Recently, President Biden signed a sprawling executive order entitled “Promoting Competition in the American Economy.”
The executive order is premised on the notions: (1) that America lacks competition under current laws and regulations; and (2) that the executive order can lead to new regulations that will enhance competition. Among other things, the order calls for retrospective merger review, new Federal Trade Commission Section 5 rulemakings, and “greater scrutiny of mergers, especially by dominant [I]nternet platforms.” The order addresses so-called “right to repair” issues and seeks to limit occupational licensing restrictions. It also revives the tech policy debate that will never die—“net neutrality”—by calling on the Federal Communications Commission to restore Obama-era Title II regulation of broadband providers.
There is much to debate about the merits of each of the order’s proposals. But more fundamental and largely ignored issues loom: namely, are there constitutional limits to the content of an executive order, and does President Biden’s order exceed those limits?
The president is the executive managing a large organization of federal workers. Every president has issued executive orders in large part to manage these workers. Thus, a president might have an executive order instructing administration employees to include a non-discrimination clause in all federal contracts administered by the executive. All federal employees would be instructed to comply with the executive order and to take no steps to circumvent it. Fair enough.
Executive orders are subject to court review. Those that exceed statutory authority, such as President Truman’s order seizing control of private property, can be struck down by courts.
But an executive order cannot instruct or even cajole other branches of government. It cannot tell Congress, the courts, or state governments how to conduct themselves or what policies to pursue. The President, of course, may, in a political speech, ask other branches to take certain actions, but such requests should not be characterized as executive orders.
President Biden’s executive order asks independent agencies, particularly the FTC and FCC, to pursue certain policies supported by the Administration. Although such policy advocacy is reasonable in a political speech, it is unseemly to use executive orders to tell independent agencies to act in a manner outside of presidential authority. The Supreme Court has ruled that agencies like the FTC and FCC are independent. The Court granted particular deference and independence to the FTC, which, according, to the Court, operates “quasi legislatively and quasi judicially.”
Congress vests the president with the power to nominate the commissioners of independent agencies. Through this power, the president can greatly shape independent agencies’ agendas; personnel is indeed policy. But once in power, those commissioners, not the president, decide how the agency acts. Lest a president might wish to remove uncooperative commissioners, most independent agencies’ commissioners can only be removed for cause. This is the case at both the FTC and FCC.
To be sure, the very existence of independent agencies is awkward under the constitution. How does the creation of, in the words of then-Judge Kavanaugh, a “headless fourth branch of the U.S. Government,” comport with the founders’ original vision of the constitutional separation of powers? On the other hand, how would an executive branch, directly in control of writing federal law via the regulatory process, comport with the Founders’ vision of an executive that enforces, but not creates, law? But that is a discussion for another day. If Congress wants to pass a law that the president will sign to eliminate independent agencies and place them under the executive branch, then the structure of the Biden executive order makes perfect sense. But such elimination of independent agencies has not yet occurred.
Use of the passive voice does not legitimize an illegitimate executive order. The Biden executive order states that on six instances that the chair of an independent agency “is encouraged” to pursue a certain action that the president may not instruct. An executive order is an instruction to employees who work directly or indirectly for the president to implement the order, and thus hundreds of thousands of honorable federal employees are instructed to “encourage” the heads of independent agencies to take actions that the president cannot command.
The executive order compromises the integrity of the heads of the independent agencies. An agency chair who pursues policies “encouraged” by the executive—even if uninfluenced by the order—creates an appearance of being under the direction of the president. A truly independent chair could issue a statement admonishing the president for an improper executive order and reminding the administration that it can always submit comments to the agency along with 330 million other Americans. We have yet to see such statements of independence from agency chairs.
Separation of powers works best when each branch of government competes to perform its governmental roles best and guards its authority from encroachment by other branches. Separation of powers is a form of competition—competition among various branches of government. When one branch of government, the executive, views that it can control and influence another branch, independent agencies, competition among the branches and separation of power are both diminished.
The Biden Administration has a noble goal in seeking greater market competition that will ultimately benefit the American consumer. But the ends do not justify the means. Greater market competition cannot be obtained by reducing competition among the branches of government or diminishing the separation of powers.
