The second day of FedSoc’s 2012 Annual Student Symposium began with a panel on "Congress vs. Agencies: Balancing Checks and Efficiency: Gridlock, Organized Interests, and Regulatory Capture." Judge Lois Haight served as the moderator.
The general thesis of C. Boyden Gray’s presentation was that there has been too much delegation to agencies with not enough detail and oversight. As a consequence of the unpredictability this has created, there has been reduced investment in the business world. The Dodd-Frank bill is almost 2,000 long yet provides little guidance to regulators, he claimed. Courts have been cut off from any review of agency decisions under Dodd-Frank, and even Congress has been effectively cut off since the regulators are funded internally. “There are a lot of financial institutions that are terrified by Dodd-Frank,” he said, but finding private plaintiffs to challenge it has not been easy because they are intimidated by the government.
Professor Lisa Heinzerling of Georgetown Law spoke next, questioning the very title of the Symposium, “Bureaucracy Unbound: Can Limited Government and the Administrative State Co-Exist?” She suggested that a more accurate title would be “Bureaucracy Bound.” Agencies are not free to roam at will, she claimed, but are constrained on all sides: by Congress, who pass highly prescriptive bills and hold numerous influential hearings with agency officials; by the White House, which uses the Office of Management and Budget to effectively kill agency rules it does not like; and courts, with their oversight authority as outlined in the Chevron Supreme Court case.
Professor Michael McConnell spoke on what he termed the “pathologies of the modern regulatory state” as predicted by James Madison. The problem according to McConnell is not so much the amount of regulation as the mode of regulation—the vast number of perplexing incomprehensible laws coupled with broad administrative discretion as to individual cases. He quoted Madison in Federalist 62: “It will be of little avail to the people, that the laws are made by men of their own choice, if the laws be so voluminous that they cannot be read, or so incoherent that they cannot be understood.” McConnell pointed to the number of pages in recent bills: Patriot Act (131 pages), Cap & Trade (1,428); Dodd-Frank (House version 1,616; Senate version 1,705); and the Affordable Care Act (House 2,012; Senate 906). By contrast, the Banking Act of 1864 was just 29 pages, and the Federal Reserve Act of 1931 was 32 pages.
Not only is it impossible for the American people to monitor the content of the massive bills, even Congress cannot do so, said McConnell. He quoted Senator Max Baucus: “I don’t think you want me to waste my time to read every page of the health care bill. You know why? It’s statutory language. . . .We hire experts.” The people who benefit from such lengthy and complex bills, McConnell argued, are lobbyists and lawyers, particularly the big law firms. Furthermore, such regulation of business works to the advantage to the larger players, who can better absorb the deadweight costs than small upstart competitors. This is why big business sometimes acquiesces to such regulation under the cover of being good public servants.