Summer Reading: Agency Mission Creep

August is a great time for lawmakers to grab a boogie board and hit the waves while avoiding riptide currents (and current events). But, there’s always that overzealous lifeguard who gets in the way of a good time. Virtually all beachgoers can think of a lotion-nosed busybody who is a little too liberal with his or her whistle. Like these lousy lifeguards, bureaucrats at federal agencies such as the U.S. Postal Service (USPS), Internal Revenue Service (IRS), Federal Trade Commission (FTC), Securities and Exchange Commission (SEC), and Consumer Financial Protection Bureau (CFPB) have been sticking their noses where they don’t belong and giving law-abiding taxpayers and consumers a hard time. Fear not, because the Taxpayers Protection Alliance (TPA) is keeping an eye on the lifeguard chair and isn’t afraid to use the megaphone to keep these beach buffoons in check.

While it’s not easy to forget the billions of dollars in losses being racked up by the USPS, it is  easy to forget all about the mail while on vacation, especially when your neighbor or relative has begrudgingly agreed to collect it on your behalf. Just because you have forgotten about the USPS doesn’t mean the USPS has forgotten about you. Back in 2021, Reason contributor Elizabeth Nolan Brown reported on some pretty troubling news: “Pop quiz: Which federal agency runs a social media surveillance unit known as the Internet Covert Operations Program (iCOP)?…postal inspectors have been monitoring social media platforms about U.S. protests, using tools that include a facial recognition database.”  

U.S. Postal Inspection Service (USPIS) agents browsing “Facebook, Parler, Twitter, and Telegram had noticed ‘significant activity regarding planned protests occurring internationally and domestically’ as part of a rally for freedom and democracy.” In the years since this disturbing discovery, lawmakers have repeatedly introduced legislation that would end federal funding for this program. No action has been taken, and additional information on the program has been hard to come by.

When the USPS isn’t busy cosplaying as the Central Intelligence Agency, the agency is keen on playing banker. It has been three years since the USPS launched its postal banking pilot program. The results speak for themselves. A recent analysis by Cato Institute policy analyst Nicholas Anthony notes, “The program allows customers to transfer business and payroll checks up to $500 to gift cards for a flat fee of $5.95 at locations in Virginia, Maryland, New York, and Washington, DC… At its peak, the pilot program had only six sales. In fact, the project has only garnered seven sales across its entire three years of existence.”

Imagine a business telling its investors not to worry about a lack of revenue coming in because there are no costs either. Yet, that’s exactly what the USPS recently told the Postal Regulatory Commission in a filing that was supposed to answer questions about the pilot.

The USPS isn’t the only agency masquerading as an unsuccessful business. The IRS somehow thinks it can be trusted to file Americans’ taxes, despite the agency’s poor track record with safeguarding sensitive taxpayer information, their repeated abuses of discretion, bipartisan political persecution, and false claims about not targeting the middle class with audits. As TPA’s Manager of Government Affairs Michael Mohr-Ramirez points out:

Direct File is an inherent conflict of interest for the IRS to both estimate tax bills and conduct audits on incorrect returns. Further, the IRS has shown itself incapable of handling the sensitive data it already has. This includes the massive amount of data that would come with providing such a program. In May  2022, the Government Accountability Office (GAO) published a study finding that between fiscal year (FY) 2012 and FY2021, the IRS completed 1,694 investigations into the ‘willful unauthorized access of tax data by employees’ with 27 percent of cases being found in violation. In June 2022, the Treasury Inspector General for Tax Administration (TIGTA) found that the IRS’s Cybersecurity Program was not effective in 17 of 20 metrics.

Fortunately, the IRS Overreach Prevention Act (H.R. 9109), introduced by Reps. Adrian Smith (R-Neb.) and Chuck Edwards (R-N.C.), would require the IRS to end the Direct File pilot program.

Hopefully, lawmakers also find time to rein in the FTC, which has embraced populist grandstanding at the expense of consumer welfare. TPA policy analyst David McGarry traces the problems of modern-day antitrust enforcement to the rise of “neo-Brandeisian” thinkers (named after Progressive-era trustbuster Justice Louis Brandeis) keen on expanding the clout of federal agencies such as the FTC and DOJ.

McGarry notes, “President [Biden] has placed neo-Brandeisians in key roles. Jonathan Kanter, Department of Justice (DOJ) Assistant Attorney General for Antitrust, and Lina Khan, [FTC] Chair, are prime examples of this flawed philosophy…While policy circles have made much of the DOJ and the FTC’s more overt attempts to vest themselves with more authority, less discussed is the degree to which the mere threat of legal actions can shape economic choices. The burdensome expenses required for a legal defense—even a successful one—are a powerful incentive for companies to avoid any sort of behavior that might draw scrutiny. Given the highly-interventionist philosophy of both Kanter and Khan, that category is quite broad.”

Antitrust investigations and enforcement expand by the day, and as a result, companies must think twice before hiring workers, adjusting prices, or doing really anything else. In the past few months, the FTC and DOJ have launched investigations against bulk discounting by grocery stores, enacted broad and costly regulations on employment contracts, and obsessed over the color of text messages.

The antitrust agencies are holding off for now on energy sector scrutiny, but that hasn’t stopped other regulators from embracing a costly climate agenda. In March, Competitive Enterprise Institute Research Fellow Stone Washington wrote in National Review about the SEC’s disastrous new climate-disclosure rule:

The [SEC] is finalizing a mandatory climate-disclosure rule for public companies — perhaps the costliest regulatory mandate in its entire 90-year history. In fact, the rule represents the first SEC-inspired disclosure that compels secondary information beyond a company’s present and prospective financial performance… Today’s climate-disclosure rule deviates from this tradition by compelling largely theoretical information on climate risks from an outside stakeholder’s perspective… Public companies and their private suppliers face significant financial costs if the rule is enacted. The SEC estimates a 250 percent increase for disclosure costs from the climate rule alone, raising the annual amount to $10.2 billion.

That means higher costs for consumers of the (many) companies bound by the disclosure rule, as regulatory expenses are inevitably passed down the chain. It also means less hiring and lower wage growth amid a faltering economy. The new disclosure requirements are currently in legal limbo, but their return would spell trouble for millions of Americans.

While antitrust and securities regulators have a field day cordoning off supermarket shelves, color-shaming messaging apps, and tying up the stock market in red tape, the CFPB is using hard-earned taxpayer dollars to go after… video games and credit card rewards points. The agency is a reckless regulator, running afoul of the Constitution and evading congressional oversight. The agency was created by the Dodd-Frank Act of 2010 to “regulate the offering and provision of consumer financial products or services.”

In an April report titled, “Banking in Video Games and Virtual Worlds,” the CFPB stretches its paper-thin mandate into the gaming world, playing up all sorts of scary scenarios regarding virtual video game currencies. Agency bureaucrats allege that “[g]aming publishers can collect a host of surveillance data about their users” and “operators of gaming and virtual worlds do not appear to provide the kinds of customer protections that apply to traditional banking and payment systems.” Like virtually all other media products, video games provide targeted advertisements based on consumer behaviors and patterns. Players can often pay to get rid of these ads, though many users prefer to endure brief ads for a free or low-cost gaming experience.

Earlier this year, CFPB hosted a joint briefing with the Department of Transportation to go after travel rewards programs. The CFPB was, in all likelihood, using this as an opportunity to do through regulatory fiat what the dubiously-named Credit Card Competition Act would do if it weren’t stalled in Congress. The CFPB tried to claim these rewards programs are, in some way, predatory and anti-competitive. However, as an organization tasked with protecting consumers, the agencies glossed over the immense popularity of such programs.

Sadly, it never occurs to bureaucrats what consumers want or need. Instead, the name of the game is mission creep and eating up ever-expanding budgets. TPA has had to constantly blow the whistle on these wasteful activities and call for reform and increased transparency. This regulatory “Sharks and Minnows” will surely continue long after the end of summer.