Harold Shapiro

Every year, hundreds of federal agencies issue thousands of guidance documents designed to increase transparency and give the public insight into how they operate. The Food and Drug Administration, for instance, has issued more than 50 guidance documents in the last 90 days.

But Yale Law professor Nicholas Parrillo says these guidelines can have inadvertent consequences. On March 14, he testified before the U.S. House of Representatives Committee on Oversight and Government Reform to share his research on the guidelines’ consequences — positive and negative.

“Guidance is an important means for increasing the transparency of regulation,” Parrillo explained in his testimony. “When an agency chooses individual targets for enforcement or decides individual applications [of its policies] … the case-by-case approach can subject regulated parties to uncertainty and unequal treatment.”

On the other hand, he added, guidance can undermine transparency if it substitutes for “notice-and-comment rulemaking” — a more official, but costly, method of developing agency policies with input from the public. “We confront what you might call a transparency trade-off,” he said.

The hearing, titled “Shining Light on the Federal Regulatory Process,” was designed to evaluate the ways in which these public statements affect agency operations. Parrillo was one of five experts invited to testify before the committee, chaired by Rep. Trey Gowdy, R-S.C. After each delivered an opening statement, the five experts answered questions posed by members the committee.

Rep. Gary Palmer, R-Ala., a member of the Committee on Oversight and Government Reform, said it is important that Congress reclaims legislative authority that has been usurped by the executive branch and government agencies.

“Congress as a body has ceded much of its by lawmaking authority to the executive branch by writing vague laws that give federal agencies wide latitude to interpret laws in a way that fits their agenda,” he said.

Parrillo’s testimony was based primarily on research he conducted from 2016 to 2017 on federal regulation. For the researched, he interviewed 135 people whose work relates directly to the federal bureaucracy — both bureaucrats and people affected by their decisions, Parrillo told the News.

In particular, his testimony focused on the various ways guidance documents issued by federal agencies can be used by the government.

“My research is about the potential for guidance documents to operate like binding laws even though they’re not supposed to,” he explained. “I conclude … that bureaucracies do sometimes follow guidance so closely as to make it like binding law — something they’re not supposed to do — but this inflexibility isn’t normally something the bureaucracy is doing deliberately. Indeed it can be a response to pressures in favor of consistency and predictability that we wouldn’t want the government simply to ignore.”

During the hearing, Parrillo discussed the distinct roles that lawmaking and guidance policy play in agency operations and said that these should not substitute for one another. He added, however, that the public and businesses often desire guidance policies in order to better understand how agencies will operate, noting that agencies can easily be accused of favoritism if they do not adhere to these documents.

Rep. Mark Meadows, R-N.C., a member of the Committee on Oversight and Government Regulation, echoed Parrillo’s concerns during the hearing, stating that government agencies overstep their power when they treat these policies as binding.

“There is no doubt that federal agencies play an important role in our government,” he said. “But they should still play by the rules laid down by Congress.”

The U.S. House Committee on Oversight and Government Regulation consists of 42 congressmen, 24 Republicans and 18 Democrats.

Niki Anderson | niki.anderson@yale.edu