Commentary Magazine


Bureaucracy Versus Democracy

On May 20, the Supreme Court handed down a ruling that gave federal agencies increased deference as to their own scope of authority at the expense of Congress. It was only the latest win, law professor Jonathan Turley wrote in the Washington Post later that week, for the “fourth branch” of the federal government, “an administrative state of sprawling departments and agencies that govern with increasing autonomy and decreasing transparency.”

We often talk about the growth of the federal government and especially the bureaucracy associated with it, and those topics are getting even more attention as the IRS scandal develops. But Turley put his argument in numbers: according to one study, “in 2007, Congress enacted 138 public laws, while federal agencies finalized 2,926 rules, including 61 major regulations.” With the growth of the state came the creation of administrative courts tied to agencies to relieve the judiciary of regulatory cases. As a result, Turley writes, “a citizen is 10 times more likely to be tried by an agency than by an actual court.”

It’s easy to understand why agencies of the administrative state behave as if they are above the law: in many cases, they very nearly are. They have put themselves (often with lazy congressional collusion) beyond the oversight of the other branches of government. They are unelected, and therefore unaccountable–and in many cases their employees are impossible to fire. But beyond the abuse of power and undemocratic nature of this “fourth branch” are the costs. Taxpayers are on the hook for the generous salaries and lavish benefits of corrupt and incompetent bureaucrats. But they are also, as Niall Ferguson writes today in the Wall Street Journal in discussing a new study from the Competitive Enterprise Institute, paying the compliance costs.

Though Ferguson writes that “final rules” emanating from the regulatory state in the last decade “have outnumbered laws passed by Congress 223 to 1,” that number seems slightly misleading if only because some congressional laws (alas, too many) create via the democratic process multiple new regulations or the necessary regulatory authority. Nonetheless, Ferguson writes:

The cost of all this, Mr. Crews estimates, is $1.8 trillion annually—that’s on top of the federal government’s $3.5 trillion in outlays, so it is equivalent to an invisible 65% surcharge on your federal taxes, or nearly 12% of GDP. Especially invidious is the fact that the costs of regulation for small businesses (those with fewer than 20 employees) are 36% higher per employee than they are for bigger firms.

Next year’s big treat will be the implementation of the Affordable Care Act, something every small business in the country must be looking forward to with eager anticipation. Then, as Sen. Rob Portman (R., Ohio) warned readers on this page 10 months ago, there’s also the Labor Department’s new fiduciary rule, which will increase the cost of retirement planning for middle-class workers; the EPA’s new Ozone Rule, which will impose up to $90 billion in yearly costs on American manufacturers; and the Department of Transportation’s Rear-View Camera Rule. That’s so you never have to turn your head around when backing up.

Ferguson ties the growth of the regulatory state to the concurrent decline in “American associational life,” that essential communal space between government and the individual.

The existence of a stable federal bureaucracy has its advantages–to a point. It enables the government to retain institutional memory and train and prepare its workers to ensure that each new Congress and presidential administration is not starting the project of American governance from scratch. The frustrating inability to clean house when faced with institutional decay can also protect against partisan witch hunts or the accumulation of too much power within any one administration.

But it requires a durable system of transparency, oversight, and accountability or it will insulate itself from the trappings of democracy and do what all bureaucracies do instinctively if not consciously (though often both): act in service to its own perpetuation. That means problems will go deliberately unsolved and a defensive paranoia will seep into the system. The IRS’s targeting of groups named after the most famous antitax protest in American history is a pristine example of this kind of bureaucratic self-preservation that is so corrosive to the authority, credibility and, most important, balance of power represented by the three federal branches it has too often supplanted.

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