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Regulatory State

6 min read

Part of Regulation and the administrative state.

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Every episode (3)

Who argued it

Sam Batkins · Brian Walsh · Matt Welch

Criminal Justice Reform · Federalism · Constitutional Law · Housing Policy · Enumerated Powers · Libertarianism

Background

The term describes the system by which agencies promulgate and enforce rules that function as law. In the episodes, Bob Zadek frames the topic as a threat to liberty: most Americans are governed by rules made by people they never voted for. The regulatory state appears as a recurring theme across several shows—from overcriminalization, to the Bill of Rights, to “midnight regulations.”

Delegation and the volume of rules

Bob Zadek opened a show by contrasting the civics-class account with reality: laws are taught to be made by the legislature and approved by the president, but Americans are governed by rules “enacted by anybody we even know about, let alone voted for or approved.” A Lame Duck’s Last Stand (2017) Guest Sam Batkins, identified as a director of regulatory policy at the American Action Forum, said regulators approved roughly 3,600 federal rules in the prior year, of which about 100 were “major,” meaning an annual economic impact of at least $100 million. He listed the Environmental Protection Agency among the “usual suspects,” said Congress had delegated a lot of power to it, and described an “alphabet soup” that includes the FCC, SEC, CFTC and CFPB. He counted something like 52 different regulatory agencies, excluding sub-agencies. A Lame Duck’s Last Stand (2017)

In the same conversation, Batkins explained that Congress often includes a provision in new legislation stating that violations of the section, and of regulations and rules promulgated under it, can be punished by five years in prison or whatever else it might be—a “blanket criminalization” for regulations “unelected bureaucrats” later promulgate. He called it a destructive trend, and named a coalition of organizations on the left and right, including the National Association of Criminal Defense Lawyers, the Heritage Foundation, Cato Institute, Institute for Justice, and the Federalist Society. “You’re Under Arrest!”: Overcriminalization with Brian Walsh (2015)

Bob Zadek argued that no strong lobby exists for people caught up in the regulatory criminal law environment, except libertarians, whose core lobbying value is liberty. “You’re Under Arrest!”: Overcriminalization with Brian Walsh (2015)

The non-delegation principle

On the Bill of Rights episode, a caller, Roger, raised the regulatory state as the major challenge to liberty, saying it is not even elected, so even a majority cannot control it; he cited data that people can vote on roughly half of a percent of all federal employees. Bob replied that a theory holds the entire administrative part of government unconstitutional as an unfair delegation of power from Congress to the executive, and named the “non-delegation principle”—that Congress lacks the constitutional power to delegate legislative functions to the executive. The caller cited phrases in Obamacare stating “the Secretary shall decide,” which Bob agreed is exactly that delegation. Carol Berkin on The Bill of Rights No One Wanted (2016)

Courts, deference and the lost amendments

In that same exchange, Bob Zadek attributed the loss of the 9th and 10th Amendments to judges and the Supreme Court, saying judicial deference allowed Congress to be its own policeman as to constitutionality. Carol Berkin on The Bill of Rights No One Wanted (2016) Earlier, Carol Berkin had explained that the 10th Amendment was the one the Anti-Federalists wanted to nail down—that the federal government could not legislate about anything not expressly mentioned—and that had “expressly” been included, the government could not have built highways, could not have had the EPA, and other things now assumed. Carol Berkin on The Bill of Rights No One Wanted (2016)

Regulatory gotchas and overcriminalization

Batkins told the story of Krister Evertson, an inventor who spent about $100,000 of his family’s money on clean energy cells. He adhered to existing regulations, but when he sold materials over eBay, he failed to put the right sticker on his package; no federal official could show what that sticker was supposed to look like. He was acquitted after his public defender showed that a UPS agent had lied, but was then prosecuted on a charge of abandoning his materials—stored in half-inch thick stainless steel drums with no leakage—and because no criminal intent had to be proved, he was found guilty and spent two years in federal prison, his livelihood destroyed. “You’re Under Arrest!”: Overcriminalization with Brian Walsh (2015)

In the same episode, Bob Zadek pushed back on Batkins’s claim that pressure from Congress to pass a federal carjacking law reflected a clamoring; Batkins conceded there may have been no clamoring and described the media as a facilitator and enabler. He said we should ask whether laws already on the books can punish the conduct, because if they can, “We may not need new law.” “You’re Under Arrest!”: Overcriminalization with Brian Walsh (2015)

Spending power and fiscal federalism

Frank Buckley, in the California episode, described the federal government’s “spending power” as its ability to suck up all the money and send it back to the states with strings attached, and said that because of the thickness of our regulatory state, basic decisions are run out of Washington—even highway decisions and bike lanes in a small community. He noted a net transfer from rich to poor states, from the Californias to the Mississippis, which makes separation politically attractive to some Californians. Did California Just Declare Itself a Nation-State? (2020)

Bob Zadek replied that taxing power mitigates against devolution, and proposed returning money to the states through block grants as a halfway step, then a reduction in federal taxes and power in exchange for increases at the state level. Did California Just Declare Itself a Nation-State? (2020)

Across episodes

The same question—whether unelected bodies should make binding rules—is argued in the 2015 and 2017 episodes. In 2015, Brian Walsh described blanket criminalization buried in regulations and gave the Evertson case; in 2017, Sam Batkins supplied the counts—3,600 rules, 100 major, 52 agencies—and pointed to the Congressional Review Act and Administrative Procedure Act as tools for attempting deregulation. In 2016, the focus shifted to judicial deference and the 10th Amendment; in 2020, to spending power. The episodes show no resolution, only a widening set of mechanisms by which the problem is described. Bob Zadek’s judgment that the fault lies with the Supreme Court is stated in 2016 but not revisited in later excerpts.

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