Trump's New Executive Orders To Restrain the Administrative State
Federal agencies evade the rulemaking process, yet still levy fines, revoke permits, and seize property via “guidance.” Trump’s orders may put a stop to this practice.
President Donald Trump just announced two executive orders to rein in unlawful administrative state action.
The first order declares that its goal is "to ensure that Americans are subject to only those binding rules imposed through duly enacted statutes or through regulations lawfully promulgated under them, and that Americans have fair notice of their obligations."
The second complements the first, promising that Americans will not "be subjected to a civil administrative enforcement action or adjudication absent prior public notice of both the enforcing agency's jurisdiction over particular conduct and the legal standards applicable to that conduct."
That's all well and good, but how could two executive orders fundamentally change the administrative state and the presumed authority it has amassed in over a century of unlawful accretion of power? They target a specific, pernicious tool of federal agencies—guidance—by employing a new regime that is elegant in concept and elementary in operation.
Federal agencies issue memoranda, notices, letters, bulletins, circulars, directives, and blog posts (among other things) to evade the rulemaking process established by Congress in the Administrative Procedure Act (APA). Agencies euphemistically refer to these documents as "guidance." Guidance has been responsible for revoking permits to conduct business, barring Americans from working in their chosen occupations, prohibiting taxpayers from taking deductions, levying post-conviction penalties for crimes, and seizing property, without statutory or constitutional authority and without due process. Think of guidance as an off-the-books way for the government to ignore commonly held understandings of fairness. It's a shameless, unconstitutional scheme designed to skirt judicial review, avoid public scrutiny, and evade accountability.
Guidance Is an Offer Regulated Parties Can't Refuse
Substantive rules impose enforceable obligations or prohibitions on regulated parties. Congress' APA rulemaking is the only lawful way an agency may issue substantive rules. Conversely, interpretive rules—or guidance—cannot impose enforceable obligations or prohibitions, so they don't require APA rulemaking.
But here hangs the forbidden fruit: Since guidance lacks notice, comment, and process requirements, it's easier, faster, and cheaper than substantive rulemaking. Agencies almost always give in to the temptation; they disguise substantive rules as interpretive and call them "guidance." When they are feeling really cheeky, they describe their hard-and-fast rules as "merely guidance."
Trojan horse rulemaking to create substantive guidance isn't just unlawful, it's unconstitutional, as it intrudes on the exclusive province of the legislature. "All legislative powers…shall be vested in a Congress" after all. That quote is not just the first article of the Constitution, it's the first section of the first article. Even a federal agency can't miss it.
But there's another constitutional problem. Agencies use substantive guidance to avoid judicial review, which prevents the accused from benefiting from their constitutional right to due process. Agency action must be "final" before a regulated party can sue an agency, but courts don't typically view guidance as final agency action. For instance, a common agency tactic is to issue a warning letter to a regulated party, threatening enforcement. Though the regulated party has little choice but to comply with the agency's demands, courts will not intervene because the letter itself does not establish sufficiently concrete legal consequences, as it is "merely" a notice.
Don Vito Corleone would call this an offer a regulated party can't refuse. Agencies call it guidance.
A Welcome Change
The Executive Orders require agencies to post all guidance online within 120 days of implementation. Guidance must be searchable and specifically articulate the statute or regulation that authorizes its implementation.
This level of transparency will hold agencies accountable by ensuring that a regulated party can't be held responsible for conforming with guidance that isn't accessible online. Additionally, the executive orders allow the public to petition agencies to revoke substantive guidance, putting the burden on agencies to demonstrate the interpretive nature of their posting. Moreover, agencies will be required to tender "economically significant" guidance to the Office of Management and Budget (OMB) for approval.
This new standard of accountability will make the process more fair. If an agency notifies a regulated party of nonconformance with guidance, it must have previously codified its process for conducting administrative investigations through APA rulemaking. The executive orders also prohibit agencies from imposing legal consequences upon regulated parties for guidance nonconformance unless parties have received prior notification of the investigation and had an opportunity to respond to—and defend against—the agency's allegations. Most importantly, posted guidance will be a final agency action, so guidance will finally be reviewable by courts. This shouldn't be a revolutionary change, but it is.
By specifying straightforward conditions for issuing and enforcing guidance, the Trump administration has increased the cost to agencies for issuing guidance.
Loosening the Grip of the Administrative State
Trump's regulatory gambit conditions agencies' use of guidance on meeting simple conditions. Substantive guidance is already unlawful, so another president pronouncing its unlawfulness wouldn't cure a sick system where the administrative state has metastasized into an unconstitutional fourth branch of government. Instead, the administration has set forth simple conditions for guidance implementation that mirror the transparency, accountability, and fairness features of APA rulemaking. Moreover, with OMB review and public petitions for revocation, these executive orders create backstops to prevent unlawful substantive guidance from slipping through the cracks.
Substantive guidance's days are numbered. Agencies will no longer be able to blindside individuals and businesses with their schemes of secret rules, obtuse interpretations, and mafia-like shakedowns.
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Who is this Degrandis guy? Let’s have more articles from him.
I’m sure orange man is bad somehow. This guy is not long for employment here.
It’s as if there is no other lens between the observer and his subject.
A breath of fresh air.
He’ll be out on his ass like the poor kid who wrote the piece on why the Trans-Pacific Partnership was a libertarian nightmare.
Agreed. If this guy is a real libertarian, there’s zero chance that Welch and Gillespie will allow him to stick around for long.
This #LibertarianMoment brought to you by Orange Man and the Deplorables who supported him, over the hysterical pants shitting opposition of @Reason.
You’re welcome.
Trump is the most libertarian president in my lifetime. I’d expect at least some Reason authors to be celebrating that.
This whole article shows a highly libertarian action by Trump’s administration. He’s managing to do a lot in spite of Congress not helping him at all. Just a few GOP members are helping Trump, most in the libertarian Freedom Caucus.
My mistake on hitting the flag.
He’s a Senior Litigation Counsel at the New Civil Liberties Alliance.
Shush. If you speak positively of him his chances of being #metoo’d increase exponentially.
Administrative Agencies have been illegally abusing Americans and American companies for years. This action by our President is long over due. I worked in Washington DC representing companies in the energy business for several years. These Agencies and their workers are the “swamp”. DRAIN THE SWAMP.
Yes but just think of the repercussions this will have when a Democrat is in the white house and Reason wants a unitary executive to mete out social justice by way of a pen and a phone!
Reason has its flaws, but they are pretty consistent on this stuff.
Not lately. When was the last anti regulation is good prior to this article? Some will argue the current free trade article, but those never actually look at the costs imposed by actors like china, so more slanted propaganda than actual anti regulation. Boehm only cares about regulation on this side of the equation.
“When was the last anti regulation is good prior to this article?”
I would imagine that was the last time regulation was in the news.
There was an article about Canadian licensing that touched on american licensing schemes just this morning.
How about immigration regulations?
Haha. Regulations? Or laws? How about sovereignty?
This explains some people’s complete lack of comprehension about the word “illegal”.
And you and others care only about Trump. Trump Good. Hillary Bad.
Reason at least does note some good things about Trump. You and the other Trumpistas have never admitted to a single bad thing about Trump. If you can’t claim it’s objectively good, you claim he’s playing 36DD chess as an excuse to applaud him.
You’re clearly delusional.
Go back to playing with your blocks
Close, it is more like Hillary is terrible. Trump is slightly less terrible.
Reason at least does note some good things about Trump.
THEY DIDN’T PRAISE HIM HARD ENOUGH WHICH PROVES THEY ARE SECRET LEFTISTS!1!
They have never called for more federal regulation to enforce “social justice”. That’s what I was responding to. I would like to see more coverage of Trump’s deregulation (and increased regulation in areas other than immigration and trade) actions.
They’ll employ bothsidesism when Lizzie Warren become President and pretend to that lowering dioxin concentrations in water is just like locking up Mexicans in concentration camps. Don’t worry, GOPer, you’ll have something to cheer for.
This should be front-page above-the-fold headline news.
Instead, we have yet … I don’t even have words to describe the single-themed tail-eating fiasco that is most journalists’ approach to national politics.
This is why they want him gone.
The Deep State will figure out a way to undermine these Executive Orders. After all, there are tens of thousands of parasites whose living depends on it.
This guy gets it
This is great news. I know they’ll eventually figure ot a way around this (where the is a will there is a way), but this should cut these shakedowns off at the knees at least for a while.
I share your concern that creative bureaucrats might find a work-around. But that’s why the New Civil Liberties Alliance (www.NCLAlegal.org) is here! We stand ready to offer pro bono representation to challenge unlawful agency action in court. These executive orders provide us with more tools to hold the administrative state accountable — I can’t wait to use them!
Good! And great work.
Not to fault Trump exactly, but they’re EOs. The administrative state isn’t going to collapse in the 5 yrs. and then the new guy, whether Democrat, RINO, or Gary Johnson can fix the issue. The odds of someone as
libertariananti-administrative state or more anti-administrative state than Trump succeeding him are slim to none.While it’s a good step, this is an EO and as we already know those are (usually) fairly easy to reverse. While Trump in particular has had some issues with his EO’s, it’s unclear how much difficulty a future President will have to reverse these EO’s.
This is a temporary measure in all probability, and could even be read as a way for Trump to create something ‘good’ to sell to waffling Republicans in a potential up-and-coming impeachment hearing.
Obviously, that’s no reason to lambaste this as something bad but I would have been happier if this was a more permanent limitation given that as soon as Trump is out of office this could be reversed. At least, I assume that’s the case given the type of order.
The Congress could make this more permanent.
Sure. Liawatha can’t wait to vote to reduce the power of the unconstitutional CFPB. Bernie can’t wait to shrink Obamacare.
Yeah, but seriously. POTUS Trump could submit a bill for the House to make this permanent. We want to permanently roll back the administrative state, or at the very least….make it hard as hell for the administrative state to circumvent the law.
Finally! A POTUS who is serious about rolling back the administrative state. Only took a century or so….(dating from Coolidge) 🙂
But but literally Hitler? Impeachable?
But, but, but without rules it will be chaos!
Nancy Pelosi will be predicting the end of civilization any moment now.
Trillions of transgender migrants will literally starve in concentration camps.
The Executive Orders require agencies to post all guidance online within 120 days of implementation.
So agencies can still enforce “guidance” on the regulated for four months before having it available for review online?
Agencies are perfectly free to offer guidance that Executive Orders are not binding acts of the legislature. Trump has made his ruling, now let him enforce it.
Good question. The 120 day deadline after OMB implementation does not permit agencies to enforce guidance. It merely gives agencies time to post their guidance online in a searchable database. The best part: “The website shall note that guidance documents lack the force and effect of law, except as authorized by law or as incorporated into a contract.”
He’s neutering our precious bureaucracy?
DC will be the eunuch capital of the world. Beijing has a sad.
I’m sure this is amazing, but the article could really benefit from some links to examples of guidance run amok. Or court cases where judges have thrown out lawsuits because it was ‘only guidance’. Not exactly obvious all the kinds of behavior this covers.
Exactly what I was looking for and thinking.
Good point! Unfortunately, even webpages have space limitations, so let me append my article with just a few interesting cases:
Mendoza v. Perez, 754 F.3d 1002, 1021 (D.C. Cir. 2014) (DOL policy of allowing certain foreign workers to be hired in the ranching industry harmed domestic workers sufficiently to be considered an invalid binding rule)
Elec. Privacy Info. Ctr. v. U.S. Dep’t of Homeland Sec., 653 F.3d 1, 8 (D.C. Cir. 2011) (TSA “guidance” required all airline passengers to pass through body scanners; struck down as binding)
Hemp Indus. Ass’n v. Drug Enforcement Admin., 333 F.3d 1082, 1091 (9th Cir. 2003) (DEA “guidance” criminalizing possession of sterilized hemp seeds and oil was an invalid binding rule)
…and I would be remiss if I didn’t add that there are more examples in NCLA’s Petitions for Rulemaking, all located on our website (https://nclalegal.org/petitions/). We filed 21 of these with various federal agencies over the past 15 months, asking them to do away with regulation-by-guidance.
Wow, some of those cases are almost unbelievable. Great work!
Most of these don’t get published or even public.
I can’t talk about company business publicly, but this is used by the EPA to require extra monitoring that is not legally required or take regulations that apply to one industry and then apply them to a completely different one, and the mismatch often results in the requirement being ineffective or excessively burdensome.
Most companies just do it. Fighting the government is generally a losing proposition, and even if you win, you lose more money than you would just by doing it.
Substantive guidance’s days are numbered. Agencies will no longer be able to blindside individuals and businesses with their schemes of secret rules, obtuse interpretations, and mafia-like shakedowns.
You know who else engages in Mafia-like shakedowns? The Mafia. They’re still around last time I checked, what makes you think the Administrative State is going away anytime soon? Just because Trump hand-waves a make it so doesn’t mean anybody’s going to thy will be done.
Still the handwave and ‘make it so’ in opposition to the shakedowns is better than the handwave and ‘make it so’ in support of them.
True, but it would be better if the handwave included a sword. Still baffled that Trump’s first act wasn’t forming a task force to identify every single administrator hired by the Obama administration that could be fired or transferred to an outpost in Nome and then making sure they got fired or transferred. If I had to guess, I’d say about 90% of the upper ranks of the civil service voted for Hillary simply because they’re genetically pre-disposed to favor more government and more government control down to a granular level and how the hell do you expect to drain the swamp if 90% of your employees are swamp-dwellers?
Well, it’s rational for public employee’s to support Democrats. Most people are smart enough not to bite the hand that feeds. Not that Republicans are generally great at deregulation, but of the two parties it seems Republicans still have some deregulation spirit left.
They pretty much insured he couldn’t do such an act by getting the Russian investigation going and then we are onto the Ukrainian Impeachment just as the investigation into intelligence agency and DoJ malpractice is expanding and it is revealed that Mueller lied under oath when he denied he had interviewed for the FBI director job.
“”You know who else engages in Mafia-like shakedowns? The Mafia”‘
I was going to say Cuomo. But that would be redundant.
Why not just end the practice altogether? If it’s unconstitutional, how does putting it online for 120 days make it constitutional?
Talk to congress about that. They want no part of being a coequal branch with the executive.
Yeah this is a nice step but we need legislative action to reign in the administrative state. Only problem is they have fundraising to do and can’t be bothered with such antiquated ideas like legislation.
Yeah they are more than happy to cede all of this to the Judicial and Executive branches and fundraise by bitching about it not taking any action that may piss off one of the patchwork of special interest groups that make up their various coalitions who actually stroke the checks that keep the lights on.
Don’t forget impeachment inquiries without actually having impeachment inquiries.
I’m sure Congress will be on that any day now.
Oh wait, no they won’t. They’re too busy with impeachment kabuki theater to care about actually legislating. Although that’s probably a good thing considering the kinds of laws they usually pass.
It’s like being chased by an insane serial killer – would you really prefer one who’s good at his job to one who’s bad at his job?
Which one skips the rape and torture and just gets to the killing? That is the one I want, if I had to choose.
I prefer the incompetent, fatter and more out of shape one then me, who doesn’t use firearms.
The House sent plenty of legislation to the Senate before this impeachment inquiry began. Mitch is the one who sat on it.
They came in ready to legislate, and Pelosi tried hard to keep the House Dems on task, thinking that they needed to demonstrate to Americans they were getting the job done in order to retain the majority in 2020. But Mitch sought to frustrate this agenda by blocking all of their bills in the Senate. Then Trump went overboard in stonewalling the House’s oversight responsibilities. So now they have nothing to do but impeach.
It’s your own fucker’s fault, moron.
Because there are instances where guidance is a good idea.
Take the Mossberg Shockwave, which is effectively a sawed off shotgun with a different grip. At first glance it looks like it falls under the short barrel shotgun provisions of the National Firearms Act, but because of an actual loophole, it doesn’t, and instead is categorized as a “firearm.” Not a pistol, not a shotgun, just a firearm.
Since it looked like an actual loophole, Mossberg sent it over to the ATF along with their reading if the regulation, and the ATF issued guidance that yes, indeed, it was not covered by the NFA.
Bump stocks went through the same process, until the Trump ATF decided to ignore the law and redefine “trigger” to include the person pulling it within the definition (if that sounds like idiotic rambling, then you understand their new interpretation correctly).
FoxNews Poll: support impeachment 50%, against impeachment 41%
It’s too bad you GOPers couldn’t get this level of support for removing Clinton, who lied in court about fucking his [IMHO, hot] intern. I mean, all Trump did was have a hilariously corrupt conversation with a foreign leader and already Americans want him thrown out on his ear. Just think: you guys couldn’t even get support for removing a rapist from office— though, to be fair his instance of rape wasn’t with a 13 yo girl at an Epstein party at a rave. I guess context matters.
This is definitely a good move, although the next president will most likely issue executive orders to supersede these and it will be back to business as usual. Enjoy it while it lasts I guess.
Exactly. Good on Trump for doing this. Now, codify this into law through Congress so that it’s harder to “executive order” away in the future.
Maybe by putting this to Congress we can have substantive debate about real, important issues, rather than he said/she said about Ukraine.
Leo….Agree completely. That is exactly how it is supposed to work.
Yeah, right. Legislation.
We already have it. It’s called the APA. And since the APA, the Republicans have regularly pushed through regulatory “reforms” designed to further constrain the rulemaking process. The main consequence of all this activity has been to create more redtape and make rulemaking even more costly and time-consuming. Is that what you think the administrative state needs?
Not so long ago, Reason was celebrating the thinner Federal Register – the publication in which all pending regulations are required to be disclosed – like it represented a cut in new rulemaking. It did, though perhaps not quite in the way intended. The thing is that the APA and all these other regulatory reform efforts require more to be published in the Federal Register. Comments on rule proposals have to be discussed and addressed. Arguments and evidence have to be provided. This is true of both creating new rules and amending existing ones. So lack of pages in the Federal Register meant that there was no agency activity happening at all. If Trump were truly presiding over a massive regulatory rollback, the thing would be twice as long.
Orange man good? Orange man good?
BANG!
What was that loud sound?
A paradigm shifting without a clutch.
(stolen from Scott Adams in a Dilbert)
The issue is that the agency has several general rules like the OSHA and EPA “Primary Responsibilities”. They say, effectively, “Thou must be safe” and “thou must not pollute”. These were created to avoid “there ain’t no rule” scenarios. They have been used to enforce guidance as law for decades now. However, we do need those sorts of general regulations to punish and correct businesses for reckless disregard of human life BEFORE it happens.
The alternative is an endless series of ludicrously specific regulations. For example, in OSHA’s PSM, there is a regulation that you may not weld anything to a wall if the wall is made of a combustible material. That’s one example out of thousands.
Wait… that’s not a good regulation?
I’m pretty sure the laws of physics already had a superseding regulation on the matter. It’s right next to the regulation that prohibits storing molten steel in Tupperware containers.
When you are making a line by line response to a 500 page regulation, and 9/10 can be legitimately responded to with “We are not going to win a Darwin award”, it becomes absurd. No one can recall the entirety of even this one regulation due to its length. However, it’s fully enforceable. This also leads to nonsense like the Dental Hygenist article as the specific requirements might not apply in every case.
Sounds almost like Reason should support this guy.
Reason should not support any politician. But they should support this action.
Cue issuance of first regulatory “Hints” in 3… 2… 1…
Good move. Not surprised I didn’t see this on Wapo.
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“The Executive Orders require agencies to post all guidance online within 120 days of implementation.”
Why not 120 BEFORE implementation? Phase two?
Is “guidance” the same as “guidelines”? Used to be when a substantive regulation or statutory provision was unclear, and affected parties wanted clarification, or an agency just thought clarification was a good thing, they’d issue a “guideline”. A guideline wasn’t a rule, but it was a statement (which could be taken as binding on the agency via estoppel) that if you did ABCD, you would be understood as in compliance. It did not say that if you did not do ABCD you would be understood as in violation. Unfortunately there was a tendency on the part of both the agencies and the affected parties to treat the latter as true.
This ain’t gonna do a thing. You know why? Because if it actually restricts the state, they’ll find some California judge to strike the whole thing down.
In the end, this will just ossify the unaccountable, unelected regulatory state into a permanent and unchangeable fixture, just as challenges to Obama’s executive orders have resulted in rulings that have established that presidents cannot undo that which has been done by preceding administrations. The ratchet only turns one way, people.
dey guts judjiz like dat in Seattle, too.
When those rogue judges exceed their constitutional authority and issue their “rulings”, Mister Barr will, if he is faithful to his oath of office, pounce upon said rogue judge and politely (perhaps, if he’s feeling noble that day) inform said judge that he had best READ the COnstitutoin, specifically Article Three, Sectioin two, paragraph two. Therein it is laid out clearly the limits of judicial authority for lesser federal courts. Dona;d Trump, asPresident and the issuer of the executive order bing challenged, will of necesdsity be one of the NAMED parties in the legal action. That bieng so, ONLY the SUpreme COurt, and ONLY on original jurisdition, can take up the matter. So, sorry, widdow judgie wudgie, you broke the law when you elevated your little self to take that case up.
Now we can hang you for your constructive perjury, swearing your oath of office then failing to uphold the promise you made.
Buh bye….
Herbert Hoover so completely crashed the banking system with a single Executive Order that by the time FDR was sworn in and ordered the banks shut down, every bank in the country had ALREADY slammed its doors. Prefiguring the Capo di Tutti Capi´s plans shut down the kleptocracy’s Mafioso tactics seems almost like a movie trailer worth watching!
Now do draft guidance.
This one COULD be great fun.
Remember the “rule making” by BATF in the post-event kneejerk to the murder spree in Las Vegas, whereupon someone snapped a couple pics of a long gun way up in that hotel that had a “bumpfire stock” installed….. and made the absolutely baseless claim that the device was actually USED in the massacre. The invading federal agents (isn’t it fascinating how often masses of them are always “right there” when something like this happens?) snapped the apparently staged photos, then REFUSED to allow BATF, the “firearms forensic experts”, to even hold any of the guns.. absolutely no opportunity for BATF to examine or test any of the weapons found up there. Next thing we know BATF have “redefined” a cheap plastic part into a “fully automatic fire weapon”. and therefor they ALL must be surrendered or destroyed. That whoe sorded business certainly would fall under this “guidance” category. Once these EO’s are signed, someone needs to take off after the bump stock ban….. and get it dumped on the basis it was not enacted by COngress, but a mere bit of “guidance” from BATF. THAT would be some poetic justice……
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Hey KMW, why not get this guy on the Reason podcast?
And get rid of that rude, ignorant, interrupting Suderman.
This is an idiotic piece, wholly uninformed of the important role that regulatory guidance plays in the industry.
You’re quite correct to note that guidance circumvents the lengthy, time-consuming process that is ordinary APA rulemaking. The problem is that business moves much, much faster than the rulemaking does, but businesses remain subject to standing statutory and regulatory obligations. If they cannot get reliable interpretive guidance from regulating agencies in more-or-less real time, then they are simply stuck with the regulatory risk. They have no assurance from the agencies that they are in compliance with their regulatory obligations, and they must simply hope that the agencies never choose to attempt to enforce the rules in an adverse way.
A world without guidance is not just a world with fewer rules and mandates. It is a world where the existing rules are unclear and no one knows how to act in compliance with them. It is a world where statutory mandates to promulgate regulations and pressing regulatory reforms compete with adding details to existing regulations that previously would have been addressed through interpretive guidance.
You think this won’t impact you? Well, a ton of tax rules are interpreted through guidance. Securities offerings. Mutual funds. Your 401(k). If Trump stops interpretive guidance and further politicizes whatever guidance can come through, the result will not be liberated industry, but industry frozen to the status quo. Regulated industries will not treat the lack of new guidance as free rein to do whatever they want. They will stick to existing, “blessed” forms of doing business.
You’ve made an excellent argument for eliminating regulations! Welcome to freethinking!
You can’t get rid of regulations without also getting rid of the statutes that require their implementation. So what you’re actually saying is – stop regulating securities offerings and exchanges; eliminate most tax exemptions and deductions; stop protecting the environment; and so on.
If that’s the road you want to go down, then so be it – I’m sufficiently familiar with the typical libertarian approach to market failures, prisoner’s dilemmas, and so on. That is, they deny that any social problems are worth doing anything about.
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I hated both the Clintons— seeing both of them as neoliberal hacks and warmongers. It’s too bad you couldn’t impeach him. I guess people saw Newt Gingrich waiting in the wings and said: “Fuck him.”, which—ok— was what I was saying at the time.