The idea behind the nondelegation doctrine is sound: Congress should not delegate legislative power to executive branch agencies. But its implementation leaves much to be desired. Nearly every nondelegation case acknowledges there’s a theoretical boundary but then finds that Congress hasn’t crossed it here. Only twice has the Supreme Court found a law violated the nondelegation doctrine, in 1935, both involving a statute that literally allowed President Roosevelt to cartelize the entire economy and make rules at whim. The modern rule allows Congress to give agencies significant authority as long as it includes an “intelligible principle” to guide exercise of that authority. Perhaps more than any other doctrine, this toothless standard has permitted the modern atrophy of our legislative branch, concentrated power in unelected bureaucrats, and enabled the imperial presidencies of the 21st century.
But next week, the Supreme Court has a chance to reconsider the doctrine. FCC v. Consumer’s Research involves the Universal Service Fund (USF), a good vehicle through which to do so. In 1996, Congress instructed the Federal Communications Commission (FCC) to establish a program promoting universal service, which it described as “an evolving level of telecommunications services that the Commission shall periodically establish.” Rather than funding the project through appropriations, Congress allowed the FCC to set its own annual budgets, funded by an FCC-determined surcharge on telephone bills. The FCC, in turn, sub-delegated this budgeting power to a private entity, the Universal Service Administrative Company, a non-profit run by entities that benefit from USF programs.
Unsurprisingly, allowing the agency to define a program, create benefits, and then reverse-engineer a tax rate to fund its initiatives, without meaningful congressional oversight, has been a fiscal disaster. The fund’s annual budget has grown consistently since the 1990s as the scope of its benefits have expanded. Coupled with the collapse of the telecommunications revenue that supports it, the USF surcharge has skyrocketed, from four percent in 1998 to a whopping 36.6 percent today. And a long string of Government Accountability Office (GAO) reports have highlighted the program’s deficiencies and its propensity toward waste, fraud, and abuse.
Despite these shortcomings, it’s likely the law survives under the current legal test. As the government brief explains, Congress provided several high-level intelligible principles to guide the Commission’s discretion. These include guideposts that “quality services should be available at just, reasonable, and affordable rates,” that “access to advanced communications…should be provided in all regions of the nation,” and that “all providers of telecommunications services should make an equitable and nondiscriminatory contribution” to the fund. While these seem broad and provide few guardrails for agency power, as Justice Alito has noted, the Court has consistently “upheld provisions that authorized agencies to adopt important rules pursuant to extraordinarily capacious standards.” Even the Fifth Circuit, which struck down the USF, struggled to explain how the fund violated the current doctrine, concluding only that Congress “may have [unconstitutionally] delegated legislative power to the FCC,” which in turn “may have impermissibly delegated the taxing power to private entities,” and only the combination of the two allowed the court to invalidate the statute.
But members of the Court have signaled interest in revitalizing the current doctrine. In Gundy v. United States, Justices Gorsuch’s dissent (joined by Thomas and Roberts) would have created more robust nondelegation principles. Justice Alito did not join this dissent but supported the effort in the right case, while Justice Kavanaugh (recused from Gundy) later announced his support as well. So the current Court has five potential votes for revisiting nondelegation.
Of course, agreement that there’s a problem does not necessarily imply agreement on a solution. But the Court can build a more robust nondelegation doctrine slowly over time. And it can start with what should be an uncontroversial proposition: Congress cannot delegate the taxing power to an agency without meaningful Congressional oversight. Requiring the USF program to be funded through appropriations would enhance accountability, address many GAO concerns, and save the fund from what supporters and critics alike recognize as its current financial death spiral.
Admittedly, such an outcome is unlikely, given the nondelegation doctrine’s history. But with the current president running amok, it might be a good moment for the Court to find some judicially enforceable guardrails that limit Congress’s ability to give executive branch vast swaths of power. Notably, the National Foreign Trade Council has filed an amicus brief in the USF case, highlighting how the current nondelegation doctrine has facilitated President Trump’s trade war as a reason to move toward a more robust doctrine. The political left has been generally critical of the Supreme Court’s recent efforts to rein in the administrative state. Yet our recent political environment illustrates why respect for the separation of powers should be a bipartisan objective.
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