The future of agency independence

Vanderbilt Law Review

Volumn 63, Issue 3, 2010, Pages 599-672

  Bressman, Lisa Schultz ^a   Thompson, Robert B ^a,b  

^a VANDERBILT UNIVERSITY LAW SCHOOL   (United States)

^b GEORGETOWN UNIVERSITY LAW CENTER   (United States)

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EID: 77953266344     PISSN: 00422533     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (477)

1. E.g., 15 U.S.C. §78d (2006) (SEC);
2. U.S.C. §153 (2006) (NLRB);
3. U.S.C. §154 (2006) (FCC).
4. See, e.g., 29 U.S.C. §153 ("Any member of the Board may be removed by the President, upon notice and hearing, for neglect of duty or malfeasance in office, but for no other cause.").
5. Although the SEC statute lacks explicit removal language, it is "commonly understood" to include a "for cause" removal limitation. MFS Sec. Corp. v. SEC, 380 F.3d 611, 619-20 (2d Cir. 2004)
6. (quoting SEC v. Blinder, Robinson & Co., 855 F.2d 677, 681 (10th Cir. 1988)).
7. See Neal Devins & David E. Lewis, Not-So Independent Agencies: Party Polarization and the Limits of Institutional Design, 88 B.U. L. REV. 459, 469-77 (2008) (demonstrating empirically that the President influences independent agencies through appointment of members, although with certain limits);
8. Peter L. Strauss, The Place of Agencies in Government: Separation of Powers and the Fourth Branch, 84 COLUM. L. REV. 573, 587-91 (1984) (arguing that the President influences independent agencies through appointment of members, selection of chairs, and assistance with budget negotiations);
9. see also Neal Devins, Unitariness and Independence: Solicitor General Control over Independent Agency Litigation, 82 CAL. L. REV. 255, 291-301 (1994) (arguing that the Solicitor General influences the policy of independent agencies by controlling their litigation);
10. Elliot Karr, Independent Litigation Authority and Calls for the Views of the Solicitor General, 77 GEO. WASH. L. REV. 1080, 1087-90 (2009) (arguing that the ability of the Supreme Court to call for the views of the Solicitor General even when independent agencies have their own litigating authority enables the Solicitor General to check those agencies);
11. Paul R. Verkuil, Jawboning Administrative Agencies: Ex Parte Contacts by the White House, 80 COLUM. L. REV. 943, 943-44 & n.1 (1980) (describing jawboning as the ability of the President to influence agency decisions through informal contacts with agency officials).
12. See, e.g., Devins & Lewis, supra note 3, at 466 ("Presidents typically see themselves as heads of the regulatory state and fight tooth and nail to resist congressional delegations to independent agencies.").
13. See discussion infra Part II.A.
14. See id.
15. E.g., Stephen Labaton, Doubts Greet Treasury Plan on Regulation, N.Y. TIMES, Apr. 1, 2008, at Al (noting that "Treasury Secretary Henry M. Paulson Jr. laid out an ambitious plan to overhaul the regulatory apparatus that oversees the nation's financial system," including major alterations to the structure of securities and commodities regulation).
16. Kg., Exec. Order No. 12, 291, 3 C.F.R. 127 (1982), reprinted in 5 U.S.C. §601 (1988), revoked by Exec. Order No. 12,866, 3 C.F.R. 638 (1993), reprinted as amended in 5 U.S.C. §601 (2006) (order by President Reagan establishing requirements for agencies to follow in promulgating regulations, reviewing regulations, and developing legislative proposals concerning regulation) (12,291 also available at 46 Fed. Reg. 13,193 (Feb. 17,1981)).
17. See, e.g., Amit R. Paley & David S. Hilzenrath, SEC's Cox Defends Approach, L.A. TIMES, Dec. 27, 2008, at 3 ("But in publicly acknowledging for the first time that the [shortselling] ban was not productive, Cox said he had been under intense pressure from Treasury Secretary Henry M. Paulson Jr. and Fed Chairman Ben S. Bernanke to take the action and did so reluctantly.").
18. See ALAN GREENSPAN, THE AGE OF TURBULENCE: ADVENTURES IN A NEW WORLD 122 (2007) (noting that President George H.W. Bush blamed Federal Reserve Chairman Alan Greenspan for his 1992 reelection defeat).
19. See, e.g., Jody Freeman, The Private Role in Public Governance, 75 N.Y.U. L. REV. 543, 546-47 (2000) (arguing that private actors play a role in checking the action of agency officials);
20. Dawn E. Johnsen, Faithfully Executing the Laws: Internal Legal Constraints on Executive Power, 54 UCLA L. REV. 1559, 1560-62 (2007) (arguing that legal advisors within the executive branch check the actions of that branch);
21. Neal Kumar Katyal, Internal Separation of Powers: Checking Today's Most Dangerous Branch from Within, 115 YALE L.J. 2314, 2316-17 (2006) (arguing that civil service members within the executive branch check the actions ofthat branch).
22. See Lisa Schultz Bressman, Beyond Accountability: Arbitrariness and Legitimacy in the Administrative State, 78 N.Y.U. L. REV. 461, 486-91 (2003) (describing the call for presidential control of regulatory policy).
23. See, e.g., Steven G. Calabresi & Saikrishna B. Prakash, The President's Power to Execute the Laws, 104 YALE L. J. 541, 570-99 (1994) (making the constitutional argument).
24. See, e.g., Elena Kagan, Presidential Administration, 114 HARV. L. REV. 2245, 2331-32 (2001) (offering a more pragmatic defense of presidential control);
25. Jerry L. Mashaw, Prodelegation: Why Administrators Should Make Political Decisions, 1 J.L. ECON. & ORG. 81, 95 (1985) (same).
26. See Humphrey's Ex'r v. United States, 295 U.S. 602, 619 (1935) (finding constitutional a statutory provision that prevented the President from removing members of the Federal Trade Commission except for cause).
27. See Morrison v. Olson, 487 U.S. 654, 685-93 (1988) (formulating the constitutional test as whether congressional limitations on presidential control of agency officials or decisions unduly impede presidential authority, but noting that formal agency functions are still relevant).
28. See, e.g., Unlawful Internet Gambling Enforcement Act of 2006, 31 U.S.C. §§5361-5367 (2006) (prohibiting any person from placing wagers or bets over the Internet when such wagers would be illegal in the state where they are made and directing the Secretary of the Treasury and the Board of Governors of the Federal Reserve System to work together on a series of issues, for example promulgating (in consultation with the Attorney General) regulations requiring Internet payment systems to establish procedures to identify and block prohibited transactions);
29. National Bank Act, 12 U.S.C. §24a(a)(3)(A)(ii) (2006) (authorizing the Secretary of the Treasury and the Board of Governors of the Federal Reserve System to jointly issue regulations defining some of the criteria that national banks must meet to control a financial subsidiary, and, for example, requiring them jointly to establish an indexing mechanism to adjust over time the amount of assets that a national bank is required to hold).
30. See, e.g., Importation of Hazardous Material Act, 15 U.S.C. §1269(b) (2006) (requiring the Secretary of the Treasury and the Consumer Product Safety Commission to issue joint regulations regarding the efficient enforcement of the provisions describing the process of examining hazardous substances imported into the United States);
31. Shipment of Valuables Act, 40 U.S.C. §17302(a) (2006) (directing the Secretary of the Treasury and the United States Postal Service to jointly prescribe regulations for the shipment of valuables by federal government employees).
32. See, e.g., 15 U.S.C. §78i(k)(6) (2006) (providing that before an emergency suspension of trading on all national securities exchanges, the SEC shall consult with the Secretary of the Treasury, Board of Governors of the Federal Reserve, and the CFTC);
33. id. §78o-5(e)(2) (providing that the SEC shall consult with the Secretary of the Treasury before exempting government securities brokers or dealers from the requirement of membership in a registered national securities exchange or securities association,);
34. id. §78s(b)(5) (providing that the SEC must consult with and consider the views of the Secretary of the Treasury prior to approving, abrogating, adding to, or deleting any proposed rules filed by a registered securities association regarding transactions in government securities);
35. id. §7244(a)(3) (providing, under the Sarbanes-Oxley Act, that the SEC shall consult with the Secretary of Labor in issuing rules regarding the ban on insider trading during "pension fund blackout periods");
36. id. §3391(a), (b) (providing that, although any curtailment plan of an interstate natural gas pipeline cannot curtail the delivery of gas for "essential agricultural use[s]," this restriction does not apply if the Federal Energy Regulatory Commission, in consultation with the Secretary of Agriculture, determines that the use of alternative fuels is practicable);
37. 16 U.S.C. §1362(I)(A) (2006) (requiring the Secretary of the Interior to consult with the Marine Mammal Commission on a variety of issues related to the protection of marine mammals, including when a species has fallen below "optimum sustainable population").
38. Federal Reserve Act, 12 U.S.C. §§221-522 (2006).
39. Securities Exchange Act of 1934, 15 U.S.C. §§78a-78M (2006). The SEC oversees the work of a variety of other actors, a mix of private and public, described in more detail in Part II, such as the PCAOB, FASB, MSRB, FINRA, and the New York Stock Exchange.
40. Commodity Exchange Act, 7 U.S.C. §2(a) (2006 & Supp. II 2008).
41. Angel Manuel Moreno, Presidential Coordination of the Independent Regulatory Process, 8 ADMIN L.J. AM. U. 461, 475 n.66 (1994)
42. (citing 12 U.S.C. §§221-522
43. and ROBERT E. CUSHMAN, THE INDEPENDENT REGULATORY COMMISSIONS 146-61 (1941)).
44. See, e.g., Timothy A. Canova, Financial Liberalization, International Money Dis/Order, and the Neoliberal State, 15 AM. U. INT'L L. REV. 1279,1295 (2000) ("Contrary to popular opinion in the United States, interest rates are not set by the Board of Governors ... of the Federal Reserve System ... but by the Federal Open Market Committee ....").
45. 12 U.S.C. §263. The President of the New York Federal Reserve bank always has a vote; the other regional banks have the remaining four votes on a rotating basis.
46. 12 U.S.C. §241.
47. 7 U.S.C. §2(a)(2) (CFTC);
48. 15 U.S.C §78d(a) (SEC).
49. Moreno, supra note 23, at 476 n.68
50. (citing 15 U.S.C. §§78a-7811
51. and CUSHMAN, supra note 23, at 327-45).
52. Moreno, supra note 23, at 477 n.72
53. (citing 7 U.S.C. §4(a) (current version at 7 U.S.C. § 2(a)(2)).
54. Federal Deposit Insurance Corporation Act, 12 U.S.C. §1811 (2006).
55. Id. §§1811-1812.
56. Id. §1812.
57. Id.
58. see id. §1;
59. 31 U.S.C. §§307, 321(c) (2006) (Comptroller of Currency);
60. 12 U.S.C. § 1428 (2006 & Supp. II 2008);
61. 31 U.S.C. §§309, 321(c) (Office of Thrift Supervision).
62. See 12 U.S.C. §4511(a) (Supp. II 2008) (establishing the FHSA as an independent agency).
63. The FHSA oversees Fannie Mae and Freddie Mac, lending institutions that were ostensibly independent corporations before they were folded back into the federal government during the meltdown of 2008. Id.;
64. see also Press Release, Henry M. Paulson, Jr., Sec'y of the Treasury, Statement by Secretary Henry M. Paulson, Jr. on Treasury and Federal Housing Finance Agency Action to Protect Financial Markets and Taxpayers (Sept. 7, 2008), available at http://www.treas.gov/press/releases/hp1129.htm (outlining the steps taken to place Fannie Mae and Freddie Mac back in direct federal control).
65. The leaders of the offices mentioned in the text typically are appointed by the President and confirmed by the Senate and have a sphere of action in which they operate on their own, outside of the cabinet department where they may be located. E.g., 12 U.S.C. §1812 (2006).
66. Federal Trade Commission Act, 15 U.S.C. §§41-58 (2006).
67. The FTC "regulates competition, prevents trade restraints and unfair methods, prevents pricing discrimination, enforces proper labeling and packaging of certain commodities, and gathers economic information." Moreno, supra note 23, at 476 n.67
68. (citing 15 U.S.C. §§41-58
69. and CUSHMAN, supra note 23, at 177-213).
70. 47 U.S.C. §154 (2006).
71. The FCC "regulates interstate and international common carrier communications by telephone, telegraph, radio, and satellite, and the use of radio spectrum for industrial and business purposes." Moreno, supra note 23, at 476 n.69
72. (citing 47 U.S.C. §154 (1988 & Supp. V 1993)
73. and CUSHMAN, supra note 23, at 320-26).
74. National Labor Relations Act, 29 U.S.C. §§153-169 (2006).
75. The NLRB "oversees the collective bargaining process, industrial relations, and the prevention and remedy of unfair labor practices." Moreno, supra note 23, at 476 n.70
76. (citing 29 U.S.C. §§153-169
77. and CUSHMAN, supra note 23, at 345-68).
78. Consumer Product Safety Act, 15 U.S.C. §§2053-2083 (2006).
79. The CPSC "protects the public from risk or injury from consumer products, assists consumers, and establishes safety standards for consumer products." Moreno, supra note 23, at 476 n.71
80. (citing 15 U.S.C. §§20532083).
81. 42 U.S.C. §7171 (2006).
82. The FERC "sets rates, and charges for transportation and sale of natural gas and electricity." Moreno, supra note 23, at 477 n.73
83. (citing 42 U.S.C. §7171).
84. Federal Maritime Commission Act, 46 U.S.C. §§301-307 (2006).
85. 42 U.S.C. §5841 (2006).
86. The NRC "oversees the construction and operation of nuclear reactors and other civilian nuclear facilities; the use, handling, and disposal of nuclear materials; and the licensing of nuclear power plants." Moreno, supra note 23, at 478 n.75
87. (citing 42 U.S.C. § 5841).
88. See CUSHMAN, supra note 23, at 3-4 (defining "independent regulatory commission").
89. Some of the agencies in this group picked up functions exercised by prior agencies or executive departments. Id. at 6.
90. See id. at 8 (explaining the "quasi-judicial" power of independent agencies).
91. See id. at 8-9 ("[P]robably every independent regulatory agency exercises what is sometimes called 'quasi-legislative' power."). Some agencies, such as the National Labor Relations Board, have used rulemaking power sparingly.
92. See Catherine L. Fisk & Deborah C. Malamud, The NLRB in Administrative Exile: Problems with its Structure and Function and Suggestions for Reform, 58 DUKE L.J. 2013, 2017 (2009) (discussing NLRB practice of eschewing rulemaking).
93. United States v. Mead Corp., 533 U.S. 218, 218 (2001).
94. See CUSHMAN, supra note 23, at 10 (describing the investigation function of independent agencies).
95. See id. at 8 (describing the Fed, in term of its powers, as "an exception");
96. see also 12 U.S.C. §248 (2006) (outlining the Fed's powers).
97. For example, members of the Fed Board are removable by the President only "for cause." 12 U.S.C. §242 (2006).
98. The SEC, meanwhile, is not governed by a statutory removal restriction; instead, the removal power belongs to the President and is "commonly understood" as limited to "inefficiency, neglect of duty or malfeasance in office." MFS Sec. Corp. v. SEC, 380 F.3d 611, 619-20 (2d Cir. 2004)
99. (quoting SEC v. Blinder, Robinson & Co., 855 F.2d 677, 681 (10th Cir. 1988)).
100. The Supreme Court has held that the restrictions on the President's removal of Commissioners for " 'inefficiency,' 'neglect of duty,' or 'malfeasance in office' " are "very broad and ... could sustain removal... for any number of actual or perceived transgressions ...." Bowsher v. Synar, 478 U.S. 714, 729 (1986).
101. This definition differs from some popular definitions of independence, such as "[t]hose agencies that exist outside of the federal executive departments (those headed by a Cabinet secretary)." See Independent agencies of the United States government, www.wikipedia.org/ wiki/Independent-agencies-of-the-United States-government (last visited Mar. 7, 2010). That definition would include, for example, the Environmental Protection Agency, although the administrator of that agency is fully removable by the President.
102. 12 U.S.C. §241-242 (2006).
103. Id. §241.
104. 15 U.S.C. §78d (2006).
105. See, e.g., 12 U.S.C. §243 (2006) (authorizing Federal Reserve Board to levy assessments against Federal Reserve banks in order to pay for operating expenses and member salaries);
106. Joel Seligman, Self-Funding for the Securities and Exchange Commission, 28 NOVA L. REV. 233, 253-58 (2004) (discussing self-funding mechanisms by financial regulatory institutions).
107. See Humphrey's Ex'r v. United States, 295 U.S. 602, 625 (1935) (recognizing independent agencies require insulation from politics because its operations "should not be open to suspicion of partisan direction").
108. CUSHMAN, supra note 23, at 153 (discussing the Federal Reserve).
109. See, e.g., 107 CONG. REC. 5847 (1961) (statement of President John F. Kennedy) ("This does not mean that either the President or the Congress should intrude or seek to intervene in those matters which by law these agencies have to decide on the basis of open and recorded evidence, where they, like the judiciary, must determine independently what conclusions will serve the public interest as that interest may be defined by law.").
110. See also Donna M. Nagy, Playing Peekabo with Constitutional Law: The PCAOB and Its Public/Private Status, 80 NOTRE DAME L. REV. 975, 1014-18 (2005) (describing the adjudicatory functions of the PCAOB and drawing similarities to the adjudicatory functions of the SEC).
111. See MARVER H. BERNSTEIN, REGULATING BUSINESS BY INDEPENDENT COMMISSION 67 (1955) (quoting Speaker of the House Sam Rayburn as to why independent agencies are needed).
112. See Richard B. Stewart, The Reformation of American Administrative Law, 88 HARV. L. REV. 1667,1678-88 (1975) (discussing the evolving views of courts and scholars).
113. See generally Brian Z. Tamanaha, Understanding Legal Realism, 87 TEX. L. REV. 731 (2009).
114. See Bressman, supra note 12, at 475 (discussing the scholarly trend toward "an interest group representation model").
115. BERNSTEIN, supro note 57, at 67.
116. This is perhaps even truer in recent years, as computers have extended the range of instruments that can be traded and opened up even more sophisticated trading strategies.
117. CUSHMAN, supra note 23, at 154.
118. And the PCAOB provides even higher salaries for its board members, two or three times what the SEC commissioners receive. See Nagy, supra note 56, at 979 (summarizing the controversy over the disparity between salaries of PCAOB members and SEC commissioners). The Presidents of the Federal Reserve regional banks have been paid more than the Fed governors.
119. See CUSHMAN, supra note 23, at 150.
120. See e.g., Steven A. Ramirez, Depoliticizing Financial Regulation, 41 WM. & MARY L. REV. 502, 546-48 (2000) (positing that the political branches remain committed to the independence of the Fed in setting interest rates because they themselves could not resist pressure from narrow interests, and providing historical examples of when this tied-to-the-mast approach has succeeded).
121. See Devins & Lewis, supra note 3, at 465-66 ("Some members of Congress, and the business interests supporting them, feared that the short-term incentives of Presidents would be to use monetary and banking regulation for political or electoral benefit to the detriment of longterm economic stability and investment."
122. (citing CUSHMAN, supra note 23, at 153-55)).
123. See Devins & Lewis, supra note 3, at 466.
124. Of course, independent agencies do not necessarily prevent such gyrations. For example, NLRB policy has shifted to reflect the administration that appointed the members and the general counsel. Cf. id. at 465 (finding that agency policy can shift in the direction of the party of the President who appoints new members).
125. See CUSHMAN, supra note 23, at 154.
126. See JOEL SELIGMAN, THE TRANSFORMATION OF WALL STREET 553-56 (2003) (discussing the establishment of the FASB).
127. See Elliott J. Weiss, Some Thoughts on an Agenda for the Public Company Accounting Oversight Board, 53 DUKE L.J. 491, 497 (2003) ("One major concern that led to the passage of Sarbanes-Oxley was that, as accounting firms began to derive an increasing portion of thenrevenues from nonaudit services, they faced increasing conflicts of interest.").
128. It is also readily visible in the setting of monetary policy, where the Fed Board works with the heads of the regional Federal Reserve banks, which in turn are picked by bankers in the various geographic areas.
129. See, e.g., Concept Release Concerning Self-Regulation, 69 Fed. Reg. 71,256-01 (Dec. 8, 2004) (to be codified at 17 C.F.R. pt. 320) (describing proposed changes to self-regulated organizations).
130. See Melvin Aron Eisenberg, The Structure of Corporation Law, 89 COLUM. L. REV. 1461, 1514 (1989) (discussing stock exchange incentives that might be superior to that of government);
131. Paul G. Mahoney, The Exchange as Regulator, 83 VA. L. REV. 1453, 1455 (1997) (examining stock exchange incentives "to provide rules and enforcement mechanisms that increase investor returns," and the reasons why exchanges were subjected to government oversight in the 1930s).
132. FINRA, About the Financial Industry Regulatory Authority, http://www.finra.org/ AboutFINRA/index.htm (last visited Mar. 7, 2010).
133. FASB, Facts About FASB, http://www.fasb.org/facts/index.shtml (last visited Mar. 7, 2010). The PCAOB, which was created by Congress in the Sarbanes-Oxley Act of 2002 to oversee auditor conduct, includes some elements of private ordering as well.
134. RAYMOND MOLEY, AFTER SEVEN YEARS 161 (1939).
135. See Moreno, supra note 23, at 481-88 (outlining the historical development of independent agencies).
136. See MOLEY, supra note 77, at 177 (noting Sam Untermyer's initial draft to place securities regulation within the Post Office as the best assurance against the legislation's constitutionality, and Moley's reaction that "the idea of sticking an immense regulatory machine into it horrified [his] sense of the administrative and legal proprieties").
137. The securities regulation function was initially put within the Federal Trade Commission, an independent agency, and a year later in another independent agency, the newly formed Securities and Exchange Commission. Id. at 178.
138. CUSHMAN, supra note 23, at 154.
139. Id. at 154-55.
140. Id. at 153.
141. Humphrey's Ex'r v. United States, 295 U.S. 602, 618-19 (1935).
142. Id. at 625, 631-32.
143. Myers v. United States, 272 U.S. 52, 163-76 (1925).
144. Humphrey's Ex'r, 295 U.S. at 628.
145. The President's appointment power served as an effective substitute for the removal power. President Franklin Delano Roosevelt was able to appoint members such as Harvard Professor James Landis to the FTC and Robert Healey as its chief counsel. Within a year, Congress and the administration chose to cleave off securities regulation from the FTC with the formation of a separate independent agency, the Securities and Exchange Commission. Two FTC members and its chief counsel became three of the founding five members of the SEC, giving President Roosevelt the opportunity to place his own people in both agencies. On the early history of the SEC, see SELIGMAN, supra note 70, at 11-72.
146. LOUIS FISHER, THE POLITICS OF SHARED POWER: CONGRESS AND THE EXECUTIVE 113, 148,167 (4th ed. 1998).
147. Id.
148. See Devins & Lewis, supra note 3, at 467 n.47 (providing examples of presidential plans to reorganize the executive branch and exert increased control over independent agencies).
149. For a historical description of presidential efforts to influence the decisions of the independent regulatory commission see Moreno, supra note 23, at 481-88.
150. See generally Verkuil, supra note 3, at 944-47 (describing how the President can influence agencies, including independent agencies, through informal contacts).
151. A.C. Pritchard & Robert B. Thompson, Securities Law and the New Deal Justices, 95 VA. L. REV. 841, 912-17 (2009).
152. 295 U.S. 495 (1935).
153. 293 U.S. 388 (1935).
154. For example, the National Industrial Recovery Act at issue in Schechter Poultry authorized the President to approve codes of fair competition upon application by a trade or industrial association. 295 U.S. at 521-22.
155. NLRB v. Jones & Laughlin Steel Corp., 301 U.S. 1, 49 (1937).
156. Pritchard & Thompson, supra note 91, at 914-16.
157. 332 U.S. 194, 203 (1947).
158. 318 U.S. 80, 95 (1943).
159. Id. at 93-94.
160. Chenery II, 332 U.S. at 217-18 (Jackson, J., dissenting).
161. See Letter from Justice Felix Frankfurter to Justice Hugo Black (Dec. 23, 1946) (on file with Robert Jackson Collection, Library of Congress, Box 138) ("With every impulse to sustain the commission, I cannot escape the conviction that the Commission has decided this case ad hoc.").
162. See 16 U.S.C. § 797 (Federal Energy Regulatory Commission);
163. 42 U.S.C. § 5841 (Nuclear Regulatory Commission);
164. 29 U.S.C. § 651(b)(3) (Occupational Safety and Health Review Commission).
165. CASS SUNSTEIN, AFTER THE RIGHTS REVOLUTION: RECONCEIVING THE REGULATORY STATE 57-69 (1990);
166. see also Robert L. Rabin, Federal Regulation in Historical Perspective, 38 STAN. L. REV. 1189, 1278-94 (1986) (describing this period as the "public interest era").
167. Exec. Order No. 12, 291, 3 C.F.R. 127 (1982), reprinted in 5 U.S.C. § 601 (1988), revoked by Exec. Order No. 12, 866, 3 C.F.R. 638 (1993), reprinted as amended in 5 U.S.C. § 601 (2006) (12, 291 also available at 46 Fed. Reg. 13, 193 (Feb. 17, 1981)).
168. Id. § 5.
169. Id. §§ 3, 5.
170. As revised by the President Clinton, the executive order provided that the administrator of OIRA subsequently would circulate this plan to other agencies and would notify the agency as necessary to "request further consideration of inter-agency coordination." Id.
171. Id. § 3(d).
172. Robert W. Hahn & Cass R. Sunstein, A New Executive Order for Improving Federal Regulation? Deeper and Wider Cost-Benefit Analysis, 150 U. PA. L. REV. 1489, 1506 (2002).
173. During the Carter administration, the Office of Legal Counsel issued a memorandum stating that the President could, as a legal matter, subject independent agencies to a regulatory review executive order. See Memorandum for the Hon. David Stockman, Dir., Office of Mgmt. & Budget, from Larry L. Simms, Acting Ass't Atty. Gen., Office of Legal Counsel (Feb. 12, 1981),
174. reprinted in part in PETER M. SHANE & HAROLD H. BRUFF, THE LAW OF PRESIDENTIAL POWER: CASES AND MATERIALS 355-58 (1988).
175. Legal scholars writing shortly thereafter echoed this view. See Peter L. Strauss & Cass R. Sunstein, The Role of the President and OMB in Informal Rulemaking, 38 ADMIN. L. REV. 181, 203 (1986).
176. Edward Sherwin, The Cost-Benefit Analysis of Financial Regulation: Lessons from the SEC's Stalled Mutual Fund Reform Effort, 12 STAN. J.L. Bus. & FIN. 1, 10-11 (2006)
177. (citing BARRY D. FRIEDMAN, REGULATION IN THE REAGAN-BUSH ERA: THE ERUPTION OF PRESIDENTIAL INFLUENCE 78 (1995));
178. see also Richard H. Pildes & Cass R. Sunstein, Reinventing the Regulatory State, 62 U. CHI. L. REV. 1, 11-19 (1995) (observing that "[t]he independent agencies were asked voluntarily to comply with Executive Order 12291, but not one of them formally acknowledged their willingness to do so").
179. Kagan, supra note 14, at 2299. Meanwhile, during the Clinton administration, Congress created a six-year "for cause" term for the single head of the Social Security Administration, meaning that one in every three Presidents would have no voice in the leadership of that agency.
180. Bressman, supra note 12, at 487-88.
181. See Kagan, supra note 14, at 2295-96 ("[D]irectives to agency heads were a critical means of spurring administrative initiatives, and these initiatives were an important aspect of [Clinton's] tenure in office.").
182. See id. at 2337 (arguing that "the greater openness of Clinton's methods of administrative control" demonstrates "presidential reliance on and responsiveness to broad public sentiment").
183. Exec. Order No. 12, 866, 3 C.F.R. 638 (1993), reprinted as amended in 5 U.S.C. § 601 (2006);
184. Hahn & Sunstein, supra note 108, at 1507 (noting that the Clinton executive order took the "first step toward including independent agencies" by subjecting them to its coordination mechanism).
185. See Sherwin, supra note 109, at 10-11 (noting that independent agencies are excluded from the definition of "agency" in the George W. Bush version of the executive order).
186. See Bressman, supra note 12, at 491 ("The President's unique capacity for public responsiveness - in a word, majoritarianism - ensures that this model is likely to survive into the future.").
187. See Kagan, supra note 14, at 2277 (explaining the shift under Reagan).
188. Bressman, supra note 12, at 487.
189. Id. at 487.
190. See STEPHEN BREYER, BREAKING THE VICIOUS CIRCLE: TOWARD EFFECTIVE RISK REGULATION 80 (1993) (discussing the need for "increased coordination and rationalization" of regulatory agencies).
191. Id.
192. E.g., W. KIP VISCUSI, FATAL TRADEOFFS 248-51 (1992) (discussing the shortcomings of new agencies regulating health, safety, and the environment);
193. Martin Shapiro, Administrative Discretion: The Next Stage, 92 YALE L.J. 1487, 1499-50 (1983) (discussing calls for "rationality in the regulatory process").
194. Cf. Kagan, supra note 14, at 2315-17 (comparing the Reagan and Clinton administrations' approaches to the administrative state).
195. E.g., id. at 2331-32 (contending that the President, as a single actor, is uniquely visible and responsible for agency action).
196. See, e.g., Calabresi & Prakash, supra note 13, at 570-99 (asserting "that the Constitution unambiguously gives the President the power to control the execution of all federal laws").
197. See, e.g., Mashaw, supra note 14, at 95-99 (contending that agencies are accountable via the President, which addresses many of the concerns about broad legislative delegations).
198. See supra notes 105-106, 119-121 and accompanying text.
199. See supra note 106 and accompanying text.
200. See supra notes 116-118 and accompanying text.
201. Harold H. Bruff, Presidential Management of Agency Rulemaking, 57 GEO. WASH. L. REV. 533, 591 (1989);
202. see also Moreno, supra note 23, at 512-13 ("For those IRCs that are important to the accomplishment of the presidential agenda, the White House needs to develop a legal arrangement that affords the executive total control").
203. Kagan, supra note 14, at 2376-77.
204. Recommendations of the Administrative Conference Regarding Administrative Practice and Procedure, 54 Fed. Reg. 5207 (Feb. 2,1989) (to be codified at 1 C.F.R. § 305.88-9).
205. See BERNSTEIN, supra note 57, at 5 (describing the criticism against independent agencies on grounds of coordination);
206. CUSHMAN, supra note 23, at 5-7 (same).
207. E.g., DEP'T OF THE TREASURY, FINANCIAL REGULATORY REFORM: A NEW FOUNDATION 10-18 (2009) (outlining a series of proposed reforms) [hereinafter A NEW FOUNDATION].
208. E.g., id. at 10 (proposing the creation of a Financial Services Oversight Council to identify and respond to emerging risks).
209. E.g., id. at 10-11 (providing that the Secretary of the Treasury would chair the proposed council and that full-time Treasury staff would provide support).
210. E.g., id. (proposing that the council would be devoted in part to resolving jurisdictional disputes between regulators and that, among its primary purposes, would be referral of emerging risks to the regulators with authority to respond).
211. See, e.g., Turmoil in the Financial Markets: Hearing on Hedge Funds Before the H. Comm. on Oversight and Government Reform, 110th Cong. 3 (2008) (statement of Andrew W. Lo, Director, Sloan School of Management) ("Systemic risk is usually taken to mean the risk of a broad-based breakdown in the financial system, often realized as a series of correlated defaults among financial institutions, typically banks, that occur over a short period of time and typically caused by a single major event.").
212. Financial Crisis and Breakdown of Financial Governance: Hearing Before the S. Comm. on Homeland Security and Government Affairs, 111th Cong. 2 (2009) (statement of Howell E. Jackson, Professor of Law, Harvard Law School) ("As lender of last resort, the Federal Reserve has traditionally been responsible for overseeing systemic risk, but its regulatory powers were largely defined more than half a century ago when the banking system was considered to be the primary source of systemic financial risks.").
213. See, e.g., CUSHMAN, supra note 23, at 152 ("Broadly, [the Fed] was to have power to see that... the whole banking structure operated smoothly and securely.").
214. Lawrence Summers, This is where Fannie and Freddie step in, FIN. TIMES (London), Aug. 27, 2007, http://blogs.ft.com/economistsforum/2007/08/this-is- where-fhtml/ ("The problem this time is not that banks lack capital or cannot fund themselves. It is the solvency of a range of nonbanks in question, both because of concerns about their economic fundamentals and because of cascading liquidations as investors who lose confidence in them seek to redeem their money and move into safer, more liquid investments.").
215. See, e.g., DAVID WESSEL, IN FED WE TRUST 150 (2009) ("The public - or at least big money investors - didn't view the shadow banks as quite so safe and grew reluctant to provide the short-term money on which the shadow banks depended.");
216. Penelope Wang, 5 Lessons From the Crash, MONEY, Sept. 2009, at 78, 80-81 (discussing how the financial meltdown of 2008 was caused in part by the failure of Lehman Brothers and AIG).
217. See Edmund L. Andrews, Fed Chairman Endorses New Round of Stimulus, N.Y. TIMES, Oct. 21, 2008, at B8 (quoting Fed Chairman Bernanke discussing the need for a stimulus in order to loosen credit for businesses and individuals).
218. WESSEL, supra note 142, at 251.
219. See Joe Nacera, Risk Management, N.Y. TIMES MAG., Jan. 4, 2009, at 24 (describing valuation models that did not include outcomes at the most uncertain end of the distribution of probabilities).
220. Recall the large drop in the markets in response to Congress's initial inability to pass legislation in the aftermath of the Lehman and AIG crises and the relative ineffectiveness of the Treasury's remedies of 2008. See, e.g., John Authers, Politicians Look to Enter Another Faustian Pact, FIN. TIMES (London), Jan. 23, 2010, http:// www.ft.com/cms/s/0/b1379f2a-07bf-11df-915f00144feabdc0. html ("It was a perceived political failure to make an adequate response to the problems created by the bankruptcy of Lehman Brothers - the US Congress's initial refusal to vote through the Tarp bail-out plan, and the European Union's failed attempt to agree on coordinated deposit insurance - that triggered the global equity collapse in early October 2008.").
221. Another independent agency, the Reconstruction Finance Corporation, played a similar, although less fully successful role in the response to the earlier crisis. See JESSE H. JONES, FIFTY BILLION DOLLARS 3-4 (1951) (describing $10.5 billion the agency loaned, spent, invested, and gave away to banks, railroads, agriculture, and other parts of the economy in the struggle against the depression and about $22.5 billion disbursed later in the country's war effort).
222. Edmund L. Andrews, A New Role for the Fed: Investor of Last Resort, N.Y. TIMES, Sept. 18, 2008, at A1.
223. This argument, too, parallels the experience of the Great Depression. Representative Fiorello LaGuardia called the Reconstruction Finance Corporation a "millionaire's dole and you cannot get away from it. It is a subsidy for broken bankers-a subsidy for bankrupt railroads-a reward for speculation and unscrupulous bond pluggers." JAMES STUART OLSON, HERBERT HOOVER AND THE RECONSTRUCTION FINANCE CORPORATION 1931-1933, at 35 (1977).
224. See Stephen Labaton, Behind the Scenes, Fed. Chief Advocates Bigger Role, N. Y. TIMES, June 24, 2009, at B1 (outlining the disagreement among various officials about which institution should cover nonfinancial sources of systemic risk).
225. See Damian Paletta, Finance Reforms Pared Back, WALL ST. J., June 9, 2009, at A1 (describing the possibility of creating a "systemic-risk council" comprised of existing agencies);
226. INVESTORS' WORKING GROUP, CFA INST. CTR. FOR FIN. MKT. INTEGRITY & COUNCIL OF INST. INVESTORS, U.S FINANCIAL REGULATORY REFORM: THE INVESTORS' PERSPECTIVE 25 (2009) (attributing label "college of cardinals" to Senator Mark Warner).
227. See A NEW FOUNDATION, supra note 134, at 10 (proposing "the creation of a Financial Services Oversight Council" but providing that the Fed should have "authority and accountability for consolidated supervision and regulation" of firms that could pose a threat to financial stability).
228. See H.R. 4173, 111th Cong. (2009);
229. Senate Committee on Banking, Housing, and Urban Affairs, Chairman Chris Dodd, Summary: Restoring American Financial Stability (Mar. 15, 2010) [hereinafter Restoring American Financial Stability], available at http://banking. senate.gov/public/-files/FinancialReformSummary231510FINAL.pdf (summarizing Senator Dodd's bill). These proposals view the Board of Governors as the regulator as opposed to the Federal Reserve System, which includes the Fed Board and the regional banks.
230. A NEW FOUNDATION, supra note 134, at 10-11.
231. Id.
232. The council has "authority to gather information from any financial firm and the responsibility for referring emerging risks to the attention of regulators with the authority to respond." Id.
233. The Senate proposal also includes as members an independent member from the insurance industry and the head of the new consumer agency. See Restoring American Financial Stability, supra note 153.
234. For an exploration of Congress's practice of granting shared authority to the President and agencies, so called "mixed delegations," see Kevin M. Stack, The President's Statutory Powers to Administer the Laws, 106 COLUM. L. REV. 263, 276-83 (2006).
235. See WESSEL, supra note 142, at 160.
236. See H.R. 4173, 111th Cong. (2009);
237. Restoring American Financial Stability, supra note 153.
238. A NEW FOUNDATION, supra note 134, at 10.
239. See id. (outlining the structure of the council and its relationship with the Fed).
240. Id.
241. Id.
242. Id.
243. Exec. Order No. 12, 866, 3 C.F.R. 638 (1993), reprinted as amended in 5 U.S.C. § 601 (2006).
244. CUSHMAN, supra note 23, at 154.
245. See id. at 165-69 (summarizing the removal of the Secretary from the Board).
246. See Joe Nocera, 36 Hours of Alarm and Action as Crisis Spiraled, N.Y. TIMES, Oct. 2, 2008, at A1 (describing how Bernanke consulted with Paulson about possible bank rescue plans following the Bear Stearns bailout).
247. See, e.g., Dana Milbank, Banking on Their Confidence, WASH. POST, Oct. 15, 2008, at A3 (summarizing, in tongue-in-cheek fashion, a press conference held in at the Treasury Department by Paulson and Bernanke to instill confidence in the wake of the financial crisis).
248. See, e.g., David Stout & Brian Knowlton, Geithner Seeks Broader Powers Over Financial Firms, N.Y. TIMES, Mar. 24, 2009, at A1 (describing congressional hearing in which Geithner and Bernanke called for Congress to cede more authority to the Treasury and Fed).
249. See Sebastian Mallaby, Book Review, The Charm of the Chairman: Greenspan Knew All About Money, But He Also Knew How to Work a Room, WASH. POST, Sept. 23, 2007, at T3
250. (reviewing GREENSPAN, supra note 10 and contrasting Chairman Volcker's avoidance of the White House with Chairman Greenspan's active courting of it).
251. Although political scientists have asserted that Congress may create independent agencies to prevent present and future administrations from diverting regulatory policy from statutory goals, they have assumed that the President will resist any loss of control. See Devins & Lewis, supra note 3, at 465 (providing examples of times when Congress created independent agencies and positing that choice was purposed on insulating those agencies from political manipulation by current and future presidents).
252. See, e.g., DAVID EPSTEIN & SHARYN O'HALLORAN, DELEGATING POWERS 153-54 (1999) (predicting that "the trend toward independent commissions should increase the higher the level of policy conflict between Congress and the executive").
253. See Edmund L. Andrews, Obama to Nominate Bernanke to 2d Term at Fed, N.Y. TIMES, Aug. 25, 2009, at B1 (describing Bernanke's background and qualifications).
254. See The New Team: Timothy F. Geithner, http://projects.nytimes.com/44th- president/ new-team/show/timothy-geithner (last visited Mar. 7, 2010) (describing Geithner's background and qualifications and highlighting his "close working relationship" with Bernanke).
255. See generally, STEVEN G. CALABRESI & CHRISTOPHER S. Yoo, THE UNITARY EXECUTIVE (2008);
256. Calabresi & Prakash, supra note 13.
257. E.g., JERRY L. MASHAW, GREED, CHAOS, AND GOVERNANCE 152 (1997);
258. Kagan, supra note 14, at 2327-31;
259. Lawrence Lessig & Cass R. Sunstein, The President and the Administration, 94 COLUM. L. REV. 1, 2-5 (1994).
260. See Bressman, supra note 12, at 490-91 n.146 (collecting sources).
261. See Strauss, supra note 3, at 590-91 (describing president's prime control over independent agencies as appointment of the chairperson). For an interesting study showing that Presidents generally have a difficult time transforming the makeup of an independent agency (and therefore elbowing it into submission),
262. see Devins & Lewis, supra note 3, at 459-61.
263. BD. OF GOVERNORS OF THE FED. RESERVE SYS., THE FEDERAL RESERVE SYSTEM: PURPOSES & FUNCTIONS 4 (9th ed. 2005), available at http://www. federalreserve. gov/pf/pdf/pf-1.pdf.
264. See Verkuil, supra note 3, at 943-44 & n.1 (describing the practice of jawboning, through which the President influences agency decisions through informal, ex parte contacts with agency officials).
265. WILLIAM O. DOUGLAS, DEMOCRACY AND FINANCE 82 (James Allen, ed. 1940).
266. E.g., Verkuil, supra note 3, at 963 (discussing the President's ability to exert control through his involvement in the budget process).
267. See id. at 955 ("[T]he President's power to remove for cause is itself a significant tool of executive control.").
268. See supra notes 152-62 and accompanying text.
269. See id. We wonder whether the President could use the failure or inadequacy of consultation as a ground for removal of the independent actors. We do not imagine that the President would do so lightly because removal, for any reason, attracts considerable political attention and this ground would not only be novel but difficult to substantiate. But good cause is not well defined in administrative law and leaves the President with some room to define it if the President has the political will. Furthermore, the statute makes consultation relevant to the agency's functions.
270. See id.
271. See, e.g., BERNSTEIN, supra note 57, at 145, 147.
272. See supra notes 1, 180 and accompanying text.
273. See WESSEL, supra note 142, at 199-200 (describing the point at which Ben Bernanke said to Henry Paulson in the third week of September 2008, "We can't do this anymore, Hank. We have to go to Congress.");
274. Adding Up the Government's Total Bailout Tab, N.Y. TIMES, Feb. 4, 2009, available at http://www.nytimes.com/interactive/2009/02/04/business/20090205- bailouttotals-graphic.html (laying out the need for funding through April 30, 2009).
275. See 12 U.S.C. § 5211 (Supp. II 2008) (creating the Troubled Assets Relief Program (TARP));
276. Laurie Montgomery & Paul Kane, Senate Votes to Release Bailout Funds to Obama, WASH. POST, Jan. 16, 2009, at Al (describing tiered release of funds under TARP).
277. This claim is different from the one that the Court has used to constrict the reach of statutory delegations. The Court has said that some issues are too important for Congress to implicitly delegate to an agency through mere ambiguity. See, e.g., FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 160 (2000) (holding that the FDA lacked authority to regulate tobacco products because Congress would not have intended to implicitly delegate to the agency "a decision of such economic and political significance"). The point here is that when Congress explicitly delegates authority to an agency over an issue of national significance, subsequent presidential involvement is natural and desirable.
278. See, e.g., Labaton, supra note 150 (discussing Bernanke's efforts to partner with the Obama administration in expanding the authority of the Fed).
279. See, e.g., Timothy Geithner, U.S. Sec'y of Treasury, Remarks on Financial Stability Plan (Feb. 10, 2009), available at http://blogs.wsj.com/economics/ 2009/02/10/geithner-remarks-onfinancial-stability-plan/tab/article/ (discussing the importance of the administration's Financial Stability Plan).
280. See, e.g., Whitman, E.P.A. Administrator, Resigns, ASSOC. PRESS, May 21, 2003, available at http://www.nytimes.com/2003/05/21/politics/21WIRE-WHIT.html (recounting disagreements between EPA Administrator Christine Todd Whitman and George W. Bush administration over environmental issues).
281. THE ODYSSEY OF HOMER 185 (George Herbert Palmer, trans. 1921).
282. See supra notes 66-67 and accompanying text.
283. See Lisa Schultz Bressman, Deference & Democracy, 75 GEO. WASH. L. REV. 761, 776 (2007) ("The administrations used broad statutes in an undemocratic fashion to take an action on a controversial issue that disregarded the likely preferences of Congress or to take a position on an issue subject to public debate without conducting any public process of its own.");
284. Jody Freeman & Adrian Vermeule, Massachusetts v. EPA: From Politics to Expertise, 2007 SUP. CT. REV. 51, 54 ("Our main suggestion for administrative law, then, is that MA v EPA is part of a trend in which the Court has at least temporarily become disenchanted with executive power and the idea of political accountability and is now concerned to protect administrative expertise from political intrusion.").
285. See Bressman, supra note 195, at 784 ("If accountability is to serve as the key to agency legitimacy then it is not unreasonable to expect representation and responsiveness, not just credit-claiming and blame-shifting.");
286. cf. Freeman & Vermeule, supra note 195, at 87 (explaining that the Court's approach in Massachusetts v. EPA "hearkens back to an older, pre-Chevron vision of administrative law in which independence and expertise are seen as opposed to, rather than defined by, political accountability, and in which political influence over agencies by the White House is seen as a problem rather than a solution").
287. See, e.g., Massachusetts v. EPA, 549 U.S. 497, 510-14 (2007) (recounting the administration's position that EPA would not regulate greenhouse gas emissions from motor vehicles even if it's newly articulated position that it had no authority to do so were determined wrong because it would conflict with the President's "comprehensive approach" to climate change);
288. Gonzales v. Oregon, 546 U.S. 243, 248-49, 267-69, 274-75 (2006) (rejecting the Attorney General's claimed authority to effectively criminalize physician-assisted suicide under the Controlled Substances Act via an interpretive rule, short-circuiting " 'earnest and profound debate' across the country" without "any consultation with anyone outside the Department of Justice who might aid in a reasoned judgment").
289. In evaluating the 2009 proposals, some have questioned whether expanding the Fed's authority would cause the agency to lose its independence and effectiveness in setting interest rates. See Labaton, supra note 150 ("Some critics have raised other concerns - that the Fed is stretching itself too thin, or compromising the political independence that is essential for setting monetary policy."). If so, expanding the Fed's authority would impose an unintended cost that should detract from its normative appeal as market stability regulator. Under our analysis, the answer will depend on whether the Fed (or the chair) can successfully wear two hats-one for the regulation of market stability and another for the setting of interest rates. Although this concern is difficult to address in the abstract, we explain in Section C below why dual roles are politically and theoretically possible.
290. Private lawsuits, principally class action lawsuits under Rule 10b-5, see 17 C.F.R. § 240.10b-5 (2009), are an important and controversial part of the enforcement mechanism for securities fraud, which we do not address here.
291. Regulation of broker-dealers is authorized by Section 15 of the Securities Exchange Act of 1934, see 15 U.S.C. § 770 (2006);
292. regulation of broker-dealers was increased by the SarbanesOxley Act of 2002, Pub. L. No. 107-204, 116 Stat 745 (2002) (codified in scattered sections of U.S.C.A.).
293. See supra Part I.B.3 and accompanying notes.
294. DOUGLAS, supra note 179, at 82,
295. quoted in Silver v. N.Y. Stock Exchange, 373 U.S. 341, 352 (1963). This was visible in Douglas's battle with the stock exchanges over their governance in the mid 1930s and in the statutory push in the Mahoney Act in 1935, which led to selfregulation of broker-dealers under the newly formed National Association of Securities Dealers under SEC supervision.
296. See Silver, 373 U.S. at 351-53.
297. The story of the odd-eighths scandal, with the data that brought the problem to light, is told in William G. Christie & Paul H. Schultz, Why Do NASDAQ Market Makers Avoid Odd-Eighth Quotes?, 49 J. FINANCE 1813 (1994).
298. SEC. & EXCHANGE COMM'N, APPENDIX TO REPORT PURSUANT TO SECTION 21(A) OF THE SECURITIES EXCHANGE ACT OF 1934 REGARDING THE NASD AND THE NASDAQ MARKET [hereinafter 21(a) REPORT APPENDIX], available at http://www.sec.gov/litigation/ investreport/nd21a-appx.txt.
299. NASD, Inc., Report of the NASD Select Committee on Structure and Governance (Sept. 15, 1995) at App. A. The Committee was appointed by the NASD Board of Governors in November 1994 in the wake of the odd eighths scandal.
300. See 21(a) REPORT APPENDIX, supra note 204, at 10-12, 16-24.
301. Pursuant to the reorganization, NASD reduced its board to eight members, five of whom would be drawn from the public sector and created a separate regulatory unit, NASD Regulation Inc., with a board of twenty-eight members that would be equally divided between industry and public representatives. In addition, the NASDAQ board was restructured to include sixteen members drawn equally from industry and the public. William G. Christie & Robert B. Thompson, Wall Street Scandals: The Curative Effects of Law & Finance, 84 WASH. U. L. REV. 1567, 1576 (2006).
302. In 2004, the SEC brought enforcement action against the specialists' firms who make markets for NYSE stocks, based on illegally trading ahead of client orders and "interpositioning" a similar practice. Phyllis Diamond & Kip Betz, SEC, NYSE Specialist Firms Reach $241M Settlement Over Trading Practices, 36 Sec. Reg. & L. Rep. (BNA) 602 (Apr. 5, 2004) (reporting agreement to pay $87 million in civil penalties and $154 million in disgorgement). The following year, the federal government indicted fifteen specialists on charges of illegally trading ahead and interpostioning, and fined the NYSE $20 million.
303. See Chad Bray, Aaron Lucchetti & Paul Davies, Two Ex-Van der Moolen Specialists Are Convicted of Securities Fraud, WALL ST. J., July 15, 2006, at A3 (reporting convictions for trading for their firm before they fulfilled customer orders);
304. Kara Scanneil & Aaron Lucchetti, Ex-Specialists Face Indictment for NYSE Deals, WALL ST. J., Apr. 12, 2005, at C1.
305. But see Government Drops Case Against Five NYSE Specialists, 38 Sec. Reg. L. Rep. (BNA) 2002 (Nov. 22, 2006) (reporting that U.S. Attorney Michael Garcia had dropped five of the fifteen indictments). During this same period, new leadership at the exchange, brought in after a controversy as to the amount of former CEO Richard Grasso's compensation, revamped the governance structure to make it more independent along the lines of the earlier NASD reforms.
306. See Richard Hill, Reed Details Proposal for Revamped Governance Structure of Embattled NYSE, 35 Sec. Reg. & L. Rep. (BNA) 1873 (Nov. 10, 2003);
307. Stephen Labaton, Different Roles and Fresh Faces Promised at Big Board, N.Y. TIMES, Oct. 17, 2003, at C1 (reporting overhaul of the NYSE board and a regulatory structure reporting to independent directors).
308. See Order Approving Proposed Rule Change to Amend the By-Laws of NASD, Exchange Act Release No. 56,145, 72 Fed. Reg. 42, 169 (July 26, 2007), available at http://sec.gov/rules/sro/nasd/2007/34-56145.pdf (SEC Order approving bylaw amendment for NASD setting up the new governance structure of FINRA, with Board to include eleven public members, ten industry members and the CEO).
309. 15 U.S.C. §7211 (2006).
310. Id. §7211(e)(4)(A) ("[T]he Commission, after consultation with the Chairman of the Board of Governors of the Federal Reserve System and the Secretary of the Treasury, shall appoint the chairperson and other... members of the Board ....").
311. Id. §7211(e)(6).
312. Id. §7217.
313. Senator Sarbanes, who gave a name to the statute that created the PCAOB, noted that "if we can structure the board well enough, it might actually have more independence from political influence than the SEC would have." Accounting Reform and Investor Protection Issues Raised by Enron and Other Public Companies: Hearing Before the S. Banking, Housing, and Urban Affairs Comm., 107th Cong. 1027 (2002).
314. 15 U.S.C. §7211(e)(2).
315. Public interest in the PCAOB recently increased when the Supreme Court heard oral arguments as to the constitutionality of the entity's structure. Free Enter. Fund v. Pub. Co. Accounting Oversight Bd., 537 F.3d 667 (D.C. Cir. 2008), cert, granted, 129 S. Ct. 2378 (2009);
316. cf. Peter L. Strauss, Free Enterprise Fund v. Public Company Accounting Oversight Board, 62 VAND. L. REV. EN BANC 51 (the first in a series of Roundtable essays about the case specifically and the PCAOB generally).
317. Press Release, U.S. Dep't of the Treasury, Henry Paulson, U.S. Sec'y of the Treasury, Remarks on the Competitiveness of U.S. Capital Markets, Address Before the Economic Club of New York (Nov. 20, 2006), http://www.ustreas.gov/ press/releases/hpl74.htm.
318. See Stephen Labaton, Treasury Chief Urges "Balance" in Regulation of U.S. Companies, N.Y. TIMES, NOV. 21, 2006, at Cl (discussing Paulson's speech in the broader political context).
319. The Committee on Capital Markets Regulation, as it was formally called, issued an interim report in November 2006. COMMITTEE ON CAPITAL MKTS. REGULATION, INTERIM REPORT (2006), available at http://www.capmktsreg.org/pdfs/ 11.30Committee-Interim-ReportREV2.pdf.
320. The other contemporaneous reports were by the U.S. Chamber of Commerce. U.S. CHAMBER OF COMMERCE, COMM'N ON THE REGULATION OF U.S. CAPITAL MKTS. IN THE 21ST CENTURY, REPORTS AND RECOMMENDATIONS (2007), available at http://www.uschamber.com/publications/reports/0703capmarketscomm.htm;
321. McKINSEY & Co., SUSTAINING NEW YORK'S AND THE U.S.' GLOBAL FINANCIAL LEADERSHIP (2007), available at http://www.nyc.gov/html/om/pdf/ny-report-final. pdf.
322. The proposed rules were issued on December 20, 2006 and final rules were promulgated in 2007. The final rules, as corrected, are described in the SEC release, Amendments to Rules Regarding Management's Report on Internal Control Over Financial Reporting, Exchange Act Release No. 55,928, Securities Act Release No. 8809, 72 Fed. Reg. 35,310 (June 27, 2007) available at http://www.sec.gov/rules/final/2007/33-8809.pdf (codified in scattered sections of 17 C.F.R. pts. 210, 228, 229, and 240).
323. The SEC issued a concept release in the summer of 2006, Concept Release Concerning Management's Reports on Internal Control Over Financial Reporting, Exchange Act Release No. 54,122, 71 Fed. Reg 40, 866 (proposed on July 18, 2006), available at http://www.sec. gov/rules/concept/2006/34-54122.pdf, and earlier in the year Chairman Cox had testified that his goal was to make section 404 work for small business, although not by removing them from coverage of the statute,
324. Tim Reason, Cose: "My Goal Is to Make 404 Work," CFO, Apr. 25, 2006, http://www.cfo.com/article.cfm/6848926.
325. Press Release, U.S. Dep't of the Treasury, Schedule for Treasury Conference on U.S. Capital Markets Competitiveness (Mar. 9, 2007), http://www.treas.gov/press/releases/hp304.htm.
326. Press Release, U.S. Dep't of the Treasury, Paulson Announces First Stage of Capital Markets Action Plan (May 17, 2007), http://www.treas.gov/press/ releases/hp408.htm.
327. Id.
328. Id.
329. Press Release, U.S. Dep't of the Treasury, Remarks by Secretary Paulson on Blueprint for Regulatory Reform (Mar. 31, 2008), http://www.treas.gov/press/ releases/hp897.htm.
330. President Reagan established the Working Group on Financial Markets in response to the stock market crashes of October 19, 1987. Exec. Order No. 12,631, 53 Fed. Reg. 9421 (Mar. 18, 1988). The Working Group was to report to the President within sixty days and periodically thereafter, and the "heads of Executive departments, agencies, and independent instrumentalities" were instructed to assist this group in its inquiries. Id.
331. See id. (explaining that one of the purposes of the group is "policy coordination").
332. A NEW FOUNDATION, supra note 134, at 10.
333. Id.
334. Id. at 51-52.
335. See Timothy L. O'Brien, A Federal Turf War Over Derivatives Control, N.Y. TIMES, May 8,1998, at D3 (describing CFTCs regulatory reform proposal).
336. See Evan N. Turgeon, Note, Boom & Bust for Whom?: The Economic Philosophy Behind the 2008 Financial Crisis, 4 VA. L. & BUS. REV. 139, 162-63 (2009) (summarizing the legislative debate surrounding the Financial Derivatives Supervisory Improvement Act of 1998).
337. See Lisa Schultz Bressman & Michael P. Vandenbergh, Inside the Administrative State: A Critical Look at the Practice of Presidential Control, 105 MICH. L. REV. 47, 68 (2006) (describing how various White House offices created coalitions with regard to "the development of EPA rules").
338. This has been the President's statutory right since 1949 and was followed by custom for most of the prior period beginning with Franklin Roosevelt who designated Joseph P. Kennedy as the first chair, followed by James M. Landis, and then William O. Douglas when Landis left to be dean of the Harvard Law School.
339. See Audio Recording: Oral History of Harold Williams, conducted by Daniel Goelzer & Amy Goodman (Jan. 19, 2006), available at http://www. sechistorical.org/collection/oral-histories/williamsH011906Transcript.pdf (describing Williams' unwillingness to remain at SEC after he lost the chairman position).
340. WILLIAM L. CARY, POLITICS AND THE REGULATORY AGENCIES 13 (1967).
341. Manuel Roig-Franzia, Credit Crisis Cassandra, WASH. POST, May 26, 2009, at C1 (describing combined efforts of Fed Chairman Allen Greenspan, Treasury Secretary Robert Rubin, future Treasury secretary Lawrence Summers, and SEC Chair Arthur Levitt against CFTC Chair Brooksley Bom's plan to release a concept paper on regulation of derivatives).
342. Andrew Ross Sorkin, Geithner Is Said to Lash Out at Regulators, N.Y. TIMES DEALBOOK, Aug. 4, 2009, http://dealbook.blogs.nytimes.com/2009/08/04/ geithner-said-to-lose-his-cool-at-regulators-meeting/?apage=2.
343. See 31 U.S.C. §1108 (2006) (providing for OMB review of annual requests for appropriations).
344. See Margaret H. Lemos, The Solicitor General as Mediator Between Court and Agency, 2009 MICH. STATE L. REV. 185, 190-91, 191 n.22, 195-96 (stating that, though the Solicitor General handles litigation by independent agencies, he is subordinate to the Attorney General and subject to at-will removal).
345. See Devins, supra note 3, at 291-301 (discussing changing relationship of Solicitor General and SEC, and the Solicitor General's willingness to prevent the SEC from advancing a position at odds with those of the administration).
346. The Department of Justice represents the United States in bringing criminal actions. See 17 C.F.R. §202.5(f) (2008) (stating that it is SEC policy to devolve responsibility for criminal prosecutions to the DOJ).
347. Kagan, supra note 14, at 2290-99.
348. Prior Chairmen Harold Williams and John Shad acted like traditional independent agency heads and either did not talk to the White House (Williams) or rebuffed OMB efforts to intervene (Shad). But Williams did meet with Treasury Secretary Mike Blumenthal, who held that position for the first 2 Vz years of President Carter's term, because he knew Blumenthal from his prior life. See Oral History of Harold Williams, supra note 235, at 4-5.
349. See Bressman & Vandenbergh, supra note 233, at 70 (demonstrating selectivity in environmental context);
350. Kagan, supra note 14, at 2307-08 (acknowledging that presidential control of regulatory policy is selective in its focus).
351. See Steve Holland, Obama Fashions a Government of Many Czars, REUTERS, May 29, 2009, http://www.reuters.com/article/newsOne/idUSTRE54S5U120090529 (describing the administration's "reliance on czars" in various regulatory contexts).
352. See Brian Wingfield, Time to Get Angry About AIG Again, FORBES STREETTALK, Feb. 3, 2010, http://blogs.forbes.com/streettalk/2010/02/03/time-to- get-angry-about-aig-again/ (describing Kenneth Feinberg as the "executive compensation czar").
353. See Press Release, Nat'l Ctr. for Pub. Policy Research, Following Obama Comments, Corporate and Environmental Interests Lobby Administration Officials on Global Warming Legislation (Feb. 11, 2010), http://www.nationalcenter.org/PR- Cap-and-Trade-021110.html (describing Carol Browner as the administration's "Climate Change Czar").
354. See John Crudele, Car Czar's Roundabout Ties to General Motors, N.Y. POST, Nov. 3, 2009, at 36 (describing Steven Rattner as the "car czar").
355. See supra notes 66-69 and accompanying text.
356. See, e.g., Alberto Alesina & Lawrence H. Summers, Central Bank Independence and Macroeconomia Performance: Some Comparative Evidence, 25 J. MONEY, CREDIT & BANKING 151, 158 (1993) ("On the other hand, as one would expect given our findings about inflation variability, there is a clear negative relationship between central bank independence and the variability of ex post real interest rates.").
357. Jon Hilsenrath, A Reshaped Fed is Likely to Gain Some Powers, Lose Others, WALL ST. J., at A2 (May 18, 2009) ("Fed officials believe critics are missing a key distinction: While the central bank has aligned itself with the Treasury on individual rescues, its broader decisions about interest rates and how much money to pump into the economy are still entirely the Fed's own. Its independence, in other words, remains intact.").
358. Alesina & Summers, supra note 251.
359. Kg., Withrow v. Larkin, 421 U.S. 35, 58 (1975) (holding that a state medical examining board's "combination of investigative and adjudicative functions does not, without more, constitute a due process violation").
360. See Lisa Schultz Bressman, Procedures As Politics in Administrative Law, 107 COLUM. L. REV. 1749, 1786-88 (2007) (discussing ex parte contacts).
361. See 5 U.S.C. §557(d) (2006) (providing that "no interested person outside the agency shall make ... to the agency, administrative law judge, or other employee who is .. . involved in the decisional process of the proceeding, an ex parte communication relevant to the merits of the proceeding," and providing remedy if such communication nonetheless occurs).
362. Kg., Action for Children's Television v. FCC, 564 F.2d 458, 469-78 (D.C. Cir. 1977) (refusing to find a due process violation as a result of ex parte contacts during informal rulemaking where the determination at issue did not involve "competing claims to a valuable privilege").
363. Edmund L. Andrews, Two Authorities on Fed Advise Congress Against Expanding Its Power, N.Y. TIMES, July 9, 2009, at B3.
364. Humphrey's Ex'r v. United States, 295 U.S. 602, 628-32 (1935).
365. Free Enter. Fund v. Pub. Co. Accounting Oversight Bd., 537 F.3d 667 (D.C. Cir. 2008) (upholding the constitutionality of PCAOB), cert, granted, 129 S. Ct. 2378 (2009).
366. 272 U.S. 52, 163-64 (1926).
367. Id. at 132.
368. 295 U.S. at 629-30.
369. Id. at 627.
370. Id. at 627-28.
371. Id. at 628, 630.
372. 357 U.S. 349, 350, 356 (1958) (upholding removal restriction for members of the War Claims Commission).
373. 487 U.S. 654 (1988).
374. Id. at 660-61.
375. Id. at 663 (citing 28 U.S.C. §596(a)(1) (Supp. V 1982)).
376. Id. at 686.
377. Id. at 689-90.
378. Id. at 691
379. Id.
380. Id. at 691-92.
381. Id. at 692;
382. see Kevin M. Stack, The Story of Morrison v. Olson; The Independent Counsel and Independent Agencies in Watergate's Wake, in PRESIDENTIAL POWER STORIES 401, 403, 435 (Christopher H. Schroeder & Curtis A. Bradley eds., 2009) (arguing that the Morrison Court upheld the removal provisions by analogizing independent counsel to the Watergate special prosecutor).
383. Morrison, 487 U.S. at 693.
384. Id. at 694;
385. see Bowsher v. Synar, 478 U.S. 714, 733-34 (1986) (holding that Comptroller General, as an officer of the legislative branch subject to congressional removal, violated separation of powers by retaining executive power to direct budget cuts);
386. INS v. Chadha, 462 U.S. 919, 956-59 (1983) (holding that legislative veto power authorizing action by one house of Congress violated Article I requirements of bicameralism and presidential presentment).
387. Morrison, 487 U.S. at 693-94.
388. Id. at 686.
389. Id.
390. (explaining Myers v. United States, 272 U.S. 52 (1926)).
391. Id. at 691.
392. Id. at 695.
393. Id. at 696.
394. Id. (quoting 28 U.S.C. §592(b)(1) (Supp. V 1982)).
395. Id. The Court also rejected the arguments that the Act constituted judicial usurpation of executive power by giving the special division of the D.C. Circuit a role in appointing an independent counsel. Id. at 675.
396. See Stack, supra note 276, at 442-43 ("By viewing the good cause restriction as allowing the President adequate authority to supervise the independent counsel, the Court also opened up the question of how much protection its validation of removal protections really provide to the independent counsel- or to the independent agencies.").
397. Id. at 408, 420 (discussing the relationship between the creation of the independent counsel and President Nixon's termination of the first Watergate special prosecutor).
398. Humphrey's Ex'r v. United States, 295 U.S. 602, 628 (1935).
399. See 12 U.S.C. §242 (2006) (describing appointment, tenure, and removal for the Board of Governors of the Fed).
400. See Strauss, supro note 3, at 590-91(including appointment power among means for the President to influence independent agencies).
401. See 12 U.S.C. §242.
402. See supra notes 158-160 and accompanying text.
403. Morrison v. Olson, 487 U.S. 654, 696 (1988).
404. Id.
405. See supra notes 193-197 and accompanying text.
406. 15 U.S.C. §7211(e)(6) (2006) (providing for PCAOB member removal by SEC for "good cause");
407. see supra note 48 (citing authority for proposition that SEC members are removable only "for cause").
408. Free Enter. Fund v. Pub. Co. Accounting Oversight Bd., 537 F.3d 667 (D.C. Cir. 2008), cert. granted, 129 S. Ct. 2378 (2009).
409. Id. at 680-81.
410. Id. at 680.
411. Id. (citing Strauss, supra note 3, at 594-95).
412. Id. (citing Strauss, supra note 3, at 596).
413. Id. at 680-81.
414. Id. at 680.
415. Id. at 680-81 (citing 15 U.S.C. §§7217(d)(1), 7202(c) (2006)).
416. Id. at 681 (citing §7219(b), (d)).
417. Id. at 686 (Kavanaugh, J., dissenting).
418. Id.
419. See supra notes 213-218 and accompanying text. 310.
420. Patricia Zengerle & Ross Colvin, Factbox: Health Care, War, Climate on Obama's Tough Agenda, REUTERS, Aug. 24, 2009, http://www.reuters.com/article/ GCA-HealthcareReform>/idUSTRE57N5M520090824.
421. This was formerly the Health Care Financing Administration within HHS. Susan Bartlett Foote, Why Medicare Cannot Promulgate a National Coverage Rule: A Case of Regula Mortis, 27 J. HEALTH POL. POL'Y & L. 707, 709 n.1 (2002). The Social Security Administration, which in its early days had cabinet level status, and later was put with the Department of Health, Education and Welfare, has been an independent agency since 1995. Id.;
422. Phyllis E. Bernard, Social Security and Medicare Adjudications at HHS: Two Approaches to Justice in an Ever-Expanding Agency, 3 HEALTH MATRIX 339, 378 (1993). It is headed by a single administrator rather than a board. Bernard, supra, at 378. Yet SSA and CMS remain closely linked despite their different status. Both are headquartered outside the beltway in the Baltimore suburb of Woodlawn, and the nationwide SSA offices provide the registration point for those who qualify for Medicare.
423. Former Senate majority leader Tom Daschle was the original choice for both roles. After his withdrawal, Kansan Governor Kathleen Sebelius was named to the cabinet position and former HCFA Administrator Nancy-Ann De Parle was named to the czar position as director of the White House office of Health Reform. Michael Fletcher, Nancy-Ann DeParle and Kathleen Sebelius Announced to Lead Obama Health Effort, WASH. POST, Mar. 2, 2009, http://voices. washingtonpost.com/44/2009/03/02/nancy-ann-deparle-announced-as.html.
424. America's Affordable Health Choices Act, H.R. 3200, 111th Cong. §141 (2009) (establishing HCA).
425. The House bill directed the HCA to consult and coordinate with a variety of other regulators, including state insurance regulators, the Secretaries of the Treasury (before specifying the benefits to be made available under each participating health benefit plan), Health and Human Services (prior to entering into memoranda of understanding with each state), and Indian tribes and tribal organizations. Id. §143.
426. Id. §142 (describing functions).
427. Id.
428. Id.
429. Id. §141(b)(2) ("The provisions of paragraphs 2, 5, and 7 of subsection (a) (relating to compensation, terms, general powers, rulemaking, and delegation) of section 702 of the Social Security Act (42 U.S.C. 902) shall apply to the Commissioner and the Administration in the same manner as such provisions apply to the Commissioner of Social Security and the Social Security Administration."). The Social Security Act contains a good-cause removal provision for its commissioner. 42 U.S.C. §902(a)(3) (2006) ("An individual serving in the office of Commissioner may be removed from office only pursuant to a finding by the President of neglect of duty or malfeasance in office."). The House health care bill did not cross-reference that particular section of the Social Security Act.
430. Letter from President Barack Obama to Senators Edward Kennedy & Max Baucus (June 2, 2009) (released by the White House office of Press Secretary), available at http://www.healthreform.gov/2009healthcareletterpres.pdf.
431. Medicare Payment Advisory Committee (MedPAC) Reform Act of 2009, S. 1380, 111th Cong. (2009) (Senate bill);
432. H.R. 2718,111th Cong. (2009) (House bill).
433. Ezra Klein, An Interview with Jim Cooper, WASH. POST, June 10, 2009, http://voices.washingtonpost.com/ezra-klein/2009/06/remember-a-few-years-ago- how-e.html.
434. Id.
435. See supra text accompanying note 202.
436. See Patient Protection and Affordable Care Act, amending H.R. 3590 (2009), §3403 (creating the Independent Medicare Advisory Board), §10320 (expanding the scope of the Independent Medicare Advisory Board and changing its name to the Independent Payment Advisory Board). The IPAB can propose plans if the Chief Actuary of the Centers for Medicare and Medicaid Services determines that the growth rate exceeds a target growth rate. The IPAB cannot make recommendations as to certain issues, such as rationing health care and raising revenue or premiums.
437. Id. § 3403(e).
438. Id. § 3403(g).
439. Id. The President can appoint the remaining three members without mandated consultation with an individual legislative leader.
440. Ezra Klein, How Obama Plans to Reform Medicare, WASH. POST, June 3, 2009, http://voices.washingtonpost.com/ezra-klein/2009/06/how-obama-plans-to-reform- medi.html.
441. Id.
442. See Clean Air Act, 42 U.S.C. §7521(a)(1) (2006);
443. Massachusetts v. EPA, 549 U.S. 497, 528-29 (2007) (holding that carbon dioxide satisfies the definition of "pollutant" in the Clean Air Act).
444. See Energy Policy and Conservation Act, 42 U.S.C. §6201(5) (2006) (stating as among purpose of the Act promotion of energy efficient vehicles).
445. See Massachusetts v. EPA, 549 U.S. at 510-14, 533-34 (rejecting the EPA's refusal to regulate greenhouse gases for policy reasons, including the Bush Administration's preference for a "comprehensive approach").
446. Id. at 528-29.
447. Id. at 533-34. Subsequently, in Massachusetts v. EPA, the Supreme Court rejected the EPA's arguments, holding that greenhouse gases constitute "pollutants" for purposes of the statute and therefore required regulation upon a finding that they endanger human health, regardless of the President's contrary wishes. Id. at 528-29, 534-35.
448. 42 U.S.C. §7543(b) (2006).
449. See Micheline Maynard, E.P.A. Denies California Emission's Waiver, N.Y. TIMES, Dec. 19, 2007, available at http://www.nytimes.com/2007/12/19/washington/ 20epa-web.html>(describing role of Bush administration).
450. See Memorandum, State of California Request for Waiver under 42 U.S.C. 7543(b), the Clean Air Act, 74 Fed. Reg. 4905 (Jan. 26, 2009) (directing, six days after President Obama's inauguration, the EPA administrator to reassess the Bush administration's decision to deny California's waiver request);
451. Jim Tankersley, California Wins EPA Waiver on Greenhouse Emissions, L.A. TIMES, June 30, 2009, at A6, available at http://articles. Iatimes.com/2009/jun/ 30/nation/na-california-waiver30 (reporting that the Obama administration granted California's waiver request).
452. Kent Garber, Obama's Energy and Environment Team Includes a Nobel Laureate, Veteran Regulators, U.S. NEWS & WORLD REP., Dec. 11, 2008, http://www.usnews. com/articles/news/obama/200 8/12/11/obamas-energy-and- environment-team-includes-a-nobellaureate-veteran-regulators.html?PageNr=1.
453. Obama Names First 'Climate Czar' for U.S., Dec. 15, 2008, http://www.cnn.com/2008/WORLD/americas/12/15/eco.obamaenergyteam/index.html.
454. Garber, supra note 338.
455. See Jeff Mason, Obama "Flexible" on Climate Legislation, REUTERS, Apr. 8, 2009;
456. Obama Implores Senate to Pass Climate Bill, ASSOCIATED PRESS, June 27, 2009,.
457. American Clean Energy and Security Act of 2009, H.R. 2454, 111th Cong. §311 (2009) (containing new §702 and §703 to the Clean Air Act).
458. Id. (containing new §702 of the Clean Air Act). In addition to creating a cap-and-trade system to reduce nation-wide greenhouse gas emissions, the bill contains other major provisions, including those aimed at promoting renewable sources of energy, carbon capture and sequestration technologies, low-carbon transportation fuels, clean electric vehicles, energy efficient buildings, and green jobs.
459. See generally id.
460. John M. Broder, House Passes Bill to Address Threat of Climate Change, N.Y. TIMES, June 26, 2009, available at http://www.nytimes.com/2009/06/27/us/ politics/27climate.html.
461. H.R. 2454, 111th Cong. §112 (2009) (creating a new §813 of the Clean Air Act for carbon capture and sequestration).
462. Id. §311 (containing new §702 and §703 of the Clean Air Act for capping greenhouse gas emissions).
463. Id. (containing new §732 of the Clean Air Act for offsets). Other agencies would have a role in the cap-and-trade program. For example, the Department of Agriculture will be responsible for determining which domestic agricultural activities qualify as offsets. Id. §321. The President himself would be required to "establish an interagency working group on carbon market oversight." American Clean Energy and Security Act of 2009, H.R. REP. No. 111-137 (2009), at 213 (describing §341, which amends §401(d) of the Federal Power Act).
464. H.R. REP. NO. 111-137, at 209 (describing new §401(b)); Katherine Ling & Ben Geman, Senate Dems Wrestle Over Carbon Market Regs, N.Y. TIMES, July 24, 2009, available at http://www.nytimes.com/cwire/2009/07/24/ 24climatewire-senate-dems-wrestle-over-carbon-market-regs-91367.html
465. H.R. REP. 111-137, at 420 (describing new §351-58 of the Commodity Exchange Act (7 U.S.C. §2)).
466. Congressional Research Service Summary of H.R. 2998, 111th Cong. (2009), http://thomas.loc.gov/cgi-bin/bdquery/z?d111: HR02998:D&summ2=m& (summarizing the relevant section as included in a slightly different version of the legislation). Some senators have already reflected concern about these provisions and the precise market mechanisms may change, though they are likely remain in the hands of independent agencies.
467. See Ling & Geman, supra note 348.
468. Jessica Leber, Forest offsets Give Regulators Some Tough Nuts to Crack, N.Y. TIMES, May 27, 2009, available at http://www.nytimes.com/cwire/2009/05/27/ 27climatewire-forest-offsets-give-epa-regulators-some-toug-91999.html
469. American Clean Energy and Security Act of 2009, H.R. 2454, 11th Cong. §311 (2009) (containing new §731 to the Clean Air Act).
470. Id. (new §731(a)).
471. Id. (requiring the Board to consider "(A) the availability of a representative data set for use in developing the activity baseline; (B) the potential for accurate quantification of greenhouse gas reduction, avoidance, or sequestration for an offset project type; (C) the potential level of scientific and measurement uncertainty associated with an offset project type; and (D) any beneficial or adverse environmental, public health, welfare, social, economic, or energy effects associated with an offset project type") (new §731(c)(1)).
472. Id. (new §731(b)).
473. See Robert W. Hahn, Climate Policy: Separating Fact from Fiction, 33 HARV. ENVTL. L. REV. 557, 558 (2009) ("The public good nature of this problem means that each country has an incentive to free ride on the efforts of others, and that widespread cooperation among countries will eventually be needed if we are to make headway on limiting global emissions.").
474. William D. Nordhaus, Reflections on the Economics of Climate Change, 7 J. ECON. PERSP., Fall 1993, at 11,18.
475. See Kenneth Stier, Senate to Take up Landmark Climate Change Legislation, June 2, 2008, available at http://www.cnbc.com/id/24891046 ("It seems unlikely that as American families face harsh economic times that any Senator would dare stand on the Senate floor and vote in favor of significantly increasing the price of gas at the pump and cost millions of American jobs - all for no environmental gain." (quoting Senator James Inhofe)).
476. See Massachusetts v. EPA, 549 U.S. 497, 534-35 (2007) (rejecting presidential policy reasons for refusing to regulate greenhouse gases under the Clean Air Act).
477. The Pew Research Center for the People and the Press, Survey Reports, Economy, Jobs Trump All Other Policy Priorities in 2009, Jan. 22, 2009, available at http://people-press.org/report/485/economy-top-policy-priority. Fifteen other countries registered strong support for increasing the level of governmental involvement. Only Iraq and the Palestinian territories joined the U.S. on the other side.