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Over the next few weeks, I’m going to post several items addressing how the presidential election and the pending change in administrations will affect federal agencies.

Today, the Washington Post has a nice piece on how the Bush Administration is seeking to push through several 11th hour regulatory (or rather, deregulatory) initiatives during the last days of the administration.

What effects might these initiatives have on the next administration?  How permanent are they?

UPDATE: President-elect Obama’s transition team is already considering how it may undo several Bush Administration policies.  The Washington Post reports today that Obama’s team has identified over 200 items to reverse, including several key Executive Orders and the federal EPA’s refusal to allow the state of California to regulate greenhouse gas emissions.

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Last year, the Chairwoman of the Federal Trade Commission refused to bring an antritrust investigation against Intel even though regulatory agencies in other countries found that Intel violated their antitrust laws.  There are a number of interesting administrative law issues here.

Here’s a chance to earn some participation credit towards your grade.  Copy and paste any passages from the article that address issues we’ve discussed in class, then post your analysis.  Please choose one salient issue.  You may address the same issue as previous posters if you would like to supplement or disagree with that person’s analysis.

UPDATE: Thanks to Jennifer Wong for alerting us in Comment 7 to the FTC’s change of heart.  New FTC Chairman William Kovacic authorized a formal investigation in June 2008.  Nevertheless, it will probably take the FTC some time to determine whether to bring formal charges.

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Regulations.gov

As the book notes in today’s readings, the E-Government Act of 2002 established a federal web site, www.regulations.gov, to allow the public to track rulemaking proceedings by federal agencies.  I recommend doing a few searches and getting a flavor for the notices posted by various agencies and particularly the public comments submitted in response.

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From the “Government is Good” blog:

Ask yourself this question: “What has government done for me lately?”  If you are like most Americans, you will probably answer: “Not much.”  Surveys show that 52% of Americans believe that “government programs have not really helped me and my family.”  But let’s see if that is really true.  Let’s examine a typical day in the life of an average middle-class American and try to identify some of the ways that government improves that person’s life during that 24-hour period.

http://www.governmentisgood.com/articles.php?aid=1

The post goes on to explain how government regulation affects nearly every aspect of our daily lives.  I posted this last year in class and got some interesting responses.  Do you agree?  Disagree? There is a raging ideological battle right now given the financial crisis whether the government regulates too much or not enough.  Where do you stand?

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As I mentioned in class last night, keep an eye on the regulatory debates surrounding the ongoing financial crisis. Here are some interesting takes from  Steven Levitt (of Freakonomics fame), and Joseph Stiglitz, a Nobel Prize-winning economist.

Today, the Washington Post reports that Congress has been frustrated by unilateral decisions by the Federal Reserve, backed by the Treasury Department, to bail out various financial institutions.

Here are a few interesting excerpts from the article:

One idea that’s rapidly gaining currency is the creation of a new federal entity that would acquire “toxic” mortgage-backed assets from failing firms and hold them until the housing market improves….

Setting up such an entity also would give lawmakers a chance to determine the parameters of future bailouts, as opposed to leaving the decision in [Federal Reserve Chairman] Bernanke’s hands. While most lawmakers said they trust Bernanke’s judgment, Frank said he was troubled to learn in the meeting Tuesday that Bernanke has legal authority to use the central bank’s reserves, which total $888 billion, to make loans to any entity under any terms he deems economically justified.

“No one in this democracy — unelected — should have $800 billion to dispense as he sees fit,” Frank said. “It may be that there is so much bad debt out there clogging our system that we may have to have some intervention. But it shouldn’t be the unilateral decision of the chairman of the Federal Reserve with the backing of the secretary of the Treasury.”

Should Congress create a new agency to acquire bad debt?  If so, when? We already have agencies and regulations to oversee these financial institutions.  But it is rapidly becoming apparent that these regulatory mechanisms have failed. What could Congress do vis-a-vis The Fed and the Treasury Department?

Second, recall the non-delegation cases, in which the Court scrutinized congressional grants of authority to the executive branch to take swift, decisive actions during economic crises. What might those cases say about the current balance of power between Congress and the executive branch in regulating the financial sector?

Are there any other administrative law issues at play here?

UPDATE: The draft bailout legislation has a provision stating that “Decisions by the Secretary pursuant to the authority of this Act are . . . committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.”  We’ll discuss this issue later in the semester, in Classes 24 and 25. 

See Frank Pasquale’s post at Concurring Opinions for a nice summary of the response to this language.

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This week, the media have begun reporting a scandal at the Minerals Management Service (MMS), a branch of the Interior Department.  Investigators from the Interior Department’s own Inspector General found that MMS officials had, to put it kindly, inappropriate financial and personal relationships with the oil companies that they regulate.

The MMS runs the controversial Royalty-In-Kind program, which “allows energy companies to pay the government in oil and gas, rather than cash, for the privilege of drilling on government land.”

Recall our discussion last week of how the two political branches can control or influence agencies.  There are a few interesting points here.

First, the Justice Department refused to prosecute two of the highest ranking officials named in the Inspector General’s report, reportedly creating tension with officials at the Interior Department.  Why might Justice refuse to prosecute here?  Can Congress do anything if Justice fails to prosecute?

Second, auditors at the Interior Department said they weren’t allowed to audit the MMS for failing to properly collect royalties from the oil companies.  Again, can Congress do anything in this regard?  If so, what?  And what should President Bush do?

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Back in June, the New York Times reported that state and federal regulators are starting to scrutinize a new industry: selling genetic test results directly to consumers:

“Regulators are cracking down on companies that sell genetic tests directly to consumers, threatening to crimp the growth of one of the hottest sectors of the biotechnology industry.”

Many of us might like to know if we’re genetically predisposed to developing diabetes, cancer, or maybe Alzheimer’s down the road, or whether our children or future offspring might be more at risk. An emerging group of companies can take saliva samples or other tissues and scan our genomes, looking for certain clues that we might be at risk to develop certain diseases.

But consumers and regulators have flagged several questions about this budding industry:

What are the standards for proving a genetic test is valid? Must a doctor always be involved in ordering such tests to protect patients, or is that an attempt by doctors to protect their turf?

Of course, the companies retort that

people have a right to know the information in their genes and to guide their own health care.

The major question seems to be who has jurisdiction to regulate this new field.  As we discussed in our first two classes, this can be a tricky question.  If these tests somehow constitute medical advice, state medical boards would likely have jurisdiction.

So far, the state Departments of Health in New York and California have sent cease-and-desist letters to gene testing companies, saying they need to be licensed.  A federal advisory committee said these companies need to be regulated because they can do harm to patients.  The FTC is investigating, and the U.S. Senate is investigating.  The labs themselves are regulated by the Centers for Medicare and Medicaid Services (CMS), a federal agency.  What about the FDA?

So, should the government regulate this new industry?  If so, what should it do?  And should responsibility for this new industry lay with the federal government or states?  Which agency?

If we shouldn’t regulate yet, why not?

UPDATE: Google founder announces that he has a gene that gives him a greater chance of developing Parkinson’s.  His wife founded one of these gene testing companies, 23andMe.com.

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