I have argued for over a decade that America has a fourth, largely unaccountable branch of government in the administrative state. My 2012 book, Stealing You Blind, describes how federal bureaucrats were making bank while ruining people’s lives and concluded that we were entering a Class War 2.0 between working man and bureaucrat (rather than between worker and boss.)
With the election of President Donald Trump and his institution of the Department of Government Efficiency (DOGE) that appears to have turned into a hot war, with DOGE winning battle after battle. That war is about to enter a new phase, and it is one all critics of government excess should cheer, not least for its recognition of some central economic truths.
The case against the administrative state has many justifications. One is that the whole idea of the executive branch having rulemaking authority is a breach of the nondelegation doctrine: Congress cannot deputize other branches of government to make law. Another is that the administrative state is out of control, going way beyond what Congress strictly required it to do, aided by ill-conceived court rulings such as the Chevron doctrine that required judges to defer to agency interpretations.
Congress had also foolishly created agencies and gave them executive power independent of the executive branch. It created commissions and tried to insulate them from the president’s power to control them. While initially quasi-legislative and quasi-judicial, in that they brought enforcement actions and the like, Congress gave commissions and agencies power to write and execute rules. While there were supposed to be rules about rules in the shape of the Administrative Procedure Act, agencies increasingly used “guidance” documents and other avenues to avoid formal rulemaking. My colleague Wayne Crews calls this “regulatory dark matter,” and in a particularly egregious example, the Obama administration announced what were essentially changes to employment law via a blog post.
Meanwhile, the unionization of the federal workforce, which even President Franklin Roosevelt opposed as injurious to government legitimacy, gave federal workers protection in their jobs such that malice or incompetence were no longer fireable offenses. Even if told to stand down, federal workers could just wait for the next friendly administration and then restart their efforts to control Americans according to their ideological preferences. As government grew, it attracted more people who saw big government as a good thing, compounding the problem.
The administrative state may have reached its zenith during the COVID crisis. Public health bureaucrats dictated how Americans should go about their lives. The Occupational Safety and Health Administration issued a nationwide vaccine mandate. The FBI surveilled PTA meetings. Their fellows in other agencies exercised hard and soft power in stopping debate on health issues, and this spread into other areas as a general attack on what they called disinformation.
How could this happen? Economics gives us the answer. Those with power want to increase it. When I was a young bureaucrat in the UK, my wily old mentor told me that the way to demonstrate success was to increase your budget and staff. The more power you have, the more successful you have been. Bureaucrats aren’t benevolent gods, blindly balancing the scales of justice, but individual men and women with the same virtues and vices as the rest of us. If you expect businessmen to be self-interested, you should expect the same of public servants. The field of economics that studies this is called public choice, aptly described by its sage James Buchanan as “politics without romance.”
None of this is how America is supposed to be governed. America is a constitutional republic with separation of powers, and enumeration of those powers. The various checks and balances of the Constitution are there to mitigate the problem of public choice. Unfortunately, since the New Deal, all three branches of government have turned a blind eye to their responsibilities in this area. That is now beginning to change.
Indeed, before President Trump’s election the Supreme Court began the process of restoring constitutional government in a series of decisions. Seila Law reasserted the President’s control over senior officials. The assertion of what is known as the Major Questions Doctrine in West Virginia vs EPA held that the executive cannot act on what would be a major political question if Congress has not considered it and legislated accordingly. Then Loper Bright overturned the Chevron Doctrine, removing automatic judicial deference to agency interpretation of the law.
What was needed, however, was an administration willing to act on these new legal principles. That appears to have come to fruition with DOGE.
It must be said that the speed and ferocity with which DOGE began its mission was like the vaunted “shock and awe” campaign at the beginning of the Iraq War. However, it was also noticeable that DOGE did not begin with a rulemaking agency, but a grantmaking one, the US Agency for International Development. DOGE’s assault on USAID made it apparent that federal bureaucrats had immense patronage power, making grants of taxpayer money to many seemingly undeserving recipients who happened to be ideologically aligned with previous administrations. Contracts at other agencies served a similar purpose.
This was another example of public choice at work. Wayne Crews had long ago noted that grants and contracts were being used as an additional form of dark matter, with additional stipulations (like requirements to promote DEI policy) being written into them. Thus, contracts became another way to regulate industry. When spending becomes regulation, we have entered a new zone of government control.
Another way to tackle the public choice problem is simply to reduce the number of bureaucrats. Fewer bureaucrats mean fewer people looking to improve their status at taxpayer expense. DOGE appears to be doing this by means of trimming staff numbers where it can. First up have been probationary employees, whose job status is not as protected as that of those in permanent jobs. Options for buy-outs and a mandate that employees return to physical offices may also help reduce headcount.
Government unions have pushed back, saying vital expertise is being lost. This is only to be expected — fewer government employees mean fewer union dues. A good example is what has happened at the Federal Aviation Authority, where, despite claims to the contrary, no air traffic controllers or critical safety personnel have been released in the recent firings. But the unions claim that losing support personnel means those critical safety personnel cannot do their jobs. If this is the case, then any marginal reduction in the workforce is a safety risk, and therefore impossible. That is how the public choice ratchet has worked over the past fifty-plus years.
These first two moves, however — canceling contracts and grants and reducing the workforce — are just a prelude to what needs to be the real work of DOGE, which is reducing the number and burden of regulations. That work has been enabled by the new White House Executive Order, Ensuring Lawful Governance and Implementing the President’s “Department of Government Efficiency” Deregulatory Initiative.
This order empowers DOGE and departmental heads to review all regulations and classify those that:
a. Exceed the powers granted to the executive by the Constitution
b. Are based on unlawful delegations of legislative power
c. Exceed the strict “lawful” reading of the law granting regulatory power (this would seem to aim at instances previously allowed under Chevron deference)
d. Attempt to address “major questions” of social, political, or economic significance
e. Impose costs that do not “outweigh” public benefits (this is an interesting return to the language of Reagan-era regulation; President Clinton changed the language such that benefits merely had to “justify” costs)
f. Impede other national aims such as innovation, disaster response, or energy production (this would nix many if not most environmental regulations)
g. Impose undue burdens on small businesses and entrepreneurs.
Agency heads are instructed to deprioritize enforcement of any regulations that fall into these classifications and to promulgate new regulations accordingly. Of course, until rules are actually rescinded, affected parties will still need to act as if they are in place, so the real meat of DOGE’s efforts will be in how many rules are rescinded, and how quickly (rules about rules will still need to be followed.)
This is where DOGE’s rubber meets the road. Permanent officials can be guaranteed to argue that few of their regulations fall into any of these classifications and will instead serve up a variety of minor rules for removal. DOGE will have to be strict about this, lest it go the way of every regulatory review since Carter. It will need to set targets for reductions and proper standards for cost-benefit analysis (the current circular A-4 that purports to do so will probably need to be amended quickly, perhaps under this very process).
If DOGE and agency heads succeed in this process, and all rules that fall in those classes are indeed rescinded, then it will be nothing less than the greatest deregulatory achievement seen in the modern world. Even more so because, despite complaints, it will have been according to due process and the rule of law. The Supreme Court may well have to settle many disputes.
The war will not end there, however. Congress will have to follow through and repeal laws, or future Presidents will just reinstate regulatory programs. The dark matter of ‘guidance’ will have to be brought under control. A new vision for the shape and nature of the federal civil service will have to be developed and agreed upon.
Yet thanks to DOGE, for the first time, there is light at the end of the tunnel.