Confronting the Problem of Stealth Regulation

From: Mercatus Center | George Mason University

John D. Graham , James Broughel

The federal regulatory system includes two important components, each designed to ensure that the regulatory process works to advance the interests of the American people. First, the Administrative Procedure Act of 1946 (APA) compels regulatory agencies to consider the wishes of the American public via a process of public participation in rulemaking. Second, regulatory review by the Office of Information and Regulatory Affairs (OIRA), in place since the early 1980s, provides assurance that a minimal level of evidence, especially economic evidence, is supplied to support agency decisions. Along with judicial review and congressional oversight, these components provide the checks and balances that are the foundation of the modern regulatory state.

Whether intentionally or not, agencies often avoid these procedural requirements. A recent study finds that agencies avoided the notice-and-comment process, which facilitates public participation in rulemaking, in almost 52 percent of regulations finalized from 1995 to 2012. Meanwhile, only about 8 percent of final regulations underwent OIRA scrutiny between fiscal years 2004 and 2013. More troubling, however, is the fact that agencies can evade checks and balances altogether via an array of mechanisms that circumvent or bypass the traditional rulemaking process. This type of under-the-radar rulemaking is known as stealth regulation.


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