Chapter 8-Administrative Agencies and the Regulatory Process
Chapter Summary

Regulation is important to make sure that all laws are implemented. It is for that reason that administrative agencies were set up. People often complain about too much regulation and red tape, but regulation is necessary to prevent chaos.

Part One: Introduction to Administrative Agencies
The article "So You Want To Get Your Roof Fixed" discusses the everyday ways in which regulations affect our lives, bringing up issues that are often debated. First, is there too much regulation? Secondly, is some regulation necessary in a society as large as ours? Thirdly, where should the line be drawn between freedom and regulation?

The Agencies
Administrative law is the branch of government that deals with the administration functions of the government. According to the Federal Administrative Procedure Act, an agency is any government unit, other than the legislature (i.e. Congress) and the courts. So basically this includes the entire executive branch of government. There are also some judicial and legislative agencies. Federal administrative law also applies to state and local governments. Executive agencies are created by the President and the heads of those agencies are appointed by the President. Examples of executive agencies are: Department of Education, Dept. of Labor, Dept. of Agriculture, Dept. of Defense, Dept. of Energy, Dept. of State, Dept. of Justice, Dept. of Commerce. State and local governments also have agencies.

History
Interstate Commerce Commission (first established agency)-1887
Food and Drug Administration-1907
Federal Trade Commission-1914
Securities and Exchange Commission
Federal Communications Commission
The Civil Aeronautics Board
The National Labor Relations Board
Equal Employment Opportunity Commission-1965
Environmental Protection Agency-1970
Occupational Safety and Health Administration-1970
Consumer Product Safety Commission-1972

Creating the Agencies
Congress has the power the create agencies, such as the ones listed above, through law called "enabling legislation". The Congress gives (delegates) a portion of its powers to the agency to carry out the agency's duties. Since Congress does not have the time to handle every problem, the agencies take over many of these tasks.


Agency Duties
Agencies generally have three broad duties. The control of supply duty of agencies controls the entrance of products or services into the market for the protection of the public. This duty makes sure that there aren't too many products or too few in our markets. For example, the FCC grants television and radio permits. If there are too many radio stations in one area, the FCC denies the permits. The control of rates duty of agencies is a dying role of agencies. Historically, agencies such as the Federal Energy Regulatory Commission tried to make rates the same in a given area. However, in more recent times, agencies have deregulated many industries, such as airlines. That is why you will note such big differences in prices for airline tickets to the same destination. The control of conduct function of government makes sure that there is enough information available by consumers to make good decisions; that standards are set to promote safety of products and services; and that a product can be banned if it is found to be unsafe. See: "What's a Government To Do? Is That Really A Pizza?", p. 308.

Part Two-Summary of the Administrative Process

OPERATING THE AGENCIES
Executive Functions-One of the major duties of agencies is to carry out the agency's purpose as defined in agency legislation and policies. These tasks are carried out everyday. Most agencies offer advice and explain their policies to the public.

Legislative Functions-Agencies create rules, which are treated as laws, meaning that every citizen must obey these rules. There are three types of rules which agencies create. Procedural rules lists the agency's internal structure and way they do things. Interpretative rules are the agency's view on the meaning of the rules they write, but do not have the force of law. Legislative rules are the ones which explain specific ways to handle disputes or problems. There are two ways to make an agency rule, formal or informal. In both types, the agency must publish the proposed rule in the Federal Register. In formal rulemaking, after the rule is published, something similar to a trial is held where interested parties support or contest the rule with evidence. In informal rulemaking, after publishing the rule, anyone can submit written comments and a hearing must be held to discuss these comments. See: "A Golden Anniversary? The Administrative Procedures Act of 1946".

Judicial Functions-Once agency rules are set, there must be a way to enforce the rules if they are broken. This can be either be done by settlement and allowing the party that has broken the rule to correct its mistake or through a trial heard by an administrative law judge.

CONTROLLING THE AGENCIES
Just like citizens, the agencies must be controlled to make sure that they do not abuse their powers.
Executive Constraints--Since the president appoints the top leaders of the agencies, the president has some power to control the agencies through the people he appoints.
Congressional Constraints-Congress creates and eliminates agencies. Congress also controls the budget of the agency so it can turn down funds for any activity they do not agree with.
Judicial Review-Any agency rule can be challenged in court which is an important way to make sure that agencies pass rules that are in the best interests of the public. See: FCC v. Pacifica Foundation, p. 316.

Part Three-The Food and Drug Administration
The FDA was created to protect the public from dangerous food, drugs and cosmetics and to make sure that drugs sold in stores work the way they are advertised. During the Industrial Revolution, there were very bad working conditions for workers and unsanitary handling of food. The federal government eventually recognized these problems and set up the FDA to correct these problems. Many of their current duties include the following, determining whether cigarettes are drugs, approving new drugs to combat diseases, whether silicone breast implants are safe, labeling food so people know what they are buying, and whether the abortion pill is safe, among many other duties. The FDA recently asserted its right to regulate human cloning. See: "The New Diet Pill: A Close Call", p. 325.

Part Four-The Federal Regulatory Process Evaluated
· Many people feel that government regulation restricts the running of business, makes them inefficient and limits their freedoms. See: "FDA Regulatory Tide Swallows Up McCurdy Fish Co.", p.329.
· Many people also feel that the present regulations don't go deep enough and need to be constantly re-evaluated to make sure nothing is being missed as our society grows and changes. See: "Safety Labels For Cars", p.331.
· Many feel there is too much influence by business in the agency processes, which is commonly referred to as lobbying. The interests of a special interest group or industry should not influence rules.
· Some people also argue that the voice of the people is not heard very well by agency rulemakers when developing regulations.
· As a result of these questions and problems, a movement toward deregulation of agencies began in the 1970s, however we will never get to a point when some government regulation does not exist. As we have seen, it is vital for the safety of all citizens.


Summarized with the permission of Irwin McGraw-Hill

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