Independent Agency Overview

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Independent agencies of the Federal government of the United States are those agencies that exist outside of the United States federal executive departments.

Established through separate statutes passed by the United States Congress, each respective statutory grant of authority defines the goals the agency must work towards, as well as what substantive areas, if any, over which it may have the power of rulemaking. These agency rules (or regulations), while in force, have the power of federal law.

Contents

Overview

The federal executive departments are the major operating units of the federal government, but many other agencies have important responsibilities for serving the public interest and carrying out government operations.

Independent agencies are not part of a fourth branch of government, instead, they exercise executive functions outside of an executive department. (Most are part of the executive branch, although a few independent agencies are part of the legislative branch under Congress, such as the Government Accountability Office (formerly called the General Accounting Office), the Library of Congress, the Congressional Research Service, and the United States Government Printing Office).

The nature and purpose of independent agencies vary widely. Some are regulatory agencies with powers to supervise certain sectors of the economy. Others provide special services either to the government or to the people. In most cases, the agencies have been created by Congress to deal with matters that have become too complex for the scope of ordinary legislation. In 1970, for example, Congress established the United States Environmental Protection Agency|Environmental Protection Agency to coordinate governmental action to protect the environment.

The Administrative Procedure Act establishes the protocols for agency rulemaking and decisions in agency enforcement proceedings. The APA also provides for direct judicial review of agency action in the United States Court of Appeals for the District of Columbia Circuit (and then on appeal to the Supreme Court of the United States), once all intra-agency procedures have been exhausted.

The D.C. Circuit can uphold the regulation as a valid exercise of statutory authority by the agency, or it can remand back to the agency for further consideration and information gathering. Decisions and rules must be sufficiently justified by the agency to withstand judicial review. If there is no established factual or rational basis for the agency's actions, the court will not infer or assume one.

Functional characteristics

Independent agencies can be distinguished from the federal executive departments and other executive agencies by their structural and functional characteristics. (Pierce, Richard; Shapiro, Sidney A.; Verkuil, Paul (5th ed. 2009), Administrative Law and Process, Section 4.4.1b, p. 101, Foundation Press ISBN 1599414252)

Congress can also designate certain agencies explicitly as "independent" in the governing statute, but the functional differences have more legal significance. (Shane,Peter, Merrill, Richard; Mashaw, Jerry (2003), Administrative Law: The American Public Law Process pp.228-29, Thomson-West: ISBN 9780314144256) [1]

While most executive agencies have a single director, administrator, or secretary appointed by the President of the United States, independent agencies almost always have a commission, board, or similar collegial body consisting of five to seven members who share power over the agency. (Pierce, Richard; Shapiro, Sidney A.; Verkuil, Paul (5th ed. 2009), Administrative Law and Process, Section 4.4.1b, p. 101, Foundation Press ISBN 1599414252) (This is why many independent agencies include the word "Commission" or "Board" in their name).

The President appoints the commissioners or board members, subject to United States Senate confirmation, but they often serve with staggered terms, and often for longer terms than a usual four-year Presidential term, (Pierce, Shapiro, & Verkuil (2009) p. 102.) meaning most Presidents will not have the opportunity to appoint all the commissioners of a given independent agency.

Normally the President can designate which Commissioner will serve as the Chairperson. (Pierce, Shapiro, & Verkuil (2009) p. 102.) Normally there are statutory provisions limiting the President's authority to remove commissioners, typically for incapacity, neglect of duty, malfeasance, or other good cause. (See, e.g., Humphrey's Executor v. United States, 295 U.S. 602 (1935). In addition, most independent agencies have a statutory requirement of bipartisan membership on the commission, so the President cannot simply fill vacancies with members of his own political party. (Pierce, Shapiro, & Verkuil (2009) p. 102.)

In reality, the high turnover rate among these commissioners or board members means that most Presidents have the opportunity to fill enough vacancies to constitute a voting majority on each independent agency commission within the first two years of the first term as President. (Shane, Merrill, Mashaw (2003) p. 230; Pierce, Shapiro, & Verkuil (2009) p. 102.)

In some famous instances, Presidents have found the independent agencies more loyal and in lockstep with the President's wishes and policy objectives than some dissenters among the executive agency political appointments. (Shane, Merrill, Mashaw (2003) p. 231.)

Presidential attempts to remove independent agency officials have generated most of the important Supreme Court of the United States legal opinions in this area. (Pierce, Shapiro, & Verkuil (2009) p. 102.) Presidents normally do have the authority to remove heads of independent agencies, but they must meet the statutory requirements for removal, such as demonstrating that the individual has committed malfeasance. In contrast, the President can remove regular executive agency heads at will.

If the independent agency exercises any executive powers like enforcement, and most of them do, Congress cannot participate in the regular removal process of commissioners. See Bowsher v. Synar, 478 U.S. 714 (1986), Buckley v. Valeo, 424 U.S. 1 (1976).

Constitutionally, Congress can only participate directly in impeachment proceedings. Congress can, however, pass statutes limiting the circumstances under which the President can remove commissioners of independent agencies. (Humphrey's Executor v. United States 295 U.S. 602 (1935))

Members of Congress cannot serve as commissioners on independent agencies that have executive powers, (Buckley v. Valeo, 424 U.S. 1 (1976)) nor can Congress itself appoint the commissioners - the Appointments Clause of the Constitution vests that power in the President. See Myers v. United States, 272 U.S. 52 (1926); Buckley v. Valeo, 424 U.S. 1 (1976).

The Senate does participate, however, in appointments through "advice and consent," which occurs through confirmation hearings and votes on the President's nominees.

Examples

The Central Intelligence Agency (CIA) coordinates the intelligence activities of certain government departments and agencies; collects, correlates, and evaluates intelligence information relating to national security; and makes recommendations to the United States National Security Council within the Executive Office of the President of the United States.

The Commodity Futures Trading Commission (CFTC) regulates commodity futures and option markets in the United States. The agency protects market participants against manipulation, abusive trade practices and fraud. Through effective oversight and regulation, the CFTC enables the markets to serve better their important functions in the nation's economy providing a mechanism for price discovery and a means of offsetting price risk.

The United States Environmental Protection Agency (EPA) works with state and local governments throughout the United States to control and abate pollution in the air and water and to deal with problems related to solid waste, pesticides, radiation, and toxic substances. EPA sets and enforces standards for air and water quality, evaluates the impact of pesticides and chemical substances, and manages the "Superfund" program for cleaning toxic waste sites.

The Federal Election Commission (FEC) oversees campaign financing for all federal elections. The Commission oversees election rules as well as reporting of campaign contributions by the candidates.

The Federal Communications Commission (FCC) is charged with regulating interstate and international communications by radio, television, wire, satellite, and cable. It licenses radio and television broadcast stations, assigns radio frequencies, and enforces regulations designed to ensure that cable rates are reasonable. The FCC regulates common carriers, such as telephone and telegraph companies, as well as wireless telecommunications service providers.

The Board of Governors of the Federal Reserve System is the governing body of the Federal Reserve System (frequently referred to as "the Fed" [2], the central bank of the United States.

It conducts the nation's monetary policy by influencing the volume of credit and money in circulation. The Federal Reserve regulates private banking institutions, works to contain systemic risk in financial markets, and provides certain financial services to the U.S. government, the public, and financial institutions.

The Federal Trade Commission (FTC) enforces federal antitrust and consumer protection laws by investigating complaints against individual companies initiated by consumers, businesses, congressional inquiries, or reports in the media. The commission seeks to ensure that the nation's markets function competitively by eliminating unfair or deceptive practices.

The General Services Administration (GSA) is responsible for the purchase, supply, operation, and maintenance of federal property, buildings, and equipment, and for the sale of surplus items. GSA also manages the federal motor vehicle fleet and oversees telecommuting centers and child care centers.

The National Aeronautics and Space Administration (NASA) was established in 1958 to run the American space program. It placed the first American satellites and astronauts in orbit, and it launched the Apollo spacecraft that landed men on the moon in 1969. Today, NASA conducts research aboard earth-orbiting satellites and interplanetary probes, explores new concepts in advanced aerospace technology, and operates the U.S. fleet of manned space shuttle orbiters.

The National Archives and Records Administration (NARA) preserves the nation's history by overseeing the management of all federal records. The holdings of the National Archives include original textual materials, motion picture films, sound and video recordings, maps, still pictures, and computer data. The Declaration of Independence, the U.S. Constitution, and the Bill of Rights are preserved and displayed at the National Archives building in Washington, D.C.

The National Labor Relations Board (NLRB) administers the principal United States labor law, the National Labor Relations Act. The board is vested with the power to prevent or remedy unfair labor practices and to safeguard employees' rights to organize and determine through elections whether to have a union as their bargaining representative.

The National Science Foundation (NSF) supports basic research and education in science and engineering in the United States through grants, contracts, and other agreements awarded to universities, colleges, and nonprofit and small business institutions. The NSF encourages cooperation among universities, industry, and government, and it promotes international cooperation through science and engineering.

The National Transportation Safety Board (NTSB) investigates all commercial aviation accidents in the United States, and certain major railroad and other accidents.[3]

The Office of Personnel Management (OPM) is the federal government's human resources agency. It ensures that the nation's civil service remains free of political influence and that federal employees are selected and treated fairly and on the basis of merit. OPM supports agencies with personnel services and policy leadership, and it manages the Federal Employees Retirement System and health insurance program.

The Peace Corps, founded in 1961, trains and places volunteers to serve in foreign countries for two years. Peace Corps volunteers, now working in 74 nations, assist in agricultural-rural development, small business, health, natural resources conservation, and education.

The Small Business Administration (SBA) was created in 1953 to advise, assist, and protect the interests of small business concerns. The SBA guarantees loans to small businesses, aids victims of floods and other natural disasters, promotes the growth of minority-owned firms, and helps secure contracts for small businesses to supply goods and services to the federal government.

The Selective Service System (SSS) is an independent federal agency operating with permanent authorization under the Military Selective Service Act (50 U.S.C. App. 451 et seq.). It is not part of the Department of Defense; however, it exists to serve the emergency manpower needs of the Military by conscripting untrained manpower, or personnel with professional health care skills, if directed by Congress and the President in a national crisis. Its statutory missions also include being ready to administer an alternative service program, in lieu of military service for men classified as conscientious objectors.

The Social Security Administration (SSA) manages the nation's social insurance program, consisting of retirement, disability, and survivors benefits. To qualify for these benefits, most American workers pay Social Security taxes on their earnings; future benefits are based on the employees' contributions. SSA was part of the U.S. Department of Health and Human Services until the early 1990s.

The Securities and Exchange Commission (SEC) was established to protect investors who buy stocks and bonds. Federal laws require companies that plan to raise money by selling their own securities to file reports about their operations with the SEC, so that investors have access to all material information. The commission has powers to prevent or punish fraud in the sale of securities and is authorized to regulate stock exchanges.

The United States Agency for International Development (USAID) administers U.S. foreign economic and humanitarian assistance programs in the developing world, as well as in Central and Eastern Europe and the New Independent States of the former Soviet Union. The agency supports programs in four areas — population and health, broad-based economic growth, environment, and democracy.

The United States International Trade Commission (USITC) provides trade expertise to both the legislative and executive branches of government, determines the impact of imports on U.S. industries, and directs actions against certain unfair trade practices, such as patent, trademark, and copyright infringement.

The United States Postal Service is operated by an autonomous public corporation that replaced the Post Office Department in 1971. The Postal Service is responsible for the collection, transportation, and delivery of the mails, and for the operation of thousands of local post offices across the country. It also provides international mail service through the Universal Postal Union and other agreements with foreign countries.

An independent Postal Rate Commission, also created in 1971, helps the Postal Service set the rates for different classes of mail by holding hearings on rates proposed by the Postal Service, and recommending rates to the Postal Service Board of Governors, which in turn may accept or reject the rates. As of February 2006, legislation had passed both houses of Congress greatly increasing the regulatory powers of the Postal Rate Commission.

The Federal Retirement Thrift Investment Board is one of the smaller Executive Branch agencies, with just over 100 employees. It was established to administer the Thrift Savings Plan (TSP), which provides Federal employees the opportunity to save for additional retirement security. The Thrift Savings Plan is a tax-deferred defined contribution plan similar to a private sector 401(k) plan.

The Federal Energy Regulatory Commission (FERC) is the United States federal agency with jurisdiction over interstate electricity sales, wholesale electric rates, hydroelectric licensing, natural gas pricing, and oil pipeline rates. FERC also reviews and authorizes liquefied natural gas (LNG) terminals, interstate natural gas pipelines and non-federal hydropower projects.

Former agencies

The Interstate Commerce Commission regulated common carriers and was thus able to render far reaching orders, such as the desegregation of public transportation. It was deregulated and eventually replaced with the Surface Transportation Board.

The United States Maritime Commission was intended to formulate a merchant shipbuilding program to design and build five hundred modern merchant cargo ships for the U.S. Merchant Marine. It also formed the United States Maritime Service. In 1950, its functions were transferred to the United States Maritime Administration within the United States Department of Transportation|Department of Transportation.

The Reconstruction Finance Corporation was designed to help finance projects during the Great Depression. It later helped finance the nation's military buildup as World War II approached. Scandals led to its eventual dissolution in 1956.

The Office of the United States Nuclear Waste Negotiator was responsible for the placement and long term storage of radioactive waste. It was dissolved in 1995.[4]

State governments

State and local governments may also contain regulatory agencies that are considered to be "independent." [5]

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