I recently read a book called "The Great COVID Panic" discussing among other things the failures of administrative agencies in the past two years. (Disclaimer of bias: one of the authors is a friend). The book has a very interesting proposal at the end: keep or even expand the powers of leaders of administrative agencies, but convene randomly chosen citizen juries to choose those leaders. So you would have one jury assembled every so often to choose the head of the EPA, another for OSHA, etc. The idea is to preserve expert independence and get superior leadership competence in the specialist domains to that of Congressmen, but check elite corruption by making sure a representative sample of ordinary people gets to decide which experts to empower.
I don't know if this would do better than what we have, but it strikes me as an example of mechanism reform worth trying. We need popular accountability and we need independent domain expertise, and ordinary democratic elections have proven to be a very poor means of balancing the two.
A very simple reform that would require a minimal tweak of the current APA system would be the simple requirement that Congress vote to approve any new rulemaking within 90 days of its submission - perhaps prior to publication in the Federal Register for public notice and comment - else it dies on the vine.
The current budget process is permanently and awfully messed up and so probably not a good example for anything. But still, in general, the President comes up with a proposal, but must submit it to Congress for approval so that some modified version can 'originate' in the HOR. By this mechanism, Congress maintains and exerts a lot of political control - theoretically on behalf of the members' constituents - over what gets done. And if the White House is trying to sneak some really objectionable stinker in there, it gets nipped in the bud.
The only reason the Executive bothers with any of this at all is because the Constitution explicitly says it has to, but it's a good check. In circumstances in which the executive can fund itself - for example, when an agency is authorized to collect fees and *keep the money as a slush fund to spend with wide discretion* instead of immediately handing it over to the Treasury, to say that the ways the money gets spent evades public awareness and democratic accountability is to put it extremely mildly.
But that's how new rules get made, and what causes a lot of deadweight loss from regulatory uncertainty and "policy whiplash", not to mention greatly increasing the stakes of already hyper-staked Presidential elections which generates increasingly widespread and neurotic tensions.
To be fair, this would mean that the process of making any new rules might grind to a halt. On the other hand, that wouldn't be the worst thing in the world.
I see a much broader problem than just getting the administrative agencies to come to better decisions. The big problem is the huge burden, both in salaries and in resulting compliance and litigation costs, caused by the size and complexity of the system; a situation the founders promised would not happen (for instance in Federalist #45).
I would impose two remedies. The first requires no constitutional change at all, but merely that the Supreme Court rule as it should, and that is to declare the entire Code of Federal Regulations unconstitutional as a violation of separation of powers. Then Congress can proceed, piecemeal, to enact whatever rules are needed themselves (reading each one aloud in front of Congress, thus limiting the amount of change that can be made in a year to the time they want to spend doing their jobs).
The second would require constitutional change, and that would be a sunset law like that of Texas, and preferably along with it, a law limiting Congress to part-time meetings, maybe even just three weeks every other year as they do in Texas.
Above all we need to stop accepting that either the law or the bureaucracy needs to be large and complicated. They don't, and shouldn't. Congress is a bunch of greedy lawyers and they make the law complicated to create work for themselves.
Why would members of Congress cut back on their ability to reward donors through legislation and regulation by installing an independent auditor that could upset things? Hard to imagine that Arnold's scheme would ever even be tried.
I'll egotistically take Arnold's post as a rebuttal to my comment on his post of 1/3, and provide a partial response.
But first, I'll say that the point I was raising there was a subtly different one than is raised in some other comments on this post. Whether the administrative state is actually unconstitutional, or ought to be unconstitutional, under the separation-of-powers doctrine is not my point, though it is the point others have made. Rather, my point is that the actual separation of powers limits some excesses of the administrative state, so is good even from a utilitarian perspective.
That leads sideways to one of the points that I made and that Arnold has chosen not to rebut: that the administrative agencies especially ought not have judicial power, because that's where the rubber hits the road. As I said there, if a federal judge isn't smart enough to understand the administrative agency's rule, no one else is, either.
Turning to what Arnold does say, his main point is that it is unrealistic to expect the Congress to do a better job than an administrative agency in writing rules. Perhaps so. But that need not undermine the separation of powers.
First, as I suggested in my comment, we could allow a new agency to write rules for some set period, then require the agency to propose their codification to Congress. We could specially privilege a bill that does such a codification, to assure that it is introduced and heard. (For example, there's nothing in the constitution that says that only elected members of Congress can introduce bills, except perhaps for bills raising revenue, which must "originate" in the house.)
Second, we currently have administrative agencies that combine legislative powers delegated from Congress and executive powers delegated from the President. There's no reason that both of these delegations have to be to the same entity. Take the Federal Trade Commission, which I think was the first independent regulatory agency. There's no reason it must have both the power to issue regulations and the power to enforce them. There could be a Federal Trade Commission that only has the power to issue rules and a separate Federal Trade Authority that only has the power to enforce them. (Though I'd predictably prefer that enforcement power to be in the traditional, Presidentially controlled executive branch.) With an FTC that has only rules-making power, the commission could have commissioners who arrive with impressive credentials, receive set terms, and develop greater competence on the job -- those being some of the things that I think Arnold would point to as resulting in slightly greater competence in administrative rule-making compared to Congressional legislating.
I think this approach might be slightly better in avoiding regulatory capture, though that's mostly a gut sense. With rules-making, enforcement, and adjudication in separate bodies, there's more chance of it coming to light and getting caught downstream. So if that matters to you, there's that. (That might be a negative to you. My sense is that regulatory capture is probably, on net, a positive thing in many regulatory contexts.)
If the rules-making and enforcement functions are separate, I don't think we'd want Arnold's COO overseeing the rules-making commissions. An executive like that shouldn't really oversee the legislating. Rather, it should be over the enforcement agencies. But the need for audit remains just as strong for both types.
If you talk with Zvi again, please ask him what reforms he might suggest as having the biggest bang for the buck in terms of things that would have been likely to have made the regulatory / policy response to the pandemic much better.
Or whether he thinks that is a "regime-change complete problem" for the US at this point.
My position is that we're lucky that covid isn't that bad of a virus, in comparison to how bad it might have been. Government flailed and many QALYs were unnecessarily lost as a result, but it could have been a lot worse. Had it been like the black death, we would have been totally screwed.
However, many people disagree with me and say something to the effect of if the pandemic had been a lot worse, the government would have risen to the challenge, at least proportionately in terms of relative failure. The models of state capacity and decision-makings that would have to be true to make that claim accurate seem wildly implausible to me, but I'd be curious to hear what Zvi thinks about it.
Just because you think the Congress we have is incompetent to draft detailed regulations it does not mean that independent regulatory agencies must breach the concept of the separation of powers. Congress could authorize an agency to write detailed rules or revise existing rules and could commit to an up or down vote whereupon to rule would take effect. A separate arm of the executive could enforce any criminal aspects or bring civil suits. The judiciary could be expanded so that life textured judges hear all cases. Why is this less desirable than hiring a deep state tsar?
The counter to "Congress won't be smart enough" is that you could raise the budgets and salaries of committee staffers, and make committee staffing comparably prestigious to a tour in a high position at one of the administrative agencies. Right now committee staffers tend not to be the most impressive, high-wattage people (although certainly many of them mean well). The high intellectual wattage people at the regulators are just doing their tour on behalf of their dark masters, engaging in the gritty work of regulatory capture.
In fact, I would argue that you would get similar outcomes to what we have today if you abolished the regulatory state and shifted control back to Congress, just with chairs having been shifted from one formal organization to another. The lobbying activity directed at regulatory agencies would naturally shift back to Congress. As a side note, lobbying Congress is significantly more regulated than regulatory lobbying.
The Congress and the Supreme Court should dare take a close on whether the Federal Reserve, by for its bank capital requirements decreeing risk weights of 0% the Federal Government and100% We the People, is following constitutional rules.
I think there's a case to be made that Congressional incompetence is caused by the regulatory state as much as it is a cause of the regulatory state.
That is, it's a vicious circle; the more the more powerful the legislative capability of the administrative state, the less need for Congress to act as practical lawmakers. Rather, they are free to pursue more aspirational politics (e.g. Green New Deal) and cherry picking of lobbying opportunities.
The auditor would then evolve the department to become just another large inefficient paperwork generator. Only with real failure (bankruptcy) can you maintain efficient and viable institutions, but government regulators are monopoly's that can't fail and when they do screw up it just grows by claiming "lack of resources or power".
Perhaps we should split up the government regulatory monopolies then the people vote on the survival of one agency every decade and the looser all gets fired. A new one can from the failed institution with a new name and rehire new people and the best of the old.
Additionally I would focus less on new cross cutting titles and positions. There already is an OMB Director who effectively has CFO (budget) and COO (management) organizations. Maybe you devote some more resources to the management side as it is imbalanced. The real issue is that power is too diffuse. It’s only when you have a strong White House and firm majorities in both houses with a veto proof or close majority that things happen expeditiously. We sacrifice state capacity so that we can make sure we can hobble our enemies. Not much will change until you take care of that. That is if you want to fix it.
I work with agencies now and worked in congress in the past. One big issue is Congress’s inability to function under normal order. If congress were more majoritarian, it could respond faster. The growth of the administrative state’s power is at least in some part the abdication of Congressional power. In lots of cases the executive branch wants Congressional involvement and backing but so few things pass that they can’t wait forever. This in the end puts the lie to gridlock. Things happen whether Congress acts or doesn’t act. They just end up being done by bureaucrats with no Congressional input.
Re: "At the moment, the debate about the regulatory state is unproductive. [... .] The upshot of this debate is a futile tug-of-war, with conservatives arguing for less regulation and less deference to agency experts while progressives argue for more. To break free from this impasse, both sides will need to set aside their respective biases toward the regulatory state and consider structural reforms that would make it more effective and less prone to abuses of power." (Arnold Kling, "Designing a Better Regulatory State," (National Affairs, at embedded link in blogpost).
Arnold proposes a two-pronged constitutional reform that would improve the administrative state's effectiveness (the Chief Operating Officer) and establish a correlative new check-and-balance (the Chief Auditor) to limit abuses of power. His eloquent essay provides much food for thought.
In the meanwhile, simple, sensible reforms at the 2nd decimal of the current administrative state might yield great benefits.
For example, currently, agency directors at NIH and NIAID allocate major research grants and also server as advisors to the President about public-health policy. This conflation of roles creates a perverse incentive for researchers to avoid taking policy positions that conflict with the agency advisors' (lest the dissenting researchers suffer retaliation in access to research grants). The result is suppression of alternative views in science and public policy. I submit that this was a serious problem during the pandemic. Therefore, for example, a sensible reform would prohibit the directors of NIH and NAIAD, who control major research funding, from serving as advisors to the President about public-health policy.
The most obvious and accuse example of regulatory overreach today is COVID.
Elected officials have generally been far more sane than public health officials. Even elected democrats are to the left of public health officials. Quite frankly, looking at polls of public health officials opinions on COVID makes your average politician seem like a great alternative.
The second most contentious public area today is education, specifically public schools. Again, unelected officials are the most extreme on education issues today. Politicians, even leftist politicians, are generally saner.
It seems to me this elite technocrats know best model works best when we are talking about obscure and complicated technical questions which don't have huge value implications on which people can disagree. The closer things get to common sense everyday things that have big impacts on peoples lives, the less power technocrats should have.
Congress could do more to (continually) tweak the incentives that regulatory agencies have to come to good decisions (conceptually setting the values of parameters in the agencies cost-benefit calculations). Then the Auditor could check to see that they were following the policies that Congress specified. Maybe.
I recently read a book called "The Great COVID Panic" discussing among other things the failures of administrative agencies in the past two years. (Disclaimer of bias: one of the authors is a friend). The book has a very interesting proposal at the end: keep or even expand the powers of leaders of administrative agencies, but convene randomly chosen citizen juries to choose those leaders. So you would have one jury assembled every so often to choose the head of the EPA, another for OSHA, etc. The idea is to preserve expert independence and get superior leadership competence in the specialist domains to that of Congressmen, but check elite corruption by making sure a representative sample of ordinary people gets to decide which experts to empower.
I don't know if this would do better than what we have, but it strikes me as an example of mechanism reform worth trying. We need popular accountability and we need independent domain expertise, and ordinary democratic elections have proven to be a very poor means of balancing the two.
A very simple reform that would require a minimal tweak of the current APA system would be the simple requirement that Congress vote to approve any new rulemaking within 90 days of its submission - perhaps prior to publication in the Federal Register for public notice and comment - else it dies on the vine.
The current budget process is permanently and awfully messed up and so probably not a good example for anything. But still, in general, the President comes up with a proposal, but must submit it to Congress for approval so that some modified version can 'originate' in the HOR. By this mechanism, Congress maintains and exerts a lot of political control - theoretically on behalf of the members' constituents - over what gets done. And if the White House is trying to sneak some really objectionable stinker in there, it gets nipped in the bud.
The only reason the Executive bothers with any of this at all is because the Constitution explicitly says it has to, but it's a good check. In circumstances in which the executive can fund itself - for example, when an agency is authorized to collect fees and *keep the money as a slush fund to spend with wide discretion* instead of immediately handing it over to the Treasury, to say that the ways the money gets spent evades public awareness and democratic accountability is to put it extremely mildly.
But that's how new rules get made, and what causes a lot of deadweight loss from regulatory uncertainty and "policy whiplash", not to mention greatly increasing the stakes of already hyper-staked Presidential elections which generates increasingly widespread and neurotic tensions.
To be fair, this would mean that the process of making any new rules might grind to a halt. On the other hand, that wouldn't be the worst thing in the world.
I see a much broader problem than just getting the administrative agencies to come to better decisions. The big problem is the huge burden, both in salaries and in resulting compliance and litigation costs, caused by the size and complexity of the system; a situation the founders promised would not happen (for instance in Federalist #45).
I would impose two remedies. The first requires no constitutional change at all, but merely that the Supreme Court rule as it should, and that is to declare the entire Code of Federal Regulations unconstitutional as a violation of separation of powers. Then Congress can proceed, piecemeal, to enact whatever rules are needed themselves (reading each one aloud in front of Congress, thus limiting the amount of change that can be made in a year to the time they want to spend doing their jobs).
The second would require constitutional change, and that would be a sunset law like that of Texas, and preferably along with it, a law limiting Congress to part-time meetings, maybe even just three weeks every other year as they do in Texas.
Above all we need to stop accepting that either the law or the bureaucracy needs to be large and complicated. They don't, and shouldn't. Congress is a bunch of greedy lawyers and they make the law complicated to create work for themselves.
Why would members of Congress cut back on their ability to reward donors through legislation and regulation by installing an independent auditor that could upset things? Hard to imagine that Arnold's scheme would ever even be tried.
I'll egotistically take Arnold's post as a rebuttal to my comment on his post of 1/3, and provide a partial response.
But first, I'll say that the point I was raising there was a subtly different one than is raised in some other comments on this post. Whether the administrative state is actually unconstitutional, or ought to be unconstitutional, under the separation-of-powers doctrine is not my point, though it is the point others have made. Rather, my point is that the actual separation of powers limits some excesses of the administrative state, so is good even from a utilitarian perspective.
That leads sideways to one of the points that I made and that Arnold has chosen not to rebut: that the administrative agencies especially ought not have judicial power, because that's where the rubber hits the road. As I said there, if a federal judge isn't smart enough to understand the administrative agency's rule, no one else is, either.
Turning to what Arnold does say, his main point is that it is unrealistic to expect the Congress to do a better job than an administrative agency in writing rules. Perhaps so. But that need not undermine the separation of powers.
First, as I suggested in my comment, we could allow a new agency to write rules for some set period, then require the agency to propose their codification to Congress. We could specially privilege a bill that does such a codification, to assure that it is introduced and heard. (For example, there's nothing in the constitution that says that only elected members of Congress can introduce bills, except perhaps for bills raising revenue, which must "originate" in the house.)
Second, we currently have administrative agencies that combine legislative powers delegated from Congress and executive powers delegated from the President. There's no reason that both of these delegations have to be to the same entity. Take the Federal Trade Commission, which I think was the first independent regulatory agency. There's no reason it must have both the power to issue regulations and the power to enforce them. There could be a Federal Trade Commission that only has the power to issue rules and a separate Federal Trade Authority that only has the power to enforce them. (Though I'd predictably prefer that enforcement power to be in the traditional, Presidentially controlled executive branch.) With an FTC that has only rules-making power, the commission could have commissioners who arrive with impressive credentials, receive set terms, and develop greater competence on the job -- those being some of the things that I think Arnold would point to as resulting in slightly greater competence in administrative rule-making compared to Congressional legislating.
I think this approach might be slightly better in avoiding regulatory capture, though that's mostly a gut sense. With rules-making, enforcement, and adjudication in separate bodies, there's more chance of it coming to light and getting caught downstream. So if that matters to you, there's that. (That might be a negative to you. My sense is that regulatory capture is probably, on net, a positive thing in many regulatory contexts.)
If the rules-making and enforcement functions are separate, I don't think we'd want Arnold's COO overseeing the rules-making commissions. An executive like that shouldn't really oversee the legislating. Rather, it should be over the enforcement agencies. But the need for audit remains just as strong for both types.
Max
If you talk with Zvi again, please ask him what reforms he might suggest as having the biggest bang for the buck in terms of things that would have been likely to have made the regulatory / policy response to the pandemic much better.
Or whether he thinks that is a "regime-change complete problem" for the US at this point.
My position is that we're lucky that covid isn't that bad of a virus, in comparison to how bad it might have been. Government flailed and many QALYs were unnecessarily lost as a result, but it could have been a lot worse. Had it been like the black death, we would have been totally screwed.
However, many people disagree with me and say something to the effect of if the pandemic had been a lot worse, the government would have risen to the challenge, at least proportionately in terms of relative failure. The models of state capacity and decision-makings that would have to be true to make that claim accurate seem wildly implausible to me, but I'd be curious to hear what Zvi thinks about it.
Just because you think the Congress we have is incompetent to draft detailed regulations it does not mean that independent regulatory agencies must breach the concept of the separation of powers. Congress could authorize an agency to write detailed rules or revise existing rules and could commit to an up or down vote whereupon to rule would take effect. A separate arm of the executive could enforce any criminal aspects or bring civil suits. The judiciary could be expanded so that life textured judges hear all cases. Why is this less desirable than hiring a deep state tsar?
The counter to "Congress won't be smart enough" is that you could raise the budgets and salaries of committee staffers, and make committee staffing comparably prestigious to a tour in a high position at one of the administrative agencies. Right now committee staffers tend not to be the most impressive, high-wattage people (although certainly many of them mean well). The high intellectual wattage people at the regulators are just doing their tour on behalf of their dark masters, engaging in the gritty work of regulatory capture.
In fact, I would argue that you would get similar outcomes to what we have today if you abolished the regulatory state and shifted control back to Congress, just with chairs having been shifted from one formal organization to another. The lobbying activity directed at regulatory agencies would naturally shift back to Congress. As a side note, lobbying Congress is significantly more regulated than regulatory lobbying.
The Congress and the Supreme Court should dare take a close on whether the Federal Reserve, by for its bank capital requirements decreeing risk weights of 0% the Federal Government and100% We the People, is following constitutional rules.
https://subprimeregulations.blogspot.com/2013/11/have-risk-weights-of-current-bank.html
I think there's a case to be made that Congressional incompetence is caused by the regulatory state as much as it is a cause of the regulatory state.
That is, it's a vicious circle; the more the more powerful the legislative capability of the administrative state, the less need for Congress to act as practical lawmakers. Rather, they are free to pursue more aspirational politics (e.g. Green New Deal) and cherry picking of lobbying opportunities.
The auditor would then evolve the department to become just another large inefficient paperwork generator. Only with real failure (bankruptcy) can you maintain efficient and viable institutions, but government regulators are monopoly's that can't fail and when they do screw up it just grows by claiming "lack of resources or power".
Perhaps we should split up the government regulatory monopolies then the people vote on the survival of one agency every decade and the looser all gets fired. A new one can from the failed institution with a new name and rehire new people and the best of the old.
Additionally I would focus less on new cross cutting titles and positions. There already is an OMB Director who effectively has CFO (budget) and COO (management) organizations. Maybe you devote some more resources to the management side as it is imbalanced. The real issue is that power is too diffuse. It’s only when you have a strong White House and firm majorities in both houses with a veto proof or close majority that things happen expeditiously. We sacrifice state capacity so that we can make sure we can hobble our enemies. Not much will change until you take care of that. That is if you want to fix it.
I work with agencies now and worked in congress in the past. One big issue is Congress’s inability to function under normal order. If congress were more majoritarian, it could respond faster. The growth of the administrative state’s power is at least in some part the abdication of Congressional power. In lots of cases the executive branch wants Congressional involvement and backing but so few things pass that they can’t wait forever. This in the end puts the lie to gridlock. Things happen whether Congress acts or doesn’t act. They just end up being done by bureaucrats with no Congressional input.
Re: "At the moment, the debate about the regulatory state is unproductive. [... .] The upshot of this debate is a futile tug-of-war, with conservatives arguing for less regulation and less deference to agency experts while progressives argue for more. To break free from this impasse, both sides will need to set aside their respective biases toward the regulatory state and consider structural reforms that would make it more effective and less prone to abuses of power." (Arnold Kling, "Designing a Better Regulatory State," (National Affairs, at embedded link in blogpost).
Arnold proposes a two-pronged constitutional reform that would improve the administrative state's effectiveness (the Chief Operating Officer) and establish a correlative new check-and-balance (the Chief Auditor) to limit abuses of power. His eloquent essay provides much food for thought.
In the meanwhile, simple, sensible reforms at the 2nd decimal of the current administrative state might yield great benefits.
For example, currently, agency directors at NIH and NIAID allocate major research grants and also server as advisors to the President about public-health policy. This conflation of roles creates a perverse incentive for researchers to avoid taking policy positions that conflict with the agency advisors' (lest the dissenting researchers suffer retaliation in access to research grants). The result is suppression of alternative views in science and public policy. I submit that this was a serious problem during the pandemic. Therefore, for example, a sensible reform would prohibit the directors of NIH and NAIAD, who control major research funding, from serving as advisors to the President about public-health policy.
The most obvious and accuse example of regulatory overreach today is COVID.
Elected officials have generally been far more sane than public health officials. Even elected democrats are to the left of public health officials. Quite frankly, looking at polls of public health officials opinions on COVID makes your average politician seem like a great alternative.
The second most contentious public area today is education, specifically public schools. Again, unelected officials are the most extreme on education issues today. Politicians, even leftist politicians, are generally saner.
It seems to me this elite technocrats know best model works best when we are talking about obscure and complicated technical questions which don't have huge value implications on which people can disagree. The closer things get to common sense everyday things that have big impacts on peoples lives, the less power technocrats should have.
Congress could do more to (continually) tweak the incentives that regulatory agencies have to come to good decisions (conceptually setting the values of parameters in the agencies cost-benefit calculations). Then the Auditor could check to see that they were following the policies that Congress specified. Maybe.