The Pathfinder: How Big A Role Should Government Play in Daily Life?

It’s a question that transcends time, personalities and party affiliation: What role should the government play in our daily lives? This year, the debate may reach a turning point as the U.S Supreme Court and a number of state legislatures are poised to weigh-in on the role and power of what some call the “fourth branch of government” – the administrative state.  

To many, the administrative state is synonymous with “the bureaucracy,” but a more accurate definition is “How executive branch departments and agencies create, enforce, and judge their own rules and regulations.” These departments are the administrative arms of the president, such as the armed forces, the Council of Economic Advisors, the Cabinet, and the Office of Management and Budget, to name a few. 

This system/structure, where administrative state agencies effectively have the powers that would normally be distributed across the three branches of government, is viewed both favorably, as essential to the effective and fair administration of the law, and adversely, as unaccountable agencies exercising unconstitutional authority.

Tension between these two viewpoints has frequently resulted in court cases that are ultimately decided – with long term effects – in the U.S. Supreme Court. In a 1984 decision (Chevron U.S.A. v. Natural Resources Defense Council,) the Supreme Court held that courts should defer to an agency’s interpretations of federal law when making  new rules and regulations. Since then, this principle has been referred to as Chevron deference.

Forty years later, that doctrine is again at the heart of a case the Supreme Court is currently hearing.

The case is called Loper Bright Enterprises v. Raimondo. The dispute is between the National Marine Fisheries Service (NMFS) and several New England fishing companies over the NMFS rule requiring, when possible, that fishing boats pay for agency monitors to be on board in order to measure the size of the catch. 

Court observers believe that if the court overturns the Chevron doctrine, it will have profound effects on how agencies write and enforce rules and regulations. In such a scenario, judges—rather than the agencies themselves—would interpret the extent of agency rulemaking authority allowed by statute, potentially limiting the regulatory scope of agencies governing almost every aspect of our economy.  

Because it concerns the federal government, the court’s actions in this case will surely generate headlines. But the administrative state is not a federal monolith. In fact, every state has its own version of it, with agencies writing, interpreting, and enforcing thousands of new and existing regulations every year.  States differ on how they manage and supervise their own administrative state, and with more states putting a premium on growth and economic development, they’re looking at how to make their regulatory environments more competitive.

One idea – regulatory budgeting – which was first developed at the federal level in the 1970s, is gaining steam at the state level. In its simplest form, regulatory budgeting would have state legislators establish limits on the costs of rules and regulations coming from state agencies. The Trump administration used an Executive Order to establish a version of this in 2017, requiring agencies to eliminate two existing regulations for every new regulation created.

Another approach being debated at the state level is also one that’s been around for a while: sunset provisions. Some states already include sunset provisions in statutes requiring agencies to conduct regular review and reauthorization of certain rules and regulations. Without specific action to renew the regulations in a given period of time, they expire and are eliminated from the code. 

A developing issue to watch on the administrative state front is a move among some (mostly Republican) legislators to adopt state-level versions of the federal REINS Act. Under this proposal, state lawmakers would  have more oversight in how agencies make and enforce rules and regulations. Regulations  with significant compliance costs or other major economic effects would require legislative approval.

So far, Florida and Wisconsin have approved versions of the REINS-style laws. Arizona legislators approved a REINS-style law (along party lines) in May 2023. Gov. Katie Hobbs (D) vetoed the bill.

More state level debate, and possible legislation, is likely to emerge throughout 2024. How the debate evolves depends on a host of factors, from partisan control of state governments to the needs of states to do what they can to encourage economic growth.

The most interested parties in these debates, though, are citizens – all of us – the people who go to the DMV for license renewals, or to state agencies that handle housing subsidies, unemployment insurance, education, health care, and much more. 

We are the ones who need to know, understand, and be ready to engage when lawmakers debate changes to the administrative state.