bureaucracy (ch 14)

We briefly interrupt our tour of the three branches of national government--Congress, the Presidency, and the courts--to consider the bureaucracy. The bureaucracy is taken up now, right after the Presidency, because the president is at least nominally in charge of the executive departments which are authorized, and for which funds are appropriated, by Congress. As will be seen shortly, government agencies (bureaucracies) are often parties to cases heard by the courts, often as results of challenges to agencies' implementation of laws and regulations adopted by Congress or ordered by the President (an example is recent court activity on the Federal Communications Commission fining of CBS for the Superbowl wardrobe malfunction [D. Stout, "Lower court told to revisit" NYT 14 May 09]).. So, now seems as good a time as any to study the bureaucracy.

but first, a calming picture of Second Connecticut Lake (north of Pittsburg, NH)

Points to ponder:

1. The text does not give an adequate analysis of the types of bureaucracies which have different architectures, in particular the differences between agencies and commissions; there are

• Cabinet departments, headed by Secretaries (or in the case of Justice an Attorney-General) appointed by the president with the advice and consent of the Senate (once in office, they serve at the pleasure of the president and can be fired by him); these department contain within them various, specialized bureaus, agencies, and administrations (consider, as examples, the Department of State, the Department of the Treasury offices and bureaus, and the Department of Commerce [see the list of bureaus on the right side of the page])
• Independent agencies like the Environmental Protection Agency, and the Central Intelligence Agency, headed by Directors or Administrators, appointed by the president with the advice and consent of the Senate (they, too, serve at the pleasure of the president and may, at the president's discretion, be given Cabinet status)
• Independent regulatory commissions like the Federal Trade Commission, the Nuclear Regulatory Commission, and the Federal Reserve (see below) are largely involved in, as the name suggests, regulating aspects of the US economy, impacting both businesses and their customers (the Federal Elections Commission is an example of one that does not regulate business but is politically sensitive); commissions are composed of multi-member boards, one of whom is chair; the members are appointed by the president with the advice and consent of the Senate but have fixed terms and are not normally removable; in many cases, there are statutory requirements to balance membership in terms of political party or region or some other criterion
• Government corporations like Corporation for Public Broadcasting, AMTRAK, and the Overseas Private Investment Corporation provide goods and services (radio and television programming, passenger rail travel, and financing and insurance for foreign investment by US companies, respectively) like private companies (Wal-Mart, Proctor & Gamble, and Exxon-Mobil) but are government-owned; government corporations are run by boards of directors appointed by the president, with the advice and consent of the Senate, who then appoint operating executives.

2. The critical element in the political power and thus political significance of the bureaucracy is the matter of (administrative) discretion, where discretion is the power to choose among alternative courses of action.  Members of Congress, presidents, and judges tend to issue vague policy decisions for one or more of several reasons—they don’t have enough information to dictate specifics, they don’t have the time or interest to set out all the details, or there is a political advantage in being vague (because vagueness is less likely to threaten those with opposing views).  Once vague policies have been established, it is the job of the bureaucrats to implement the decisions, but implementation deals with specifics not the general. 

• A piddling example:  a police officer sees you driving a little quickly and erratically—does he or she give you a warning or a ticket? 
• A less piddling example:  the Small Business Administration provides loans (or, actually, guarantees loans made by private lenders) for eligible enterprises, but there is always more money being sought than there is money available:  of three applicants, who gets the loan? 
• Not a piddling example (given by Brown 1979):  in the Occupational Safety and Health Act, Congress directed OSHA to develop regulations that would protect workers from workplace hazards “to the maximum extent feasible;” polyvinyl chloride is a carcinogen and it is technically possible to reduce the risk to nearly nothing, but only at a great economic cost that might drive manufacturers out of business and throw employees out of work--the issue was left to OSHA to determine, what does maximum extent feasible mean, technical feasibility or economic feasibility?  A life or death v dollars and cents question.
  • by the way, this OSHA example is a much better one than that given by Coleman et al. (504) on the Full Employment Act which was largely symbolic

3. There is a perennial challenge with the bureaucracy to balance political control, which will make the bureaucracy responsive to elected politicians, against neutral (nonpartisan) expertise; Lichtblau in the New York Times has several reports ("Report assails" 25 Jun 08, "New scrutiny" 2 Jul 08, "Criticism of ex-official" 13 Jan 09) on an investigation into hiring practices at the Department of Justice by the G.W. Bush administration that illustrates politicians' desires to control bureaucratic appointments; and now things have turned under Obama (Savage, "In shift, Justice" 31 May 11)

3. There is an argument that “public servants” in fact have private interests, that bureaucracies and the bureaucrats who work in them have a self-interest in trying--for reasons of job security or status--to expand their mission, staff, and budget (and this is sometimes given as the explanation for the overall growth in government)

Bureaucrats are often the butt of jokes--former Alabama governor George Wallace used to refer to them as "pointy-headed intellectuals who can't park their bicycles straight"--but as serious as are the issues of red tape, inefficiency, capture, slack, and drift, too often analysts fail to credit the seriousness with which bureaucrats are committed to the mission of their agencies and the norm of bureaucratic responsibility which recognizes the legitimacy of elected officials to make policies which they, the bureaucrats, are to carry out

It's also worth noting that one thinks of federal bureaucrats as being unable to park their bicycles straight in bike racks in Washington, DC, when 85-90% of them don't work in the capital but out in state capitals and cities and towns across the US (looking for a federal job in Arkansas?)

Along these lines, it might be pointed out that while state and federal employees were important players in the Big Dig (519 ff) much of the work on this project, as is the case for many government programs, was carried out by private companies working on government contract; some see a solution to the problems of government bureaucracy in privatization (Coleman et al.: 532), but they need to take into account, for example, the problems of contracting out assignments in Iraq (the Congressional Research Service has a report on the use of private security contractors in Iraq); as another example of how one needs to balance the costs of bureaucracy and regulation against the benefits, a strong argument has been made that the 2008 financial crisis was caused by the proliferation of complicated and risky types of financing (such as derivatives [P.S. Goodman, "Taking hard new look" NYT 8 Oct 08) made possible by a low-regulation philosophy in the Clinton and G.W. Bush administrations (S. Labaton, "Agency's '04 rule" NYT 2 Oct 08; but there are dissenters [see E. Lipton & S. Labaton, "Deregulator looks back" NYT 16 Dec 08; and a commentator from the American Enterprise Institute])

4. While we talk about the bureaucracy as a single, massive institution, in fact it is made up of thousands of departments, agencies, and bureaus, all of which makes coordination difficult, but things become even more difficult because the various units--each with its own mission, unique perspectives, problems, and desires for more money where there are budget limits--may well be in competition and conflict with each other

• when Dick Cheney was Secretary of Defense he objected on security grounds to computer technology sales to the eastern bloc, something the Commerce Department favored as a way to promote US business (M.R. Gordon, "Pentagon assails" NYT 20 Jul 89)
• President Obama just announced his plan to establish a White House office to deal with security against cyberattacks which he says are among our "greatest vulnerabilities;" according to the reporters covering the story (D.E. Sanger & J. Markoff, "Obama outlines" NYT 29 May 09) there are "running turf wars among the Pentage, the National Security Agency, the Homeland Security Department and other agencies over the conduct of defensive and offensive cyberoperations"
• for Mad fans, there is also the case of Spy vs Spy (M. Mazetti, "Turf battles" NYT 8 Jun 09)

5. The concept of the “iron triangle” is that much government policy is decided in very cozy arrangements, essentially a series of subgovernments, where the only ones playing the game are “special” interest groups, the bureaucratic agency they interact with, and the authorizing and appropriations committees that oversee the agency; when Coleman et al. write about "agency capture" (518-19) they are referring to two points in the triangle, the agency and the group, but a full understanding of the phenomenon requires looking at the third point, Congress, more specifically the relevant congressional committee(s), .

6. Of special note among the bureaucracies is the Federal Reserve System.  Economic conditions are important to all of us and so they are important to the politicians who seek our votes.  Overall national economic conditions can be influenced by raising/cutting taxes or spending more/less (together called fiscal policy) or by monetary policy which is the term used to cover a variety of levers (reserve requirements, discount rates, and open market operations) for controlling the money supply, that is the amount of money in circulation.  For a variety of reasons, monetary policy is more important than fiscal policy.  Because it is thought dangerous to allow elected politicians to control the money supply, which they might manipulate for their own political advantage, in the United States and many other political systems monetary policy is given over to an independent regulatory agency; in the US, it is the Federal Reserve (aka the Fed).  The Fed is run by a seven-member Board of Governors, where each governor is appointed by the president, with Senate confirmation, to fill slots of up to 14 years.  One of the governors is named as the chair for a four-year term (the current Fed chair is Ben Bernanke).   This all goes to show that very important government decisions, with critical everyday consequences for US citizens, are outside the direct political control of MCs and the president, a point made clear in a 20 Jan 08 Times Magazine article ("The Education of Ben Bernanke") by Roger Lowenstein on Bernanke and the Fed as the US faced a major economic downturn in 2008.  (To make things even a little more interesting, the “lever” of monetary policy that is of greatest importance is the use of “open market operations,” decisions about which are made by the Federal Open Market Committee, composed of the seven FRS governors, the president of the Federal Reserve Bank of New York, and presidents of four other Federal Reserve Banks, where the presidents of the twelve Federal Reserve Banks are chosen by the member commercial banks subject to the approval of Fed governors.  Thus, to insulate monetary policy from the politicians, important decisions are turned over to an independent body into which private economic interests have exceptional input.)

 Questions to consider: 

1. How can the President try to influence, if not control, the bureaucracy?

2. How can Congress try to influence, if not control, the bureaucracy?

3. In what ways has the US changed over the last 200 years and what are the implications of these changes for the role of bureaucracy in US life and the political system?

4. Why are independent regulatory commissions set up the way they are?

5. Could the principal-agent problem (Coleman et al: 516-18) also be in play in the relationship between voters and elected politicians, members of Congress, the President? How so?