For decades, there have been concerns about the federal government’s growing power, size, and cost. Nothing, however, has been done to address it. It just expands. Why? Is it an uncontrollable deep state, an unmanageable bureaucracy, or just too complex? While a solution is always available, the federal government benefits significantly from the Administrative State. It opposes change.

The term Administrative State describes the power of Executive branch agencies to create, adjudicate and enforce their own rules. Congress enacted the Administrative Procedure Act in 1946 (“APA”) to exert control over the administrative State by establishing procedures for federal agencies to make and enforce regulations. Unfortunately, over time the agencies, with the help of the courts, found ways around APA restraints.

Unfortunately, Congress has been unable to substantively amend the APA in the 76 years since its enactment, notwithstanding that the federal courts have expanded agency power by granting deference to their interpretations of the law. Judicial deference is a critical component of the Executive’s regulatory power. Applying it diminishes the lawmaking power of Congress by tipping the scales in favor of Executive branch interpretations.

Today, the Administrative State is a massive collection of unelected federal officials, except the president, that has issued 212,271 rules since 1976. Its regulatory tenacles control almost every aspect of society, from the food we eat to the health information given to us. Regulatory costs are estimated at $1.9 trillion in 2021.

Can the administrative State be reformed?

The 115^th Congress made a serious attempt to reform the APA, and by implication, the administrative State, through the Regulatory Accountability Act (“RAA”). The RAA sought to reform the rulemaking process to ensure final rules were based on sound facts and law. The House passed the RAA. The Senate voted it out of committee; however, Senate leadership refused to bring it to the floor. This effort was Congress’ first and last serious attempt to reform the administrative State.

While Congress has shown little ability to control federal agencies, the courts are now recognizing that the U.S. has an out-of-control regulatory process in need of restraint.

In December 2022, the Ohio Supreme Court, in TWISM Enterprises v. Board for Registering Professional Engineers, rejected “[A]ll forms of mandatory deference.” The case involved a rule that independent contractors could not be in charge of engineering projects since they were not full-time company employees. The Ohio Engineering Board received judicial deference for its interpretation from the lower courts. The Ohio Supreme Court reversed, finding there was no statutory language precluding independent contractors from serving as full-time managers of an engineering firm. It held the principle of separation of powers precludes any mandatory deference to agency regulations that interpret a statute. Under the principle of separation of powers, only courts can interpret the law, not agencies. Deference to agencies produces “systematically biased judgments” that permit the executive branch “to say what the law means,” a clear intrusion into judicial authority.

The Ohio court also noted, “Roughly half the states in the Union review agency interpretations de novo.” The Ohio court’s decision provides the reasoning the U.S. Supreme Court needs to restore the principle of separation of powers at the federal level, a principle it abandoned in Chevron when it granted agencies almost unfettered discretion to create law.

Moreover, the U.S. Supreme Court is also moving to restrict agency lawmaking. In WVA v. EPA, the court reviewed an EPA rule that relied upon section 111 of the Clean Air Act to regulate the types and amounts of energy that could be carried on the electricity grid. Before EPA’s “new found authority,” it applied section 111 only to specific energy sources at specific locations.

Like the Ohio court, the Supreme Court examined the power Congress granted the agency. It described EPA’s attempt to assume “unheralded” regulatory power as a “transformative expansion in [its]regulatory authority” over the American economy. It concluded Congress did not grant the agency the authority to set emission caps based on shifting the percentage generation of fuels that could be carried on the grid.

Recognizing that agencies use “vague language of a long-extant, but rarely used statute[s]” to create new law,” it announced the “Major Questions Doctrine, requiring agencies to point to “clear congressional authorization” when issuing expansive rules.

The uncontrolled growth of the administrative State results from the Executive constantly seeking more power, courts that, until recently, fostered the expansion of executive power, and a Congress that has failed to provide aggressive oversight of agency actions and spending. If the courts continue to restrain the expansion of agency power, reform of the administrative State will be accomplished without Congress performing its constitutional duties.

If the U.S. Supreme Court, in its next deference case, adopts reasoning similar to the Ohio Supreme Court’s decision and it actually enforces its “Major Questions Doctrine,” it will put federal agencies back into their constitutional boxes. At that point, going forward, all that is needed to maintain our constitutional separation of powers is for each branch to do its job by constantly checking the powers of competing branches.

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From its first days, the Biden administration was using agencies to impose laws without congressional authority. The court noted it rejected the Biden administration’s use of the Occupational Safety and Health Act (OSHA) to mandate 84 million Americans either obtain a Covid-19 vaccine or submit to weekly testing. It also discussed its rejection of the Centers for Disease Control and Prevention’s asserted authority to impose a nationwide eviction moratorium to stem the spread of Covid. Recognizing that federal agencies “were asserting highly consequential power beyond what Congress could reasonably be understood to have granted,” it took up the EPA’s efforts to impose a climate change law by regulation.

The EPA and environmentalists (at times referred to jointly as the “environmental community”) sought, without any specific statutory authority, to impose a  comprehensive and costly regulatory structure to address climate change. To determine the extent of the EPA’s authority, the Supreme Court took up a case brought by the state of West Virginia, West Virginia vs Environmental Protection Agency (WVA v. EPA).

The court reaffirmed the legislative power of Congress holding that agencies cannot legislate without specific congressional authority.

To resolve the issue of whether agencies can make new laws by regulation, the Supreme Court, for the first time, announced the “Major Question Doctrine,” for analyzing an agency’s authority to regulate. The court made clear that regulatory agencies can only act on matters of economic and political significance if the agency… point[s] to ‘clear congressional authority.’”

While the Supreme Court could have narrowly resolved the controversy (EPA’s “new found authority” to impose a cap-and-trade scheme for carbon emissions) using statutory construction, it recognized that many agencies were finding “vague language of a long-extant, but rarely used, statute[s]” as authority to regulate major economic and political issues without congressional authorization. The climate debate was the perfect set of facts for clarifying the roles of Congress and agencies.

Congress consistently rejected climate legislation

The court noted, “Congress, however, has consistently rejected proposals to amend the Clean Air Act to create such a program [regulating climate change].” It cited the American Clean Energy and Security Act of 2009, the Clean Energy Jobs and American Power Act of 2009, the Climate Protection Act of 2011, and Save our Climate Act of 2011. There were many more failed attempts by the environmental community to enact a comprehensive legal structure to address climate change: The Kyoto Protocol (Senate voted 95-0 against ratification), The Paris Agreement (Lacking votes, it was never submitted as a Treaty); McCain-Lieberman, Kerry-Lieberman-Graham, and others that never received a vote. Congress clearly spoke.

Efforts to make law by litigation

Realizing Congress would not impose a massive climate change scheme on American society, the environmental community orchestrated a nationwide litigation campaign to persuade courts to impose such a system. It filed lawsuits across the nation under any statute that might relate to climate change – Clean Air Act, (186), Endangered Species and other wildlife statutes (174), National Environmental Protection Act (322), Clean Water Act (58), miscellaneous land use statutes (168), constitutional claims under the Commerce Clause (20), First, Fifth and Fourteenth Amendments (41); under state laws (464), common law (29), public trust (27) and securities and financial statutes (24). The environmental community had some successes; however, its overreach ended in a defeat for the administrative state.

Using Executive Orders to make climate law

On Biden’s first day in office, he issued several Executive Orders to address climate change. Biden further directed all executive departments to place a moratorium on oil and gas leasing programs and establish the Social Cost of Carbon to justify the high cost of the regulatory structure. A week later, Biden ordered a whole-of-government approach to address climate change. This order was followed by the SEC’s proposed climate disclosure rules which again raise the question of identifying the needed congressional authority.

The futile regulatory march to circumvent Congress ends

While the environmental community worked for decades to impose a climate change law by regulation or litigation, it was the Biden administration’s sheer arbitrary use of the regulatory process that captured the Supreme Court’s attention.

As the environmental community was suffering legislative defeat after defeat, Obama’s EPA issued an “endangerment finding” that greenhouse gases contributed to man-made climate change that may endanger public health and welfare.  This finding served as the foundation for the EPA’s Clean Power Plan (CPP) regulations, the issue decided in WVA v. EPA.  The CPP was a cap-and-trade rule. President Trump repealed the CPP and put in its place the Affordable Clean Energy rule that limited EPA’s regulatory power to available emission reduction technologies, consistent with the Clean Air Act. On Trump’s last day in office, the DC Circuit Court of Appeals vacated the Trump rule; however, before President Biden could reinstate a new CPP rule, the Supreme Court accepted the case for review.

The Supreme Court establishes regulatory sanity

While the Supreme Court held that “Congress could not have intended to delegate a decision of such economic and political significance (regulation of climate change) to an agency [EPA] in so cryptic of a fashion,” its decision limits the regulatory power of all agencies to enact major political and economic matters unless the agency can point to “clear congressional authority.”

Had the environmental community been successful in expanding the authority of agencies to regulate climate change without statutory authorization, many agencies would search for and find “long-extant authorities” to further diminish the role of Congress. By reaffirming the constitutional powers of Congress, and placing limits on the Executive’s power to legislate using the rulemaking process, the Supreme Court also solidified its role as a co-equal branch of our government.

The most gratifying aspect of the long battle over the power of EPA to regulate climate change is the ironic ending to the struggle. In the end, the EPA’s aggressive regulatory overreach resulted in limits being placed on the regulatory powers of all federal agencies.

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