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Supreme Court Overturns Chevron Deference, Limiting Federal Agency Power

Supreme Court Overturns Chevron Deference, Limiting Federal Agency Power

Jul 3, 2024

Supreme Court Overturns Chevron Deference, Limiting Federal Agency Power

In a historic ruling that promises to reshape the landscape of American governance, the Supreme Court has decisively overturned the Chevron deference, a legal precedent that has granted expansive powers to federal agencies for the past four decades. The case, known as Loper Bright v. Raimondo, saw the court side with a group of fishermen who challenged the hefty regulatory fees imposed upon them by government bureaucrats, signaling a seismic shift in the balance of power from the executive to the legislative branch.

The Chevron doctrine, established in the 1980s, has long been a cornerstone of the administrative state, compelling judges to defer to agencies' interpretations of statutes unless they were deemed unreasonable. This principle had been affirmed in approximately 70 Supreme Court rulings and over 17,000 lower court cases. But as of last Friday, this era has come to an abrupt end.

The implications of this decision are far-reaching, addressing a fundamental question of American democracy: Who holds the legislative power? By siding with the fishermen, the court reaffirmed that it is Congress, and not unelected officials, that should create laws as stipulated by the Constitution. The New York Times has expressed concern over the shift, while critics of the administrative state have hailed the ruling as a victory for accountability and democratic governance.

The data highlights the gravity of the situation, with federal bureaucrats issuing nearly 4,000 rules annually, wielding the force of law, in stark contrast to the approximately 50 substantive laws passed by Congress each year. This means that a staggering 98.8% of the rules affecting Americans' daily lives have been issued without direct legislative oversight—rules that, due to their unpopularity, would likely never survive the rigors of the congressional process.

The Loper decision is expected to spark a wave of legal challenges against a host of regulations that were enacted without clear congressional authorization, affecting areas from environmental policies to financial oversight. This could also retrospectively invalidate actions taken during the COVID-19 pandemic, such as lockdowns and vaccine mandates, which were implemented without explicit legislative backing.

Moreover, the ruling has immediate consequences. In recent weeks, the Supreme Court has already invalidated a ban on bump stocks and ruled against the Securities and Exchange Commission's use of in-house tribunals to impose fines, both seen as manifestations of unchecked bureaucratic power.

Economically, the curtailing of the administrative state's reach is anticipated to reduce cronyism, bolster job creation, stimulate growth, enhance incomes, and curb inflation. While it may take time for the full effects of the Loper ruling to materialize, many see it as the beginning of a healing process for an encumbered American economy.


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