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As we near the end of President Barack Obama’s time in office, we start to see stories about what his legacy will be. For this president regulation will play a major (if not definitive) role. As the New York Times puts it, he “will leave the White House as one of the most prolific authors of major regulations in presidential history.”
The Obama administration in its first seven years finalized 560 major regulations — those classified by the Congressional Budget Office as having particularly significant economic or social impacts. That was nearly 50 percent more than the George W. Bush administration during the comparable period, according to data kept by the regulatory studies center at George Washington University.
The new rules built on the legislative victories Mr. Obama won during his first two years in office. Those laws — the Affordable Care Act, the Dodd-Frank Act and the $800 billion economic stimulus package — transformed the nation’s health care system, curbed the ambitions of the big banks and injected financial support into a creaky economy. But as Republicans increased their control of Capitol Hill, Mr. Obama’s deep frustration with congressional opposition led to a new approach: He gradually embraced a president’s power to act unilaterally.
History may now judge the regulations to be one of Mr. Obama’s most enduring legacies. At the least, his exercise of administrative power expanded and cemented a domestic legacy that now rivals Lyndon B. Johnson’s Great Society in reach and scope.
The Times short-changes the Obama’s administration’s prolificacy. Regulators have actually finished work on 600 major regulations with dozens more in the pipeline. In 2010 alone, the administration completed work on 96 major rules, “more than in any subsequent year,” the Times reports.
Many of these rules will have profound effects on businesses and the economy.
Two examples came in 2015 alone from one agency--EPA. It released its water rule, claiming federal regulatory authority over vast amounts of land, making it harder to build factories and homes, and it also finished its Clean Power Plan that will drive affordable coal power plants into extinction, making the power grid less reliable.
(The administration may have gone too far on both, as federal courts have put temporary blocks on the regulations until legal questions are decided.)
Pumping out regulations requires an army of workers. In Fiscal Year 2016 George Washington University’s Susan Dudley and Washington University’s Melinda Warren conservatively estimate 279,000 federal workers staff regulatory agencies. To put this in perspective, in 1960 at the end of President Dwight Eisenhower’s second term, that number was just over 57,000.
How did President Obama become “Regulator in Chief?”
After legislative victories in the first two years in office, President Obama’s party lost control of Congress. That’s when he looked to make policy via regulation. In 2011, a frustrated President Obama declared, “Where they [Congress] won’t act, I will.”
But this could only happen if Congress didn’t closely guard its constitutional lawmaking power. Unfortunately for the public, as William Kovacs, U.S. Chamber Senior Vice President for Environment, Technology & Regulatory Affairs, explains, over the years Congress allowed regulators to extend their reach:
Congress passed vague and broad laws requiring agencies to “fill in the many blanks” left by Congress. As the agencies filled in the blanks, it became easier for Congress to have the agency fill in more and more blanks. After all, why not let the agency take the heat for difficult decisions concerning the environment, labor, banking, the Internet or medicine. By the time Congress realized that agencies were being too aggressive and needed to be held accountable, it was near impossible to restrain them in a divided government. Moreover, by this time, the courts came to view the agencies as the “experts” in developing their regulations (“laws”) and granted tremendous “deference” to decisions.
Now the situation is that an agency makes the law, the courts grant deference to agency decisions, and a divided Congress is unable to regain its legislative powers from the agencies or restrain an agency’s power to issue more and more regulations.
As Congress has ceded its constitutional powers to regulate, the Executive Branch filled the vacuum.
We then see a path to taming the Regulatory State. It starts with Congress reasserting its authority as the lawmaking branch of the federal government. As Kovacs writes:
[T]he moral of the story is that if we are to remain a nation of laws, our laws must be made by those elected to make them; the agencies must implement the intent of Congress rather than the intent of the agency; and the courts must independently review agency laws to ensure they achieve congressional intent rather than the desires of the “experts.”