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Trump Can't Shut Federal Agencies. But He Can Turn Them Off.

Cass R. Sunstein is a Bloomberg View columnist. He is the author of “The World According to Star Wars” and a co-author of “Nudge: Improving Decisions About Health, Wealth and Happiness.”
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Many Republicans hope, and many Democrats fear, that Donald Trump’s administration will close or shrink a variety of federal agencies and offices. Both the hope and the fear are justified -- even without a supermajority in the Senate, there’s a lot Republicans can do to restrict the actions of the executive branch.

Let’s start with what Trump can’t do: Acting on his own, could he disband an agency or department -- say, the Department of Energy? Absolutely not. He would need Congress for that, and almost certainly 60 votes (and it’s not going to get close to that). But his administration could work to cut staff, if only by refusing to fill vacancies, and it could certainly work with Congress to reduce appropriations.

Far more important, Trump could do a lot to reduce agency activity.

On the campaign train, Trump said that he would issue a moratorium on new “financial regulations.” That would certainly shrink the activity of many agencies, including the Department of Treasury, the Securities and Exchange Commission, the Federal Reserve Board and the Consumer Financial Protection Bureau. But without going to Congress, does a president really have the authority to impose a moratorium?

Insofar as we are speaking of executive agencies -- defined as those headed by people the president can fire whenever he likes -- the answer is mostly yes. The Department of Treasury falls in this category (as do most federal agencies). Under a controversial court of appeals ruling (which may be overturned), so does the CFPB.

Through a presidential memorandum or an informal communication (perhaps via incoming Chief of Staff Reince Priebus or the new administrator of the Office of Information and Regulatory Affairs), the administration could grind the rule-making activity of such agencies to a near-halt. It could do the same for the many executive agencies not involved in financial regulation, such as the Department of Transportation, the Environmental Protection Agency, the Department of Health and Human Services, and the Department of Agriculture.

Word to the wise: There’s a website where you will be able to see whether that’s happening. Reginfo.gov offers a public accounting of the number of regulations under review at the Office of Information and Regulatory Affairs. At any given time, the number usually ranges from 80 to 140.  If the number drops below 50, something major is afoot. If it is below 25, we have something very close to a moratorium. If there’s very little from the EPA and HHS (usually the federal government’s principal regulators), we can infer that they’ve been told to stop.

But for any such slowdown, the new administration will face two serious obstacles. The first consists of legislative mandates. Some laws, including those in the financial and environmental areas, require agencies to issue rules by specified dates. No president can lawfully ignore legal deadlines, and a court is likely to insist that he comply with them.

The second obstacle is that most financial regulators, including the SEC and the Federal Reserve, count as “independent” agencies, which means that their heads do not serve at the president’s pleasure. (The Federal Communications Commission, the National Labor Relations Board, and the Federal Trade Commission are also independent.) By tradition, presidents have been reluctant to meddle in policy making by such agencies -- though the Supreme Court has yet to say whether they have the legal authority to do so.

If the Trump administration wants to control the independent agencies without violating tradition, the easiest path is simple: Ensure that new appointees to such agencies (including their chairmen) share his views about regulation. The boldest path would be to assert the right to exercise ongoing supervision over their decisions -- which would raise some difficult legal questions.

Of course, issuing new rules is only one thing that agencies do. They also bring enforcement proceedings. For example, the Department of Justice enforces civil rights and antitrust laws, the EPA enforces environmental laws, and the Food and Drug Administration enforces food safety laws. Agencies promote their missions, and extend their reach, by moving aggressively against those who violate existing requirements (including those imposed by prior administrations). Conversely, they can reduce their presence by eliminating their enforcement activity in particular areas or even in general.

If the new administration and Congress significantly cut an agency’s budget, the agency would have no choice but to curtail enforcement. And if the president or the new agency head gives a clear signal (for example, that civil rights actions should not be brought against the police), that signal would also reorient enforcement policy.

Most of the time, enforcement activity is relatively routine and not monitored by the White House. But in terms of broad policy directions on large issues -- such as civil rights and antitrust -- the White House is in charge and gives a sense of its preferences. Agencies are entirely aware of that, and they generally follow the boss.

True, the law matters. Courts have left open the possibility that they will forbid agencies to “abdicate” their legal responsibilities -- but in recent decades, courts have hardly ever done that.

Here as well, the independent agencies may well have a measure of protection against White House interference. But if they’re headed by a Trump appointee, that may not matter so much: Personnel is policy. Before long, the independent agencies will generally be led by Trump appointees (and the multi-member commissions, like the SEC, will have Republican majorities).

There’s a larger lesson here. Many people complain about some democratic deficit that is alleged to come from the power of “unelected bureaucrats.” The complaint is (largely) misguided. Most of the unelected bureaucrats must, and do, follow the policies laid out by the president. That’s so even if the president’s policy is to do little or nothing.

Skeptical? Just watch.

  1. As of this writing, the number is 159, which is unusually high.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author of this story:
Cass R Sunstein at csunstein1@bloomberg.net

To contact the editor responsible for this story:
Christopher Flavelle at cflavelle@bloomberg.net