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David J. Barron and Todd D. Rakoff, In Defense of Big Waiver, 113 Colum. L. Rev. 265 (2013).

In July, 2012, the Obama administration invited states, which administer the Temporary Assistance for Needy Families (TANF) program, to apply for waivers from some federal requirements for that program.  The states would have to have alternative programs in place for increasing employment among the poor.  In short order, the presidential campaign of Republican candidate Mitt Romney charged the President with gutting federal law.  Campaign commercials alleged that Obama was illegally ending the work requirements that had been a centerpiece of federal welfare reform in the 1990s.

Although the commercials had little political impact, they did bring to public attention a little-noticed feature of a surprising number of federal statutes – a feature that Professors David Barron and Todd D. Rakoff call “big waiver.”  In their superb paper, “In Defense of Big Waiver,” they analyze a fascinating phenomenon.  Congress sometimes will enact “a fully reticulated, legislatively defined regulatory framework” that contains within it a delegation of “broad, discretionary power to determine whether the rule or rules that Congress has established should be dispensed with.”

The waiver authority that the Obama Administration implemented in connection with the Temporary Assistance to Needy Families (TANF) Program is but one illustration.  Other prominent examples appear in the No Child Left Behind Act, the Patient Protection and Affordable Care Act, and the National Defense Authorization Act for FY 2012.  Such statutes, the authors point out, “share a basic feature that has significant implications for both regulatory design and administrative law:  They confer broad policymaking discretion so that an agency may choose to displace a regulatory baseline that Congress itself has established.”

The Barron and Rakoff paper sets out to accomplish four ambitious goals.  The first – and of no small importance by itself – entails identifying “big waiver” as a form of legislative innovation that is distinguishable from both “little waiver” and ordinary nonenforcement discretion, and documenting its widespread appearance.  “Little waiver” is statutory authority to waive otherwise applicable legal requirements in extraordinary individual cases. “Big waiver” allows an agency to substantially supplant otherwise applicable legal requirements with an alternative regulatory regime it believes better serves Congress’s purposes.  Nonenforcement decisions, which do not actually absolve anyone of legal liability, are usually “discrete, informal and wholly revisable” exercises of an agency’s implicit general administrative discretion. “Big waiver,” where it exists, rests on explicit statutory authority that permits agencies to change the legal rights and responsibilities of regulated parties.

The second is to set forth a somewhat speculative argument as to the conditions of the modern administrative state that have given rise to “big waiver.”  The third is to demonstrate its lawfulness as a constitutional matter, and to set forth the conditions under which the exercise of “big waiver” ought to be deemed lawful under applicable administrative law doctrines.  The fourth is to provide a normative defense of “big waiver” as a legislative innovation.

So much of the authors’ discussion is interesting and provocative that I will comment here only on a few highlights.  One is the authors’ persuasive argument that courts ought to be as deferential to Congress’s judgments in conferring “big waiver” authority as they are in assessing the permissibility of broadly worded conventional delegations.  Indeed, Barron and Rakoff point out, “big waivers” might be thought less vulnerable to the kinds of pathologies sometimes attributed to more conventional delegations.  That conclusion may seem surprising if one thinks of waiver authority as permission to simply ignore an enacted statute.  In reality, however, Congress’s delineation within the authorizing statute of a detailed regulatory regime – the regime that an agency is then allowed to waive – actually gives courts a much more concrete sense of congressional purpose.  Congress’s regulatory specifics provide the court a far stronger baseline against which to measure whether an agency has acted in a non-arbitrary, legally permissible way in interpreting both the scope of its waiver authority and the conditions regulated parties must satisfy in order to obtain waiver.  Judicial review thus promises to be a stronger tool of regulatory accountability as a result of “big waiver” than in the more conventional delegation case.

Another interesting point is the authors’ astute handling of Clinton v. City of New York, 524 U.S. 417 (1998), in which the Supreme Court invalidated the Line-Item Veto Act, and which thus might be thought to cast doubt on the constitutionality of “big waiver.”  Giving the President a line-item veto is precisely to give him a kind of waiver authority, and the Court rejected the line-item veto as too creative a reworking of the constitutionally prescribed legislative process.  Barron and Rakoff respond, however, with a convincing distinction.  “Big waiver” authority must be exercised pursuant to statutory conditions and in a way that agencies may well have to justify in court based on reasoned elaboration and a factual record.  In contrast, line-item veto authority was not exercised as a result of changing conditions or based upon discretion-limiting statutory criteria.  The President could not plausibly have learned anything in the five days allowed for a line-item veto that would justify changing the law Congress enacted based on circumstances of which Congress was unaware.  In that sense, the President’s “waiver” of an expenditure item really was a veto, not a friendly amendment in the name of accomplishing Congress’s objectives more effectively.  “Big waivers” should not be thought of as vetoing Congress’s handiwork in the same way.

Of great interest also is the authors’ normative case for “big waiver.”  In essence, they argue that, under conditions of divided government, “the delegation of an administrative veto affords Congress regulatory flexibility that enables it to codify fundamental policy choices that it otherwise might be unwilling (or unable) to specify, thereby making legislative policymaking viable—precisely because it can be monitored and altered through the administrative process.”  “Big waiver” also provides a tool through which Congress can express fairly specific regulatory imperatives while reducing the risk of statutory inflexibility that can render regulatory programs dysfunctional in fairly short order.

The authors recognize, of course, that “big waiver” authority may be drafted well or badly.  The Real ID Act, which authorized the Secretary of Homeland Security to waive the requirements of all other federal statutes in order to get a border fence built, is a glaring example of the latter.  (I like to ask my administrative law students if the Secretary could legally have built the fence with undocumented immigrant labor.)  On the whole, however, Barron and Rakoff are convincing that Congress should be allowed this newly prominent tool of regulatory authorization.  Theirs is a paper likely to fuel much discussion and further scholarship in the years ahead.

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Cite as: Peter Shane, “Big Waiver” as a Constructive New Tool of the Administrative State, JOTWELL (May 10, 2013) (reviewing David J. Barron and Todd D. Rakoff, In Defense of Big Waiver, 113 Colum. L. Rev. 265 (2013)),