Cicero Institute Applauds End to Bureaucratic Agency Stranglehold on Economy
02 July 2024 - 6:02PM
The Cicero Institute applauds the Supreme Court’s recent decision
in Loper Bright Enterprises v. Raimondo, which overruled the
Chevron doctrine and restored checks and balances essential for a
healthy economy.
Established in 1984, the Chevron
doctrine required courts to defer to federal agency
interpretations of ambiguous laws. The Loper ruling marks
a significant shift in judicial interpretation, ensuring that
courts, not agencies, define ambiguous statutes.
In the Loper majority opinion, Chief
Justice Roberts emphasized that the Administrative Procedure Act
(APA) mandates courts to exercise independent judgment, stating
that “Chevron defies the APA’s command that ‘the reviewing
court’—not the agency whose action it reviews—is to ‘decide all
relevant questions of law’ and ‘interpret...statutory provisions.’”
However, Roberts noted that Loper does not question prior
cases relying on Chevron.
Loper provides a crucial check
against regulatory inertia at the federal level. The
Mercatus Center found that federal regulations reduced
GDP by 0.8 percent annually over 35 years — roughly the
lifespan of Chevron — leading to a 25 percent smaller economy. The
Competitive Enterprise Institute estimates federal regulatory
costs at $1.939 trillion, or $14,514 per household annually.
Economist George Stigler noted that broad regulatory
power enables industry capture, “Regulation is acquired by the
industry and is designed and operated primarily for its
benefit.”
However, Loper does not apply to state
regulations, presenting a challenge for state governments. State
regulations, often inconsistent and redundant, impede business
formation and growth. Yet, this challenge also presents an
opportunity for growth and progress. Eight state courts endorse
Chevron-like deference, while ten states apply Chevron
inconsistently. These states must reassess their regulatory
frameworks to avoid uncertainty, paving the way for a more
streamlined and efficient system.
“While Loper is certainly a step in the
right direction at the federal level, the new Supreme Court
standard is only forward-looking and is not binding at the state
level, where many courts remain deferential. State policymakers
should seize upon Loper’s momentum and strengthen checks
and balances in their states by passing smart laws,” says Tanner
Jones of the Cicero Institute. He added, "Thirteen states have
already limited deference through court precedent, statute, or
constitutional amendment, setting an example for others.”
About the Cicero Institute: The Cicero
Institute is a nonpartisan public policy research organization
committed to fostering informed and constructive dialogue on
critical issues facing our nation.
Stefani Buhajla
The Cicero Institute
386-681-7625
media@ciceroinstitute.org