INDEPENDENT AGENCIES

11/20/2022 IN THE UNITED STATES:

LAW AND STRUCTURE

ANJALI K P
ROLL NO.1421
 TABLE OF CONTENTS

INTRODUCTION.........................................................................................2

INDEPENDENT AGENCIES OF THE UNITED STATES GOVERNMENT.....................2

ASSESSING THE CHARACTERISTICS OF INDEPENDENT AGENCIES.....................3

EXECUTIVE AND REGULATORY AGENCIES....................................................5

STRUCTURE OF INDEPENDENT AGENCIES......................................................6

EXAMPLES OF INDEPENDENT AGENCIES.......................................................7

Page 1 of 11
 INTRODUCTION
The independent agency has been around for 100 years now, but we are still trying to
understand how it best relates to the administration of government. Its popularity as an
organizational mechanism is more a function of competing political forces within the
legislative and executive branches than of any systematic analysis of its effectiveness. Yet one
can discern reasons why independent agencies might be superior mechanisms for
administering government programs if their structure and purpose are analysed functionally.

Independent federal agencies occupy a special constitutional position in the governmental

structure. Their stock-in-trade is the expert, apolitical resolution of regulatory issues. They are
supposedly “independent” of the political will of the executive branch. Because most are
multi-member organizations, they are also perceived as accommodating diverse views and
able to prevent extreme outcomes through the compromise inherent in the process of collegial
decision-making. But such a view is not universally held.

A well-known examination of such agencies in the 1930s described them uncharitably as a

“headless ‘fourth branch’ of government, a haphazard deposit of irresponsible agencies and
uncoordinated powers.” Most modern independent agencies, in fact, are not simply impartial
government referees. Nonetheless, as Justice Breyer has suggested, they possess “comparative
freedom from ballot box control” and “enjoy an independence expressly designed to insulate
them, to a degree, from the ‘exercise of political oversight” that affects cabinet or cabinetlike
executive agencies.

INDEPENDENT AGENCIES OF THE UNITED STATES GOVERNMENT

Independent agencies of the United States federal government are agencies that exist outside
the federal executive departments (those headed by a Cabinet secretary) and the Executive
Office of the President. In a narrower sense, the term refers only to those independent
agencies that, while considered part of the executive branch,
have regulatory or rulemaking authority and are insulated from presidential control, usually
because the president's power to dismiss the agency head or a member is limited.

Established through separate statutes passed by the Congress, each respective statutory

grant of authority defines the goals the agency must work towards, as well as what substantive

Page 2 of 11
areas, if any, over which it may have the power of rulemaking. These agency rules (or
regulations), when in force, have the power of federal law.

ASSESSING THE CHARACTERISTICS OF INDEPENDENT AGENCIES

The quality that most distinguishes independent agencies from the executive variety is the
notion of independence itself. This characteristic is based largely upon three statutory
arrangements: the bipartisan appointment requirement; the fixed term requirement; and the
requirement that removal be limited to express causes. Taken together these qualifications
distinguish independent officials from executive ones. The requirement that the President
appoint some commissioners of the party out of power or who are politically "independent" is
designed to isolate those decisionmakers from politics. Indeed, this is a remarkable
requirement, at least in theory, when it is considered that the appointment of federal judges,
who are meant to be our most independent officials, bears no such onus of political balance.
The term of years requirement complements the desire for independence by establishing
staggered terms that usually extend beyond a President's four-year term of office. Finally, the
limitation of removal to designated causes ensures that a President will not be able to
discipline an official for purely political reasons, or for no reason at all. These provisions do
much to give independent agencies their distinctive character, but they are not all that do so.
Another distinguishing characteristic of independent agencies is their organization. They are
predominantly commissions or boards, not single decisionmakers. They are collegial bodies.
That is another quality that distinguishes them from most executive agencies and from all
cabinet departments. Collegial decision-making has far different purposes and effects from
single (or executive) decision-making. It is meant to be consensual, reflective and pluralistic.
It expresses shared opinions rather than decisive ukases. In this sense, collegial bodies express
deeply felt values about the decisional process. They are more concerned with the values of
fairness, acceptability and accuracy than with the single dimension of efficiency. When the
three qualities of independence are added in (namely bipartisan appointments, terms of years
and for cause removal), it becomes clear the independent agencies emulate our most revered
collegial bodies-the courts, or, more precisely, the appellate courts. Judicial independence is
of course a study unto itself but the analogy to administrative commissions is a compelling
one. As Martin Shapiro has pointed out, the courts (in the Anglo-American setting) secured

Page 3 of 11
independence first from the king (the executive) and then from Parliament. The courts'
success in doing so (testified to in article III of the Constitution) has its closest administrative
analogue in the independent agency. It was emulation of the appellate courts that allowed the
first independent agency, the ICC, to gain the legitimacy necessary to introduce the twentieth-
century administrative state. Appellate decision-making in the judicial setting involves group
deliberation. This has meaning at several levels: it promises greater accuracy (and thereby
fairness) because of the dialectical nature of the deliberative process. Arguments are presented
that must be refuted or accepted, a process that can exist only in the group rather than solitary
setting. Moreover, research on the impact of multiple versus single deciders suggests that the
group decision will tend toward consensus in disparate cases, whereas those same deciders
sitting alone might produce more widely dispersed results. There is, in other words, an
empirical dimension to the proposition that group decision-making results in compromises
toward the middle position. From this, one can also conclude that group decision-making has
a value in helping to achieve more consistent results in difficult factual situations, such as
those that occur in the complex world of disability decision-making.

If these qualities are associated with appellate courts and judges, then, if the analogy holds,
they should also be associated with independent agencies and commissioners. The reflective,
consensual nature of the group decision process is best suited to decisions that are factual in
nature, where accuracy is an important but often elusive goal. When it comes to executive
policy type decisions, those activities designed to implement broad programs or to urge
modifications in social behaviour, single deciders who can act decisively are better suited to
the task. In those circumstances, the goal is to improve society in some overall sense, not to
ensure justice in the individual case. Consensus building can be frustrating and
counterproductive in this setting. What is needed are deciders who can act and be held
accountable for their activities. Hence the important distinction between judicial and
executive decisions has long been part of our society. If that distinction is not obvious, simply
remember that when the Founders established the executive branch during the constitutional
period, they rejected a plural executive (or commission approach) in favour of a single
executive largely on this basis.

Adjudication and policymaking call for different skills and temperaments as well as different
organizational mechanisms. Another quality of independent commissions that relates to
collegiality is the nature of their jurisdiction. Unlike courts, commissions have jurisdiction
over limited types of subject matter; they are called upon to decide complex or routine matters

Page 4 of 11
on a repetitive basis. Independent agencies develop an expertise with the subject matter that,
in the ideal world, also makes their more reflective decision-making cost-efficient. When
Congress selects industries or segments of the economy for regulation and builds agencies
around them, it expects the deciders to obtain expertise. Transportation, banking, financial
markets, consumer and workplace safety, communications, labour relations and nuclear
energy have been selected for independent agency supervision with this thought in mind.
There is no reason why other problems, such as the environment or the regulation of
prescription drugs, could not have been similarly directed. Once the choice of independent
agency format has been made, the agency is obliged to become expert in identifying and
solving the problems presented if it wants to survive congressional oversight. Selecting
commissioners with relevant experience and aski.ng them to concentrate on cases that arise in
their field gives them an edge that generalist judges cannot and are not meant to have.

This characteristic in effect becomes a way of distinguishing agencies from courts as well as
an indicator of administrative rather than judicial jurisdiction. In a recent study by the Council
on the Role of the Courts that tried to identify the activities that courts perform best,
"repetitive or administrative questions" were indicators of nonjudicial resolution. The
qualities of decisional independence, collegial decision-making, and subject matter expertise
are all indicators of independent agency status. Only the first two characteristics relate
exclusively to that kind of agency, but when combined with the third they produce a
conceptual framework.

EXECUTIVE AND REGULATORY AGENCIES

Independent agencies exist outside the federal executive departments (those headed by a
Cabinet secretary) and the Executive Office of the President.   There is a further distinction
between independent executive agencies and independent regulatory agencies, which have
been assigned rulemaking responsibilities or authorities by Congress. The Paperwork
Reduction Act lists 19 enumerated "independent regulatory agencies", such as the Securities
and Exchange Commission, the Federal Reserve, the Commodity Futures Trading
Commission, the Federal Deposit Insurance Corporation, and the Consumer Financial
Protection Bureau. Generally, the heads of independent regulatory agencies can only be
removed for cause, but Cabinet members and heads of independent executive agencies, such

Page 5 of 11
as the head of the Environmental Protection Agency, serve "at the pleasure of the president"
and can be removed without cause.

The degree to which the President has the power to use executive orders to set policy for
independent executive agencies is disputed. Many orders specifically exempt independent
agencies, but some do not. Executive Order 12866 has been a particular matter of
controversy; it requires cost-benefit analysis for certain regulatory actions.

In a narrower sense, the term independent agency refers only to these independent regulatory

agencies that, while considered part of the executive branch, have rulemaking authority and
are insulated from presidential control, usually because the president's power to dismiss the
agency head or a member is limited.

STRUCTURE OF INDEPENDENT AGENCIES

Independent agencies can be distinguished from the federal executive departments and other
executive agencies by their structural and functional characteristics. Their officers can be
protected from removal by the president, they can be controlled by a board that cannot be
appointed all at once, and the board can be required to be bipartisan.

Presidential attempts to remove independent agency officials have generated most of the
important Supreme Court legal opinions in this area. In 1935, the Supreme Court in the case
of Humphrey's Executor v. United States decided that although the president had the power to
remove officials from agencies that were "an arm or an eye of the executive", it upheld
statutory limitations on the president's power to remove officers of administrative bodies that
performed quasi-legislative or quasi-judicial functions, such as the Federal Trade
Commission.   Presidents normally do have the authority to remove regular executive agency
heads at will, but they must meet the statutory requirements for removal of commissioners of
independent agencies, such as demonstrating incapacity, neglect of duty, malfeasance, or
other good cause.

While most executive agencies have a single director, administrator, or secretary appointed by
the president of the United States, independent agencies (in the narrower sense of being
outside presidential control) almost always have a commission, board, or similar collegial
body consisting of five to seven members who share power over the agency. (This is why
many independent agencies include the word "Commission" or "Board" in their name.) The

Page 6 of 11
president appoints the commissioners or board members, subject to Senate confirmation, but
they often serve terms that are staggered and longer than a four-year presidential
term, meaning that most presidents will not have the opportunity to appoint all the
commissioners of a given independent agency. In addition, most independent agencies have a
statutory requirement of bipartisan membership on the commission, so the president cannot
simply fill vacancies with members of his own political party. The president can normally
designate which commissioner will serve as the chairperson.

Congress can designate certain agencies explicitly as "independent" in the governing statute,
but the functional differences have more legal significance. In reality, the high turnover rate
among these commissioners or board members means that most presidents have the
opportunity to fill enough vacancies to constitute a voting majority on each independent
agency commission within the first two years of the first term as president. In some famous
instances, presidents have found the independent agencies more loyal and in lockstep with the
president's wishes and policy objectives than some dissenters among the executive
agency political appointments.

Although Congress can pass statutes limiting the circumstances under which the president can
remove commissioners of independent agencies, if the independent agency exercises any
executive powers like enforcement, and most of them do, Congress cannot reserve removal
power over executive officers to itself. Constitutionally, Congress can only remove officers
through impeachment proceedings. Members of Congress cannot serve as commissioners on
independent agencies that have executive powers, nor can Congress itself appoint the
commissioners – the Appointments Clause of the Constitution vests that power in the
president. The Senate does participate, however, in appointments through "advice and
consent", which occurs through confirmation hearings and votes on the president's nominees.

EXAMPLES OF INDEPENDENT AGENCIES

These agencies are not represented in the cabinet and are not part of the Executive Office of
the president:

Amtrak (National Railroad Passenger Corporation) is a passenger railroad service that

provides intercity service throughout the contiguous United States and parts of Canada.

Page 7 of 11
The Central Intelligence Agency (CIA) gathers foreign intelligence and provides national
security assessments to policymakers in the United States. It acts as the primary human
intelligence provider for the federal government. It is one of the principal members of the
Intelligence Community, which is overseen by the Office of the Director of National
Intelligence (ODNI), which is itself an independent agency.

The Commodity Futures Trading Commission (CFTC)  :

regulates commodity futures and option markets in the United States. The agency protects
market participants against manipulation, abusive trade practices, and fraud. Through
oversight and regulation, the CFTC enables the markets to serve better their important
functions in the US economy, providing a mechanism for price discovery and means of
offsetting price risk.

The Consumer Financial Protection Bureau (CFPB) is responsible for consumer protection

in the financial sector. Its jurisdiction includes banks, credit unions, securities firms, payday
lenders, mortgage-servicing operations, foreclosure relief services, debt collectors, other
financial companies in the United States.

The Election Assistance Commission (EAC) was formed in 2002 to serve as a national

clearinghouse and resource of information regarding election administration. It is charged
with administering payments to states and developing guidance to meet the Help America
Vote Act (HAVA) requirements, adopting voluntary voting system guidelines, and
accrediting voting system test laboratories and certifying voting equipment. It is also charged
with developing and maintaining a national mail voter registration form.

The Environmental Protection Agency (EPA) works for state and local governments

throughout the United States to control and abate environmental pollution and to address
problems related to solid waste, pesticides, radiation, and toxic substances. The EPA sets and
enforces standards for air, soil and water quality, evaluates the impact of pesticides and
chemical substances, and manages the Superfund program for cleaning toxic waste sites.

The Federal Communications Commission (FCC) is charged with regulating interstate and

international communications by radio, television, wire, satellite, and cable. It licenses radio
and television broadcast stations, assigns radio frequencies, and enforces regulations designed
to ensure that cable rates are reasonable. The FCC regulates common carriers, such as
telephone and telegraph companies, as well as wireless telecommunications service providers.

Page 8 of 11
The Federal Deposit Insurance Corporation (FDIC) provides deposit insurance to
depositors in U.S. commercial banks and savings banks. The FDIC was created by the 1933
Banking Act, enacted during the Great Depression to restore trust in the American banking
system. Member banks' insurance dues are the primary source of funding.

The Federal Election Commission (FEC) oversees campaign financing for all federal

elections. The commission oversees election rules as well as reporting of campaign
contributions by the candidates.

The Federal Energy Regulatory Commission (FERC) is the United States federal agency

with jurisdiction over interstate electricity sales, wholesale electric rates, hydroelectric
licensing, natural gas pricing, and oil pipeline rates. FERC also reviews and
authorizes liquefied natural gas (LNG) terminals, interstate natural gas pipelines, and non-
federal hydropower projects.

The Federal Maritime Commission (FMC) regulates the international ocean transportation

of the United States. It is charged with ensuring a competitive and efficient ocean
transportation system.

The Federal Trade Commission (FTC) enforces federal antitrust and consumer

protection laws by investigating complaints against individual companies initiated by
consumers, businesses, congressional inquiries, or reports in the media. The commission
seeks to ensure that the nation's markets function competitively by eliminating unfair or
deceptive practices.

The General Services Administration (GSA) is responsible for the purchase, supply,

operation, and maintenance of federal property, buildings, and equipment, and for the sale of
surplus items. GSA also manages the federal motor vehicle fleet and oversees remote
work centers and civilian child care centers.

The United States International Trade Commission (ITC) provides trade expertise to both

the legislative and executive branches of the federal government, determines the impact of
imports on US industries, and directs actions against certain unfair trade practices, such as
patent, trademark, and copyright infringement.

Page 9 of 11
The National Archives and Records Administration (NARA) preserves the nation's history
by overseeing the management of all federal records. The holdings of the National Archives
include original textual materials, motion picture films, sound and video recordings, maps,
still pictures, and computer data. The Declaration of Independence, the US Constitution, and
the Bill of Rights are preserved and displayed at the National Archives building in
Washington, D.C.

Page 10 of 11