todd Zywicki (more here):

A centerpiece of the Dodd-Frank financial reform legislation was the creation of a new Federal Consumer Financial Protection Bureau (“CFPB”) within the Federal Reserve. Few bureaucratic agencies in American history, if any, have combined the vast power and lack of public accountability of the CFPB. It is an independent agency inside another independent agency, presided over by a single director who is insulated from presidential removal. Additionally, the Board is outside of the congressional appropriations process. Finally, its actions are unreviewable by the Federal Reserve—they can be checked bureaucratically only by a supermajority vote of the Financial Stability Oversight Council finding that the Board’s actions imperil the safety and soundness of the American financial services industry.

The CFPB brings us the reductio ad absurdum of the administrative state. The legal structure around the CFPP is designed precisely to insulate it from political accountability. It is a design better suited for a government of unlimited powers conducive to tyranny rather than to a government of limited powers conducive to freedom. One wonders if the Supreme Court will ever return to first principles or set some limits on how far the agencies can be removed from political accountability. That would be a beginning.

As I looked around online for scholarship that would help me understand the questionable constitutionality of the administrative state, I discovered that Professor Hamburger’s book Is Administrative Law Unlawful? was forthcoming in 2014 from the University of Chicago Press. Professor Hamburger’s book addressed the question I wanted answered. Spoiler alert: His answer was No! in thunder (as Melville said of “the grand truth about Nathaniel Hawthorne”).

Urging the editors of National Review to review the book when it came out, I was instead sent a review copy by Rich Lowry and Michael Potemra. They invited me to put up. For me the book represented an awakening. That’s what I tried to convey in my review of the book.

In addition, we posted an interview with Professor Hamburger. The Library of Law & Liberty posted an outstanding podcast with Professor Hamburger that remains accessible online. Hillsdale College’s Kirby Center hosted Professor Hamburger for a fantastic lecture about the book upon its publication (video below).

Last year the Manhattan Institute awarded Is Administrative Law Unlawful its Hayek Book Prize. The institute has posted Professor Hamburger’s Hayek Lecture here with a preface by Amity Shlaes and an introduction by former New York Times columnist John Tierney.

Myron Magnet reviewed Professor Hamburger’s book for the Manhattan Institute’s City Journal in 2015 in “The dead Constitution.” The new issue of City Journal publishes Professor Hamburger’s essay “How government agencies usurp our rights.” The same issue includes Adam White’s thematically related essay “Break the bureaucracy!”

My thanks to Paul and E.J. Dionne and Steve Bannon, for that matter, for giving me the occasion to revisit this subject. In his Hayek Lecture Professor Hamburger asserts that the question of the administrative state is the great civil liberties issue of our time. It is a thought that helps to put Steve Bannon’s comments last week in the appropriate context.

  

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