A Powerful Administrative State – Why You Should Fear It

Neither Democrats nor Republicans realize what the true threat to our liberty is. As a result, both parties spend all their time and resources attacking the wrong things. For example, conservatives complained loudly when President Obama agreed to the Iran nuclear deal and cut the defense budget, citing these actions as proof of his contempt for American exceptionalism. While today, liberals assert that President Trump’s proposed immigration restrictions and his distrust of the national press corps amount to an assault on the Constitution.

However, both sides are ignoring the very large elephant in the room. The biggest danger Americans face is actually the administrative state—a sprawling, executive-branch bureaucracy made up of hundreds of federal agencies, sub-agencies, and departments. Often referred to as the “deep state” or the “regulatory state,” this bipartisan behemoth exercises powers once held only by royalty. These include the authority to create, adjudicate, and enforce laws that affect almost every aspect of our lives.

Americans should fear an overly powerful administrative state for a variety of reasons. First, it is nearly impossible to hold these bureaucrats accountable for their actions. These officials are unelected and thus don’t have to please their constituents to keep their jobs. Adding to the unaccountability of the administrative state is its status as a nebulous entity.

Nobody can even say for sure how many agencies actually exist, because there is no definitive list. The spring 2015 edition of the Unified Agenda of Federal Deregulatory and Regulatory Actions publication, for example, lists 60 federal agencies. However, the Administrative Conference of the United States claims the number is 115. Meanwhile, The United States Government Manual states that there are 316 federal agencies.

If we can’t even figure out how many agencies there are, how can we tell who is making all the rules we must follow, or for that matter, how many rules even exist? To make matters worse, these agencies constantly produce a multitude of what amount to undocumented regulations, otherwise known as “regulatory dark matter,” through their bulletins, memos, and guidance documents. A US House of Representatives Committee on Oversight and Government Reform voiced its alarm over these “non-legislative” rules in 2012, stating

“Guidance documents, while not legally binding or technically enforceable, are supposed to be issued only to clarify regulations already on the books. However . . . they are increasingly used to effect policy changes, and they often are as effective as regulations in changing behavior due to the weight agencies and the courts give them.”

Another reason to fear the administrative state is that it has assumed the powers that were once the exclusive domain of Congress and the courts. The National Labor Relations Board (NLRB), for example, not only creates laws that govern employer-employee relations, it also investigates rule violations, decides the fate of the rule-breakers, and enforces the consequences of its decisions. However, according to Article I, Section I of the Constitution, all legislative powers are supposed to reside with Congress. In fact, the Founding Fathers thought it was extremely important to separate the judicial, legislative, and executive powers into different branches of government. James Madison explicitly states in Federalist No. 47 that

“the accumulation of all powers legislative, executive, and judiciary in the same hands . . . may justly be pronounced the very definition of tyranny.”

In his 2014 book Is Administrative Law Unlawful?, constitutional scholar Philip Hamburger claims that today’s administrative state has essentially “gutted” the Constitution. One supporting example is the use of administrative courts, which deny citizens the right to a fair trial. These proceedings, which judges on the agencies’ payroll oversee, often lack a jury and fail to follow full due-process procedures.

According to Hamburger, the framers of our Constitution would be appalled by the abuses we see perpetuated by today’s administrative state. In fact, they drafted the Constitution specifically to avoid the possibility of a corrupt head of state, like King James I, ever governing America. James Madison even went as far as to say that the Constitution was a means to guard against “the danger to liberty from the overgrown and all-grasping prerogative of an hereditary magistrate.”

King James I believed that his divine right of “absolute power” allowed him to dismiss laws or make them not apply to certain people without having to obtain approval from Parliament. James also made his own laws, bypassing Parliament and the court system. He issued proclamations and established tribunals, which, like modern administrative agencies, commissioned expert reports and issued and enforced decrees.

The federal agencies of today are essentially doing the same thing. The federal Department of Health and Human Services (HHS), for instance, exempted a number of politically important companies, like McDonald’s, from certain Obamacare provisions. However, in place of royal decrees, the administrative state issues rules and sends out “guidance” letters. One particularly infamous letter is the one from an Education Department official in 2011 that stripped college students of due process rights when someone accuses them of sexual misconduct.

So, how do we reign in the administrative state and the overreach of the executive branch? According to Hamburger, there are several practical things we can do. One is to hold agency officials financially accountable for exceeding their constitutional authority. Until the 19th century, the American people could sue these individuals for damages. Today, thanks to a “qualified immunity” doctrine, government officials are safe from repercussions of their actions.

Other ways to restrain the power of the administrative state involve requiring Congress to approve any new laws and to review all existing regulations to decide which ones should become laws. Additionally, the president could make certain agencies try cases in regular courts rather than relying on administrative judges.


Distinguished Daycrofter Award Recognizes Community Contributions

The Daycroft School Foundation continues the mission of the Daycroft School, a Christian Scientist nursery school founded by Sara Pyle Smart in 1928 in Darien, Connecticut. Over the years, the school grew, adding different grade levels until it offered a preschool through high school education. During this period, it also moved locations, first to Stamford and then to Greenwich, Connecticut. Although the school closed its doors in 1991, the Daycroft School Foundation continues to focus on its goal to “provide an educational environment which embraces the teachings of Christian Science, giving opportunity for individual unfoldment and community responsibility.” To accomplish this, the foundation focuses on four core areas: online learning, peer support, grants, and programs for Christian Scientist Educators.

In 2000, the Daycroft School Foundation established its Distinguished Daycrofter Award to recognize former students, faculty, and staff who have contributed to their communities in a way that exemplifies the Daycroft School’s motto of “Perceive Then Demonstrate.” Read on to learn more about what it takes to earn this prestigious recognition.

What are the criteria for receiving the Distinguished Daycrofter Award?

The Daycroft School Foundation instituted this award to recognize members of the Daycroft family who have positively affected other people’s lives. To earn this award, an individual must demonstrate his or her commitment to humanity, as well as an unwavering commitment to achievement by doing the following:

– Making some form of meaningful contribution to society

– Embodying the character traits that Daycroft promoted

– Displaying an appreciation for the school and the principles of Christian Science

Who has won the Distinguished Daycrofter Award?

Since it first instituted the award, the Daycrofter School Foundation has presented it only three times. The following individuals have earned this distinction:

Donald L. Koch—The foundation presented the award to Mr. Koch in 2007 for his charitable work in educating young people. A Daycroft student from elementary school through his junior year of high school, he has stated that he feels indebted to the school for teaching him about hard work and perseverance, as well as for showing him “how to think.”

Utilizing the tools he gained at Daycroft, Mr. Koch created the Donald L. Koch Foundation to help students become better citizens. To this end, it sponsors lectures on America’s founding documents and on how to reach one’s true potential. Some guest lecturers have included Dr. Henry Kissinger, Colin Powell, and David McCullough. The foundation also hands out copies of the Constitution to students at these events.

In addition to the efforts of his foundation, Mr. Koch gives back to his others by volunteering with the Boy Scouts of America, teaching Sunday School, and paying school tuition for young people in need.

Lynn A. London—A former Daycroft faculty member and assistant head, London received the award in 2000. As Daycroft President Trude Harper presented the award to London, he praised her ability to bring “light and warmth” to the school, as well as the broader community.

Over the course of nearly 30 years at Daycroft, Lynn London earned a reputation as being someone with whom students could share their troubles without fear of being judged. After providing students with a sympathetic ear, she would encourage them to do the “right” thing and offer to help, whether they required financial, emotional, or scholastic assistance. She was also a steadfast and patient presence in the lives of everyone she worked with.

Still giving to others today, she immediately steps in to help out as soon as she hears about someone in need. Among the many recipients of her caring heart are older people, her church, and the Girl Scouts of the USA.

Janet and Cobbey Crisler—Known as “two of Daycroft’s dearest friends,” this couple received the Distinguished Daycrofter Award in 2007. Cobbey Crisler, a 1950 graduate of Daycroft, returned to serve as the institution’s president from 1966 to 1976. During Mr. Crisler’s tenure at what he often referred to as “our God-blessed free school,” his wife Janet taught at the Daycroft nursery school program.

Passionate about the Bible, Mr. Crisler began to share his passion for Scripture with others, giving talks throughout the country and guiding others on expeditions to the Holy Land. After his departure from Daycroft, Mr. Crisler focused exclusively on his Bible investigations and lectures. He also co-authored two books: Fishers of Men: The Way of the Apostles and Come See The Place: The Holy Land Jesus Knew. Janet Crisler was a full partner in her husband’s work and even co-authored her own book: Loaves and Fishers: Foods of Bible Times. She also serves the American Schools of Oriental Research as an associate board trustee.

After Cobbey Crisler’s death in 1988, Janet Crisler became an active fundraiser for various initiatives. She also established a biblical research institute to carry on the work her husband started.

One Important Way This Think Tank Is Fighting for Your Rights

To guard against any one bloc of the central government gaining too much influence, the founding fathers installed a system of checks and balances into our founding documents. One aspect of this system is the concept of separation of powers, which means that each of the three branches of government – the executive, the judicial, and the legislative – must operate solely within the boundaries delegated to it by the Constitution.

Also inherent in separation of powers is the idea that those who execute the law are directly accountable to the president. However, many government agencies today are effectively disregarding the strictures of the Constitution. They do so by arguing that in order to efficiently serve the needs of modern society, they must employ powers designated to other branches.

Administrative Law Judges and Conflicts of Interest

There are a number of organizations, however, that are fighting against the creep of the administrative state. The Cato Institute is a research foundation that aims to advance the principles of limited government, free markets, and individual liberty in public policy. It recently filed an amicus curiae, or “Friend of the Court,” brief in support of the defendant in a case involving the US Securities and Exchange Commission (SEC), condemning its use of administrative law judges (ALJs).

Essentially, the SEC claimed that in 2006, the investment advisory firm Timbervest and its four owners committed fraud by arranging to sell a client’s land at an extremely low price to another client before purchasing the property itself without notifying the first client. The SEC also alleged that Timbervest received real estate commissions on these transactions that it failed to disclose. The SEC “tried” Timbervest’s owners in its in-house court, which does not rely on a jury to render a decision, but instead leaves rulings in the hands of ALJs, who the agency considers its “employees.”

After the SEC pronounced Timbervest liable, it ordered the firm to pay back all the fees the initial client paid and permanently barred the owners of Timbervest from engaging with any investment advisers. Timbervest appealed to the DC Circuit Court, arguing that it was innocent of the charges and that, regardless, the matter had surpassed the statute of limitations specified by the Investment Advisers Act of 1940.

The Significance of the Appointments Clause

The Cato Institute filed its amicus brief with the DC Circuit Court on May 2, 2016 because it wanted to “address the implications of core separation-of-powers issues along with the democratic accountability of executive officers – issues that no other amicus brief covers.” Cato argued that ALJs are essentially judicial officers of the executive branch, similar to territorial judges.

However, there are three layers of officials between the SEC’s ALJs and the president. As a result, the president cannot remove them like he or she can remove other officers if they abuse their powers. The ALJ system therefore violates the Appointments Clause in Article II of the Constitution, which grants the president control over “inferior officers” of the executive branch, even if these posts are judicial in nature.

Another issue Cato raised was that the process by which the SEC hires ALJs produces inherent bias. After all, if a judge’s employer chooses him or her to try a case that involves the employer, the judge may (whether consciously or unconsciously) side with the entity that supplies his or her paycheck.

The Supreme Court has even stated that bias is nearly inevitable when “a man chooses the judge in his own cause.” As a testament to how widespread the problem has become, a former SEC ALJ named Lillian McEwen recently publicly revealed how the SEC pressured ALJs to favor the agency in rulings.

Article III Courts Ensure Due Process

In addition, the Constitution specifies that cases involving real estate fraud should be heard before an Article III court, not an administrative one. Congress can assign cases to administrative courts for cases involving new public rights, such as Social Security Disability claims. However, it can’t do this for cases, like the Timbervest one, that address common-law matters that have been argued in courts since the birth of our nation.

The government also can’t eliminate a person’s Constitutional rights without the due process provided by a proper judge. By banning Timbervest’s owners from any kind of association with an investment adviser, the ALJ violated the owners’ First Amendment right to free association. To remove this right requires, at the least, a jury trial held in an Article III, or federal, court.

While the Timbervest case still lingers in the appeals process, a number of other organizations have joined The Cato Institute in supporting Timbervest in its struggle against the ALJ system. The Washington Legal Foundation, a public interest law firm that bills itself as “an advocate for freedom and justice,” and the Securities Industry and Financial Markets Association, which promotes efficient and effective capital markets, have also filed amicus briefs supporting Timbervest’s assertion that the SEC’s ALJ system is inherently unconstitutional.