Herring Loss
Anchovy is one of the least popular pizza toppings. The anchovy is a relative of the herring. Both are members of the Clupeiformes order, and are usually eaten highly salted. The food blog Savoryful ranks anchovies as the 16th favorite among 20 pizza topping contenders, edging out 17th-ranked artichoke hearts. The humble herring has, however, been more impactful on the public policy front than on pizza pies. Last week’s overturning of the Chevron doctrine reminded us that an effort to control herring populations was at the heart of the decades-long skirmish between the expansive power of government regulatory agencies and the industries that agencies seek to regulate.
The 1976 Magnuson-Stevens Fishery Conservation and Management Act, amended in 1996 and 2007, gave the Department of Commerce specified powers to control overfishing of herrings. Among such powers, Magnuson provides permission for observers to be stationed on herring boats, and requires fishermen to pay for the observers, at a cost of approximately $710/day.
A 1984 Supreme Court ruling in Chevron v. Natural Resources Defense Council upheld the ability of a government agency (in this case the Department of Commerce) to decide on interpretation and implementation of laws. This was known as “Chevron deference.” But last Friday Chevron was overturned by the Supreme Court in a 6 to 3 decision. Overturning Chevron has vast implications beyond herrings. It sharply cuts back the power of government agencies. It will likely unleash a torrent of litigation by businesses, pushing back on government agencies’ regulatory authority. The impact will be seen in the form of challenges to the powers of agencies, such as the Food and Drug Administration, the Environmental Protection Agency, the Department of Labor, the Department of Health and Human Services, the Centers for Medicare and Medicaid Services, the Centers for Disease Control and Prevention, the Securities and Exchange Commission, the Consumer Financial Protection Bureau, as well as the Department of Treasury and its Internal Revenue Service.
Overturning Chevron may also tip the scales in a long-running battle between a small unit within the Treasury Department, the Federal Insurance Office (FIO), and the insurance industry. The FIO was established in 2010, as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The FIO was established with a false premise. In the wake of the panicky days of the financial crisis of 2007-2008, Dodd-Frank sought to lay down legislation that could prevent the reoccurrence of a financial crisis. The FIO was created to monitor the insurance industry, should it endanger the financial system. The financial crisis was, however, not caused by insurers. It was the bursting of a bubble created by subprime lending by banks and non-bank financial institutions. Insurers were neither the cause of the crisis, nor were they cratered by the crisis. The insurance industry was falsely accused.
Prior to the overturning of Chevron, the most recent dust up between the FIO and the insurance industry was the Insurance Data Protection Act, H.R. 5535, introduced by Rep. Scott Fitzgerald (R-Wis.). This bill would limit the ability of the FIO to subpoena insurers with data calls for information already available in other sources. Specifically, the bill would eliminate the subpoena power of the FIO, as well as the Treasury’s Office of Financial Research, to compel production of information that might contribute to a systemic financial crisis. The bill seeks to curtail duplicative data calls and stymie efforts of the FIO, a camel with its nose already in the tent, to arrogate more powers to itself.
The overturning of Chevron will not provide ammunition in efforts to eliminate the FIO entirely, such as those of Sen. Ted Cruz (R-Texas) in his attempted Federal Insurance Office Abolishment Act, S.1694, which he introduced last year. However, the Supreme Court’s new ruling does constitute broadside fire against the heavy hand of multiple agencies in an “administrative state” that, left unchecked, would continue to allow government agencies to write, judge, and enforce their own laws. Conservative limited government free marketeers will be celebrating this check on the power of the federal bureaucracy.
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