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Is the Rulemaking Process Really a Quagmire?

| Jan 17, 2013 | Analysis

At least one critic has called the multi-year implementation of the Dodd-Frank Act “plodding impotence,” echoing a strain of popular and anecdotal evidence that the American regulatory system is broken down because it moves too slowly.  However, a recent study shows that the median process of making a new regulation is completed within only twelve months.

UndueThumbnail image for regulatory breakdown cover.jpg delay is one of the major critiques of the current rulemaking structure, with popular accounts of the American regulatory state frequently focusing on stories of bureaucratic delay, sluggishness, and rigidity. For instance, many scholars have pointed to the ten years it took the Food and Drug Administration (FDA) to decide if peanut butter must be composed of a minimum of about 90 percent peanuts.
However, a recent study produced byJason Yackee and Susan Webb Yackee of the University of Wisconsin suggests otherwise. Yackee and Yackee analyzed the time it takes agencies to adopt a new regulation under the notice and comment rulemaking process laid out in Section 553 of the Administrative Procedure Act (APA). They found “suggestive evidence against the notion that our administrative state is systematically broken or prone to failure.”
Yackee and Yackee examined the Section 553 rulemaking process because most important regulatory policy decisions in the United States are made through that process. Although Congress is the primary lawmaker, it delegates a significant role to federal agencies in implementing legislation. After a bill is passed, serious substantive choices remain about what that law means.
Informalred tape cut.jpg rulemaking under Section 553 is the most common process through which policy choices are made by federal regulatory agencies. This process begins with a federal agency’s announcement of a draft rule. The agency then requests public comments on the draft rule, and after considering public feedback it issues a final and fully binding rule.
Yackee and Yackee’s analysis focuses on the period between an agency’s announcement of a draft rule to the time the agency promulgates a final rule. The authors draw on the Unified Agenda of Regulatory and Deregulatory Actions which details the federal government’s expected and pending rulemaking activities since 1983. After calculating the time from a rule’s announced draft to its completion, the authors found that most of proposed rules “become final rules in remarkably little time.”
The median completion time across agencies was twelve months and the mean completion time was slightly longer at eighteen months. These times remain remarkably stable even when analyzing only “important” rules, namely those agency rules which the Office of Management and Budget (OMB) decides to review. Roughly seventy-five percent of rules analyzed by OMB were completed in less than thirty months — and half were completed in just one year. Some rules, like the peanut butter controversy mentioned above, take dramatically longer. Roughly ten percent of rules take more than 3 years to promulgate, but this is, as the authors describe, “relatively rare.”
Across agencies, Yackee and Yackee observe “remarkably” stable numbers over time. In 1987, the first year with comparable data, median time to promulgation was ten months and that statistic stayed between nine and thirteen months for the next twenty years.
On the other hand, the authors identified significant variations between agencies. Among the fifteen agencies that write the most rules under Section 553, the National Oceanic and Atmospheric Administration (NOAA) finalized rules the fastest, with a median time to finalization of only three months. In contrast, the FDA took a median of twenty-four months to finalize rules.
Yackee and Yackee do not purport to explain these differences in time across agencies, but they do speculate that each agency’s style, culture, customs, and other idiosyncratic factors play a role. For instance, the Department of the Treasury’s Internal Revenue Service (IRS) finalizes rules relatively slowly (a median time of eighteen months), but this may be because the Department frequently issues temporary, but legally binding, regulations through a slightly different mechanism than the normal Section 553 process.
Yackee and Yackee say that their study suggests ways people interested in administrative law can begin to “operationalize and test their intuition that too often regulatory efforts drag on if not quite forever, then certainly for ‘too long.’” They also caution against dramatic changes to the regulatory system in an effort to speed it up. Instead, they suggest that reformers look first to the particular realities within individual agencies to determine why some agencies might take longer time to issue rules than other agencies.

Yackee and Yackee’s analysis appears as a chapter in the recently published book, Regulatory Breakdown: The Crisis of Confidence in U.S. Regulation, edited by Cary Coglianese and published by the University of Pennsylvania Press.

 

This post is part of RegBlog’s three-week series, Regulatory Breakdown in the United States.


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