A Brief History of Regulation and Deregulation

Photo of the US Capitol
By: Susan Dudley
March 12, 2019

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Ever since Congress created the first federal regulatory body more than 130 years ago, people have debated the proper role for what has been called the “fourth branch” of government. This essay provides a brief history of regulation and deregulation, reviewing the key milestones that have shaped regulatory practices in the United States from the mid-1900s to the presidency of Donald J. Trump.

Milestone 1: The Administrative Procedure Act. The Interstate Commerce Commission was created in 1887 to constrain railroad rates. In the decades that followed, Congress established a variety of agencies to regulate interstate trade, water and power, communications, commodity exchanges, and other areas of activity. In the 1930s, President Franklin D. Roosevelt’s New Deal expanded the jurisdiction of these agencies and added new ones, but their sweeping authorities began to raise concerns that Congress’s apparent delegation of legislative powers to federal agencies might be unconstitutional.

Years of debate on the question of unconstitutional delegation led to the passage in 1946 of what was arguably the first regulatory reform bill—the Administrative Procedure Act (APA). The APA reflected a “fierce compromise,” balancing the competing goals of bureaucratic expertise and legislative accountability. Its requirements—that regulations be grounded in statutory law and an administrative record that includes public notice-and-comment—continue to guide rulemaking today...

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