The Administrative Procedure Act of 1946 Was a Truce, and It Still Shows

Every treaty carries the marks of the war that preceded it. You can read the borders, the exceptions and the quiet concessions and tell who was winning when the pen came out. The same is true of the statute that governs how every federal agency makes a rule or decides a case. It was signed in the summer of 1946, it passed with broad support, and it is a truce.

To understand the fights we have today over guidance documents, agency courts, deference and delegation, you have to know who fought the first war, what each side wanted and what each gave up. That story begins in the 1930s, with a government that had grown faster than anyone had planned for.

A government nobody designed

By the middle of the 1930s the federal government had accumulated a collection of boards, commissions and administrations, some older, like the Interstate Commerce Commission of 1887 and the Federal Trade Commission of 1914, and many new, born in the New Deal. They made rules, they investigated, they prosecuted and they decided disputes. Their procedures differed from one agency to the next, and in many cases they were not written down in any statute.

The Constitution has a design for this, or rather it has a design that did not anticipate it. Article I vests "All legislative Powers herein granted" in Congress. Article II vests the executive power in the President. Article III vests the judicial power in the courts. Madison explained in Federalist 47 why the three must be kept apart: "The accumulation of all powers, legislative, executive, and judiciary, in the same hands, whether of one, a few, or many, and whether hereditary, self-appointed, or elective, may justly be pronounced the very definition of tyranny." An agency that writes a rule, enforces it and decides whether you broke it is an accumulation of just the kind he described.

That was the critics' point. The defenders of the New Deal had a point too. The problems of an industrial economy, they said, were too numerous, too technical and too fast-moving for Congress or the courts to handle, and experts in specialized agencies were the practical answer. The argument was about more than convenience. It was about the future shape of American government. The Administrative Procedure Act is what came of the argument.

1937, the Brownlow Committee

In 1937, the President's Committee on Administrative Management, known after its chairman Louis Brownlow as the Brownlow Committee, delivered a report to President Roosevelt. Its main purpose was to strengthen the President's control over the executive branch. In the course of making that case it is remembered for criticizing the independent regulatory commissions as a kind of "fourth branch" of government, operating outside the control of the three constitutional branches.

Notice who said it. The report was commissioned by Roosevelt and written by friends of a strong executive. It did not oppose the commissions' work. It objected that no one was in charge. That is a Madisonian complaint, even if the authors did not put it that way: power without a responsible head is power without responsibility. For the background on this phrase and the history of the independent agencies, see Humphrey's Executor Created a Fourth Branch the Constitution Never Mentions.

1938, the bar sounds the alarm

The American Bar Association had a Special Committee on Administrative Law, and in 1938 it criticized the growing power of the agencies. Roscoe Pound, dean of the Harvard Law School until 1936 and one of the best-known legal minds of his day, became one of the profession's leading critics, and the phrase "administrative absolutism" became the banner of the critics. The complaint was that agencies exercised powers that combined lawmaking, prosecution and adjudication, with weak review by the courts, and that the result threatened the rule of law. The remedy the critics urged was to make the agencies' procedures regular and their decisions reviewable. For more on Pound, see Roscoe Pound Warned the Bar About Administrative Absolutism in 1938.

The ABA's concern was not hostility to government. It was the lawyer's concern with procedure: that a person with a grievance against the government should have notice of the charge, a chance to be heard and a court to review the result. Those are the oldest rights in the common law, and the lawyers who wrote the report thought the agencies were slipping out from under them.

1940, the veto

The profession's concern found a legislative vehicle in the Walter-Logan bill, named after Representative Francis Walter of Pennsylvania and Senator Marvel Logan of Kentucky. The bill would have required agencies to follow set procedures and would have expanded judicial review of their decisions. It passed Congress in 1940.

President Roosevelt vetoed it. His objection was that the bill would hobble the agencies, load them with litigation and give the interests they regulated a way to delay and obstruct. The bill did not become law. The critics had won in Congress and lost at the White House, and the defenders of the New Deal had won the day without answering the problem the bill raised.

Here is where the truce begins to take shape. Neither side could get everything. Congress could pass a bill that the President would not sign. The President could veto a bill but could not make the complaint go away. The only way out was a compromise that both would accept.

1941, the Attorney General's committee

Roosevelt and his Attorney General had already taken a step toward that compromise. In 1939, Roosevelt asked Attorney General Frank Murphy to form a committee to study administrative procedure. Its final report came in 1941.

The committee's report recommended standardizing agency procedures. It gave both camps a body of fact to argue from.

The war then intervened. The United States entered the Second World War at the end of 1941, and the attention of the government turned elsewhere. When the question returned after the war, the report was there to build on.

June 11, 1946

Congress took up the problem again in the 1940s. Senator Pat McCarran of Nevada introduced a bill drawing on the Attorney General's committee report in October 1945. After hearings and revisions, it passed Congress in 1946, and President Truman signed the Administrative Procedure Act into law on June 11, 1946.

The shape of the bill tells you something. When a bill draws broad support, it does not mean everyone loves it. It means that each side has been given enough to live with it, and that neither side wants to be the one on record against procedure and fairness. The conservative critics of the New Deal got a statute that, for the first time, set uniform rules for agencies and provided for judicial review. The defenders got a statute that left the agencies in place, kept their powers and left them wide discretion.

What the Act actually requires

The APA is a short statute, in Title 5 of the U.S. Code, and I recommend reading it. Here is its structure in outline.

Section 551 defines terms. A rule, it says, is "the whole or a part of an agency statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law or policy." Notice how broad that is. It includes a statement that is merely "designed to interpret" the law. An adjudication is the process of formulating an order. Everything an agency does falls into one of those two bins, with some exceptions.

Section 553 governs rulemaking, and it is the heart of the matter. In its basic form, notice-and-comment rulemaking works in three steps.

1. Notice. The agency publishes a notice of proposed rulemaking in the Federal Register, stating the time, place and nature of public proceedings, the legal authority for the rule and either the terms or the substance of the proposed rule or a description of the subjects and issues involved.
2. Comment. The agency must give interested persons an opportunity to participate by submitting written data, views or arguments, with or without opportunity for oral presentation.
3. Statement of basis and purpose. The statute then says that after consideration of the relevant matter presented, "the agency shall incorporate in the rules adopted a concise general statement of their basis and purpose." The final rule must also be published at least thirty days before it takes effect, with exceptions.

Sections 554, 556 and 557 govern formal adjudication and formal rulemaking on the record, with hearings, evidence and an impartial presiding officer, in the cases where a statute requires them.

Section 702 and following provide for judicial review. A person suffering legal wrong because of agency action, or adversely affected or aggrieved by it, is entitled to review. Under Section 706, a reviewing court sets aside agency action that is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law," among other grounds.

That is the compromise in a paragraph: process and review, in exchange for leaving the agencies in business.

Where the seams show

A truce settles what both sides can agree on and leaves the rest. The gaps in the APA are the gaps in that agreement, and they explain a great deal.

The exceptions to notice and comment. Section 553 does not apply to rules about military or foreign affairs functions, or to matters relating to agency management or personnel, public property, loans, grants, benefits or contracts. It also exempts "interpretative rules, general statements of policy, or rules of agency organization, procedure, or practice," and it allows an agency to skip notice and comment for "good cause" if the procedures are impracticable, unnecessary or contrary to the public interest. The exemption for interpretative rules and policy statements has become the doorway through which agencies issue guidance documents that function as rules with none of the process. That grew into one of the central fights of the modern administrative state, and it is the subject of Guidance Documents Are Rules That Skipped the Line, and Families Pay for It.

The standard of review. "Arbitrary and capricious" is a deferential test, and for decades courts in addition deferred to agencies' readings of ambiguous statutes under Chevron, which was overruled in Loper Bright Enterprises v. Raimondo in 2024. The APA's text had said that the reviewing court "shall decide all relevant questions of law," and the Court in Loper Bright relied on that text to say that courts must exercise their own judgment. The 1946 text had been waiting for that reading for seventy-eight years.

No cost test. The APA says nothing about whether the benefits of a rule exceed its costs. Later executive orders and statutes added that analysis in part. The truce did not touch the question.

No limit on delegation. The APA governs how agencies exercise power, not how much Congress gives them. The 1946 Congress was content to regulate procedure and leave substance to the other statutes. The question of how much Congress may hand over is the nondelegation question, which the APA does not answer; see The Nondelegation Doctrine Says Congress Cannot Hand Its Job to Someone Else.

Combined functions. The APA required separation of functions inside the agency in formal adjudications, but it left the basic structure in place: the same agency writes the rule, investigates, prosecutes and, in many cases, decides. The critics of 1938 would recognize the complaint.

The strongest objection

The defenders of the APA would say that it is a success. The statute has stood for nearly eighty years. It brought uniform procedures to a sprawling government, gave citizens a right to comment and a right to judicial review, and it did so without crippling the agencies. Compared with the Walter-Logan bill, the APA struck the right balance. The agencies can do their work, the public can see what they are doing and the courts can check abuses. A system that works well enough to last that long should not be disparaged.

There is truth in that and I will not deny it. The APA is a good statute. Notice-and-comment has made the rules better, in many cases, by bringing in information the agency lacked. Judicial review has stopped real abuses. The critics of 1938 were right that procedure matters, and the statute gave them procedure.

The answer is that a procedure is not a substitute for a structure. The APA made agencies fairer in the way they exercise power, and it did nothing about whether the power is theirs to exercise. A person can receive perfect notice and a full chance to comment on a rule that Congress never authorized. The statute guarantees the form of consent and leaves unanswered the Founders' question about whose consent counts. The remaining fights, about delegation, about independence, about the combination of functions and about guidance, are the ones the 1946 compromise left open.

What it means now

The APA is not a relic. It is the baseline against which nearly every challenge to an agency action is measured. When a court sets aside a rule because the agency did not respond to significant comments, it is applying Section 553 and Section 706. When a company or a citizen argues that guidance was a rule in disguise, it is relying on Section 553's distinction between legislative and interpretative rules. When the Court said in 2024 that judges, not agencies, decide what an ambiguous statute means, it was reading Section 706.

The enduring lesson is for lawmakers. A truce holds only as long as both sides keep to it. Congress could reopen the settlement, by amending the APA to close the guidance loophole, require cost-benefit analysis, add a legislative review of major rules or narrow the delegations in the underlying statutes. Make Congress Vote on Every Major Rule, and Watch Accountability Return sets out one such proposal.

Measured against the Founding

The Founders did not write an administrative state, but they wrote a way to judge one. The test is simple. Who made the rule, and can the people remove him? Under Article I, the people's representatives make the law. Under Article II, an executive they choose carries it out. Under Article III, an independent judge decides whether the law was followed. The 1946 truce produced procedures that make the agencies fairer. It did not restore the original assignment of powers, and it was never meant to.

That is the thing for a citizen to keep in mind. The APA is worth defending as far as it goes, and worth reading closely. But the larger work, returning the making of law to the people who answer to the voters, is Congress's job. It was Congress's job in 1946, and it still is.

The case in brief

1. The New Deal built agencies that combined rulemaking, enforcement and adjudication, and the Brownlow Committee in 1937 criticized the independent commissions as a kind of "fourth branch."
2. The American Bar Association's 1938 committee, and critics such as Roscoe Pound, warned of administrative absolutism, Congress passed the Walter-Logan bill in 1940 and Roosevelt vetoed it, and the Attorney General's committee reported in 1941.
3. The Administrative Procedure Act, passed with broad support and signed by President Truman on June 11, 1946, set notice-and-comment rulemaking in Section 553 and judicial review in Section 706, and left the agencies in place.
4. Its gaps, the exemption for interpretative rules and policy statements, deferential review, no cost test and no limit on delegation, explain today's fights.
5. Procedure is not a substitute for accountability, so the work of returning lawmaking to elected representatives remains with Congress.

What you can do: Read Section 553 of Title 5 on Congress.gov, then file one comment on a proposed rule at Regulations.gov or write your member of Congress through My Representatives about closing the guidance loophole.