1.14 Regulation

Profs Jarman and Greer discuss the regulatory process and how you can influence it.

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• Music: 'Blippy Trance' by Kevin MacLeod

Transcript

Scott Greer: 0:10

This is an HMP governance lab podcast. And today, Holly Jarman and I Scott Greer will be talking about federal regulations and the rulemaking process, beginning with a simple question, regulation rulemaking, what is this even about?

Holly Jarman: 0:27

Oh, dear. So a while back, I got halfway through the class. And I had a student come up to me and asked me what a regulation was. And they didn't know. And I was. So ever since I have been very careful to explain exactly what the difference between statute and regulation is. So when we talk about legislation, we're talking about most of the time, primary legislation, laws that go through a legislature goes through Congress or goes through a state legislature. And if you listen to our podcasts on the legislative process, you'll know how that works. And the law gets passed first. And the law instructs bits of government quite often to do different things. So for example, a piece of legislation could authorize the and instruct the FDA to create some regulations on tobacco control. And so the regulations happen after the the main law. And so quite often, they get called secondary legislation in a lot of places. So regulations are made by parts of government that are not the legislature that are most often agencies. And so there's this government agencies go through a process whereby they consult with stakeholders and the public. And they're required to do that in a particular way. And we'll talk about that in a minute. And they basically, fire that process, then draft and create a set of rules that put the main law into practice, essentially. And so it's kind of an important process, because those regulations interpret sometimes that the main law, because legislation is not always clear on how something should happen, or even what the causation is to get from the law to the desired outcome. And so regulations are a really important step, they interpret primary law, they put it into practice effectively. And they really implement hopefully the intent of the legislature in putting the law into place. But that's not always the case.

Scott Greer: 2:46

And the case for this is that there's a lot of things that are really detailed, the Affordable Care Act had about 1100 instances of the phrase, the Secretary shall, because what the Secretary shall do is things like meet with state insurance regulators to determine the best way to calculate the medical loss ratio, there's no hope that Congress could write good legislation that would specify how you calculate medical loss ratios for insurers in different parts of the countries it hopeless. So that's why you have to delegate the authority to make a rule to the agency, even if it annoys certain very conservative lawyers,

Holly Jarman: 3:23

right, because they would never agree on how that should happen. And then you would end up with endless bickering over all the details of the law. So quite often, a great way to read a piece of law, actually, to understand its regulatory intent is to look for phrases like the secretary shall, because it's a direction to another part of government, in this case, an agency to do a particular set of things. And that agency itself has discretion, which is bounded, again, by statute, but also by its daily practice and sort of precedent, if you will, around what sort of acceptable for that agency to do. And so within those boundaries, the regulator then creates new rules and guidance in consultation as appropriate. And so following rules on how to consult, and then puts the policy into practice. And regulation can be really important, because doing it badly, totally negates the potential effect of the policy. So if you pass a law that's relatively ambiguous, but then the regulatory agency doesn't interpret that in a way that works with, let's say, the businesses or the organizations that are being regulated, and they don't get any regulatory compliance, then you're just not going to see the intended effects of the original law.

Scott Greer: 4:52

So the EPA, for example, is under the Clean Air Act and clean water act granted the authority to identify a chemical that is bad for clean air and clean water and regulate down to zero sometimes the quantity of that chemical that's going to be in air or water that's permissible. Now it does us under a law called the Administrative Procedure Act known as the APA, which was passed in the 1940s, actually, by Republicans eager to constrain Franklin Delano Roosevelt's New Deal agencies, which were doing all sorts of stuff. And the APA maps out the rulemaking process. So let's talk about the APA.

Holly Jarman: 5:30

Right. And the APA is a good thing, I think, generally, because it says, It outlines the ways in which government agencies have to interact with the public. And it has some really important parts, which relate to transparency and sort of procedural fairness, which is really quite key. So agencies have to follow the Administrative Procedures Act. And it has rules for things like the publication of documents notification about hearings, public consultation, in general. So they, they have to publish certain statements, they have to give the public a good clear idea consistently about what they're doing. And they have to follow certain procedures for public consultation, which is really important for us because as hopefully advocates in the area of public health or health care, we're trying to influence this process. And so we're going to talk today a bit about how you can try to influence this process. So an important thing to know is that there has to be when an agency makes regulations, a statement of rulemaking authority, which has to be published in the Federal Register for all proposed rules and final rules. So what does that mean? So the agency has to say something about whether it derives the authority to do this thing from and so agencies get their authority to make regulations through a combination of things, laws passed by Congress, those establishing the agency and giving it broad authority, as well as those laws that say the secretary shall direct the agency to address a specific problem. They can also get directions via executive order. So in that case, the President is delegating authority to the agency to do something and directing it to take action. So to go back to the APA, they have to make a statement, the agency has to make a statement about where the rulemaking authority comes from and what they're proposing to do. And where do we look for that? Well, there are actually some companies that will charge you a lot of money for this information. So listen carefully, you need to take a look at the unified agenda. So agencies will publish a regulatory plan every fall. And they'll publish an agenda of regulatory and D regulatory actions every spring and fall. So they are required to report these things regularly. And there are a couple of different ways you can get this information. You can use reg info.gov, we'll put these in the the podcast notes regulations.gov, you can look at the Federal Register, which is online, and you can look at the Government Printing Office. So all of these places will have information about what's on the agenda, what's forthcoming. And because the agencies are required by the APA to issue notices about what they're considering, and what their authority to do that is, as well as other kinds of notifications. We do really have a lot of information about the the plans of regulatory agencies. So the regulatory agency will issue what essentially is an opportunity for comment. So once the agency has decided that it's going to issue a rule, it will start a process of informal information gathering. And at this stage, the public can kind of petition the agency for the rulemaking to happen. So once the agency is decided, it wants to look at a particular issue. You can isn't just as an ordinary person, petition them to say, yeah, we want this to happen. We want some rulemaking on this issue. And here's why we think it's important. The agency publishes intent in the Federal Register. So luckily for us, the Federal Register is online and it's searchable by topic. So we can take a look by agency but also by subject area, and the agency issues and advanced notice of proposed rulemaking and that's the point at which The formal public consultation begins. So, as this is all going on, there's still informal consultations. So stakeholders that are close to the agency may well still be communicating with officials and trying to put their point across in an informal way. But lucky for us, there is also a formal public consultation that has to happen by law. And so that's our opportunity to be part of the conversation. So the proposed rules that are put forward by the agency can be scrutinized by the president's office, and they can also be scrutinized by this all regulatory agency called the Office of Information and Regulatory Affairs, before they get published in the Federal Register. So that's worth noting.

Scott Greer: 10:49

This was created explicitly under ronald reagan as a choke point, because when they came into office, the republicans in the Reagan administration perceived this enormous apparatus of federal bureaucracies that they didn't think were adequately constrained by the APA. And that certainly didn't seem adequately responsive to the White House, the White House came in on a deregulatory agenda. And they found acre upon acre of agencies that had been issuing new regulations for decades. That wasn't what ronald reagan thought he was there to do. So the IRA became a choke point. Everything's got to go through. And it turned out presidents of both parties quite like this, because they don't really want various federal agencies off doing stuff simply because it's popular or scientifically based or pays off a campaign donor, or helps the secretary prepare their campaign for governor of some state, the White House wants to keep control of this. And occasionally, there's a gimmick. So for example, the Obama administration's IRA was into gimmicks about data as if data had not been discovered until 2009. But by and large, it's a straightforwardly political operation to make sure that no agency is doing things which are detrimental to the whatever the agenda of the White House's.

Holly Jarman: 12:02

So at this point, the agency has decided to issue a rule, the agency has published its intent in the Federal Register. And then after that, the agency issued a proposed rule via a notice of proposed rulemaking. So that's when you want to go to regulations.gov. And look it up and you can look up these proposed rules. And then there's an opportunity to comment on those rules as a member of the public. So the comment period is generally at least 30 days can be in some cases, 60 days or more. And individual members of the public can ask for more time to submit comments, which sometimes happens where stakeholders feel something's been inadequately explored, or there's a serious problem with the proposed rule, they might request more for more time. And the comment period can also be reopened or that though that's not particularly common. And the agency, in addition to soliciting these comments can also hold public hearings. And so that's the kind of situation where, if you've tuned into these hearings, some of these are available publicly, you can see the recordings, you have a bunch of people standing up and saying I'm from the grocers, agency, or whoever, and this is my position. And then the next person asks a question, and then it's an endless series of stakeholders normally at these meetings, but it helps the agency to kind of gain some valuable information. The key thing here is to notice that the agency is just as dependent quite often on the sector that it's regulating, as the sector is on the regular tour. So there's this kind of dependent relationship here. The regulator wants to pass regulations that work and that fit, and that don't rock the boat too much with its stakeholders. So that's important to bear in mind, in terms of trying to interpret the regulatory politics here. The agency can also allow like a reply period. So after the comment period is done. If you go on there, and you scroll through, and you're like, good grief, there's a lot of comments here on this particular piece of this particular rule that I'm interested in. But the comment period is closed. Sometimes there's a reply period. And so as a member of a public, you can reply to the comments. After that, the agency makes a final rule. And the important caveat here is that it's only partially based on the comments. So we'd be a bit naive, I think to expect that these comments would somehow translate into changes in the rule. Because the rule is politically motivated. It's it's put forward, either from directions Based on congressional legislation, agency discretion or directions from the president, so it's a partisan thing. But there's almost certainly probably at least one intern probably a bunch of interns looking at all those comments, summarizing them. And that does feed into the discussion. So your mileage may vary in terms of how different the final rule is to compare to the proposed rule.

Scott Greer: 15:28

And bear in mind that government is information poor, like most big organizations, and like most people, so they do use these regulations to learn things, and they learn detailed things. If we write the regulation, this, we will way we will have this unexpected effect. And that wasn't what we want to do. Thanks. They'll also use it to test the extent to which they're going to get political blowback. So one of the striking things is if you want to see a lot of comments, look at anything to do with E cigarettes, because anything to do with vaping produces this avalanche of comments, most of them cut and paste some social movements sent around text and said, here's where you submit your comment. But it's just amazing the extent to which vapors really get organized and comment on anything that might affect them.

Holly Jarman: 16:14

Yeah, so at this stage, it's important to note that the President and oira can add opinions, so they can come in again at the end of the process, and influence the decision on the final rule at this stage. So after all, this, the consultation is done. And the final rule goes into effect, usually 30 days after it's published. So there's a couple of weird exceptions to this. So don't be surprised if you scroll through regulations.gov. And you'll see some different terms. One is an interim final rule, which is a final rule that's published before a proposed rule has been made. It's relatively minor. So it's effective on at the point at which it's published. And it can be altered by public comments after the fact. Then there's a direct final rule. And these rules go into effect unless really significant bad comments are received. So in both these cases, we're talking about relatively minor or maybe less controversial rules. So the rules are published themselves in the Code of Federal Regulations. And that's another source of information. I would say, if you're going to take this forward, take a look@regulations.gov. It's accessible to anybody, and go and find some regulations that are pertinent to you. I think it's important to understand and explore just the extent to which policy happens through regulation, rather than necessarily through primary legislation. So while in our legislative process podcast, we have explained that the legislature is not that active right now. regulators are still active agencies are still active, and they've been producing regulations. The government produces a huge volume of regulations all the time, on some very mundane things, and some very controversial things. So it's worth understanding in a period of legislative gridlock, how you can advance your agenda through the regulatory process.

Scott Greer: 18:26

And can I just add a coda about the afterlife of regulations. So the Congressional Review Act, which was a thing passed in the glory days of newt gingrich butting heads with Bill Clinton says that Congress, a new Congress can review new federal regulations of essentially the previous presidency, within 60 legislative days of the end of the presidency. So it's possible to come in as a new sweep, for example, the early Trump administration with a Republican Congress, and they took out 14 regulations that have been passed at the end of the Obama administration. And they can do this with 60 legislative days. So now the trick is that you try to use up as many days as possible in the lame duck session, so that there's very few legislative days for the new Congress to consider repealing whatever regulations you've passed. The other thing you can do, of course, is this is America, you take them to court. And there's a lot of jurisprudence on the APA. There's a lot of jurisprudence on federal rulemaking. There's entire areas of federal courts that are specialized in analyzing it, for example, the Court of international trade, which is the place to go if you want to argue about the definition of a boiler in order to figure out the appropriate tariff. I've got a friend who had a beautiful Harvard Stanford education and spent 18 months in New York City, learning the intricacies of boilers, specifically how they're defined for tariff purposes. That's how you challenge regulation in the trade world. Well, judges for example, if they think that a rule was capriciously made or unmade, that grounds to knock it out. capriciousness means I did it because my friends didn't like it, I did it because my donors didn't like it, I did it because my boss, the President didn't like it. So, capriciousness is something you want to avoid. And you avoid that precisely by good compliance with the APA, and transparent even if somewhat slimy use of evidence is crucial to this process. Because otherwise, if you don't make the rule correctly, and if you don't unmake the rule correctly, you can be taken to court. And judges, by and large know exactly what to do to interpret the procedure and see if you're capricious.

Holly Jarman: 20:37

So in other words, if we looking for procedural fairness and evidence based policy in the American political system, maybe we should look less at the legislature and more frequently at the regulatory bodies,

Scott Greer: 20:50

which is exactly why there's a conservative legal doctrine called the non delegation doctrine, which says, America took a terrible wrong turn in the 30s. And agency shouldn't be allowed to do anything that isn't specified in law. So that's going to be a new Flashpoint in the conservative Supreme Court. Because there's now a majority of judges who in one way or another have signaled that they do by the non delegation doctrine, and don't think the executive should be able to make regulations based on for example, the authority of the Clean Air Act. So I've cheered you up. But this is really relevant. And I hope you take Holly's advice to have a good look@regulations.gov because it always makes both of our hearts go pitter Pat. When students tell us they had one look, and now they're really into it.

Holly Jarman: 21:33

You know, I'm a nerd at heart. And I care about the details of these regulatory policies.

Scott Greer: 21:38

So even if you don't care about the minutiae of the policies, you probably care about what it does to the bottom line of your employer or the objectives of your organization you work with.

Holly Jarman: 21:47

Exactly. This has been an HMP governance lab podcast. If you're interested in learning more about our research, come and find us at HMP governance lab.org or follow us on Twitter at HMP. gov