What’s an agency to do? That’s for Congress to say 

While persistent gridlock continues to bedevil Congress, federal agencies have been busy pushing the boundaries of their authority. The Federal Trade Commission (FTC) is trying to ban noncompete agreements. The Securities and Exchange Commission (SEC) is puzzling over cryptocurrencies. The Environmental Protection Agency (EPA) is pushing regulations to address climate change.  

At the same time, the U.S. Supreme Court is telling agencies that they cannot act without clear congressional authority. What’s an agency to do? The answer is disarmingly simple: nothing, until Congress clearly directs them otherwise. 

Congress is the sole source of authority for federal agencies. This authority is conferred by statutes and the language of those statutes is the lodestone guiding everything that agencies do. 

This language invariably has ambiguities. For example, a law empowering the Federal Communications Commission (FCC) to regulate the telephone network leaves open whether internet access is part of that network. The examples are myriad, from simple questions with clear answers to expansive ones where any answer will have significant economic or political implications. 

In 1984, the Supreme Court held that courts should defer to agencies’ reasonable interpretations of ambiguous statutes. This is called the Chevron doctrine, after the case in which it was established. The doctrine’s scope expanded significantly over subsequent decades, as the agencies interpreted their statutory authority flexibly — some would say expansively. Fights over the federal bureaucracy’s power moved from Congress doing its job to update legislation to the courts doing their job to interpret existing legislation. 

But over the last decade or so, the Supreme Court has been dialing back the doctrine’s scope. Perhaps the most dramatic curtailment came last year in a case that established the “major questions” doctrine. This doctrine essentially holds that agencies should not get Chevron deference when deciding questions of vast political or economic significance, even if the underlying statutory authority is ambiguous. And earlier this month, the Supreme Court agreed to hear a case next term that could reject the Chevron doctrine outright. 

Those decisions are just part of a series of Supreme Court decisions that have tended to curtail federal agencies’ power. The trend can be seen clearly in cases that range from 2010’s Free Enterprise Fund, which limited Congress’s ability to insulate agency heads from political control, to 2021’s AMG Capital, which limited agencies’ ability to seek monetary damages without clear congressional authority, and this term’s Axon Enterprises case, which will make it easier to challenge the constitutionality of federal agencies’ actions. 

Something clearly is going on with the administrative state — the collection of federal agencies that sit somewhere between the president and Congress — and the choices it makes in designing and implementing federal regulation. The political left would say that conservative courts are dismantling the federal bureaucracy. The political right might say that the courts are putting a much-needed check on a federal bureaucracy run amok. But regardless of one’s political alignment, it is inarguable that the Supreme Court appears likely to continue to put federal agencies’ authority under a microscope. 

Against this backdrop, agency heads must be asking themselves how to exercise their statutory authority while under such scrutiny. There is really only one answer to that question: modestly. An agency that pushes the boundaries of its statutory authority is inviting sharp judicial rebuke. 

But it is too simple to call this a judicial castration of the federal bureaucracy. The court’s recent cases are less about agencies exceeding the limits of their authority than about congressional failure to provide clear authority to address contemporary concerns. This congressional neglect has pushed the administrative state to the brink of failure, buffered only by the deference granted during the Chevron era. 

Ultimately, neither judicial deference nor executive discretion is a constitutionally permissible replacement for congressional authority. It’s time for federal bureaucrats to stop covering for Congress and for Congress to return to its constitutionally mandated job of legislating. 

Gus Hurwitz is the director of law and economics programs at the International Center for Law & Economics.