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REGULATORY FOCUS/TIMOTHY B. CLARK The Cost of Benefits public debate about the costs and benefits of federal regulation has been acrimor]ious in recent years, and the government turnaround promised by the new Admin- istration doesn't seem. to promise cooler debate, And yet there are hints from members of the Administration that they will not seek constant confrontation with the labor unions, environmental groups and consumerists that have formed the constituency in the past decade for regulations aimed at social goals. And it is apparent that the new procedures President Reagan has established to govern ex- ecutive branch regulatory agencies will encourage a search for better information on which to base new and, with luck, better regulations. This optimistic view is tempered by the fact that it's too early to reach firm conclusions. While some Administration officials are sounding conciliatory,.publie interest groups are enjoying a boom in membership and contributions caused by fear of what Reagan might do. There is no denying the bitterness of past debates. The President's Commission for a National Agenda for the Eighties, in its recent report, said that in its examination of regulatory issues, it "was struck by the highly adversarial character of both the existing [regulatory] process and the national discussion of government regulation." Some people now in high Administration posts have em- ployed harsh rhetoric on the subject in the past. Last November, for example, Rep. Dave Stockman, R-Mich., now the director of the Office of Management and Budget (OMB), warned of ~ "ticking regulatory time bomb" and said that "'unless swift, comprehensive regulalory policy corrections are un- dertaken immediately, an unprecedented, quantum scale-up of the much discussed 'regulatory burden' will occur during the next 18-40 months.'" At OMB, Stockman's chief deputy on regulatory matters is James C. Miller III, a regulatory economist who last year supported a proposal that agencies assure that the benefits of their final rules outweigh the costs and that only the most cost-effective alternatives are adopted. That approach is anathema to public interest groups. What Miller and Stockman said six months ago certainly suggests that they will mount an all-out attack on many regulatory agencies in their new new positions of power. And, indeed, Reagan last month issued an executive order giving OMB much more power to influence regulatory aetions. Yet Miller of late has been emphasizing that OMB will not often substitute its judgment for that of the agencies. (See NJ, 3/14]81, p. 424,) In part to give increased authority to OMB's regulatory management effort, but also to make sure that OMB does not stray too far into the deregulatory thicket, Reagan ap- pointed a Presidential Task Force on Regulatory Relief, chaired by Vice President George Bush. Though Miller is executive director of the task force, the involvement of Reagan and Bush aides should help prevent OMB's endeavor from offending many more interests than its has to. One member of the task force is Murray L. Weideabaum, chairman of the Council of Economic Advisers, who has made a name in recent years as a leading academic critic of federal regulation. In the past nionth, Weidenbaum has been taking a softer approach, saying that "wholesale de- regulation of the entire government apparatus is not in the cards. The fact is, most Americans are concerned simul- taneously about cleaning the environment.and reducing the vast burdens of regulations." And even Stockman admitted recently that "there's a major residual role for government" in regulating workplace safety and the environment. \ If these moderate statements give heart to proponents of regulation, the Administration's insistence that agencies weigh the costs and benefits of alternative courses of action before issuing new regulations probably does not. Weidenbaum argues in an article recently circulated by the Center for the Study of American Business, which he headed until this year, that "benefit-cost analyses should be '9iewed as a tool for identifying the optimum amount of regulation rather than as a means of debat, ing the pros and cons of regulation in generai." One conclusion that can be drawn is that the Administration's approach to regulation will encourage better information on which to base decisions. Three Carter Administration officials involved in regulation--Michael Sohn, former general counsel of the Federal Trade Commi.ssion; William D. Nordhaus, a former member of the Council ot" Economic Advisers; and Robert E. Litan, who served on the council's staffm recently urged business groups to help provide a sounder basis for regulatory action. The new Administration's analytical effort, they wrote, would depend on information supplied by the private sector, and so "there are important--perhaps unrecognized--strategic opportunities for business firms, industries and trade as- sociations to contribute quantitative estimates of cost and" benefits to regulatory decision makers and thereby to shape the outcomes of regulatory decisions. Indeed, from our recent experiences in the federal government, the quality of these analytical inputs is critical to the evaluation of regulatory initiatives and far outweighs the more highly visible expressions of ideological rhetoric or the use of supposed "political clout' in influencing regulatory decisions." To the extent that public interest groups also can offer careful analysis, they too can play in the game, And if the quality of information rises, so should the quality of regulations. The Agenda for the Eighties Commission said that regulatory interventions must be preceded by a more careful examination of "'the specific rights in contention" and by identification of "the winners and losers for a given outcome .... Nothing will contribute more to the improvement of government regulation than a clear and honest debate over the real issues at stake in every proposal to regulate, deregulate or change to a new method of regulation." 171 TI04230934

Bush Fingers 27 Regulations for Possible The Reagan Administration has delivered a new blow in its assault on federal regulation. Vice President George Bush on March 25 announced that the Administration had singled out 27 major regulations for early review. In addition, Bush, chairman of the Presidential Task Force on Regulatory Relief, said that 36 of the 119 '*midnight rules" issued by agencies in the closing days of the Carter Administration and then frozen by President Reagan on Jan. 29 will continue to be frozen while agencies analyze their effects on the private sector. The review of 27 existing rules and policies implies changes in long-standing regulatory approaches at 13 agen- cies. For example, the Administration will reexamine the long-standing policy of the Occupational Safety and Health Administration (OSHA) to require industries to modify their factories to control airborne hazards. Altogether, the Labor Department will have more reviews to complete than any other agency. In addition to five existing regulations and policies, it will have to reexamine nine "midnight rules," including one governing exposure to lead and another requiring employers to pay workers for time spent accompanying OSHA inspectors. " Among Environmental Protection Agency rules that will remain frozen are measures setting effluent guidelines for the timber industry, general pretreatment requirements for water polluters and revised pesticide classifications. Following is a list of the 27 existing rules and policies slated for review: Meat products---rules governing production, use and labeling of mechanically processed meat products. Fruits and vegetables--regulations to implement fruit and vegetable marketing orders specifying quality, quan- tities and sales outlets. Forest planning--rules governing preparation of land and resource management plans, due by Sept. 30, 1985, for 191 million acres of National Forest Service land. Fishery management--rules primarily intended to prevent "'overfishing" of commercial fisheries. Handicapped education---rules defining special education programs to be provided for handicapped children. Coal conversion--regulations directing electric utilities and large industrial fuel users to switch from oil and gas to coal or an alternative fuel. Residential con .servation~"complex and expensive" rules requiring utilities to provide, for a nominal fee, an "energy audit" of a customer's home. Effluent g~idelines---rules governing how much money F-PA can make industrial dischargers pay to clean up non-toxic water pollutants. Hazardo~ waste--rules establishing a "cradle-t~-grave" system governing generation, handling and disposal of hazardous wastes. Pretreatment of wastes--Rul~s requiring the electro- plating industry to remove about 90 per cent of toxic pollutants they discharge into municipal sewage treatment Early Death systems and requiring those systems to establish general pretreatment rules for industrial dischargers. New drugs~rulcs governing submission, review and ap- proval of new drug applications, many of which have been subject to long delays. Medicaid-~regulations setting administrative require- ments of state agencies that .run the medicaid program. Health care monitorlng--rules subjecting hospitals, nurs- ing homes and other health care institutions to "myriad, frequent and duplicative surveys and reviews." Minimum property standards---rules governing design, construction and amenities of subsidized housing units. Surface mining--rules governing strip mining techniques and reclamation of mined lands. Coal managemenl--rules governing competitive lease sales for coal on federal lands, which sometimes are "excessively restrictive" in the West. Nondiscrimination laws---rules implementing an executive order that gave Justice responsibility for coordinating im- plementation of laws banning discrimination in programs receiving federal aid. Nolse--reguladoos due to take effect on April 15 re- quiring employers to keep workplace noise down to an average of 85 decibels. Minority hiring--rules of the Office of Federal Contract Compliance Programs requiring affirmative action by fed- eral contractors. Prevailing wage---ru~es under the Davis-Bacon and Ser- vice Contract Acts setting minimum wages to be paid workers by government construction and service contractors. Personal protection---OSHA's policy of requiring in- dustries to modify their productloa processes to protect workers against airborne hazards. C~rcinogen policy~OSHA's statement of how it intends to regulate cancer-causing agents in the workplace. Urban impac~ aualysis--regulations requiring agencies to identify the likely effects of their programs and policies on ehles, counties and other communities. Uni~e~ity researcl~--rules establishing standards for ado ministering research programs. University resettle-guidelines requiring universities to share in the costs of federally sponsored research projects. Handicapped access--rules requiring elevators in subway stations, lift~ on buses and other measures to enable wheelchair users and other handicapped people to use public transit. Inventory accounting~rules governing methods by which busln~sses, especially small ones, account for their in- ventories. ~,x,.~ NATIONAL JOURNAL 3/25/151 :~ T104230935

~aAntitrust and Consumer Affairs nnouncement by Robert Pitofsky of his intention to resign from the Federal Trade Commission on April 30 gives President Reagan an opportunity to create a Re- publican majority on the five-member commission and to appoint a permanent chairman in place of acting chairman David A. Clanton. When commissioner Paul Rand Dixon's term expires in September, Reagan will have the chance to make another appointment to the FTC, The agency has been criticized by l~ave Stockman, head of the Office of Management and Bridget, for doing more harm than good. (See N J. 2/21/81. p. 327.1 Banking and Monetary Policy The Reagan Administration expects that its policies will reduce pressures on the nation's financial and credit markets by inducing a sharp rise iri personal saving. By 1985, it expects personal saving to increase from 3.9 per cent of gross national product in 1980 (5.6 per cent of disposable personal income) to 5.1 per cent of GNP (7.5 per cent of disposable income). Business saving would rise from 12.4 per cent of GNP in 1981 to 13.3 per cent of GNP in 1985. At 1980 prices, each percentage point of GNP is worlh about $26 billion. (See NJ, 3/14/81. p. 4540 Budget Three influential House Me.tubers have filed a proposal to overhaul the 1974 Congressional Budget Act and require a balanced budget unless Congress has declared war. The requirement could be waived if Congress passes a resolution approving a specific deficit spending request. The measure was prepared by Phil Gramm, D-Texas, and co-sponsored by Majority Leader Jim Wright of Texas and Minority Whip Trent Lott of Mississippi. Wright, explaining that his action was independent of the Demo- cratic leadership, said there was "substantial bipartisan support" for the concept. (See this issue, p. 516.) Congressional Operations The National Taxpayers Union's study of 1980 congressional voting shows that Sen. Wdham Proxm~re, D,W~s., and Rep. Run Paul, R-Texas, were the top "friends of the taxpayers." Lowest on the group's list were Sens, Carl Levin of Michigan and Paul S. Sarbanes of Maryland and Rep. Raymond F. Lederer of Pennsylvania, all Demo- crats. Democrats scored a 27 per cent pro-taxpayer average and Republicans, 51 per cent. The organization, founded in 1969, claims 450,000 members who are interested in reducing government taxes and spending. (See NJ, 3/21/81, p. 482,1 Energy Imports and Exports Net energy imports dropped last year to the lowest level since 1975, according to Energy Department data. Figures show that 1980 net energy imports totaled 12 quads (quadrillions of British thermal units), down from 16.8 quads in 1979 and a recent peak of 18 quads in 1977. The 1975 total was 11.7 quads. The reductions in net imports were achieved mainly through lower demand for imported oil and more coal exports. Total U.S. energy consumption in 1980 was listed at 76,1 quads, 3 quads less than the year-earlier figure, fSee N J, 2/7/81, p. 22.$.1 Energy Pricing The Energy Department has offered a blanket settlement to some 400 wholesale and retail dealers of oil products that are under investigation for alleged violations of federal price control regulations. Under the arrangement, the com- panies could settle for 30 cents to 50 cents per dollar. The department said it expects to recover about $100 million on total alleged violations of $267 million and that it hopes to settle these cases so that it can concentrate its enforcement work on higher priority cases. (See N J, 2/9/80. p. 236.) Energy Production and Conservation Tentative agreement on a three-year labor contract was announced on March 23 by negotiators for the United Mine Workers of America and the Bituminous Coal Op- erators Association. The agreement, subject to ratification by the union's 160,000 members, reportedly provides wage and benefit increases totaling 36 per cent. The coal operators withdrew demands for Sunday work schedules and for individual company pension plans rather than the current industry-wide system in exchange for union concessions on other items. (See this issue, p. 519.] Environment Court challenges under several environmental laws have created the biggest obstacle to the "timely development" of offshore oil and gas, according to the General Accounting Office. Delays have ranged from three months to almost two years, the GAO reported. Suits were brought under the 1969 National Environmental Policy Act and the 1973 Endangered Species Act. Federal permit procedures-- particularly the Environmental Protection Agency's drilling discharge permit--also have contributed to delays, ac- cording to the GAO. (See N J, 9/20/80, p, 1561.1 Government Management The Reagan Administration declared the week of March 23 "Waste and Fraud Week" to dramatize its intent to reform the federal government, announced creation of the President's Council on Integrity and Efficiency in Government, said it would replace inspectors general fired earlier and suggested that internal investigations of federal waste and fraud would yield some startling results within a few weeks. One specific waste-cutting effort will be strict procedures for approval of government publications and films. (See NJ. !]31/81. p, 197.) i Health Policy The American Public Health Association says it opposes the "possible appointment" of C. Everett Koop as surgeon general. Koop, now deputy assistant Health and Human Services secretary for health, is expected to be promoted to assistant secretary and surgeon general. The association stressed that the post should go to a "physician trained and experienced in public and community health ... rather than a physician experienced solely in clinical medicine." There is another reason why Koop's appointment is con- troversial: he's an outspoken opponent of abortion. (See this issue, p. 522.) T104230936

Income Security Almost one out of five families on welfare would have their benefits reduced or eliminated if Pr~sldent Reagan's proposed cuts in aid to families with dependent children are approved, according to the Administration's own es~ timates. The Health and Human Services Department says almost ~0,000 families of the 3.8 million now receiving AFDC benefits would lose some or all of their benefits. That's 17.4 per cent of the total. The estimate includes 400,836 families that would lose their eligibility for aid and another 258.528 that would lose some benefits. (See N J, 3/14/81. p. 444.~ Inflation The consumer price index rose 1 per cent in February on a seasonally adjusted basis, compared with a 0.7 per cent increase in January. Much of the increase reflected higher energy prices, which jumped 5.1 per cent in the month against 3.1 per cent in January. Excluding energy, the index rose only 0.3 per cent, but much of this.apparent slowdown stemmed from a 1.2 per cent decline in new home prices. Medical care costs rose 0.7 per cent and clothing costs increased 0.7 per cent. (See this issue, p. 538.1 Intergovernmental Relations The Reagan Administration wants to shift responsibility for earning and paying for services from federal to state and local shoulders. Federal spending cuts have only been proposed, but states already are contemplating tax increases. A Tax Foundation survey counts $3.8 billion in tax increases pending before state legislatures this year. The National Conference of State Legislatures, at its Washington meeting on March 20-22, expressed concern for the equity of the distribution of new tax burdens among the states. [See. NJ, I/3/81. p. 4.) Labor and Business President Reagan reaffirhaed his support for a submlnimum wage for young people but significantly declined to endorse a specific proposal. Reagan's decision was announced after the subject was discussed at a meeting of the Cabinet council on economic affairs. Labor Secretary Raymond J. Donovan outlined the Administration's position at a hearing held by the Senate Labor and Human Resources Subcommittee on Labor. The Chamber of Commerce of the United States also supports the concept. (See N J, 1/24181, p. 146.1 National Security The Reagan Administration has asked Congress to repeal its 1976 ban on aid to rebels in Angola. Secretary of State Alexander M. Haig Jr. said the 1976 ban represents "'an unnecessary restriction" of presidential authority. The Administration is also seeking a repeal on prohibitions against military aid and arms sales to Argentina and Pakistan. The ban on Argentina was imposed in 1978 because of that nation's human rights record. Arms sales to Pakistan are prohibited by a 1977 amendment that seeks to control nuclear proliferation. (See NJ. 2[14/81, p. 285.1 Regulation The Business Roundtable has weighed in with its views on what Congress should do when it takes up exlension of the Clean Air Act. The group said that the Environmental Protection Agency should be required to use cost-benefit and cost-effectiveness analysis in considering new rules and reviewing existing ones. It recommended streamlining the agency's permit procedures, with more authority given to states. And it suggested that EPA be given authority to extend deadlines for meeting ambient air quality stan- da.rds where "further progress" toward attainment is dem- onstrated. ~See this issue, p. 539.) Tax Policy Sen. Ted Stevens, R-Alaska, has introduced a bill (S 565) to provide more generous tax deductions for employees forced to move for business reasons. Workers now can deduct all their moving expenses, but there's a $3,000 cap on other expenses, including travel to find and buy a new home, living expenses in a new location before a house is found and extra costs of seliing an old house and buying a new one. The bill would increase the deduction to the amount allowed federal workers for moving, now $12,000. Companies now pay many of these extra expenses. (See N J, 2/28/81, p. 340.) Trade Growth in world trade slowed in 1980 compared with .1...9.79, primarily because of a decline in oil transactions, according to a survey by the General Agreement on Tariffs and Trade. The total value of world trade was estimated at $2 trillion, an increase of about 21 per cent over 1979. This compares with a 25 per cent increase in the value of trade in 1979 over 1978. In volume, world trade growth increased only I per cent in 1980. The volume of world oil trade declined/ by about 10 per cent. (See this issue, p. 536.) / ~,Transportation The Transportation Department sent a bill to Congress that. would put the Civil Aeronautics Board out of business by Sept. 30, 1982, more than two years earlier than had been planned. Under the proposal, any of the agency's regulatory powers still in existence at that time would be either eliminated or transferred to the Transportation or Justice Department. One program that would be trans- ferred provides subsidized air service to small communities adversely affected by airline deregulation. (See NJ, 1/20/79, p. ~03.) Urban Policy The Administration's civil rights policies are still unclear. President Reagan and his Cabinet say they favor de- segregation, but so far have provided no details on how to achieve it. Education Secretary Terrel H. Bell said he opposes busing because "at the end of the bus ride you are still back in that racially isolated neighborhood," HUD Secretary Samuel R. Pierce Jr. said, "We need a stronger fair housing law than is on the books," but gave no clue as to what that might be. And HUD has yet to propose regulations for implementing the current housing law. {See NJ. 12fl3/80. p, 2136.) NATIONAL JOURNAL 3128181 547 T!04230937