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This week in my Ashland University political economy class we considered chapter 14 of The Constitution of Liberty, “The Safeguards of Individual Liberty,” where instead of listing specific barriers like the Bill of Rights, Hayek discusses how the rule of law, rightly understood, is a broad barrier to excessive government power. He has an excellent legal-philosophical discussion of one of the knottiest problems in American constitutionalism, namely, delegation of power to administrative agencies–the curse of the modern American administrative state as delegated power is so sorely abused (e.g. Obamacare, etc). Hayek doesn’t say we can’t have any delegation at all; he recognizes the practical problems of modern government require it to some extent. But Hayek could see that this was, quoting German legal scholar Hans Huber, the “Trojan horse in constitutional, administrative law.”
“When courts fail, as the Supreme Court did in Mass v. EPA, then the usual safeguards of liberty are powerless to protect justice.”–Steven HaywarThe trouble with the widespread use of delegation in modern times is not that the power of making general rules is delegated but that administrative authorities are, in effect, given power to wield coercion without a rule, as no general rules can be formulated which will unambiguously guide the exercise of such power. What is often called “delegation of lawmaking power” is often not delegation of the power to make rules–which might be undemocratic or politically unwise–but delegation of the authority to give any decision the force of law, so that, like an act of the legislature, it must be unquestioningly accepted by the courts.
In this last sentence Hayek anticipates the so-called “Chevron doctrine,” by which our judiciary came to extend full “rational basis” deference to decisions of regulatory agencies, “unquestionably accepting” regulatory rule-making and essentially unleashing them to run amok across the American economy. Hence Hayek concludes:
This brings us to what in modern times has become the crucial issue, namely the legal limits of administrative discretion. Here is “the little gap at which in time every man’s liberty may go out.”
This is preface to a big story that is getting surprisingly little coverage in the media this week, namely, the design of the Environmental Protection Agency to double its budget, and to increase its number of employees more than tenfold, from the current level of about 18,000 to more than 230,000, over the next four years. And this just for one single program: the greenhouse gas regulations under the Clean Air Act. And all of this arises from the Supreme Court’s botched 2007 decision in Massachusetts v. EPA, which said the EPA could regulate greenhouse gases under the Clean Air Act, even though Congress never intended this, and even said so at the time during floor debate over the 1990 Clean Air Act Amendments.
Here’s the problem, long predicted by me and lots of other folks who know how the Clean Air Act works. The Act says any stationary source that emits as little as 100 tons a year of a pollutant must get annual permits from state agencies and the EPA. 100 tons is a lot if you’re looking at pollutants like volatile organic gases (unburned hydrocarbons) that contribute to ozone, but is a tiny amount for carbon dioxide. Your average fast-food restaurant or donut shop or apartment building easily emits 100 tons of CO2. Right now about 14,000 stationary sources have to get annual emission permits under the Act. By regulating CO2 through the Clean Air Act, the number of businesses that will require EPA permits will be over 6 million.
Who says this? The EPA itself, in a recent analysis:
Sources needing operating permits would jump from 14,700 to 6.1 million as a result of application of Title V to greenhouse gases, a 400-fold increase.…Hiring the 230,000 full-time employees necessary to produce the 1.4 billion work hours required to address the actual increase in permitting functions would result in an increase in Title V administration costs of $21 billion per year.
Totally absurd, right? The EPA agrees, but it is planning to go ahead anyway. Here’s more from their analysis:
While EPA acknowledges that come 2016, the administrative burdens may still be so great that compliance at the 100/250 tpy [tons per year] level may still be absurd or impossible to administer at that time, that does not mean that the Agency is not moving toward the statutory thresholds. To the contrary, through this regulatory process “EPA intends to require full compliance with the CAA applicability provisions of the PSD and Title V programs….” (Emphasis added.)
Nice going Supreme Court. It is obvious to anyone that Congress would never approve such an absurd result in ordinary legislation, but our administrative state, with a supine judiciary giving them the green light, charges right ahead.
As Hayek adds in chapter 14, the general rules intended to protect individual liberty from government encroachment require that the judiciary exercise some common sense judgment, which the Supreme Court clearly didn’t do in Mass. v. EPA:
In acting under the rule of law the administrative agencies will often have to exercise discretion as the judge exercises discretion in interpreting the law. This, however, is a discretionary power which can and must be controlled by the possibility of a review of the substance of the decision by an independent court. (Emphasis added.)
When courts fail to do this, as the Supreme Court did in Mass v. EPA, then the usual safeguards of liberty “are powerless to protect justice where the law deliberately leaves the decision to the discretion of authority. It is only where the law decides–and this means only where independent courts have the last word–that the procedural safeguards are safeguards of liberty.”
We’ve got a lot of work to do.
Steven F. Hayward is the F.K. Weyerhaeuser Fellow at AEI
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