One of the big problems involving administrative agencies is that they are often insufficiently checked. With the relaxation of separation of powers during the New Deal, modern administrative law limits agencies through two principal mechanisms: required procedures and judicial review. Unfortunately, administrative law allows certain loopholes to these mechanisms that agencies can exploit.
One of the biggest problems these days occurs when agencies regulate through the use “guidance documents.” Mike Greve recently had a post discussing the Department of Education’s use of one such guidance. When agencies issue legislative regulations – rules that bind the public – they are normally required to do so after a notice and comment procedure. Moreover, such rules are often subject to judicial review when they are issued. Thus, there is a procedural and judicial review check on such legislative rules.
By contrast, guidance documents – which often read like legislative rules in that they appear to tell regulated parties how to act – are not subject to the notice and comment procedure. While guidance documents do not formally bind private parties, they often operate in the real world to exert a practical influence on the public. Moreover, while the matter is subject to dispute, there is often not judicial review of such rules. As a result, agencies love to regulate with such guidance documents since they can avoid scrutiny.
While the courts could possibly address these problems, the best way would be through legislation. Administrative agencies have enormous influence over the country and the Congress needs to pay attention to them. Republicans, who have recently been greatly concerned about the abuses of administrative agencies, should attempt to address this problem through legislation.