The Gigantic Distance Between Law, Economics and Political Science.

Talking about silo mentalities, consider the ongoing debate regarding the implementation of a regulatory budget. The legal profession complains that a regulatory  budget gives inadequate attention to benefits; practitioners in the economic profession emphasize the improvement of benefit-cost analysis of individual regulations all the while the political science profession prepares holistic papers focused on  the theory of delegation central to the entire debate but never translates them into anything of use by the other two professions.   See this paper Delegation 

FINRA:  A Prototype for US Regulation of the Social Media

Administrative Law Section of the American Bar Association Teleconference on Regulation of the Social Media

July 24, 2019

N.B.  The day of the Teleconference the SEC and the FTC announced respectively fines of $100 million and  $5 billion against the social media.

Editors Note:   We appreciate the many requests we have received for additional information on the presentations made at this event but at this time we are not in a position to prepare an in-depth analysis of the statements made by the panelists. However we have summarized below a particular topic addressed by the panelists.


Management of the Administrative State

Historically three disciplines have studied the functioning of the administrative state: law, economics and political science/public administration.  Unfortunately none of the aforementioned disciplines have focused on the management of the administrative state.  By management of the administrative state we mean the processes which govern how decisions are made.

To date the management of the administrative state has been defined in large part by four actions: (1) the passage of the Administrative Procedure Act, (2) benefit-cost analysis, (3) centralized regulatory review and, (4) implementation of a regulatory budget.  These process changes have been controversial; they continue to be the subject of review by each of the aforementioned professions and have been augmented by the laudatory accomplishments of the current Administration.

802 Editions of the CRE Website Between October 2, 1999 and May 12, 2019

Fortunately the  Internet Archive Wayback Machine chose to store the content of the CRE website since its inception in 1999. Readers interested in the evolution of centralized regulatory review have a first hand seat at its historical event by scanning the pages dedicated to the preservation of the CRE website.

In particular consider the first entry on the October 2, 1999 edition of Internet Archive located on this  page  and routed to here which states:

CRE comments to OMB on its August 11, 1999 reproposal 
CRE submits comments on OMB’s proposed revisions to Circular A-110, in response to the Federal Register notice of August 11, 1999. READ ITEM

The Resurrection of the Congressional Review Act

Heretofore the Congressional Review Act (CRA) was a sleepy statute that was awakened periodically with the departure of an incumbent Administration to invalidate midnight regulations. Recent actions taken by two federal agencies acting independently of each other have converted the CRA into a 24/7 oversight mechanism.

First, the Office of Information and Regulatory Affairs in the White House Office of Management and has issued a directive to federal agencies requiring that all guidance documents be submitted to OMB before they are promulgated.

The Long Shadow of Grass Root Advocacy

Sometimes the smell of  burning of shoe letter, assisted by the use of social media, is more potent than peer reviewed science, principled economics and established law, see this post,

Two of the Most Contentious Regulatory Initiatives in Recent History

Apart from the establishment of centralized regulatory review in OMB, a regulatory initiative with a near twenty year incubation period followed by several nationwide initiatives resulting in the unfettered and widespread use of medical marijuana and related substances, there are two regulatory initiatives which rank among of the most contentious in recent history.

The first regulatory initiative includes rulemakings associated with addressing climate change.  A key obstacle to addressing climate change is the compliance cost associated with the resultant program. In particular it is very difficult to convince one nation to employ a climate change program if other nations who are often its international competitors do not make a similar commitment.  Just recently the Center for Regulatory Effectiveness has expressed its views on this matter, see this editorial in Inside EPA.

The Four Major Regulatory Procedural Accomplishments of the Trump Administration

Mid-term in any presidency Washington is abuzz with seminars on the accomplishments of the incumbent Administration. With respect to regulatory pacesetters, we believe the following fulfill the criterion of a pacesetter:

Regulatory Budget

It has been nearly forty years since the Carter Administration proposed the first regulatory budget; the Trump Administration actually put one in place. Many believe the 2-for-1 component of the Trump Regulatory Budget is integral to the concept of a regulatory budget, it need not be.

Kudos to DOT for Elevating the Data(Information) Quality Act within the Government

DOT has issued a landmark directive dealing with the development of regulations within the agency. There are a number of noteworthy components but none anymore  path-breaking than the following:

Section 12 d (2):

 Mandatory hearing for high-impact rule. In the case of a proposed high-impact rule, the responsible OA or OST component shall grant the petition for a formal hearing if the petition makes a plausible prima facie showing that-

(a) The proposed rule depends on conclusions concerning one or more specific scientific, technical, economic, or other complex factual issues that are genuinely in dispute or that may not satisfy the requirements of the Information Quality Act;

An Attention-Getting History of the “Hard Look” Review by the DC Circuit Historical Society

Review of Agency Rules in the D.C. Circuit: Back to the Future?

In the 1970 influential judges on the D.C. Circuit engaged in a well-publicized debate about the appropriate scope of judicial review of federal agency rulemaking. One faction led by Chief Judge Bazelon believed that judges were experts on procedure not the substance of regulation and wanted the courts to ensure that agencies used whatever procedures were necessary to make the best decision and build the sort of record necessary to make the best decision. On the other hand, Judges Leventhal and Wright believed that mandating additional procedures, beyond those required in the Administrative Procedure Act (APA), would lead to over-proceduralization and would ultimately slow down the rulemaking process. They believed that, instead, judges should examine and try to understand the technical matters at issue in the rulemaking in order to determine whether the agency had exercised reasoned discretion. This review, conducted under the arbitrary-and-capricious test of the APA, was labeled “hard look” a term coined by Judge Leventhal.