Hippocampus American Government: Regulatory Agencies

[Print]

Nearly all of the federal government's work was accomplished through Cabinet departments until the 1880s when Congress began establishing agencies that were positioned outside the Cabinet departments. Among these agencies are the independent regulatory commissions that were created to protect public interest by developing and enforcing rules. These agencies, which have powers similar to legislative and judicial bodies, regulate certain sectors of the nation's economy. While they operate outside the executive branch, regulatory agencies are headed by a board or commission whose members are appointed by the president and confirmed by the Senate.

The Interstate Commerce Commission (ICC) was one of the first regulatory agencies designed to help protect the public interest. Established in 1887 by the Interstate Commerce Act, the agency became the regulatory body for railways, buses, trucks, pipelines and inland waterway traffic. At its inception, the ICC issued licenses and regulated transportation routes and rates. The agency's role was diminished during the deregulation movement of the 1980s and it was eliminated in 1996 by the ICC Termination Act. It was not the only agency to fall victim to deregulation—The Civil Aeronautics Board, created in 1938 to regulate commercial air traffic, was abolished by Congress in 1985.

The Federal Communications Commission (FCC) was established in 1934. When it was established, the FCC oversaw the telegraph, telephone, and radio industries. Today, the commission regulates telephone, radio, and television, as well as microwave and satellite transmission. The five-member board licenses the public airwaves, sets broadcast standards, and hears cases on telephone rates.

Established in 1914, the Federal Trade Commission (FTC) regulates business activity by enforcing anti-trust laws and protecting consumers from unfair trade practices. The FTC monitors companies for price fixing and dishonest labeling of products. It also monitors financial agencies for compliance with truth-in-lending laws. The five commissioners divide their time between competitive practices, consumer protection, and economic issues. The FTC provides Congress and the executive branch with detailed reports on the nation's economic growth and business activity.

The Securities and Exchange Commission (SEC) was established in 1934 as part of President Roosevelt's New Deal policy initiatives. Its five-member board oversees the stock and commodities markets by establishing and enforcing strict trading rules. The SEC monitors the activities of holding companies, represents investors at bankruptcy hearings, monitors mutual funds, and regulates the sale of stock on margin.

The Wagner Act established the National Labor Relations Board (NLRB) in 1935, with the goal of resolving labor disputes. The five-member NLRB has the power to issue complaints, petition the courts for injunctions, obtain settlements, and ensure worker compliance with court orders. The board also conducts secret ballot elections when workers vote for or against unionizing a company, and it helps settle issues when more than one union tries to represent the same group of workers. Once despised by company leaders, the NLRB has become an important part of the American labor system.

The Consumer Product Safety Commission (CPSC), which was created in 1972, sets and enforces safety standards for consumer products. In performing its role, the commission issues recalls of unsafe products and conducts consumer research and education programs. The five-member board has jurisdiction over consumer products used in and around the home, in sports, recreation, and schools. However, it does not control products such as automobiles, tires, boats, alcohol, tobacco, firearms, cosmetics, and medical devices.

In addition to these regulatory bodies, there are other public agencies and commissions that serve the public, consumers, or the government. These agencies may also have regulatory and rule-making functions and may help resolve disputes over rules.

The Central Intelligence Agency (CIA) is an example of one public agency that serves the government. Its principle function is to gather information and intelligence about foreign powers to be used by the executive branch. The CIA Director is also a member of the National Security Council (NSC), an executive advisory group that has become increasingly important with respect to foreign affairs. Chaired by the president, the NSC includes the vice president, secretary of state, treasury secretary, defense secretary, and the president's national security advisor. The chairman of the Joint Chiefs of Staff serves as military advisor to the NSC.

The Environmental Protection Agency (EPA) is the government's largest independent regulatory agency. By monitoring the administration of all environmental legislation, the EPA helps to protect public health by ensuring a clean environment. The EPA was established in 1970 in response to interest group concerns about water, soil, and air pollution.

The Equal Employment Opportunity Commission (EEOC) was created as part of the Civil Rights Act of 1964. The law prohibited discrimination on the basis of race or gender in hiring, promoting, and firing employees. Title VII of the act established the EEOC to implement the new law. The role of the commission has expanded since its inception to include discrimination based on color, religion, national origin, age, and disability. Its jurisdiction today goes beyond hiring, promoting, and firing to include testing, training, wage-setting, apprenticeship, and other conditions of employment.

The Federal Reserve System (FED), which was established in 1913, regulates the nation's interest rates and money supply. The agency also supervises the U.S. Federal Reserve banks. Alan Greenspan became Chairman of the seven-member board in 1987 and is credited with helping the nation avoid excessive inflation and deep recession.