Independent Regulatory Agencies

Independent Regulatory Agencies - Government Corporations...

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Independent Regulatory Agencies An independent regulatory agency is an agency outside of the cabinet departments that makes and enforces rules and regulations. The president nominates people to regulatory boards and agencies, and the Senate confirms them. Generally, these bureaucrats serve set terms in office and can only be removed for illegal behavior. Regulatory agencies tend to function independently from the elected parts of government, which gives them the freedom to make policy without any political interference. Example: The Securities and Exchange Commission, the Federal Election Commission, and the Federal Reserve Board are all powerful independent regulatory agencies. Agency Capture Scholars argue that some agencies have been taken over by the very industries they are supposed to regulate. The industries then dictate terms and policies to the agency rather than the other way around. Scholars use the term agency capture to describe this process. Agency capture causes decreased competition and higher prices.
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Unformatted text preview: Government Corporations Some federal agencies resemble corporations in that they function in a businesslike manner and charge clients for their services. Government corporations differ in some important ways from private corporations. For example, government corporations do not have stockholders and do not pay dividends if they make a profit; instead, the government corporation retains all profits. Examples: The Federal Deposit Insurance Corporation, which guarantees deposits up to $250,000, and the Post Office are government corporations. Presidential Commissions Presidents regularly appoint presidential commissions to investigate problems and make recommendations. Although most of these commissions are temporary—such as President George W. Bush’s Commission to Strengthen Social Security or the September 11th Commission—some are permanent, such as the Commission on Civil Rights. Presidents are not bound to follow the recommendations of commissions, even though they often do....
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