Our interest dates back to the late 1960’s when some of the current employees of the Center for Regulatory Effectiveness, then career employees in the Johnson Administration, were advocates of (1) conducting benefit-cost analysis of regulations and (2) having OMB review the aforementioned benefit-cost analyses.
A number of the members of the administrative bar were adamantly opposed to the above recommendations which when implemented constitute centralized regulatory review. The aforementioned individuals argued that the enabling statutes directed a particular federal agency to issue a regulation, not the President, and that centralized regulatory review was either an illegal action or a toxic instrument of public policy. These biased and undocumented observations became engrained in future generations of attorneys by law school faculties whose graduates often became overseers of the administrative state and were in a position to jeopardize the fundamental building blocks of the common law dealing with centralized regulatory review.
The aforementioned misconceptions took years to correct. More specifically the governing directives were the Quality of Life Memorandum issued by the Director of OMB and the subsequent issuance of Executive Order 12291 by the President, both which stated that the Executive Office of the President was to review regulations before they were promulgated but made no mention of approval of the said regulation.
The supporters of centralized regulatory review set out on a campaign to expand the diversity in faculty views as well as the breadth of the subject matter taught in law schools only to be rejected at every stage by the reigning managers of law schools.
In the past fifty years there has been a continued increase in the reach of common law without virtually any ex ante input from either the legislative or executive branches of government. However one should note that although common law nearly prevented benefit-cost analysis of regulations from becoming a reality it eventually made it possible for it to become a principal operating mechanism within the administrative state. Nonetheless it is time for an ex post review of the common law process. The issue to be addressed is not the existence of the administrative state but instead how it is managed.
The thrust of this and subsequent posts is to examine alterative institutional arrangements for addressing the magnitude of the problem and if conditions warrant, to draft the associated legislation that should be enacted by the Congress.
It should be noted that we are not receiving any financial support whatsoever to address this matter. Nonetheless we believe the regulated industry is shortsighted in its historical emphasis on adding more procedural constraints on regulators in lieu of addressing two fundamental issues, increasing the diversity of the views and the educational backgrounds of the academicians who educate future members of the judiciary.