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Avoiding the Tyranny of Federal ‘Guidance’

The Supreme Court seems likely to curtail federal agencies’ interpretations of laws passed by Congress, but Washington bureaucrats have another way to exercise unaccountable power over state and local governments. States and localities can fight back.

Hauling in a catch
Hauling in a catch: The Chevron case that the Supreme Court will rule on this summer turned on a law Congress passed to curb overfishing in ocean waters. A federal agency asserted that the law allowed it to place a federal agency on every boat and make boat captains pay their salaries. (Shutterstock)
There is a murky and underreported means by which federal agencies exert authority over state and local operations, including everything from public school governance to highway projects. If a U.S. Supreme Court decision this summer turns out as expected, the use of that power is going to grow. And unlike many other political issues, this one ought to unite conservatives and liberals in opposition.

First, some background. In June the U.S. Supreme Court will likely hand down a decision that curtails Chevron, a decades-old precedent used by federal agencies to forge ever-expansive interpretations of congressional statutes. The pros and cons of Chevron can be observed in the history of the case that now threatens to undo it:

On the pro side: When Congress passed a law to curb overfishing of U.S. ocean waters, the National Marine Fisheries Service (NMFS) had to promulgate rules to make the law effective — things like fishing quotas and monitoring processes. To implement any modern federal law, Chevron’s advocates say, agencies need discretion to iron out the myriad details that are rarely clarified in congressional legislation.

On the con side: NMFS eventually asserted that the law allows it to place a federal agent on every fishing boat in those waters and make the boat captains pay those agents’ salaries. The law passed by Congress has no provision even remotely related to forcing private vessels to bring aboard federal agents and pay their salaries. This, say Chevron’s opponents, is why the discretion it affords must be curtailed: Left unchecked, federal agencies can dream up excuses to do whatever they want.

Chevron advocates, who tend to be on the left, and its detractors, who tend to be on the right, have widely different expectations for what reversing the ruling will mean for American life. What more leaders need to recognize, regardless of political party or ideological outlook, is that curbing the ability of federal agencies to make formal regulations will create an incentive for them to adopt a far more secretive method of crafting rules that they want regulated parties — prominently among them state and local governments — to follow. This means that whoever controls the White House will exercise growing, unaccountable power across American communities.

This secretive method of rulemaking poses as something called “guidance,” and for the most part it’s a useful tool. Guidance takes a variety of forms, from “Dear Colleague” letters to conference calls between federal officials and their state counterparts. When used properly and legally, it helps regulated parties comply with federal law. It’s popular (and fair) to deride Congress for foisting high-minded but unclear laws onto unelected bureaucrats to sort out, but often there are too many complexities to include in even a well-crafted statute, and guidance becomes essential.

‘Coercive Effects’

Unfortunately, federal guidance has been weaponized by recent administrations, and it’s about to get worse. Briefly summarized, agencies may, for the most part, only issue guidance that clarifies existing law or explains their processes for administering that law. If an agency wishes instead to bind parties with new regulations or interpretations, it must go through established procedures of public scrutiny and debate. Increasingly, however, agencies disguise regulatory changes as guidance about not only laws but also federal court decisions.

On the surface, they’re just offering an opinion, so it would seem that there’s often nothing to litigate. But in reality, the agencies rely on the recipients’ assumption that failing to embrace that opinion will carry a penalty. The White House Office of Management and Budget cautioned against exactly that in a 2007 bulletin, reminding federal agencies that guidance “can have coercive effects or lead parties to alter their conduct.” Some agency staffers see this not as a bug, but a feature.

Take, for example, guidance issued jointly last year by the U.S. departments of Justice and Education. The document concerns a troubling problem: the disproportionate number of Black students suspended or expelled from our public schools. This merits thoughtful consideration to isolate root causes, but the agency document isolates only one — discrimination — and strongly implies that the very existence of racial imbalance is itself sufficient to warrant a Justice Department civil rights investigation. School administrators who don’t want to suffer career damage might well conclude that the best course of action is to adjust their disciplinary practices until parity prevails. So instead of getting to the underlying causes of the problem, schools might simply make the evidence disappear.

Outraged parents saw an outworking of this top-down intimidation last year in New York City, where a child assaulted and ridiculed by classmates was given the option to transfer from her school while the perpetrators were given what appeared to be light treatment. The New York State Board of Education, emulating federal guidance, states that “evidence that a disciplinary policy disproportionately burdens a particular minority group may constitute evidence of discriminatory intent.” Savvy school administrators get the message. Federal guidance that substantially alters the rules we all live by infiltrates state and local governance more often than many realize, all without a single vote by elected national, state or local representatives.

Enshrined Guidance

Because guidance comes under the guise of clarification, it’s not subject to the public scrutiny required of formal regulations. Indeed, the extent to which agencies avoid public disclosure of guidance is troubling. The Trump administration ordered some agencies to post guidance online; removing this requirement was one of the first actions by the Biden administration. Clyde Wayne Crews of the Competitive Enterprise Institute, who has worked to catalog guidance, estimates that the federal government has published 103,642 “accessible or semi-accessible” guidance documents, but there are likely far more beneath the surface.

More pernicious still is that states sometimes enshrine federal guidance in their statutes, thereby outsourcing their governance to unelected bureaucrats in Washington. North Carolina, for example, requires school administrators to “consider any existing federal guidance … on school discipline practices issued by the United States Department of Education.” Such references in state statutes are sensible so long as federal agencies follow the law regarding what guidance may and may not contain. But increasingly they do not.

Regardless of how one feels about important issues like racial disparities in schools, how welfare eligibility is determined or myriad other areas where federal agency guidance has shifted from clarification to policymaking, most Americans likely agree that it undermines democracy to let unelected officials make choices for the entire country in a manner that avoids public scrutiny.

Unlike many other problems emanating from D.C., this one can be substantially addressed by state leaders, if only by mandating that state agencies disclose the federal guidance they receive. The Tennessee Legislature recently did exactly that, requiring by unanimous vote that its Department of Education practice such transparency. Gov. Bill Lee signed the bill, the first of its kind in America, into law.

What Tennessee has done is a good start, and hopefully more states will require more of their agencies to do the same. Equipped with awareness that guidance is not binding, and with visibility on the guidance state and local entities are being asked to follow, state lawmakers can choose whether to go along or push back. The people’s elected representatives can have a say.

Such a reform might feel, given that Democrats currently control the White House, like a conservative exercise, but liberals should ponder the very real possibility of someone they distrust moving into the White House next January. If state and local lawmakers continue to operate under the assumption that every memo from a federal agency carries the full force of law, conservatives and liberals lose, our communities lose and democracy loses.

Governing’s opinion columns reflect the views of their authors and not necessarily those of Governing’s editors or management.
Tony Woodlief is a senior fellow in the State Policy Network’s Center for Practical Federalism and the author of the book I, Citizen: a Blueprint for Reclaiming American Self-Governance.
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