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Federal Agencies


FEDERAL AGENCIES. Federal agencies fall under the executive branch of the American government. Collectively, federal agencies are often referred to as "the administration" or "the bureaucracy." The latter term has developed a less favorable connotation than the former, but both terms identify the essence of federal agencies, which are part of an organizational scheme to divide government labor and expertise among a hierarchy of specialized offices. Legally, according to the Federal Administrative Procedure Act, which governs administrative law, an "agency" is any governmental authority besides Congress and the courts. This includes 98 percent of the government workforce.

The United States Government Manual provides an organizational chart that details all the divisions and subdivisions of this expansive category of government. The president, vice president, White House staff, and Executive Office of the President (EOP) sit at the top of a massive hierarchical structure. Beneath them are the fourteen cabinet agencies. Beneath the cabinet agencies are fifty-seven independent establishments and government corporations. However, even this chart does not capture all of the important substrata of federal agencies. For example, within the cabinet agency of the Department of Agriculture are numerous agencies like the Forest Service, the Food Safety and Inspection Service, and the Rural Utilities Service. The Office of Management and Budget has put together tables tracking the bureaucratic workforce. In the early 2000s, government agencies employed 2.78 million civilian employees and 1.47 million military employees. This was down from a peak in the late sixties of 2.9 million civilian employees and 3.6 million military employees. Political appointees made up about 3 percent of the civilian employees. The remaining employees were hired through a merit system.

Executive Office of the President

President Franklin D. Roosevelt created the EOP in 1939 to manage a dramatic expansion in the size and responsibility of the executive branch. The EOP established agencies to perform highly specialized services for the president. Each president has altered the composition of the EOP to some extent. Some standard agencies within the EOP include the White House Office, Office of the Vice President, Council of Economic Advisors (CEA), Council on Environmental Quality (CEQ), National Security Council, Office of Administration, Office of Management and Budget (OMB), Office of National Drug Control Policy, Office of Policy Development, Office of Science and Technology Policy, and Office of the U.S. Trade Representative.

The two largest and most important agencies are the OMB and the NSC. The OMB has its roots in the Bureau of the Budget, which was created as part of the Treasury Department in 1921 and transferred to the EOP in 1939. The OMB was reorganized and given its name and form by President Richard M. Nixon in 1970. The OMB prepares the national budget, which also implies designing the president's program priorities. The OMB must exercise extensive communication with Congress and each federal agency.

The NSC was established under the National Security Act of 1947, and was placed within the EOP in 1949. The NSC is designed to advise the president on national security and foreign policy concerns and to coordinate the various agencies involved with these policy areas. The original membership of the NSC consisted of the president, vice president, secretary of state, secretary of defense, and the assistant to the president for national security affairs. Numerous other officials advise the NSC, such as the chairman of the Joint Chiefs of Staff (a military adviser), and the director of the Central Intelligence Agency. The NSC also has a large and permanent specialized staff of analysts.

Various presidents have run the NSC differently. Harry S. Truman had the secretary of state dominate the NSC, while Dwight D. Eisenhower allowed military officials to take control. Ronald Reagan invited his chief of staff to play an important role on the NSC. Bill Clinton added the secretary of the Treasury, U.S. representative to the United Nations, and the assistant to the president for economic policy to the NSC.

Smaller agencies in the EOP include the CEA, the President's Foreign Intelligence Advisory Board (PFIAB), and the CEQ. The CEA was created under the Employment Act of 1946 to advise the president on economic policy. The CEA prepares the president's economic report, furnishes other reports upon request, gathers economic data, and provides economic analysis of other federal agencies. The CEA is run by a three-member board appointed by the president with approval by the Senate.

The PFIAB was established by President Eisenhower in 1956 to provide the president with information on the quality and adequacy of intelligence collection. The PFIAB is a sixteen-member board and has been employed by every president since Eisenhower except Jimmy Carter.

The CEQ was established under the National Environmental Policy Act of 1970. The CEQ chair is appointed by the president with Senate approval and serves as the primary environmental adviser to the president. The CEQ prepares an annual report on the state of the environment, oversees the environmental-impact assessment process, coordinates all agency activities involving the environment, and presents environmental policy initiatives.

President Clinton added the Domestic Policy Council (DPC), National Economic Council, and Office of National AIDS Policy to the EOP. The DPC coordinates domestic policy-making process and ensures that all domestic-policy efforts are consistent across the many federal agencies. Clinton established the National Economic Council to advise on domestic and international economic issues and to ensure that all policies are consistent with the president's economic goals. The Office of National AIDS Policy monitors and gives advice on the AIDS epidemic.

President George W. Bush added the Office of Faith-Based Community Initiatives to the EOP. The office works with state and local governments, businesses, and the nonprofit sector to encourage faith-based community service. Bush also established several Centers for Faith-Based and Community Initiatives in the Departments of Health and Human Services, Housing and Urban Development, Justice, and Education. The agency in the EOP coordinates efforts across these cabinet agencies.

In the wake of the terrorist attacks of 11 September 2001, President Bush added the Office of Homeland Security to the EOP. This agency was charged with developing a national strategy to protect the United States against future terrorist attacks. This involves extensive coordination efforts across federal agencies as well as state and local law enforcement agencies.

The Office of Administration was established in 1977 to manage the many and changing agencies of the EOP. The Office of Administration provides financial management, information support, human-resource management, research assistants, facilities management, procurement, printing, and security for the EOP. The Office of Administration also prepares the annual budget request of the EOP and handles Freedom of Information Act requests for documents.

Cabinet Agencies and Subagencies

The U.S. Cabinet has no special Constitutional status. Unlike cabinets in parliamentary systems, it does not act collectively. Each cabinet agency oversees a portion of the bureaucracy. The cabinet secretaries are appointed by the president and approved by the Senate.

The most established cabinet agencies are the Department of State, Department of Justice (DOJ), Department of the Treasury, Department of the Interior (DOI), and Department of Agriculture. The Department of State is best known as the diplomatic arm of American activity abroad. The secretary of state is often an important figure in negotiating treaties, executive agreements, and other international agreements between the United States and other countries, and among countries other than the United States. Ambassadorships are most often "plum" political appointments offered to campaign contributors, but State Department foreign-service officers are highly trained diplomats who occupy the various regional bureaus and embassies worldwide.

The Department of Justice is headed by the U.S. attorney general. The DOJ mission is to enforce federal law. The solicitor general works under the attorney general as the top government lawyer in cases before the appellate courts where government is a party. The solicitor general plays a major role in more than half of the cases that come before the Supreme Court. In addition, the solicitor general has considerable influence in the determination of which cases deserve consideration. The DOJ contains divisions for many areas of the law, including taxes, civil rights, antitrust, and the environment. The agency also contains some powerful law-enforcement agencies such as the Federal Bureau of Investigation (FBI), Drug Enforcement Agency (DEA), Immigration and Naturalization Service (INS), and U.S. Marshals.

The Department of Treasury manages the national debt, prints currency through the U.S. Mint, and polices tax collection with the Internal Revenue Service (IRS). The Department of Treasury also houses the Secret Service, the U.S. Customs Service, and the Bureau of Alcohol Tobacco and Firearms (ATF), a law-enforcement agency. The ATF is often at the forefront of controversial conflicts involving the acquisition of illegal weapons and explosives, arson, and organized-crime activities.

President Abraham Lincoln established the Department of Agriculture in 1862. The department does not merely oversee the nation's farming sector. Although the department does contain the Farm Service Agency, and farm loan and rural development programs, it also runs the U.S. National Forest system, and oversees the Food Safety and Inspection Service and the Food Stamp Program.

While the Department of Agriculture contains the Forest Service, the DOI administers the many other public lands under the Bureau of Land Management, U.S. Fish and Wildlife Service, and the National Park Service. The DOI charts the land through the U.S. Geological Service (USGS), it administers public works projects such as dams through the Bureau of Reclamation, and oversees extractive industries through the Minerals Management Service and the Office of Surface Mining. The agency also contains the Bureau of Indian Affairs (BIA).

The DOI and the Department of Agriculture reflect the rural and expansive nature of the nation in the nineteenth century. The first two cabinet agencies established in the twentieth century reflect the increasingly industrial character of the nation. The Department of Commerce was established in 1903 as the Department of Commerce and Labor. This agency contained a Bureau of Corporations, Bureau of Manufacturers, and the Bureau of the Census among other subagencies. Over time, the agency gathered up the Patent Office and the Bureau of Mines from the Department of the Interior and many transportation agencies such as the Bureaus of Air Commerce, Lighthouses, Marine Inspection, and Public Roads. The Department of Commerce also oversaw the development of the Saint Lawrence Seaway. Newer cabinet agencies have taken back many former responsibilities of the Department of Commerce. The most notable subagencies within the department include the Department of the Census, the Economic Development Administration, the Patent and Trademark Administration, and the Technology Administration.

In 1913, President William H. Taft successfully created a spot in the cabinet for labor apart from the Department of Commerce. The new department inherited several responsibilities including the Bureau of Labor Statistics. The Department of Labor also added the Occupational Safety and Health Administration (OSHA). The Department of Labor houses the Office of Administrative Law Judges, which act as a major check on the power of all federal agencies.

After World War II (1939–1945), the expanded military capability of the United States prompted an overarching reorganization of the cabinet. The military has existed as long as the United States itself. The army was the first branch established and it became housed in the cabinet under the War Department in 1789. The navy and marine corps gained their own Naval Department. The air force was formally established after World War II. All branches were combined in the newly created Department of Defense in 1949. The Joint Chiefs of Staff and the secretary of defense coordinate the military branches and advise the president.

In the 1960s, the Department of Housing and Urban Development (HUD) and the Department of Transportation (DOT) were also added to the cabinet. HUD was created in 1965 to ensure fair housing practices, monitor housing safety issues, and help finance home ownership. The DOT assumed agencies in the Department of Commerce such as the Federal Highway Administration (FHWA), Federal Aviation Administration (FAA), and also the railroad, transit, and maritime administrations. This agency also contains the U.S. Coast Guard.

The Carter administration added three new cabinet agencies between 1977 and 1980. The Department of Education (ED) was elevated to the cabinet in 1977 and operates offices on many levels of education, civil rights, and student loans. In the same year, the Department of Energy (DOE) cobbled together a diverse array of energy research programs, fuel-price regulating agencies, and nuclear weapons programs into a single agency. The DOE oversees the country's national laboratories, which conduct programs on a wide range of scientific endeavors including nuclear weapons research. The DOE also contains the Federal Energy Regulatory Commission (FERC) and the Solar Energy Research Institute (SERI).

The Department of Health and Human Services (HHS) joined the cabinet in 1980. This agency was previously the Department of Health, Education, and Welfare, created in 1953. HHS contains several important research departments including the Centers for Disease Control and Prevention (CDC), the Food and Drug Administration (FDA), and the National Institutes of Health (NIH). HHS also administers welfare programs such as Temporary Assistance for Needy Families (TANF), Head Start, and Medicaid. The scope of the HHS also includes care for the elderly with such programs as Medicare.

The Department of Veterans Affairs (VA) was added to the cabinet in 1989. This agency provides federal benefits to veterans and their dependents. The VA runs the Veterans Hospitals and administers education and home loan programs. The agency also oversees veterans' pensions and military cemeteries.

Independent Establishments and Government Corporations

There is a dizzying array of agencies outside of the cabinet that the United States Government Manual calls independent establishments and government corporations. Government corporations are government-run businesses such as the U.S. Postal Service (which provides mail service), Amtrak (which provides rail service), and the Tennessee Valley Authority (which provides electricity). Other countries that have privatized a range of public services often call such agencies state-owned industries. The category of independent establishment is much less clearly demarcated. Many agencies in this category are extremely important regulatory agencies such as the Federal Reserve, the Environmental Protection Agency (EPA), the Nuclear Regulatory Commission (NRC), and the Federal Election Commission (FEC). Regulatory agencies were intended in their creation by Congress to be independent and non-partisan powers that monitor and even clarify federal regulations across environmental, economic, and social policy areas.

The Federal Reserve, created in 1913, is the central bank of the United States. It is one of the most powerful arms of the U.S. government because it dictates monetary policy. The Federal Reserve regulates money supply and credit conditions. It also regulates the banking industry. The EPA sets and enforces environmental regulations. The NRC regulates the nuclear power industry and nuclear waste disposal. The FEC enforces election laws. Other agencies in the independent establishment category are not regulatory at all. Agencies like the Peace Corps and the Central Intelligence Agency (CIA) are not easily categorized in the bureaucratic hierarchy.

Making Sense of Federal Agencies

Trying to understand and compare agencies according to their place on the organizational chart of the executive branch can be extremely confusing. Political scientist Theodore J. Lowi developed a useful way to categorize federal agencies that does not rely on the hierarchy or the issue area of the agency. He identifies four broad kinds of agencies: regulatory, redistributive, distributive, and constituent. Regulatory agencies impose obligations and sanctions and then enforce compliance. Redistributive agencies create nonvoluntary classification schemes and dispense benefits to those that fit the scheme. Distributive agencies attempt to promote socially desirable activities by providing subsidies. Constituent agencies make rules about the scope of authority of other powers. The benefit of this classification scheme is that there are more similarities in the politics of federal agencies that share a category in this fourfold scheme than there are in their place on the formal organizational chart or similarity in issue area. For example, two agencies like the Environmental Protection Agency and the Food and Drug Agency, which are concerned with different policy areas and are on different levels of the executive hierarchy, have very similar politics and processes. This is because they are both regulatory agencies.

Modern Presidents Confronting "Big Government"

When politicians and pundits refer to "big government," they are almost certainly referring to the size and scope of federal agencies. "Big" in this context is of course a political term that is wielded differently by various parties and interests depending on the types of government services favored or disdained. Typically, the Democratic Party is considered progrowth for federal agencies and the Republican Party is typically perceived as the party for shrinking the number and influence of federal agencies. The presidents that presided over the most significant growth in the federal bureaucracy were Democrats Franklin D. Roosevelt, John F. Kennedy, and Lyndon B. Johnson. Ronald Reagan, a Republican, campaigned on a promise to reduce the size of the federal government. Early in his term he made serious cuts in agency personnel and made unsuccessful attempts to eliminate the Department of Energy and the Department of Education.

Ironically, Democratic President Bill Clinton conducted the most significant reform of federal agencies. Even skeptical Republicans regarded Clinton's National Performance Review, or Reinventing Government Program, as a highly successful effort to limit the size of the bureaucracy. Clinton eliminated nearly 300,000 federal jobs or 12 percent of the federal workforce in his first term of office. He had saved $80 billion by 1995 and eliminated 16,000 pages of federal regulations.

Agency Accountability: Congressional Oversight and Administrative Law

Although the president is usually the official held responsible for federal agencies, Congress has the most fundamental control over government agencies because it creates the legislation that enables each agency. Ideally, this legislation is a clear set of guidelines that instruct the agency on the ends and means of the policy mission. The more vague the legislation, the more discretion the executive branch is allowed.

Congress has significant powers of oversight as well. Congressional committees and subcommittees can hold public hearings at which agency officials are called to account for their actions. Congressional committees and subcommittees are not directly parallel with the division of labor in the executive branch. It is common for multiple hearings to be held on one agency across more than one Congressional Committee. Congress also has significant research capabilities within each Congressperson's office and in the Congressional Budget Office, Congressional Research Service, and General Accounting Office. This research capability is often employed to ensure bureaucratic accountability. The number of congressional hearings has increased significantly since World War II, as has the size of congressional staff to keep pace with an expanding executive branch.

Administrative law is another tool employed to ensure agency accountability. The United States is unique in the world in its adjudicatory approach toward the bureaucracy. American law dictates that the delegation of power to administrative agencies must be limited by legislative guidance on ends, means, and scope. Agencies are subject to judicial review when an agency is thought to overstep its legal bounds. In such cases, the court will interpret the enabling statute of the agency to determine legislative intent as to the authority of the agency. If Congress has created a clear statute, its intent must be followed. However, if Congress has created an ambiguous statute, the administrative agency, not the court, has the responsibility of clarifying the meaning of the statute. This is known as the Chevron doctrine, as it was determined in Chevron v. NRDC (1984). The court then holds the agency to a "reasonable" interpretation of the statute.

Administrative law also holds agencies accountable by adjudicating adherence to rules and procedural requirements. Agencies create rules and standards that clarify details of legislation. These rules are binding, like law, not only on the public, but also on the agency itself. The Federal Administrative Procedure Act, enacted in 1946, imposed notice and comment procedures that ensure some degree of public awareness prior to rule making. The courts ensure that public notice is given by agencies, and that agencies follow their own rules once they are established.

Finally, any administrative decision that adversely affects private individuals can lead to a formal adversarial hearing before an administrative judge. These hearings are called evidentiary hearings and they are based on the Constitutional right to "due process." These hearings are akin to trials, complete with formal public notice, the presentation of evidence, witnesses, arguments, cross-examination, and a complete public record. The right to a full hearing does not mean that all administrative decisions result in such a trial. In most cases, the right to a hearing is waived. Less than 5 percent of such decisions result in a hearing. However, this accountability provision is a powerful check on the actions of federal agencies.


Arnold, Peri E. Making the Managerial Presidency: Comprehensive Reorganization Planning, 1905–1996. 2d ed. Lawrence: University Press of Kansas, 1998.

Fesler, James W., and Donald F. Kettl. The Politics of the Administrative Process. Chatham, N.J.: Chatham House, 1991.

Lowi, Theodore J. "The State in Politics: The Relation between Policy and Administration." In Regulatory Policy and the Social Sciences. Edited by Roger G. Noll. Los Angeles: University of California Press, 1985.

Ripley, Randall B., and Grace A. Franklin. Congress, the Bureaucracy, and Public Policy. 5th ed. Pacific Grove, Calif.: Brooks and Cole, 1991.

Schwartz, Bernard. Administrative Law: A Casebook. 3d ed. Boston: Little, Brown, 1988.

Skowronek, Stephen. Building a New American State: The Expansion of National Administrative Capacities, 1877–1920. New York: Cambridge University Press, 1982.

United States Government Manual, 2000–2001. Washington, D.C.: Office of the Federal Register, 2000.

Wilson, James Q. The Politics of Regulation. New York: Basic Books, 1980.

———. Bureaucracy: What Government Agencies Do and Why They Do It. New York: Basic Books, 1989.

Daniel JohnSherman

See alsoAdministrative Discretion, Delegation of ; Administrative Justice ; Agriculture, Department of ; Bureaucracy ; Checks and Balances ; Commerce, Department of ; Congress, United States ; Defense, Department of ; Education, Department of ; Energy, Department of ; Federal Reserve System ; Health and Human Services, Department of ; Housing and Urban Development, Department of ; Interior, Department of the ; Justice, Department of ; Labor, Department of ; State, Department of ; Transportation, Department of ; Treasury, Department of the ; Veterans Affairs, Department of .

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