Procedural Politicking: Agency Risk Management in the Federal Rulemaking Process

Administrative procedures are often hailed as the solution to managing an unruly bureaucracy, but they are not self-executing. Rather, they must be implemented by the very agencies whose behavior they are designed to constrain. Further, the expert bureaucrats that oversee these processes have superior insight on how these different procedures tend to play out and can use this information to steer policymaking in their preferred direction. This paper advances the argument that agencies use their administrative discretion in the notice-and-comment rulemaking process to mitigate political interference in the rulemaking process. Using a new dataset of more than 2,000 administrative rules from 29 agencies, I show that agencies strategically shorten— or lengthen—the public comment period on their proposed rules in response to the political environment. This research identifies a dynamic and political role for agency bureaucrats in the federal rulemaking process. ∗Prepared for the Empirical Studies of Rulemaking Conference, University of Wisconsin, Madison, WI, February 20, 2015 Under contemporary governance arrangements, unelected bureaucrats routinely make important policy decisions that affect the lives of ordinary citizens. In the United States, bureaucrats use the notice-and-comment rulemaking process to do everything from set the fuel standards for the cars we drive to make decisions about whether insurers should be required to cover contraception in their standard package offerings. In 2014, executive branch agencies issued more than 200 proposed rules (formally known as “Notices of Proposed Rulemaking”) that, if finalized, will carry the same force and effect as laws passed by Congress. Although observers often raise concerns over the democratic accountability of such decisions, a well established literature offers a more sanguine take on the practice. That is, since bureaucrats are required to follow a set of administrative procedures before reaching a decision, elected principals in Congress and the White House still retain control over agency decisionmaking (McCubbins, Noll and Weingast, 1987, 1989). With respect to noticeand-comment rule making, this means that the agency must provide notice of a proposed policy change and solicit comments from the affected public before reaching a binding final decision. Consequently, disaffected groups are given an opportunity to “sound a fire alarm” (McCubbins and Schwartz, 1984) and alert a political principal if an agency’s proposal is amiss. Principals then are afforded sufficient time to intervene, rather than being presented with a noxious policy as a fait accompli. All is well. While the logic underlying this political control argument is compelling, it overlooks several important aspects of the notice-and-comment rulemaking process. First, the key procedural components governing notice-and-comment were originally laid out in the Administrative Procedure Act of 1946 (APA). While much else has changed since that law was passed, the basic structure of notice-and-comment has not. Because the relationship beProposed rule counts from www.reginfo.gov. At a minimum, “notice-and-comment” rulemaking involves three steps: first the agency must publish a “proposed rule” in the Federal Register; then solicit feedback from the public (i.e., public comments) on the proposal; and finally publish a binding “final rule” in the Federal Register. Many agencies or types of rules face additional requirements, such as cost-benefit analysis, small business analysis “flexibility” analysis, or requirements to hold public hearings. For a more detailed and careful explanation, see Kerwin and Furlong (2011).