Musings of Captain Justice a/k/a Gil Jones

Federal Regulations – The legislature you don’t know about

English: U.S. Rep. John Linder with the 2007 T...

U.S. Rep. John Linder with the 2007 Tax code and complete set of Title 26 of the US Code of Federal Regulations (from Wikipedia)

What? There’s the House and the Senate. Right? In both the state governments and the federal government. How can it be said there is another legislature?

Where do federal regulations come from?

It’s called the administrative law and it’s where the size and scope of government is out of control. Want to reduce the size and scope of government? Attack the regulation-making function of government. In theory, legislative enactments set forth the law and regulations are adopted by the departments and agencies “merely” to implement the law as passed by the legislature. At the federal level, we have the Code of Federal Regulations (CFR).

In fact, regulations often go far beyond the letter and the intent of the law. They are frequently attacked as being outside the proper scope and subject to being struck down by a court. Just how pervasive is the regulatory process?

Simply look at the size of the CFR and the rapid pace of its growth and that alone tells the story. Some snippets from various sources that convey the idea:

Americans are endlessly paying taxes–on their income, on their property, on almost anything they purchase. But the heavy burden that the U.S. government places on its citizens does not stop there. It continues with a slew of hidden taxes imposed by an ever-larger number of government regulations. These regulatory taxes do not appear on any balance sheet, yet cost Americans about $1 trillion every year. The regulatory burden on Americans continued to surge during 2009, with record increases in costs thanks to both the Bush and Obama Administrations.

via Red Tape Rising: Regulation in the Obama Era.  (accessed 12 DEC 2011)

Tax code example

Take just the tax code for example. Here are a couple of graphics with explanation (click thumbnails):

From CCH

Growth chart

What we find is that the tax code really didn’t explode in complexity until World War II, which we observe in the large jump from being just 504 pages in length in 1939 to 8,200 pages in 1945, the final year of the war. Since then, we find that the number of pages in the U.S. federal tax code have grown at a near-steady exponential rate of 3.28% per year, which as of 2010, means that the U.S. tax code has ballooned to be 71,684 pages in length!

via Political Calculations: The Growing Complexity of the U.S. Federal Tax Code. (accessed 12 DEC 2011)

Why is this a problem?

Some Background on Regulation
More than 50 agencies have a hand in federal regulatory policy, ranging from the Animal and Plant Health Inspection Service to the Bureau of Customs and Border Protection. Together, these agencies enforce more than 150,000 pages of rules, with purposes and impacts as varied as the agencies themselves. Many of these regulations provide needed benefits. Most Americans would agree on the need for security regulations to protect citizens from terrorist attacks, although the extent and scope of those rules may be subject to debate. But each regulation comes at a cost–a “regulatory tax” imposed on all Americans. Of course, Americans do not file regulatory tax forms on April 15; the price paid for regulation is largely hidden. It is nevertheless enormous: According to a 2005 study commissioned by the Small Business Administration, the cost of all rules on the books was some $1.1 trillion per year,[1] more than Americans paid in federal income taxes in 2009.

via Red Tape Rising: Regulation in the Obama Era. (accessed 12 DEC 2011)

Good grief, how many regulations are there? Really …

Apparently opinions differ. Likely it’s impossible to know because they grow so rapidly. Here is another article with startling numbers:

How Many Federal Regulations are There?
According to the Office of the Federal Register, in 1998, the Code of Federal Regulations (CFR), the official listing of all regulations in effect, contained a total of 134,723 pages in 201 volumes that claimed 19 feet of shelf space. In 1970, the CFR totaled only 54,834 pages.

The General Accountability Office (GAO) reports that in the four fiscal years from 1996 to 1999, a total of 15,286 new federal regulations went into effect. Of these, 222 were classified as “major” rules, each one having an annual effect on the economy of at least $100 million.

via Federal Regulations – About US Federal Regulations. (accessed 12 DEC 2011)

Where do these ‘regs’ come from?

It’s a law-making process all to its own and largely hidden from the public … until it impacts you. Here is a pretty good article about the process. You should not read the entire article on a full stomach. You can also read the law itself that authorizes this process.

Federal regulations are the actual enforceable laws authorized by major legislation enacted by Congress. The Clean Air Act, the Food and Drug Act, the Civil Rights Act are all examples of landmark legislation requiring months, even years of highly publicized planning, debate, compromise and reconciliation in Congress. Yet the work of creating the vast and ever-growing volumes of federal regulations, the real laws behind the acts, happens largely unnoticed in the offices of the government agencies rather than the halls of Congress.

Regulatory Federal Agencies
Agencies, like the FDA, EPA, OSHA and at least 50 others, are called “regulatory” agencies, because they are empowered to create and enforce rules – regulations – that carry the full force of a law. Individuals, businesses, and private and public organizations can be fined, sanctioned, forced to close, and even jailed for violating federal regulations. The oldest Federal regulatory agency still in existence is the Office of the Comptroller of the Currency, established in 1863 to charter and regulate national banks.

via Federal Regulations – About US Federal Regulations. (accessed 12 DEC 2011)

An index from statute to rule

I dare you to link to the page cited next and scroll down through the entire page. You will quickly gain an appreciation for how many legislated laws, compounded by rule-made laws, we have at just the federal level.



The following table lists rulemaking authority (except 5 U.S.C. 301)
for regulations codified in the Code of Federal Regulations. Also
included are statutory citations which are noted as being interpreted or
applied by those regulations.
The table is divided into four segments: United States Code citations,
United States Statutes at Large citations, public law citations, and
Presidential document citations. Within each segment the citations are
arranged in numerical order:

via Code of Federal Regulations: Parallel Table of Authorities and Rules. (go ahead, click on the link 🙂 ) (accessed 12 DEC 2011)

More on the rulemaking process

The following is a very extensive article which at a quick glance looks to be pretty thorough and accurate. Just a few excerpts:

In administrative law, rulemaking refers to the process that executive and independent agencies use to create, or promulgate, regulations. In general, legislatures first set broad policy mandates by passing statutes, then agencies create more detailed regulations through rulemaking.
By bringing detailed scientific and other types of expertise to bear on policy, the rulemaking process has been the means by which some of the most far-reaching government regulations of the 20th century have been created. For example, science-based regulations are critical to modern programs for environmental protection, food safety, and workplace safety. However, explosive growth in regulations has fueled criticism that the rulemaking process reduces the transparency and accountability of democratic government.

* * *

Rulemaking and the courts

In the U.S., interested parties can sue to have a judge review the rulemaking process once the rule is finalized. Interested parties frequently sue the rulemaking agency, asking the court to order the agency to reconsider. For example, environmental groups may sue, claiming that the rule is too lax on industry; or industry groups may sue, claiming that the rule is too onerous.

Traditionally, courts are reluctant to step into the shoes of the technical experts and re-open the decisions made in the agency’s detailed analysis. However, courts do review whether a rulemaking meets the standards for the rulemaking process. The basis of this review by the courts may be limited to certain questions of fairness or the procedures that ensure that both sides of a dispute are treated equally before any decision making occurs or that the decision is not patently unreasonable (under Canadian law) or Wednesbury unreasonableness (under British law) or similar doctrines described below.

These powers of review of administrative decision, while often governed by statute, were originally developed out of the royal prerogative writs of English lawsuch as the writ of mandamus and the writ of certiorari.

Thus, it is not enough to simply claim that the rulemaking agency could have done a better job. Instead, under U.S. administrative law, to ask the court to order changes in a rule, a party must argue that the rule is:

Arbitrary and capricious and/or unsupported by the record. Most frequently, objectors will argue that, even if the judge is not an expert, she can tell that there is an obvious gap in the agency’s data or analysis. A court may intervene if it finds that there is no reasonable way that the agency could have drafted the rule, given the evidence in the rulemaking record. A court may send a rule back to the agency for further analysis, generally leaving the agency to decide whether to change the rule to match the existing record or to amend the record to show how they arrived at the original rule. If a court does remand a rule back to the agency, it almost always involves an additional notice and public comment period.

Exceeds statutory authority. Frequently, opponents of a rule argue that it fails to follow the instructions of the authorizing legislation. Rules can be found to exceed statutory authority if they are too strict or too lax. If a law instructs an agency to issue regulations to ban a chemical, but the agency issues a rule that instead sets levels for safe use—or vice versa—a court may order the agency to issue a new rule.

Bolt out of the blue. Occasionally, interested parties argue that the final rule contains provisions that were never vetted during the public comment period. A court may intervene if it finds that there was no way that the commenting public could have anticipated the new provisions and provided comment. If so, the new provisions are said to be, in a colorful legal phrase, a ‘bolt out of the blue’ rather than a reasonable course correction during the rulemaking process. Frequently, agencies will vet several options during the proposed rule phase to allow for comment on the full spectrum of rules under consideration.

via Rulemaking – Wikipedia, the free encyclopedia. (accessed 12 DEC 2011)

The best discussion of the size and scope of regulations

Saving the best for last, this is probably the most authoritative source on the subject. Here is just the tail-end of the discussion :

Regulatory page counts. One of the most commonly used yardsticks of regulatory activity is the size of the daily Federal Register, which reports regulatory changes. Before any new federal rule can be finalized, the agency proposing the rule must have it published in the register. In 2008, the Federal Register hit a record 79,435 pages for the year.[6] In 2009, the number dropped to 68,598. Such a decrease is not unusual in presidential transition years.
The size of the Code of Federal Regulations (CFR) provides a second yardstick of regulatory activity. Unlike the Federal Register, which is a catalog of regulatory changes, the CFR is a compendium of all existing regulations. In 2008, the CFR weighed in at 157,974 pages, having increased by 16,693 pages since the start of the George W. Bush Administration.[7] In 2009, the page count hit a record high of 163,333.
Number of new rules. Page counts, however, are not the best measure of the size of regulation. More important than the mere number of pages in the Federal Register or the CFR is the content of those pages: How many new rules are being adopted, and what is their cost to Americans?
Thousands of regulatory actions, or rulemakings, are completed each year: 3,503 such actions were reported in the Federal Register in 2009 alone.[8] However, many of these rules are not “regulatory” in the common usage of the word; they do not limit or impose mandates on private-sector activities. Many, for instance, are just internal rules that govern how agencies are run. Others are fiscal in nature, such as those that establish conditions for federal spending programs.
Excluding such “non-regulatory” rulemaking activity still leaves many thousands of agency actions each year that increase or decrease regulatory burdens. All of them have a cost, but their impact varies widely. Perhaps as much as 90 percent of regulatory costs are imposed by “major” or “economically significant” regulations–regulations that have an economic impact of more than $100 million. While costly, relatively few regulations reach this threshold.
During the Bush Administration, more than 120 major rule changes were adopted that increased regulatory burdens.[9] Of these changes, 36 were adopted in 2008, ranging from standards for automatic brake systems to limits on Internet gambling.[10]
This backloading of regulatory activity at the end of the presidential term is not surprising, fitting a pattern of regulatory surges followed by other outgoing Administrations. The Clinton Administration, for instance, promulgated 20 major rules in 2000, and 15 more in 2001 before leaving office.
The most likely explanation for this pattern is that regulators have an institutional incentive to clear their desks before turning over the office keys to new occupants. The Bush Administration explicitly focused on finishing its regulatory to-do list before the 2008 presidential election, instituting procedures that required agencies to propose new regulations no later than June 1, 2008, and finalize them no later than November 1, 2008.[11]

via Red Tape Rising: Regulation in the Obama Era.

Then we can talk about state regulations

No, let’s don’t. Not now!

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