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After Chevron: Political Economy and the Future of the Administrative State

PUBLISHED

K. Sabeel Rahman (@ksabeelrahman) is Professor of Law at Cornell Law School.

Among its many troubling rulings, the Supreme Court’s most recent term included a barrage of decisions that, taken together, promise to radically remake the modern administrative state. The implications for public power, our larger political economy, and longer-term progressive policymaking and reform are profound.

For those who haven’t been keeping score at home, a brief summary of the four most important administrative law decisions: in Loper Bright v. Raimondo, the Court overruled the principle of Chevron deference, thereby empowering the judiciary to interpret Congressional authorizations of agency powers. The impact of this limitation on agency policymaking was compounded by the ruling in Corner Post v. Board of Governors of the Federal Reserve, which enables new litigants to challenge long-standing regulations. This will result in an abundance of opportunities for courts to revisit and apply Loper to long-settled interpretations of agency authority. Agency rulemaking authority falls under even tighter judicial scrutiny following the decision in Ohio v. EPA, in which the Court faulted the EPA for failing to respond to alternative proposals in its notice and comment docket—despite, as Justice Barrett herself noted in her dissent in the case, the agency’s painstaking and evidence-based responses to comments. Finally, in SEC v. Jarkesy, the Court suggested that agencies imposing civil penalties for certain kinds of harms might be required under the Seventh Amendment to step aside in favor of Article III courts—a technical decision that may nevertheless implicate a wide range of agency enforcement powers.

There is much to be said to about each of the decisions—to parse and critique these new doctrines, as well as to map out near-term pathways for agencies pursuing urgent policies in service of their statutory missions and in the public interest. But we should also zoom out and consider the broader implications for democracy, equity, and political economy. In this brief post, I want to explain how these decisions represent a fundamental shift in both political and economic power—providing newfound judicial sanction for the kinds of social and economic domination we ought to reject—and set out an alternative vision for the future of the administrative state.

Underwriting Domination

First, these decisions are fundamentally a judicial power grab. Taken as a whole, they create a variegated and powerful toolkit that supercharges the ability of politically- and ideologically-motivated judges to throw out regulatory actions with which they disagree. Coupled with the continued consolidation of a “major questions doctrine,” these new tools constitute a sweeping judicial veto on policies the Court deems too bold—even when those policies are statutorily-authorized, as was the case with both the Court’s invalidation of the Department of Education’s student debt cancellation program and its stay of the Department of Labor’s COVID vaccine-or-test mandate.

The result is what Steve Vladeck has rightly called a suit of doctrines designed to destabilize administrative law. Any particular rule or action might make it through the judicial review gauntlet—the doctrines described are so incredibly vague and malleable—but so too might any given action, however well-conceived and founded, be thrown out by an opportunistic judge. This instability is precisely the point: it shifts power away from both Congress and the Executive to the Judiciary—the least accountable and democratic of the branches.

Second, this assertion of judicial power represents a shift in power towards economically-dominant interests: corporations, monopolists, and the wealthy. As well-resourced repeat players, these economically dominant actors are the most adept and most empowered to leverage the courts in general, and these new decisions in particular. Furthermore, there is a strategic advantage for these interest groups to focus their policy advocacy through the courts and through otherwise technical and jargon-laden doctrines of administrative law: it fundamentally obscures campaigns for policy changes that are both unpopular and unjust. Fighting over regulatory issues through the courts—rather than through political campaigns, legislative debates, or agency rule-making—means that ordinary citizens are likely to lose out.

Third, these shifts in power are magnified by their particular effects on the institutions of the state themselves. Indeed, the origins of these new doctrines of judicial power—arising from cases in which predominantly corporate litigants attack climate regulations, labor standards, financial regulations, and debt cancellation—underscore how the dismantling of agency authority is targeted at those actions and agencies most central to checking concentrations of private power, to preventing exploitation or exclusion, and to protecting vulnerable communities. By contrast, this same Court has been exceedingly solicitous and protective of Executive power when deployed in other, more sinister ways: perpetuating the national security surveillance state, validating the Trump administration’s “Muslim ban,” and the like.

These power shifts make clear that the attack on the administrative is not, despite the conventional framings, about “big” versus “small” government. Nor is it really about “government” versus “markets.” Rather it is about democratic equality versus domination. It is about dismantling those policies and institutions that are built to protect and advance a vision of democratic equality—and in so doing, recreating or preserving relations of domination in economic and social relations.

(Re)building Administration for a Democratic Political Economy

What kind of future should we envision for the administrative state in the face of these power grabs? It is critical that we not settle for simply restoring the status quo ante. Indeed, as movements and scholars and advocates have argued for a long time, and even granting some of the important advances in regulatory policy in recent years, our existing administrative apparatus is not particularly well-suited to advance equity or inclusion, or to tackle deeper structural inequities and challenges with speed and scale. We should, instead, imagine what kind of blue-sky administrative institutions we want to create anew.  

This is not just out of aspiration, but also necessity. In addition to the Court’s frontal assault on the scope of the administrative state’s power, a potential second Trump Administration represents the possibility of a revolution from within. Project 2025 has already sketched out an aggressive Executive branch agenda that involves the dramatic gutting of the regulatory state and civil service, as well as a highly dangerous concentration of Executive power in service of policies attacking women, LGBTQ communities, workers, communities of color, and other vulnerable communities. As a result, for better or worse, we are in the position of needing to think more fundamentally about what comes next. The task for an LPE approach to the administrative state must involve a more foundational rethinking in the coming years and decades – one that asks: what would effective, equitable, and democratic governance look like?

We can see the beginnings of an answer in some of the ideas that the courts and powerful litigants have tried to block: sweeping and urgent (and statutorily-sound!) rules like the FTC’s noncompete rule; inclusionary and reparative initiatives like the reparations provision for Black farmers; debt cancellation; climate regulations; and more. In building out a broader vision for what a future administrative state might look like, we should look at two dimensions: mission and machinery.

First, on mission: we should seek to restore, protect, and build anew administrative authorities and state capacities that are oriented towards creating and preserving a democratic political economy. This means expanding the capacity of agencies to rein in exploitation, corporate concentration, and systemic practices of racialized, gendered, and other forms of subordination. We should encourage more agencies to follow the path of the CFPB and the FTC, for example, in issuing new rules against excessive credit card fees and unfair employment contracts while stepping up their scrutiny of bad actors in the marketplace. We should also look to rebuild and expand the capacities of agencies to effectively and seamlessly deliver public goods, protections, and benefits programs without excessive burdens. Here, the pandemic-era Child Tax Credit offers a model: the Treasury had to build a whole new bureaucratic and outreach apparatus to deliver a transformative form of income support that successfully cut child poverty in half—before Republicans and centrists in Congress dismantled the provision.

We should double down on recent experiments in state capacities to invest directly in households, communities, and infrastructure in ways that are equitable, inclusive, and can operate at scale—building on recent experiences with clean energy investments that have sparked a rapid boom in clean energy industries. It also means sunsetting and dismantling those administrative capacities that are inextricably linked to enforcing patterns of inequity that we seek to overcome: carceral logics and bureaucracies like immigration enforcement that are optimized for racialized forms of violence. A more progressive administrative apparatus should not, for example, provide unchecked arbitrary enforcement power in its immigration system that can be so easily weaponized against communities of color, nor should it continue the kinds of punitive administrative discretion we often see in welfare programs that make it harder for vulnerable communities to access needed benefits.

Second, on machinery: fulfilling the mission outlined above will require specific approaches to the machinery of government—the processes, protocols, and bureaucratic structures that constitute the day-to-day business of administration. That might mean experimenting with new forms of interagency and presidential coordination of regulatory policy to emphasize the formation of structural policy interventions that tackle deeper root causes of inequality—an ethos hinted at in recent efforts to emphasize issues of monopoly power and equity in Executive branch decision-making. It will also require a rewiring and redesign of the bureaucratic systems that deliver benefits, services, and safety net programs to reduce burdens and make those programs as automatic, seamless, and accessible as possible—pressing agencies to undo excessive documentation requirements and to develop more sophisticated forms of automatic-enrollment. And it will require innovating and institutionalizing new forms of participation so that impacted communities have a direct voice in shaping policy design in ways that are meaningful while enabling the government to act quickly and at scale.

There is much more to be developed along each of these lines, both normatively and institutionally. And it will, of course, be important to respond to the recent Court rulings in the near term to help agencies continue to serve the public and respond to urgent policy needs; but we should not limit our ambition to playing defense. Rather, now is precisely the time to deepen and sharpen our vision for what kind administrative state we need to make our aspirations for a more equitable, inclusive, and sustainable economy and society real.