Washington — "You must safeguard the environment," the federal government orders business. "You're costing us billions, wails business. "The public must be protected," says consumer advocates such as Ralph Nader.
Now comes a new voice, President Reagan, the most constant critic of excessive federal regulation to sit in the White House. He has made a political career out of charging that Washington is getting too big. Now he has acted:
* He has named Vice-President George Bush to head a task force on federal regulation.
* He has picked Murray Weidenbaum, whose university speciality was analyzing business regulations, to head the Council of Economics Advisers.
* He has made James Watt, who had been confronting the environmental movement in the courts for four years and who now proposes to open California coastal areas and national parks for commercial exploration, Secretary of the Interior.
Signs indicate clarification of federal regulations, perhaps even a showdown, is coming. The success of the Reagan tax and budget cuts now depends on encouraging business investment, which will be influenced by the federal regulatory atmosphere. Mr. Reagan decries alleged federal centralization. Some see a new chapter opening to the story that began with New Deal intervention after the 1929 stock market crash and the creation of the Securities and Excange Commission and similar agencies.
The cost of regulation is not small. Paul W. MacAvoy, former member of President Ford's Council of Economic Advisers and now at Yale University, says $ 50 billion is spent annually on regulations in the pollution field alone. Mr. Weidenbaum computes total government regulation costs in all fields as double that each year.
The Occupational Safety and Health Administration, established in 1970, required firms to complete individual forms on occupational injuries or illnesses for each employee, a vast paper load. A small company called Graymills Corporation, with 120 workers, submitted to Congress in 1973 a list of 40 kinds of forms it had to fill out, some for each employee, some several times a year. Bethlehem Steel Corporation in 1976 asserted the share of its total capital expenditures that went for required environmental control equipment was 15 percent.
Many see the beginnings of the present sensitivity on industrial health and safety regulations to publication in 1965 of Ralph Nader's book "Unsafe at any Speed," which dealt with alleged safety hazards in cars. But presidential candidate Reagan charged that social protection and government interference had gone too far. Now comes a possible showdown.
In his inaugural Reagan said, "It's not my intention to do away with government. It is rather to make it work -- work with us, not over us; to stand by our side, not ride on our back. Government can and must provide opportunity, not smother it; foster productivity, not stifle it."
The so-called Clean Air Act may provide the immediates test of Reagan's ability to control Congress in the regulatory field as he has done on the economic front. The act is scheduled for legislative review this fall based on a 10-year record of program management by the Environmental Protection Agency. The agency agrees that its rules need moderation and has proposed modifications. Critics say it is not enough.