The purpose and nature of regulatory agencies is to handle the complexities and technicalities required to carry out specific laws in the public interest. Critics have observed that the regulatory agencies have been captured by the very industries and firms they are responsible for regulating.
U.S. Government BureaucracyPOSC 101, Fall 2011 - Professor Wallace
The Nature of Bureaucracy• Bureaucracy - A large organization that is structured hierarchically to carry out specific functions (public and private). • Any large corporation or public institution can be considered a bureaucracy • Private corporations have a single set of leaders. • Public bureaucracies do not have a single set of leaders.
The Nature of Bureaucracy• Weberian Model - Developed by German sociologist Max Weber, who viewed bureaucracies as rational, hierarchical organizations in which decisions are based on logical reasoning. • Organized hierarchically and governed by formal procedures • Power flows from the top downward
The Nature of Bureaucracy • Acquisitive Model - Views top-level bureaucrats as seeking to expand the size of their budgets and staffs to gain greater power. – Top-level leaders always try to expand and to avoid any reductions in their budgets – Public bureaucrats, on the other hand, want to maximize the size of their budgets and staff because they are powerful symbols to the public sector
The Nature of Bureaucracy• Monopolistic Model - Lack of competition in either circumstance leads to inefficient and costly operations. • Federal bureaucracies have no competitors and act accordingly; inefficient • There is no incentive to adopt cost-cutting measures or to produce more, because there is no competition
The Nature of Bureaucracy MODEL MAIN TRAITS PROBLEMS Hierarchal Specialization Weber Division of Labor Lethargy Standard Operating Procedure ExpansionAcquisitive Competition Turf WarsMonopolistic Lack of Competition Inefficiency- In the United States, national bureaucracies provide financial assistance for their state counterparts.- Some bureaucracies are administrative agencies that are responsible for regulating private companies (FCC, FAA, SEC, etc.).
The Nature of Bureaucracy • Bureaucracies in the United States enjoy a greater deal of autonomy than do federal or national bureaucracies in many other nations. • The annual federal budget for bureaucracies in the United States is $3.7 trillion dollars. • Administrative Agencies - federal, state, or local government unit created and authorized by legislative bodies to administer and enforce specific laws.
The Size of Bureaucracy• The national bureaucracy began with three departments in 1789: – The Department of State, the Department of War, and the Department of Treasury plus the Office of the Attorney General – Today there are approx. 2.8 million employees in the federal bureaucracy. The government is responsible for 16 percent of civilian employment in local, state, and national governments. Spending by all levels of government was equal to 11% of the nation’s gross domestic product in 1929. For fiscal year 2010, it exceeds 44 percent.
Federal Organization• Cabinet Depts. – 15 within the executive branch (directly • Each department is headed accountable to the President). by a secretary (except for • Line Organizations - An the Justice administrative unit that is Department, which is directly accountable to the headed by the attorney president. general) who is confirmed • Cabinet Departments are created by the Senate by Congress when the need • Each department has arose. The most recent several levels of department is Homeland undersecretaries, assist Security ant secretaries, and other personnel.
Federal Organization • Independent Executive Agency - Not part of a Cabinet department but reports directly to the president who appoints chief officials. – Environmental Protection Agency (EPA), Central Intelligence Agency (CIA), National Science Foundation (NSF), and General Service Administration (GSA)
Federal Organization• Independent Regulatory Agencies - Outside the major executive departments charged with making & implementing rules & regulations. – Nuclear Regulatory Commission (NRC), Federal Communication Commission (FCC), Federal Reserve (Fed), & the Federal Trade Commission (FTC) – Captured – An industry regulated by a government agency gains direct or indirect control over agency personnel and decision makers.
Federal Organization • Government Corporation – Quasi-business enterprise, used when activities are primarily commercial. • Have a board of directors, but no shareholders & all profits are put back into the corporation. • Tennessee Valley Authority (TVA), United States Postal Service (USPS), Federal Deposit Insurance Corporation (FDIC), American Track (AMTRAK
Federal Organization• Nationalization - Takeover of a business enterprise by the national government. Recently, the word has been used to describe temporary takeovers that are similar to bankruptcy proceedings. – Nationalization • Amtrak (1971); Savings & Loans (1980’s); Airport Security (2001); Fannie Mae/Freddie Mac (2008); General Motors (2009). – Preferred Stock
Staffing the Bureaucracy • Two categories • Political Appointees: The president must take into consideration an individual’s work experience, intelligence, political party affiliation, and personal characteristics. • Civil Servants: stay in office regardless of who is elected president. This ensures that the bureaucracy is a self- maintained, long-term element within government.
Staffing the Bureaucracy• Political appointees face heavy scrutiny: – Tom Daschle (Health and Human Services) withdrew because he failed to pay taxes on a car and driver assigned to him when he was a lobbyist. – Treasury Secretary Timothy Geithner was confirmed despite failing to pay years of previously owed taxes. – New Mexico Governor Bill Richardson (Commerce) withdrew when he was the subject of a grand jury investigation for peddling. He was later cleared.
Staffing the Bureaucracy • Political Appointees: • Presidential appointments are prestigious, but don’t accomplish much. • The average appointee term of service is less than two years. • Most appointees are not qualified for the position they hold and serve as mereFormer OMB Director Peter Orszag figureheads. • Subordinates are difficult to fire.
Staffing the Bureaucracy• Civil Servants – formerly a Spoils System: the awarding of government jobs to political supporters and friends.• As the size of the bureaucracy expanded by 300 percent between 1851 and 1881, reformers demanded a merit system for job appointments.• In 1883, the Pendleton Act or Civil Service Reform Act was passed.• Created the Civil Service Commission
Staffing the Bureaucracy • Merit System - the selection, retention, and promotion of government employees on the basis of competitive examinations. • The Pendleton Act (Civil Service Reform Act) established the principle of employment on the bass of merit • Civil Service Commission - Personnel agency created in 1883.
Staffing the Bureaucracy• The Civil Service Reform Act of 1978 – Abolished the Civil Service Reform Act of 1883 and created two new federal agencies – OPM (Office of Personnel Management) – MSPB (Merit Systems Protection Board) – Federal Labor Relations Authority
Staffing the Bureaucracy • The Political Activities Act of 1939 (the Hatch Act) – Prohibited federal employees from actively participating in the political management of campaigns. – Forbade the use of federal authority to influence nominations and elections and outlawed the use of bureaucratic rank to pressure federal employees to make political contributions.
Staffing the Bureaucracy• Congress lessened the Hatch Act in 1993, when it passed the Federal Employees Political Activities Act of 1993. – This act allowed federal employees to run for office in nonpartisan elections, participate in voter-registration drives, make campaign contributions to political organizations, and campaign for candidates in partisan elections. www.osc.gov/documents/hatchact/haflyer.pdf
Reform Attempts • Government in the Sunshine Act – Law requires all committee-directed federal agencies to conduct their business regularly in public session. • Information Disclosure • Curbs on Information Disclosure • Sunset Legislation - Laws requiring that existing programs be reviewed regularly for their effectiveness and be terminated unless specifically extended as a result of these reviews (Bush tax cuts).
Reform Attempts • Privatization • Government services are replaced by services form the private sector. • The problem is the lack of oversight with government contractors. • The government is trying to reduce costs by not relying on government contractors and providing in-house services.http://www.downsizinggovernment.org/privatization
Bureaucrats as Politicians • Congress delegates the daily operations of its powers to administrative agencies through enabling legislation. – Enabling Legislation: A statue enacted by Congress that authorizes the creation of an administrative agency and specifics the name, purpose, composition, functi ons, and powers of the agency being created. – This makes bureaucrats unelected policymakers.
Bureaucrats as Politicians• When a bill is signed into law, it is given to the agency and published in the Federal Register, for all who are interested to read and comment.• Comments are reviewed by the agency when it drafts the final version of the law. 60 day waiting period for enforcement after publication in The Federal Register.• Iron Triangle: The three-way alliance among legislators, bureaucrats, and interest groups to make or preserve policies that benefit their respective interests
Congressional Controls • Refusal to appropriate or authorize funds. • Oversight by congressional committees. • Request for Government Accountability Office (GAO) or Congressional Budget Office (CBO) to conduct studies on the agency. • Implement the Congressional Review Act.