Reining in the Administrative State: Regulatory and Administrative Law Reform

Economic and Commercial Law

2025-02-11

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Source: Congress.gov

Summary

This meeting of the committee addresses the need for regulatory reform within the administrative state, examining its impact on individuals, businesses, and constitutional principles, while also grappling with immediate concerns regarding the current executive branch's actions.[ 00:24:45-00:24:55 ] [ 00:30:25 ]

Witnesses provide testimony on the economic consequences of over-regulation, personal experiences with administrative courts, and the implications of recent executive branch activities for democratic governance.

Impact of Regulatory Overreach

Regulatory burdens have reached unprecedented levels, creating rules with the force of law and costing the American economy trillions annually, averaging over $15,000 per household.[ 00:24:55 ] [ 00:25:14 ]

[ 00:26:04 ] Unelected bureaucrats create a massive number of rules, often acting as legislator, prosecutor, and judge, which fundamentally contradicts the separation of powers established by the founders.[ 00:25:20 ] [ 00:26:55 ] [ 00:27:16 ] [ 00:27:44 ] This regulatory accumulation distorts business investments, slows GDP growth by significant margins, and has regressive effects, increasing poverty rates and income inequality. Entrepreneurs recount experiences where the "unchecked power" of agencies like the Federal Trade Commission demanded licensing intellectual property and blank checks, forcing costly legal battles to vindicate basic due process rights. The difficulty of full compliance is particularly burdensome for small businesses and immigrants, with every law and regulation acting as a "line of code" making inadvertent violations inevitable. Deregulatory efforts, such as those seen in British Columbia, have demonstrated the potential to significantly boost economic growth and alleviate disproportionate burdens.

Erosion of Constitutional Principles

A central theme is the alleged erosion of constitutional principles by both the administrative state and recent executive actions.[ 00:27:39 ]

[ 00:42:39 ] The administrative court system is criticized for its lack of independent judges, leading to agencies winning an overwhelming majority of their cases, thus denying citizens fair trials and due process. Proposed legislation like the Separation of Powers Restoration Act (SOPRA) and the REINS Act aim to restore judicial review and congressional authority over regulations, forcing agencies to consider the impact of their rules more carefully.[ 01:09:37 ] Concerns are raised that the executive branch has repeatedly violated clear statutory spending requirements, asserted control over the bureaucracy based on loyalty rather than constitutional fidelity, and fired inspectors general, thus undermining checks and balances. The independent judiciary is viewed as a crucial bulwark, with warnings that defying court orders would lead to an unprecedented breakdown of the rule of law.[ 01:13:14 ] [ 01:15:40 ]

Current Political & Executive Branch Actions

A highly contentious point is the current administration's actions and the involvement of figures like Elon Musk.[ 00:42:39 ]

Critics allege that Musk and his team have gained unprecedented access to sensitive data from at least 18 federal agencies, feeding it into AI models and potentially benefiting commercially, posing significant risks to national security and personal privacy.[ 00:43:04 ] [ 01:26:46 ] These actions, coupled with the reclassification of civil servants, imposition of loyalty tests, and illegal funding freezes, are described as a "systemic and sustained assault" on Congress's constitutional primacy. Proponents argue that Musk is exposing "stupid spending" and government overreach, and that these actions align with the principle that elected officials, not unelected bureaucrats, should make decisions.[ 00:34:47 ] [ 00:37:36 ] [ 00:38:13 ] [ 00:38:43 ] There is a sharp divide over whether these actions constitute necessary reform or an unprecedented power grab that undermines democratic institutions and the ability to root out fraud through established mechanisms like inspector generals.[ 00:43:56 ] [ 00:44:11 ] [ 01:24:10 ] [ 01:25:08 ]

The meeting's tone is highly partisan and confrontational.[ 00:26:12-00:26:12 ]

[ 00:28:54-00:28:54 ] [ 00:37:57 ] Speakers frequently engage in direct criticisms and accusations across the aisle, particularly regarding the severity and intent of administrative actions and their political implications.[ 00:29:21 ] [ 00:38:54 ] [ 00:42:31 ] There is a clear ideological divide concerning the role and scope of the administrative state, with Republicans emphasizing economic burdens and lack of accountability, and Democrats highlighting the threats to democratic institutions and social protections.[ 00:26:42 ] [ 00:27:39 ] [ 00:38:13 ] [ 00:43:51 ] Several exchanges are passionate, with witnesses directly challenging committee members' perspectives, contributing to a tense atmosphere.[ 01:33:54 ] While some attempt to find common ground on core principles like due process, the overarching sentiment is one of deep disagreement and mutual distrust.[ 01:14:57 ] [ 01:15:40 ]

Participants

Transcript

for the administrative state and look for ways that we can reform the regulatory and administrative law to work better for everyday Americans.  It's no secret that regulatory burdens have reached an all-time high.  Regulatory agencies create rules with the force and effect of law.  And the number of rules that agencies create is overwhelming.  In the final year of the Biden-Harris administration, unelected bureaucrats finalized over 3,000 rules.   It's an average of eight regulations per day.  By contrast, during the same period, Congress passed almost 150 laws.  In other words, the executive branch issued mandates with the force of law over 20 times more often than the legislative branch.  According to the Competitive Enterprise Institute, these regulations impose a total estimated annual cost of 2 billion, excuse me, 2.1 trillion or more than $15,000 per American household.   Some of my colleagues on the other side may claim that because Congress cannot pass laws, agencies feel empowered to take over.  Congress was designed to require lawmakers to think deeply about these decisions.  Congress was also designed to be accountable to the voters.   If our constituents do not like our decisions, then we are voted out of office.  Unelected bureaucrats, by contrast, are not politically accountable.  This lack of accountability shows.  When agencies make these rules, they not only act as a legislator for the country, but often as prosecutors and judges   through the administrative process.  Agencies often bring enforcement actions in their in-house administrative courts.  The same agency that makes the rules also decides to sue if a person broke them.  Then to prove that a person broke the rule, the agency tries the case before its own in-house judge.  In so-called, quote unquote, independent agencies, commissioners who directly prosecute the case also act as judges on appeal.
The whole system defies logic at this point.  The administrative system is set up to regulate the American people into submission, which is entirely at odds with the principles that this country was founded on.  Our founders deliberately split the making of laws, enforcement of laws, and judgment of laws into three co-equal branches of government.  Our founders were convinced and concerned about   exactly the same centralized power we now see in the Administrative State.  It does not have to be this way.  Last Congress, the Judiciary Committee marked up numerous bills aimed at reforming the Administrative State.  The REINS Act, the Midnight Rules Relief Act, the Prove-It Act, the Separation of Powers Restoration Act, and the One Agency Act, just to name a few.  All these bills were aimed squarely at the topic we are here to talk about today, reining in the Administrative State.   I'm proud of the work this committee undertook last Congress, and I hope for the sake of the American people that we turn these proposals into law this Congress.  My colleagues on the other side of the aisle routinely oppose all attempts by Congress to rein in the administrative state.  They also criticize President Trump for taking steps to control the administrative state.  They ignore that the Constitution makes the president the leader of the executive branch.   They will do everything in their power to protect the unelected bureaucrats in the administrative state.  Why?  Because these unaccountable bureaucrats do the bidding among colleagues in the minority.  This is true even though Americans rejected their views in the most recent election.  Today, we have an opportunity to hear from witnesses who have deep experience in the regulatory reform area.  Ms.  Wadd and Mr. Smith are entrepreneurs.   and deal with the crushing weight of regulations every day.  Mr. Smith has even faced the administrative court system and was forced to pursue a case all the way to the Supreme Court to vindicate his constitutional rights.