Shrinking the reach of US regulators

The amount of sugar in canned pineapple juice. Duck hunting. The number of prime time TV shows produced by the major networks. The interest earned by your checking account balance. Factory smokestack height. Those shallow ramps in the sidewalk, at street corners.

All these things are regulated by the long arm of the federal government - an arm President Reagan has said reaches into too many aspects of US life.

To shorten the government's regulatory reach, the Reagan White House supports a bill that would overhaul the basic rulemaking procedure, which dates from 1946 . The bill stands a 50-50 chance of passing during the lame-duck session, according to congressional sources.

A new rulemaking process would be set up by the bill, which would etch into law the requirement that agencies weigh the cost of a new rule against its benefits. It would also give presidents permanent power to oversee an agency's rulemaking activities.

The measure is a softened version of a bill that sailed through the Senate last March, 94 to 0, but bounced off stiff opposition in the House. The new bill has since been shaped in meetings between business lobbyists and the House Democratic leadership.

Opponents of the legislation say it sets up an obstacle course that few proposed regulations would be able to finish.

Critics also say that it is next to impossible to determine the true costs and benefits of a proposed rule, especially in the areas of health and environmental legislation - and they fear that the bill will allow the White House to become a hidden influence on the independent regulatory agencies such as the Consumer Product Safety Commission.

Those backing the bill deny it would radically alter government rulemaking.

In August, House Speaker Thomas P. O'Neill Jr. (D) of Massachusetts sent Reagan a letter promising action on regulatory reform legislation. But the speaker's feelings toward the bill have now cooled considerably.

In 1790, the infant Congress of the United States passed the country's first social regulation: a law allowing seamen to request inspections of the ships they sailed on.

Today's alphabet soup of federal rules, however, didn't exist until the late 1960s and early '70s, when Congress established 37 new regulatory agencies within 12 years.

These agencies produced ''vital consumer, health, and environmental statutes to protect the quality of life'' in the US from being harmed by industry actions , writes Joan Claybrook, head of the National Highway Traffic Safety Administration under President Carter.

But the explosive growth of federal regulation has also caused a string of presidents from both parties to complain that Washington, in some instances, is damaging the economy with its meddlesome ways.

The Reagan administration has claimed that government regulation costs US business upwards of $100 billion a year. (Much of that cost, however, is caused by the paper work requirements of the Internal Revenue Service.)

One month after taking office, Mr. Reagan signed an Executive Order requiring agencies to weigh the costs of major new rules against the perceived benefits.

Reagan's Task Force on Regulatory Relief is charged with overseeing the process, while rifling through old files to find rules in place that aren't worth their cost.

Now, the flow of new regulations appears to have slowed. The Reagan administration's attempts to strip away old rules have met with mixed success.

Through August of this year, Reagan rule-slashers have saved $9 billion to $ 11 billion in investment costs and $6 billion in annual costs, while cutting new rulemaking in half, says a task force report.

''We've simply eliminated a lot of very harmful regulations,'' claims task force director Christopher DeMuth.

Oil price controls have been eliminated, and prices haven't soared, he points out. A rule that would have forced New York City to pay $1.7 billion to outfit subway stations with elevators, for a relatively small number of wheelchair riders, has been scrapped. If you live in an area infested with gypsy moths, you won't have to get a government permit to move, as a proposed Department of Agriculture rule would have required.

Mr. DeMuth also counts as a major success a ''substantial reordering of antitrust policy,'' as shown by the dropping of the Justice Department's price-fixing case against IBM, and the out-of-court settlement reached with AT&T.

''Those cases were nightmares of litigation that were holding back technological progress in two critical markets,'' he says.

But critics charge that a list of rule reductions isn't an adequte measure of success. The White House views almost every regulation as an economic weight around the neck of business, without really considering the benefits society may get from the rule, says Nancy Drabble, director of Congress Watch.

''Not only are there no new (rulemaking) initiatives, they're not even enforcing the rules that are on the books,'' says Ms. Drabble, citing, in particular, changes in Food and Drug Administration procedures.

And the administration remains stymied in many areas of regulation, especially environmental rules. Changes in the Clean Air Act, for instance, remain mired in Congress - a situation former Council of Economic Advisers chairman Murray Weidenbaum has blamed on the ''combative'' style of Reagan's environmental officials.

''The situation there seems intractable,'' admits DeMuth, who adds that some of ''our most important economic sectors still are saddled with one degree or another of crummy, old-fashioned economic regulation.''

Regulatory barriers still prevent interstate banking. Pending the outcome of the AT&T breakup, the communications field is swathed in federal rules. Politically sensitive natural gas price controls remain in place.

''They haven't got their (deregulation) act together,'' grouses a regulation specialist who asked to remain unnamed.

of stories this month > Get unlimited stories
You've read  of  free articles. Subscribe to continue.

Unlimited digital access $11/month.

Get unlimited Monitor journalism.