As basic civics classes will tell you, there is a separation of powers in America. Legislators have the power to create laws. Presidents and governors enforce these laws. Judges interpret the laws and settle disputes. State departments and administrative agencies, although technically part of the executive branch, get to do all three. Jon Sanders, the director of the Center for Food, Power and Life at the John Locke Foundation, joins me to talk about it for this week’s Overton Window podcast. Sanders helped legislators in North Carolina restrict the rulemaking authority of administrative agencies.

The rationale for administrative agencies is simple, Sanders explains.

“Legislators cannot be subject matter experts in everything, so they want to set a direction and to let the executive branch execute,” he says, “They allow [administrative agencies] to make rules to implement legislation they have passed, but that’s where the problem comes in.”

Voters have little recourse when administrators make unpopular rules, and there is little political incentive for legislators to correct administrators. “Even if they exceed their authority, they dare the legislature to come and say anything to them about it,” Sanders says.

Legislators find it appealing to defer their powers to an administrative agency. They get credit for passing a new law about an issue voters care about but can leave all the messy details up to bureaucrats. Sometimes agency bloat is unavoidable because the laws address issues too complex even for the legal code. Legislators also find it beneficial to defer to these agencies on policymaking decisions that would never be popular enough to win legislative approval.

“The EPA wants to outlaw internal combustion engines, or just make it impossible for automakers to build them in the next few years,” Sanders says. “Legislators sometimes don’t want to tackle bigger issues and would rather shuffle those off to other people who don’t have to be directly accountable to the voters. I think that’s a little bit of political cowardice at that point.”

Some legislators are trying to put bounds on the administrative state. Policymakers in North Carolina added a review and sunset process to get rid of antiquated rules and to ensure that existing rules serve the public interest.

Part of this is partisan. While administrative agencies have proliferated in all states, Republicans tend to be more skeptical of regulation than Democrats.

And the party alignment of North Carolina changed in 2011. Republicans did not hold a majority in the North Carolina General Assembly for over a century, and when this partisan makeup changed, so did a lot of policies. “This was a sea change in North Carolina politics,” Sanders says.

One area they found ripe for reform was regulation. Lawmakers required all administrative rules to be regularly reviewed. Ones that did not serve the public interest had to be eliminated. “If they’re not reviewed every 10 years, they would automatically sunset,” Sanders says.

One out of 10 rules the state had were eliminated through this process. “One of the reasons sunset with periodic review is such an important reform is because it removes the politics from the decision to review any particular administrative rule,” Sanders says.

Some rules were obsolete, some were not being enforced, and some were just considered to be dead wood worth clearing by the state’s reviewers.

Sanders noted a problem with the process, however. Administrative agencies could flag a rule as important, and if no one commented on it in a review process, it would automatically be reauthorized. “Two-thirds of the rules ended up like that and weren’t reviewed,” Sanders says.

They changed this in 2019. “Now, either the rule is reviewed or it is automatically sunset. And if it is reviewed, it may still be sunset,” Sanders says.

Some of these changes came from his own efforts. Sanders has been making the case for regulatory reform for years.

He’s also proposed a number of ideas that legislators in the state are considering. One is for state legislators to ratify any rules administrative agencies come up with. This ties elected officials to the rules they’ve allowed agencies to write and ensures that voters can hold legislators accountable if they approve unpopular rules.

Sanders found resistance in other areas of regulation. “So far, we haven’t seen any movement to free up occupational licensing. There are just so many special interests involved. The regulated entities love regulation. The people who are in power and the current service providers in licensed fields are very good at fighting off change,” he says.

He worked with some groups on the left to try to put some bounds on occupational licensing. A cross-ideological coalition was insufficient to get legislators in the state to bite. “We were fighting dedicated insiders. We weren’t fighting on ideology,” Sanders says.

Check out the conversation at the Overton Window podcast.

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