The Cato Institute has long excelled at originating and disseminating policy ideas. As libertarians, however, we tend to be uncomfortable with the hard work of advancing those ideas through the levers and gears of the policy world, since that typically entails give-and-take compromises and partial victories at best. As Richard Rorty put it, “In democratic countries you get things done by compromising your principles in order to form alliances with groups about whom you have grave doubts.” This is not inherently appealing to anyone and is especially unattractive to many libertarians who tend to place great emphasis on following their principles to their logical conclusions. But if we want to see our ideas implemented, we need to engage not just with policy ideas but with the policy process as well. And that is how I found myself sitting in committee meetings for 72 hours over the past couple of months helping to write federal regulations.
Let’s back up to the beginning. When issuing new regulations, most federal offices and agencies must follow the Administrative Procedure Act (APA). A core component of this is “Notice and Comment,” which requires that proposed regulations be published so that the public can suggest changes before the regulations are finalized and implemented. The Department of Education is the main office that is required to use negotiated rulemaking as well as follow the APA. Under negotiated rulemaking, the department selects negotiators from various stakeholder groups, who then work to achieve consensus on proposed regulations. If they reach consensus, the department must propose the agreed-upon regulations, though the department can make changes to the final regulations based on the public’s comments.
As luck would have it, I recently served as one of the negotiators on one of these negotiated rulemaking committees tasked with updating federal regulations for student loans based on the recently passed reconciliation bill. What did I learn from this process?
Negotiated rulemaking can be, but isn’t always gamed.
Since the Department of Education chooses the negotiators for each stakeholder group, it is not uncommon to stack the deck. For example, the Biden administration’s negotiated rulemaking committee for student loan forgiveness didn’t include a single voice opposed to the notion of mass student loan forgiveness. The department can stack the deck not only by choosing negotiators for each group but also by deciding which groups have a seat at the table. Indeed, Cato’s own Neal McCluskey pointed out that that committee didn’t include a taxpayer representative, a scandalous choice given the massive price tag for the various loan forgiveness proposals.
In contrast, the committee I served on did include a taxpayer representative and the department didn’t seem to be stacking the deck. Part of that is likely because the committee’s task was fairly narrow—update existing regulations to account for changes in the reconciliation bill, which involved mostly technical (as opposed to policy) matters.
The negotiated rulemaking step is a bit ridiculous.
If a negotiated rulemaking committee reaches consensus, it does bind the Department of Education to propose that regulatory language. But the department can change the final regulations based on feedback gathered during the public comment period. If no consensus is reached, the department can propose whatever regulations it chooses. Courts will weigh in on the legality of whatever regulations are implemented if there is a lawsuit. This means that negotiated rulemaking doesn’t meaningfully constrain the government. It does, however, take up a lot of time, both for the negotiators and for the government, adding months to the process. This isn’t necessarily a bad thing from a libertarian perspective. But merely adding a few months to the regulatory process isn’t much of a win. And the added time affects both new and undesirable regulations as well as deregulatory efforts.
Compromise means you won’t be completely happy.
Most of the committee’s task entailed straightforward updates to federal regulations on student loans and related matters based on the reconciliation bill that passed a few months ago. In a few areas, however, the committee had some real decisions to make. In particular, the bill set different loan limits for professional students ($50,000 per year, compared to $20,500 for other graduate students), and it defined professional students by pointing to a regulation that provided a vague definition. The committee thus had to sort out what the definition of a professional student is based on the statute, congressional intent, and ambiguous regulatory text. This was the most contentious matter the committee addressed. The committee reached consensus, which means that no one got everything they wanted, but everybody got something and could live with the end result. This is a prime example of how the democratic political process is geared toward providing partial victories.
Government processes are slow and bureaucratic.
Before serving on the committee, I assumed most government decisionmaking was slow, bureaucratic, and slightly maddening for those involved. But then I served on a committee that involved 72 hours of meetings, during which I was not allowed to talk (I served as an alternate negotiator, and only the primary negotiator for each group is allowed to talk.) I also was not allowed to vote on the final regulatory language (only the primary negotiator votes). In other words, it was even slower, more bureaucratic, and more maddening than I thought.
But someone had to do it, and I kept telling myself that libertarians will achieve more of our goals if we have a seat at the table. Whether that was a coping mechanism or the truth remains to be seen.