Classical Liberal Administrative Law in a Progressive World

Abstract

This essay, which will be published in a Cambridge University Press book on Classical Liberalism, explores the question whether a much stricter separation of powers than now exists in the United States could feasibly be established in the current big government world.

It seems evident that a much stricter separation of powers could be employed in a classical liberal world where the government has only limited responsibilities. But could a stricter separation of powers be followed in a progressive world of big government institutions? It is often thought that big government can only function under a regime that employs administrative agencies which receive significant delegations of legislative and judicial power. Under this view, such agencies have the expertise and time that Congress and the federal courts lack to superintend large government institutions.

This essay argues that the separation of powers could be desirably employed even in a world of big government but doing so would require three basic reforms. First, while Congress would have neither the expertise nor the time to draft the legislative regulations currently needed by big government, a congressional approval procedure (as in the REINS Act), in which Congress must approve major regulations before they can be implemented, would avoid these deficiencies. This procedure would allow agencies to draft regulations but still permit the check of democratically accountable legislators voting on them.

But the REINS Act, while a good starting point, would require significant changes to operate beneficially. This essay proposes institutional changes to address five challenges to the operation of a congressional approval procedure. These challenges include determining the costs imposed by a regulation, deciding whether two regulations should be treated as a single regulation for congressional approval purposes, and avoiding the problem of take it or leave it regulatory proposals from agencies.

While the congressional approval procedure is directed at the exercise of legislative power by administrative agencies, the second proposed reform – independent administrative courts filled with article III judges – is directed at the exercise of judicial power by agencies. Such courts should replace the system of ALJs that currently exists. These courts should be staffed with judges who have expertise in the areas of medicine, science, and economics. Under this system, administrative agencies would bring actions before independent courts, but ones that have expertise.

The third proposed reform would significantly cut back on judicial deference to administrative agencies. I argue that judicial deference as to legal issues – under the doctrines of Chevron, Skidmore, and Auer – is inconsistent with the separation of powers and can be desirably eliminated, because the judiciary would perform legal interpretation in specific cases better than agencies. While agency discretion as to policy matters and factual findings is also problematic from a separation of powers perspective, I maintain that it is desirable only to limit, but not to eliminate, these types of agency discretion.

Keywords: Administrative Law, Separation of Powers, Chevron, Auer, Skidmore, Administrative Courts, Guidance Documents, Classical Liberalism

JEL Classification: K23