Introduction
Amidst growing pressures to streamline the federal government and reduce fiscal waste, it’s critical to distinguish two distinct roles federal agencies serve: regulatory functions and operational functions. Regulatory functions involve creating and enforcing rules to safeguard public welfare, while operational functions focus on delivering services, sharing resources, or producing outputs that provide direct value to stakeholders. The legitimacy and efficacy of these roles depends significantly on their legal foundations—whether rooted in direct congressional mandates, executive orders, or broader statutory interpretations.
This article examines the difference between regulatory and operational functions, the importance of legal foundations to agency action legitimacy, and the resulting policy making implications associated with the Department of Government Efficiency’s (DOGE) mission to align federal agency activities with public trust, economic productivity, and efficiency.
Distinguishing Regulatory from Operational Functions
Regulatory Functions
Regulatory functions are essential for protecting public goods, but their design can either foster innovation or impose significant economic costs. They involve creating and enforcing rules to ensure compliance, address externalities, and promote public interests. These activities, however, can disrupt competition or innovation if not carefully calibrated.
At their core, regulations are meant to address market failures, such as pollution or unsafe labor conditions, by creating safeguards for public health, safety, the environment, etc.. For example, the EPA’s Clean Air Act regulations have certainly improved air quality. Yet they come with compliance costs on industries, not only favoring some sectors (e.g., renewable energy) while disadvantaging others (e.g., natural gas and agriculture), but reducing the ability for smaller, more innovative companies to compete against large incumbent actors with greater ability to capture agencies.
However, it must be acknowledged that regulatory certainty can provide important frameworks for businesses to conduct cost benefit analysis, direct investment, and drive innovation within known boundaries.
Thus, certain regulatory functions are desirable but should be continually evaluated to ensure they support, rather than hinder, security, national wellbeing, innovation, and economic vitality.
Operational Functions
Operational functions involve providing services, resources, or infrastructure that enable stakeholders to address shared challenges efficiently. These activities create shared resources, reduce redundancy, and empower stakeholders to innovate and solve problems.
For example, as a scientific research agency, the United States Geological Survey centrally coordinates the collection and production of topographic and hydrologic data collection through the 3D National Topography Model (3DNTM), comprising the 3D Elevation Program (3DEP) and the 3D Hydrography Program (3DHP).
National datasets like 3DNTM demonstrate the power of public partnerships to deliver value at a scale and efficiency unattainable by private industry. They require extensive funding, coordination, and operational capabilities which exceed the capacity or profitability motives of private firms alone. For example, private firms would likely create fragmented, proprietary datasets, reducing accessibility and interoperability for public and private stakeholders, thus reducing the overall problem solving capacity and value of the data.
Open access to data ensures widespread use in public and private products and services, resulting in a value multiplying effect benefitting mission critical functions such as disaster planning, national security, infrastructure development, and private-sector innovation.
Moreover, the 3DNTM provides up to 50% of project funding to states, encouraging localized control while achieving national-scale goals. By pooling resources and prioritizing open data, 3DNTM demonstrates how operational functions can deliver measurable value, catalyze innovation, and empower stakeholders at all levels.
Operational functions like 3DNTM highlight the importance of public-private partnerships in delivering value and addressing challenges that exceed private sector capacity.
Why Legal Foundations Matter
The legal foundations behind federal agency activities play a pivotal role in determining their legitimacy, efficiency, and value to the taxpayer. Programs grounded in clear congressional mandates typically enjoy greater public trust and accountability than those operating on tenuous legal authority. However, even congressionally authorized activities are not immune to inefficiency and waste if poorly structured or executed.
Legitimacy and Public Trust
Federal programs with explicit congressional authorization draw their legitimacy from democratic oversight, reflecting the will of the taxpayer through their elected representatives. This connection to the legislative process makes such programs more resilient to political or budgetary challenges.
For example, the USGS 3D National Terrain Model (3DNTM) operates under a transparent and collaborative framework, backed by clear congressional appropriations to the USGS to support the National Geospatial Program within its Core Science Systems (Pub. L. No. 118-42, 138 Stat. 227 (2024), at page 203; H.R. Rep. No. 117-400 (2022), at page 46). This explicit congressional support ensures the 3DNTM aligns with national priorities, such as topographic and hydrologic mapping to support a host of public and private initiatives.
In contrast, regulatory actions derived from broad statutory interpretations—such as some of the EPA’s expansive rulemaking under the Clean Air Act—often face criticism for lacking direct legislative input, which can erode public trust (Supreme Court to Review EPA ‘Good Neighbor’ Air Pollution Rule, AP News (Mar. 27, 2023)).
However, congressional authorization alone does not guarantee public trust. Programs like FEMA, while clearly mandated, often suffer from inefficiencies that undermine their effectiveness (Joshua A. Geltzer & Olivia Troye, Federal Disaster Management Is a Confusing Patchwork. Reforming FEMA and Improving Interagency Coordination Can Fix It, Brookings Institution (Oct. 5, 2022)).
Public trust depends not only on the legal foundation but also on transparency, accountability, and demonstrable value.
Potential Waste and Efficiency
Even congressionally mandated programs can waste resources if they displace more efficient state or local solutions. FEMA’s disaster response, for example, often centralizes decision-making, slowing down localized responses and creating inefficiencies. In contrast, collaborative models like 3DNTM demonstrate how federal programs can avoid waste by empowering states and private stakeholders.
Through the 3DEP and 3DHP components of the 3DNTM, the USGS not only coordinates with other federal agencies to minimize redundant federal efforts, it is congressionally authorized to provide up to 50% of project funding to state and local government efforts to collect and produce high resolution elevation and hydrography data. States are given the option to manage the collection and production efforts themselves, or allow the USGS to manage their project through established contracts. Either way, the resulting data goes through a common validation process to ensure it meets 3DNTM standards before it is incorporated into the National Map. This approach reduces redundancy, encourages localized control, and ensures resources are used where they are most needed.
By providing a central coordinating framework for data collection efforts and providing open access to the resulting datasets, 3DNTM minimizes inefficiencies while maximizing the utility of taxpayer dollars.
Economic Productivity
The economic impact of agency functions depends on their ability to balance regulatory oversight with operational productivity. Regulatory frameworks can protect public goods and prevent market failures, but they also risk creating inefficiencies by stifling competition or innovation. Operational programs like 3DNTM, on the other hand, provide tangible economic benefits by enabling shared innovation and reducing costs across sectors.
For instance, 3DNTM’s publicly available data is integrated into almost every publicly and commercially available basemap, supporting applications ranging from floodplain mapping and disaster planning to agricultural optimization and urban development. This shared resource model not only reduces the cost burden on individual states and private firms but also fosters new economic opportunities by enabling the development of products and services that would otherwise be impractical.
Implications for Policymaking and the DOGE
The establishment of the Department of Government Efficiency (DOGE) underscores the necessity for deliberate and informed policymaking. By concentrating on key areas such as data management, operational strategies, governance structures, and efficiency measures, policymakers can enhance the effectiveness of federal agencies, bolster public trust, and drive economic productivity.
Governance Structures
Strong governance ensures alignment between agency activities and public interests. Congressional authority and oversight plays a critical role in maintaining strong governance and accountability. Policymakers must be intentional about legislatively enabling agency discretion within clearly defined limits to prevent overreach, thereby ensuring programs remain transparent and responsive to stakeholder needs.
Data Management
Investing in programs that generate open, standardized datasets is crucial. Initiatives such as the National Spatial Data Infrastructure (of which 3DNTM is included) enable cost-sharing and foster innovation across various sectors. Open-access data supports diverse applications, from disaster response to commercial product development. To maximize impact, federal programs should prioritize interoperability and accessibility, ensuring datasets remain usable by both public and private stakeholders.
Operational Strategies
Operational programs should emphasize partnerships and localized control, reducing inefficiencies inherent in centralized decision-making. By fostering collaboration among federal, state, and private entities, agencies can align resources with localized needs while achieving national goals at scale. Programs like the 3DNTM demonstrate the power of shared operational frameworks to minimize redundancy and amplify results.
Efficiency Measures
Efficiency should remain a guiding principle for both regulatory and operational functions. Regulatory frameworks must undergo regular cost-benefit analyses to identify and eliminate unnecessary burdens while retaining their protective value. Operational programs should evaluate resource allocation and performance metrics to ensure they maximize taxpayer value.
By prioritizing these areas, the Department of Government Efficiency can ensure federal agencies direct their regulatory and operational functions effectively, reducing waste, streamlining processes, and delivering value-driven outcomes that build public trust while empowering states, local governments, and private actors to achieve shared national goals.
Conclusion
Understanding the distinction between regulatory and operational functions within federal agencies is essential for evaluating the effectiveness and value of federal agency activities. Regulatory functions play a critical role in safeguarding public goods, but they must be carefully designed to avoid inefficiencies and unintended economic consequences. Operational functions, by contrast, offer a unique opportunity to maximize utility by pooling resources, reducing redundancy, and enabling collaboration on a scale impractical for private industry alone.
Programs like the USGS 3DNTM exemplify the potential of congressionally supported operational functions to deliver tangible benefits. By centralizing data collection and sharing costs with states and private stakeholders, 3DNTM not only reduces waste but also empowers innovation and problem-solving across sectors. In contrast, centralized models like FEMA often expose the risks of inefficiency when federal activities displace rather than complement state and local efforts.
Policymakers should prioritize operational functions that address shared challenges through collaborative frameworks and clear congressional mandates in their appropriations. These functions represent the best of what federal agencies can achieve: delivering national-scale value while empowering local actors and the private sector to innovate and succeed. By funding operational functions maximizing utility and minimizing waste, the federal government can foster public trust, ensure national resilience to today’s challenges, and create value multipliers private efforts alone cannot provide.
