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The Federal Bureaucracy: Servant or Master?

During my last years in the Senate, my staff and I were inundated with growing constituent complaints about the scope and arbitrary application of federal regulations. As a result, I became increasingly concerned over the enormous powers that have been entrusted to federal agencies and their potential abuse. I delivered these remarks to a meeting of the American Academy of Orthopaedic Surgeons in February 1980.

Last November, the state of Washington became the twentieth in just a year and a half in which the voters adopted a measure limiting how much their state would be allowed to tax or spend. A few months earlier, New Hampshire became the thirtieth state to call for a constitutional amendment requiring the federal government to live within its income.

All of this reflects a growing sense of political impotence and distrust. Millions of Americans feel they are being overwhelmed by events they can no longer influence, and that voting to replace one government official with another is an act of futility. There is no single cause for this disintegration of confidence, but as a veteran of six years on Capitol Hill who has had to wrestle with hundreds of constituent concerns, I am persuaded that a major source of the current discontent stems from the accelerating expansion of federal authority and the way that authority is being exercised.

In years past, citizens who had complaints with government could usually take them up with reasonably accessible state or local officials who had the authority to address them. With the explosive growth of the federal role, however, these officials have been converted in significant degree into mere administrators of programs and policies designed in Washington. Thus, today, a citizen with a grievance must be prepared to thread his way through the intimidating thickets of a federal bureaucracy that in practical effect now constitutes a fourth, extra-constitutional branch of government.

This bureaucracy is the creation of a Congress that has abdicated far too many of its legislative responsibilities. It is manned by insulated and sometimes imperious officials who wield an enormous influence over virtually every facet of American life. As they are not elected, they are not directly responsible to the people; and as they are protected by the civil-service laws, they are virtually immune to discipline by a president or by Congress. We have, in short, managed to vest these individuals with a degree of authority over others that the Founders of the Republic went to great pains to prevent anyone from acquiring.

Members of the business community have long been aware of the striking growth of bureaucratic power in the United States. But it is only recently that large numbers of Americans have come to feel themselves hemmed in and pushed around in their personal lives by tenured civil servants who seem to be responsible to no one. This is so because it is only recently that federal authority has been extended in a major way into areas having a direct and visible impact on very large numbers of ordinary citizens. Today, federal zealots are reaching into local schools, where they affect the interests of every child, and hence of every parent. Millions of workers now feel threatened by federally imposed affirmative-action programs requiring employers to hire and promote not on the basis of individual merit but on the basis of race, sex, or national origin. Small employers throughout America fear the knock on the door of one of the ubiquitous inspectors of the Occupational Safety and Health Administration.

Few agencies can match OSHA for the sheer rage and frustration its agents generate as they go about their appointed rounds. In its ten years of existence, the agency has become the symbol of the substitution of red tape for due process, and the way it has operated is instructive. The stated purposes of OSHA are laudable enough. To cite the language of the Occupational Safety and Health Act of 1970, they are “to assure so far as possible every working man and woman in the nation safe and healthful working conditions and to preserve our human resources.”

Although there are those, such as I, who ask whether the same purposes could not be met as well by action at the state level, it has been the way OSHA has gone about preserving our human resources that has raised hackles to such a degree. Virtually every business enterprise in the country, from the smallest corner grocer to General Motors, is subject to OSHA; and to be subject to OSHA means that you can be visited by one of its investigators at any time without notice and fined on the spot for violations of regulations you not only have never heard about but in some instances couldn’t find the text of even if you had.

A few years ago, the Daily Camera in Boulder, Colorado, published an editorial recording a vignette of life with OSHA. A local businessman, the employer of six, had a visitation from an inspector who discovered a violation for which the businessman was fined $1.16. When he asked for a copy of the regulation he had allegedly violated, he was told that none was available. For the ending of this real-life drama, let me read from the editorial:

Two weeks later he received a 248-page list of OSHA regulations. There was nothing in the document about the violation he was charged with, so again he asked for a copy of pertinent regulation. After a month he received a 48-page supplement to the 248-page rule book. The new document covered his situation but did not indicate that he was violating any rule.

So the small businessman appealed the case. After four hours of hearings with seven federal officials, the charge was dismissed—in a 19-page decision.

Now, the average individual will not go to court to protest a fine of $1.16, or even $1,600. He has no practical recourse but to pay it and mutter about high-handed bureaucrats, especially where the regulatory action is patently outrageous, as in the case of a former constituent of mine. He complained to me about being fined because he had constructed a guard rail that did not meet OSHA specifications. In fact, the iron piping he had used happened to be stronger, and therefore safer, than the wooden rails stipulated in the OSHA regulation he was fined for violating.

It occurs to me that I have been using the word “bureaucrat” in a somewhat pejorative manner, for which I apologize. Federal agencies and bureaus are manned, by and large, by able men and women most of whom work hard, are dedicated, and seek to serve the public good. They often face an impossible job in trying to make sense out of sweeping congressional directives; and given Congress’s wholesale abdication of the responsibility to define precisely what it is that these people are supposed to do and how, they often have no choice but to draft and enforce rules in what is essentially a legislative vacuum. But the net impact of the federal bureaucracy has been to move us away from a system of government by laws to which every citizen has equal access, and towards one in which some men and women are empowered by government to exercise broad discretionary authority over other men and women.

As I contemplate the vast numbers of civil servants we have loosed upon the land, I am reminded of one of the grievances listed by Thomas Jefferson in the Declaration of Independence as justifying so serious an act as rebellion. Speaking of George III, he wrote: “He has erected a multitude of new offices, and sent hither swarms of officers to harass our people, and eat out their substance.” It would appear we have come full circle in just two hundred years.

I am not suggesting that we take up arms and march on Washington, but I do suggest that we take seriously the dangers to individual liberties and to truly representative government that are posed by these latest swarms of non-elected officers. We were taught long ago that the power to tax is the power to destroy. So is the power to regulate, especially when so many essential activities are now made subject to official action or approval. It is a power that should never have been handed out without the most careful safeguards. As with any other power, it is subject to abuse; and I know of no change in human nature that would suggest that today’s bureaucrat is immune to Lord Acton’s famous dictum on the corruptive influence of power.

The old Department of Health, Education, and Welfare (which has now been spun off into two federal bureaucracies, the Department of Health and Human Services and the Education Department) could and did coerce schools into acceding to the most outrageous proposals through the simple expedient of withholding funds for programs that happened to have nothing to do with the matter in controversy; and there is no reason to believe that its successors will abandon this practice. The Securities and Exchange Commission is able to force compliance with demands of doubtful legality because a critical corporate financing cannot be postponed, or because an accounting firm cannot afford to be declared persona non grata by members of an agency with which it must continue to deal. The list of bureaucratic sins of commission and omission is endless, and in most cases the victims have little choice but to capitulate to orders they may believe to be outrageous, or irrational, or beyond the legal authority of the agency in question.

They do so because they are engaged in an unequal struggle. The laws governing the relationship between the regulator and the regulated simply reverse the normal legal presumptions. A citizen found by an agency to be in violation of its regulations is deemed to be guilty unless he can prove his innocence. A federal regulator is presumed to be acting within his authority unless the aggrieved party is able to demonstrate that he is acting in an arbitrary or capricious manner. This is a burden that is difficult and expensive to meet; and the issue too often is not merely whether the regulator is right, but whether he can be said to have abused his broadly defined discretion.

Regulatory bodies are clothed with the full authority of the federal government and have access to its resources. Most individuals and businesses, on the other hand, have limited funds and can ill afford the cost of a protracted fight. This is an advantage that some regulators consciously exploit, deliberately adopting dilatory tactics that are designed to spend their victims into submission. This practice is common enough, in fact, to have acquired a name. It is called “deep pocketing.” Rather than fight an issue on its merits, an agency will wage a war of procedural attrition that will force an opponent to reach deeper and deeper into his pockets, until his resources are exhausted.

Bureaucratic abuse does not stop with money-whipping citizens who attempt to protect their rights. Some agencies have fallen into the hands of zealots who pursue ideological goals that bear little relationship to the clear intent of the legislation they are supposed to be implementing. Witness the Federal Trade Commission’s recent antitrust suit against DuPont. Its purpose is to stop the company from expanding production of a paint pigment, titanium oxide, by a new process that has cut its cost so sharply that DuPont now supplies 40 percent of the domestic market. The company is being prosecuted for trying to make these savings available to more consumers, and all in the name of a statute that was specifically designed to enjoin the restraint of trade, not its expansion. As University of Chicago economist Yale Brozen has put it, in this action the FTC is standing the antitrust law on its head. It nevertheless has the power to charge off in hot pursuit of its own vision of what the antitrust law ought to be.

To cite another example of bureaucratic lawlessness, the Internal Revenue Service recently engaged in a power play that, if successful, would have threatened the existence of thousands of private schools, all in pursuit of a goal which, however exemplary on the face of it, was nevertheless none of the IRS’s cotton-picking business. A year ago, the IRS dropped into the Federal Register a set of proposed regulations for revoking the tax-exempt status of certain private schools. If the proposed rules had been allowed to go into effect, any private school that happened to be founded or substantially expanded at or about the time a public-school system in the surrounding area was desegregated would be presumed to be engaged in discrimination on a simple finding that its enrollment failed to meet the racial and ethnic quotas stipulated in the regulations. In order to preserve the tax deductibility of the gifts essential to its survival, a school failing to meet that test would be required to adopt a detailed, costly affirmative-action program entailing the establishment of scholarships, minority-recruitment programs, and a host of other arbitrary requirements that could break the financial back of a new institution.

Fortunately, an alert citizen spotted the proposed regulations and sounded alarms that forced the Internal Revenue Service to hold the public hearings it had hoped to avoid by labeling its proposals as merely procedural. Hearings were held; and although the IRS modified some of its proposed language to mollify the swarms of protesting educators, Congress recognized these as cosmetic only and, in a rare show of courage, adopted legislation killing this particular venture in bureaucratic imperialism.

I say it was an act of courage because members of Congress are usually very careful not to offend the shapers of respectable opinion. In this particular case, the New York Times had declared itself to be totally delighted by the new role the IRS had volunteered to assume without a shred of statutory authority. The Times wasn’t the least disturbed over the fact that the agency was out to arm itself with the power to force private schools out of existence on a mere allegation of discrimination.

One can reasonably ask why it should take an act of courage for Congress or a president to do something to keep the more spontaneously creative bureaucracies in line. I don’t know why this should be so—which may explain why I come before you as a former senator. All I can do is point out that once an interpretation of a statute commands the praise of the Times, the Washington Post, the American Civil Liberties Union, and all the other gentry who have co-opted the market for the good and the compassionate and the right and the just, pressures are created that are truly paralyzing, even though the public at large and the great majority of a given legislator’s constituents may have a rather different view of what is good, compassionate, right, and just.

Be that as it may, the fact remains that we have created, in our urge to regulate and in the way we have gone about the business of regulating, a new force in American life that undermines the safeguards the Founders so carefully wrote into our Constitution, one that threatens to destroy the sense of consensus that representative government must continue to cultivate if it is to survive. In my view, this aspect of our regulatory problem poses far greater dangers to the future well-being of the American Republic than all the waste and inefficiencies and economic dislocations that are now so abundantly documented.

We have created a professional civil service which we have endowed with an exceptional degree of power. Its members are elected by no one and, as a practical matter, are accountable to no one. Yet because so many private interests are now subject to governmental supervision and authority, the bureaucracy can exercise a fearsome power to intimidate that any president can turn to his own advantage.

An article that appeared a few months ago in the Wall Street Journal reminds us that this particular form of abuse did not end with Watergate. The article describes some of the pressures the Carter administration was able to bring to bear in order to muzzle corporate criticism of a proposed natural-gas bill. After a meeting with President Carter, the chief executives of some of our largest gas-consuming companies suddenly dropped their open opposition to the bill. According to the article, what the executives had heard from the president was some “not-so-subtle threats” involving matters pending before such agencies as the FTC and the SEC. The article noted that “the excuse for such [corporate] pusillanimity is that the fifteen-foot shelf of federal regulations passed by Congress has put a vast arsenal of weapons for punishment in any administration’s hands.”

It seems to me that any comprehensive program for regulatory reform must include, as a matter of first priority, a specific plan for pruning back the size of that arsenal while providing citizens with more effective weapons to protect themselves against bureaucratic aggression. Let me suggest just a few ways in which we can begin to achieve those goals.

First, we can narrow the scope of administrative discretion by sharpening the focus of congressional mandates and requiring that they be strictly interpreted. We can also harness economic incentives and disincentives to achieve specific goals. The Environmental Protection Agency is now finalizing a study to examine this alternative, which was mandated by an amendment I authored to the Clean Air Act. Among the EPA’s conclusions is that a system of pollution taxes or permits should be able to control nitrogen-oxide emissions from stationary sources at a tenth to a quarter the cost of the conventional regulatory approach.

Second, we should recognize that a civil servant is as capable of abusing authority as any other human being. Therefore, we should provide individuals and businesses that are subject to regulation with the kinds of procedural protections that are conjured up by the words “due process.” A taxpayer, for example, ought not to be presumed guilty until proven innocent, and a federal bureaucracy or agency ought to be required to prove its case before it can invoke the sanctions at its disposal.

Third, we should require government agencies to be as accountable for their actions as anyone else in our society. This would require the waiver of sovereign immunity so that anyone suffering a loss as a result of bureaucratic negligence or abuse could sue the federal government for damages.

And fourth, we can, to a degree, mitigate the element of cost as a deterrent to challenging the actions of a federal agency. This can be done by enacting legislation entitling any successful contestant in a civil or administrative action to reimbursement of any reasonable costs incurred in presenting his case. This would encourage those who feel they have a legitimate grievance to defend or enforce their rights against the federal government, and, in the process, it would help define the limits of governmental authority, which ought to be a major goal of any free society.

These and other reforms designed to curb the abuse of regulatory power will of course be resisted by all who in their heart of hearts applaud the fact that we have empowered a Washington-based elite to impose its enlightened views on a benighted citizenry. But citizens are growing tired of being pushed around by so-called public servants who are hellbent on imposing policies on the public that the public doesn’t want, and who are adept at throwing needless roadblocks in the way of productive citizens trying to make a living in an increasingly regulated world.

There is an enormous body of support for the kinds of measures I have suggested, some of it in surprising places. I know this because I was able to persuade two Senate committees to incorporate important elements of two of them in pending legislation. The 1976 law extending the life of the Consumer Product Safety Commission provides, on an experimental basis, for the payment of damages for losses resulting from gross negligence on the part of the commission. That same year, the Public Works Committee adopted my proposal for the reimbursement of costs incurred by anyone successfully challenging the EPA under amendments to the Clean Air Act. I was able to succeed in each instance because even regulation-prone senators had come to recognize, through the sheer volume of constituent complaints, the extent of a citizen’s helplessness in the face of even the most obvious examples of bureaucratic muddle-headedness, or indifference, or downright bullying.

It is on the basis of this experience that I so firmly believe that the reforms I speak of are politically attainable. Given the necessary effort, the power of a runaway bureaucracy can be curbed and elementary fairness restored to the regulatory process. If we make progress on this one front, we will have gone some way towards renewing the American people’s confidence that ours is a system in which the citizen continues to count, one in which public servants will remain precisely that: servants, not masters.

As might be expected in this imperfect world, the regulatory reforms I urged in these remarks have not been enacted, and, despite the efforts of Presidents Reagan and Bushes I and II to roll back the regulatory tide, the fifteen feet of fine-print federal regulations to which I referred have grown to twenty-five feet—and these do not include the additional yard or so that will be added to implement Obamacare. To compound the injury, Congress has developed the habit of imposing criminal penalties for breaches of regulations, however obscure; and to make matters even worse, it has dispensed at times with the common-law requirement that the accused know he has violated the law. We are all familiar, of course, with the principle that a person is presumed to know the law. Fair enough in the days when crimes consisted, essentially, of offenses against variations on the Ten Commandments. But today, citizens cannot rationally be presumed to know the intricacies of all the regulations that increasingly affect their lives—and can land them in jail.