Vital Interests: Paul, thanks for agreeing to participate in the Vital Interests Forum. Your expertise is in the administration of the U.S. government - what we generally know as the bureaucracy. You have published two well-respected books, the latest being Valuing Bureaucracy: The Case for Professional Government, which is the sequel to Outsourcing Sovereignty: Why Privatization of Government Functions Threatens Democracy and What We Can Do About It. 

In addition, you have practical experience based on a five-year stint during the Obama administration as chairman of the Administrative Conference of the United States. For our readers who are not familiar with the lexicon of the Administrative State can you give us a quick lesson on what we should know about this bureaucracy that runs our lives.

Paul Verkuil:  The Administrative State exists under the chief executive, the president, to exercise the power to create, adjudicate, and enforce rules and orders mostly through congressional enactments. This “state” is structured in similar ways to a court system, but it is not judicial. That's the first cut. What you should understand is that there's always a tension between what should be judicial and what should be administrative. Each of the branches are jealous of their powers and hence we get the constitutional tensions that James Madison thought would protect us (the People).

Whenever administrators adjudicate or make rules, they are emulating judicial behavior but not always behaving the way the judges would, since judges often overrule them. The courts are entitled, as a matter of judicial review, to second guess the Administrative State. That now is becoming an increasingly interesting area of activity.

VI: Can you go into the components of the Administrative State? This would include agencies that, for example, regulate the environment, certain kinds of economic activities, labor relations, etc.?.

Paul Verkuil: We can break down agencies between the executive agencies, which are controlled by a presidentially appointed Secretary, and the independent agencies which are usually controlled by five member commissions, who are appointed by the president and confirmed by the Senate and are usually politically balanced. These are entities like the SEC, the Securities Exchange Commission, the NLRB, National Labor Relations Board, and the Federal Trade Commission, et cetera. On the other side the executive agencies primarily focus on broader matters like defense, health and human services, homeland security and so forth.

VI: These are bureaucracies staffed by civil servants and headed by a political appointee designated by each new administration. Is that the way it works?

Paul Verkuil: That is correct. There's something called the Plum Book, which you probably know, which is about 2,000 political appointee positions that each president gets to fill, mostly in the agencies but in the White House too. Then there are some overarching agencies. I would start with OMB, the Office of Management and Budget, which monitors agencies for the White House; it's an executive branch operation allocated in the Executive Office Building right next to the White House. The OMB is one of the ways the president controls the agencies so it's an important agency with a lot of functions, especially to oversee rule-making, 

Then you have other  agencies with oversight functions like the GAO, the Government Accountability Office, which is actually a Congressional agency that reports to Congress. Its job is to monitor the agencies and see whether their performance is up to standards and expectations. The GAO monitors agencies and grades agency performance. It is significant and wields considerable influence.

The agency I headed, the Administrative Conference of the United States, provides procedural solutions for agencies across the board, independent and executive, and meets with the independent agencies  in a separate group to monitor their performance. It is called a “conference” because we have members from the agencies and the public that formulate, at our suggestion, recommendations that are  then circulated among the agencies. It has another government, policy-making, administrative law improvement function.

The other interesting thing about the administrative process is something called the Administrative Procedure Act. The APA, enacted in 1946, is about to celebrate its 75th anniversary. In fact, I've been in the midst of preparing a paper for that celebration, so I'm deep into its history. It was a fundamental step in the administrative process because it brought some judicial requirements, including administrative judges, and sought to regularize administration after the New Deal period. It's going to continue to be a big issue in the next year.

VI: In addition to agencies and commissions, the government has many departments -  the Department of Agriculture, Department of Commerce, Department of Labor, Department of State, and so on. When you're talking about bureaucracies, don't you have to expand it to include that huge part of the government as well?

Paul Verkuil: Those are the executive departments, exactly. In terms of influence and budget they are more significant than the independents. And sometimes independent agencies are placed within executive Departments. Take the Department of Labor; it negotiates labor-management relations and decides on how to implement policies. The National Labor Relations Board, an independent commission, adjudicates cases between management and employees and sets standards. The APA provides the procedural framework for the independents, which makes them more judicial, as I said at the outset.

VI: Let's discuss your analysis and critique of government bureaucracies as they now exist. There is a distinct trend that started a number of years ago, I believe in the Reagan administration, to outsource many government functions. The idea was to shrink government bureaucracies and make them more efficient and cost effective by hiring contractors and consultants. Can you describe how that notion of limited government came about?

Paul Verkuil: It's interesting to understand the bureaucratic state from the perspective of outsourcing. Let's go back to the Kennedy years. In 1960, there were approximately two million federal employees working in the "Administrative State." Now, in 1960 there was no EPA, or Department of Homeland Security and dozens of other agencies that didn't even exist then. Given that, sixty years later, guess how many federal employees there are?

VI: I think there must be quite a few more than two million.

Paul Verkuil: In fact around two million federal employees is what we have today. So how can this be? Either civil servants have gotten incredibly more efficient or something else is at work.

VI: So outsourcing absorbed all growth in government agencies?

Paul Verkuil: Correct, the answer is contractors. That's the bottom line. Contractors account for at least three or four times the number of government employees, we don't really know the exact number. What you get now is a leveraged bureaucracy where the government employee spends most of his or her time managing contractors. That causes its own set of problems.

It continues to be a major management problem because contractors work for you, the Public, but they also work for bosses who aren't you. Contractors don't take any oath of office like government employees.They may be very efficient and do great work but they have dual loyalties, to We the People and their employers.

This is the picture you have to understand. When I wrote my second book after my Administrative Conference experience, Valuing Bureaucracy, I made the basic point that the public interest is in jeopardy when the people who swear to uphold the constitution are not totally in charge of the government anymore.

It is exceedingly hard to manage a contractor based work environment. Some agencies like the Department of Energy are about 90% contractor-based.

VI: That is a startling percentage.

Paul Verkuil: I looked at those contractor dominated agencies in particular because those are the ones that GAO usually finds to have management problems, and are on the high-risk list. One of the points in the book is to track the correlation between the GAO's high-risk list and the contract driven agencies.

VI: Another point you make about contractors coming and going is that it leaves no real expertise within the bureaucracy itself. These agencies no longer have the institutional knowledge in their fields that they used to have. So government managers are constantly trying to buy expertise?

Paul Verkuil: Right. I appreciate your mentioning that point because this is certainly my issue, that what you, the public, wants from government employees after you hire and train them is their expertise, the knowledge of how things work in government. The fact that they have been there for a long time, means that they understand what's going on. If you come in, as I did, as a political appointee running an agency, you don't know very much. 

Assuming you come in at the beginning of an administration, you've got four years. You've got to learn a lot about your agency to begin with. You have to rely on the civil servants, who have been there to understand things, and they will brief you  and  make you smart. There's an old joke among the political appointee community that the most frightening request from the White House is a Principals Only meeting. Which means you can't bring your bureaucrat with you to tell you what's going on. You're on your own. 

We have got to nurture and grow informed civil servants to have effective governance. One of the saddest things to witness during the Trump years has been the gutting of institutions like the Foreign Service of the Department of State.  What happened, for political reasons, to many of these individuals, including some who testified during the impeachment hearings, was unconscionable. These are people who spend their lives learning languages, living in foreign countries, studying their history and getting to know the people. We're losing vital expertise that can't be replaced with contractors. Similar situations exist at other agencies, like DOJ and EPA, of course.

VI: Let’s look at how the civil service developed in the late 19th century to counter the corruption of staffing government departments with political loyalists. The Pendleton Act on Civil Service was enacted and the Civil Service System was established to ensure that qualified and politically neutral people were brought into the government. Can you discuss this?

Paul Verkuil: Sure. That really is the key issue today. It starts, as you say, with the Pendleton Act which was enacted in order to stop the spoil system because, back in the day, that's how political parties funded themselves. They would charge you a fee for your government office. Andrew Jackson thought this was great because, after all, we could bring in new people to the government, but gradually we decided that expertise and independence were an essential requirement for government employment. President Trump is said to admire Jackson the most of all presidents, perhaps for this reason? Their views on civil servants certainly mesh well. 

The real inspiration for a professional civil service was Teddy Roosevelt. Remember, he came in as a Civil Service Commissioner appointed by President McKinley. He fought hard against the spoils system. It took awhile before the Civil Service Act got really grounded and the concept of independence and talent took hold, but it did. 

Now, this idea is being challenged by the overuse of contractors and a lack of understanding of the value of civil servants. My book is a reaction to these developments. It's really a plea for the need for integrity in government. The president is still in charge, we need independent expertise as well.

Today there's a fear, I think justifiably, that we're losing the talent pool. It's been diminished. It's being compromised. It's hard for a government official to stick his or her neck out to begin with, because you usually don't get any benefit other than preserving your integrity. It is hard to run government through Inspectors General and Whistleblowers, as important as these protections are.

President Trump, by the way, has this habit of not appointing people to office in a permanent status. By keeping office holders temporary, he has the ability to replace them whenever he choses. It's a lot more complicated to remove someone who's been confirmed by the Senate than it is someone who isn't. He's violating the Vacancies Act left and right and in the process he dumbs down the government.

VI: Certain government agencies are not functioning at all because the Trump administration has not appointed enough commissioners to make a quorum. 

Paul Verkuil: That is certainly the case. Let me give you another example - the Merit Systems Protection Board. They haven't appointed a quorum in years. That means no one can get a hearing if you have been forcibly removed from a government position. You just sit around waiting for a hearing which won't come because they don't have a quorum, and therefore a statutory protection for the civil servant is purposely not functioning. 

VI: Some complain that the bureaucracy is a fourth branch of government - that it needs to be reined in and, in many areas, should be done away with. There are of course arguments on both sides of this issue, You quote Phillip Howard who maintains a responsible civil servant actually is a real exception. Others, like Jon Michaels, maintain that the civil service is a necessary countermeasure and check on the executive branch because of the importance of giving good objective advice that is essential to effective government. Can a government be functional without neutral and expert advice?

Paul Verkuil: Certainly not. I can tell you that, at this point, we're not functioning well in virtually any agency I can think of. If the current trend continues, the ranks of the professional government will be further depleted, demoralized, and it will be a considerable challenge to rebuild.

VI: Recently the New York Times published an op-ed by Cass R. Sunstein and Adrian Vermeule titled The Very Structure Of Modern Government Is Under Legal Assault. They discuss concerted efforts to undermine modern government and erode basic principles of the rule of law. Do you concur with their sentiments?

Paul Verkuil: I admire and support their analysis of the state of modern government. The ideas in the op-ed are further developed in their new book Law and Leviathan: Redeeming the Administrative State. It's so interesting what they're trying to do. They are having to make the basic arguments that we thought were resolved after the New Deal by passage of the Administrative Procedure Act.In fact, they use the APA as the starting point in their work.

They quote the Wong Yang Sung case which says that the hard fought battle between social and political forces have come to rest because of the clear requirements of the APA. In other words, we thought  this case decided right after the APA was enacted had put to rest the issues about justification and legitimation of the Administrative State.

But now they are saying the legitimacy of government is being reargued.  What they're concerned about is not just what the Trump administration has been doing, but what the Supreme Court is doing.

By virtue of the new majority on the Court, there's a movement afoot to rethink the Administrative State. Five justices now believe that reviving the so-called non-delegation doctrine is an appropriate thing. The non-delegation doctrine prevents Congress from enacting laws and creating agencies, unless the instructions are given very carefully and in a highly detailed fashion. The Schechter Poultry case of the 1930’s may now come back to haunt us.

What Sunstein and Vermuele are saying is, "Look, the administrative process was accepted for good reasons."  It meets Lon Fuller’s requirements of established rules, transparency, comprehensibility, stability, no retroactivity, et cetera. It is almost like back to the future because those arguments were made 50, 60 years ago. Most of us thought they did not have to be made again.

VI: Hasn't it been a long standing ambition by some groups to undo the New Deal? 

Paul Verkuil: It has been.  The libertarians, they have things to offer. But getting rid of government is not very realistic. By the way, has government shrunk under President Trump? Not at all. If you look at work by Paul Light his latest figures on the size of government show it is just as big as it was and bigger, actually, than it was under President Obama. We're not getting any smaller and the idea that somehow we can create a new way of doing things and rid ourselves of the Administrative State, is a malignant pipe dream that Cass Sunstein and Adrian Vermeule are trying to counter. But these aspirations are out there and what is most worrisome is that  it is captivating members of the Supreme Court.

VI: Many see the best alternative to the bureaucratic Administrative State as privatization. Many government functions can just be handed over to corporations. For example, criminal justice facilities - jails, detention centers, and prisons - can be run by private entities. The education system can be turned over to privately run charter schools. Is this the future we need to be concerned about?

Paul Verkuil: It certainly is. In my book I talk about how the Obama administration significantly reduced the number of private prisons. The day after Trump was elected the stock prices of companies running private prisons tripled. That just tells you who is thinking what. I have spent a lot of time on the question of state-run prisons versus private prisons. Both have a lot of problems but private prisons run on the profit motive and are unwilling to invest very much in protections that concern prisoners and the public. Privatization of government functions is a serious question that needs far more scrutiny and study. 

VI: Populism has been on the rise in this country and in Europe. One of the things populists distrust is expertise - what they would call “the deep state” that leads to regulation or control over their lives. How can this skepticism of bureaucratic influence be countered?

Paul Verkuil: Populist rejection of elites and expertise is a challenge to understand and address. Trump is wrongly seen as a hero to the populists, even though they represent a demographic that is often not well off, and who benefit enormously from federal programs. Without social security, Medicare, Food Assistance Programs, agricultural subsidies etc, the poverty level in the United States would grow enormously.

The very functions of government that help the people are the ones that they don't understand or appreciate. The campaign against big government, against all bureaucracies, that has captivated populists has them railing against their own interests.

This upcoming election is going to be about the Affordable Care Act. That's the key - jobs and healthcare. Both are going to need significant help from the government. We're going to have to convert the economy away from fossil fuels - this can only be done with government intervention. Those are serious social and economic issues in this country that the free market can't solve. The coronavirus may well bring back aspects of the New Deal. 

VI: Looking toward the near future there may be a change of administration. How can this attitude toward bureaucracies be changed? What can be done to create a vibrant, innovative, and dynamic bureaucracy capable of dealing with the daunting challenges that all modern societies face?

Paul Verkuil: You have just articulated the major task I have set for myself.  After coming out of government and seeing how much is in jeopardy by not maintaining and building up the Administrative State, I feel compelled to act. How to do that? For one thing, you have got to get people in government and recognize their importance.  We need to support people in government like Anthony Fauci who have been doing their job for many years for the good of their country. There are countless individuals like Dr, Fauci in agencies throughout the government who need to be recognized, relied on, and supported.

We have to be concerned not only about the federal government, but about all levels of government. The closer individuals in the government are to the people, the closer the people are to their government, and the more they admire them. Take the United States Post Office. In the Pew Foundation’s evaluation of public attitudes toward  agencies, the post office is always very popular. Why is that? Because the people see their government at work.They see them  delivering the mail (including this year, their ballots); they go to the post office and get treated well, they respect them. They like the Social Security Administration; they get good treatment. They love the National Park Service. I think that spirit is what we have to carry up the ladder and to the other agencies that may be you don't see as much of, but who do equally or even more important work. I think that a new president's biggest job is to restore respect to the bureaucracy. I'm certainly going to do everything I can to help put that in that restoration.

VI: Shouldn’t teaching about the vital roles of those in public service be part of the education system?  To inspire young people about the benefits of government service and the good they can do for their communities and for their country?

Paul Verkuil: I go back to President Kennedy, who inspired me. I signed up for the first class of the Peace Corps because of John Kennedy. That's the kind of inspiration that would be wonderful to have now and  I think the youth out there can be reached, informed about the issues, and recruited for government service. But more broadly, all of us should feel that our far from perfect government, like our Union itself, can be made more perfect.

VI:  Paul, we're coming to end our time, let’s end on that optimistic note: You do see a path toward restoring confidence in government. It will be a significant challenge for a new administration to rebuild the depleted and  maligned bureaucracy that are so essential to good governance.

Paul Verkuil: That is my sincere hope, John. 

Paul R. Verkuil served as the tenth Chairman of the Administrative Conference of the United States from 2010 to 2015. He published Valuing Bureaucracy (Cambridge Press 2017) based on many of the insights gleaned during his years of federal service. Verkuil currently serves as a Senior Fellow of ACUS.

Mr. Verkuil is a well-known administrative law teacher and scholar who has coauthored a leading treatise, Administrative Law and Process, now in its fifth edition, several other books, notably Outsourcing Sovereignty (Cambridge Press 2007), and over 65 articles on the general topic of public law and regulation. A Festschrift held in his honor in October 2010 appears at 32 Cardozo Law Review 2159 (2011).

He is President Emeritus of the College of William & Mary, has been Dean of the Tulane and Cardozo Law Schools, and a faculty member at the University of North Carolina Law School. He is a graduate of William & Mary and the University of Virginia Law School and holds a JSD from New York University Law School. Among his career highlights is serving as Special Master in New Jersey v. New York, an original jurisdiction case in the Supreme Court, which determined sovereignty to Ellis Island. He is a Life Member of the American Law Institute and the Fellows of the American Bar Foundation.