Ask the Scholar

{
    "localId": "16988387",
    "label": "Regulatory Reform (8)",
    "core": "doc",
    "dtoType": "document",
    "citationUrl": "https://catalog.archives.gov/id/16988387"
}

{
    "id": "16988387",
    "sourceUrl": "https://catalog.archives.gov/id/16988387",
    "contentType": "document",
    "title": "Regulatory Reform (8)",
    "description": "This file contains material relating to the Domestic Council Review Group on Regulatory Reform and President Ford's meetings with regulatory commissioners.",
    "citationUrl": "https://catalog.archives.gov/id/16988387",
    "collections": [
        "James M. Cannon Files (Ford Administration)",
        "James Cannon's Issues Files"
    ],
    "subjects": [
        "Aeronautics, Commercial",
        "Antitrust law",
        "Government regulation",
        "Independent regulatory commissions",
        "Intergovernmental relations",
        "Legislation",
        "Regulatory reform",
        "Trucking"
    ],
    "iiifBase": "https://s3.amazonaws.com/NARAprodstorage/lz/presidential-libraries/ford/grf-0039/635863/16988387.pdf",
    "thumbnailUrl": "https://s3.amazonaws.com/NARAprodstorage/lz/presidential-libraries/ford/grf-0039/635863/16988387.pdf",
    "largeImageUrl": "https://s3.amazonaws.com/NARAprodstorage/lz/presidential-libraries/ford/grf-0039/635863/16988387.pdf",
    "imageCount": 1,
    "hasImages": true,
    "source": "import",
    "hasTranscription": false
}

{
    "url": "https://catalog.archives.gov/id/16988387",
    "naId": 16988387,
    "coverageEndDate": {
        "logicalDate": "1976-12-31",
        "month": 12,
        "year": 1976
    },
    "coverageStartDate": {
        "logicalDate": "1975-06-01",
        "month": 6,
        "year": 1975
    },
    "levelOfDescription": "fileUnit",
    "recordType": "description",
    "ocrSource": "nara-archive"
}

{
    "seq": 1,
    "pageIndex": 0,
    "type": "document",
    "url": "https://s3.amazonaws.com/NARAprodstorage/lz/presidential-libraries/ford/grf-0039/635863/16988387.pdf",
    "mediaId": "1ad40e3833011e16",
    "ocrText": "The original documents are located in Box 29, folder \"Regulatory Reform (8)\" of the James\nM. Cannon Files at the Gerald R. Ford Presidential Library.\nCopyright Notice\nThe copyright law of the United States (Title 17, United States Code) governs the making of\nphotocopies or other reproductions of copyrighted material. Gerald Ford donated to the United\nStates of America his copyrights in all of his unpublished writings in National Archives collections.\nWorks prepared by U.S. Government employees as part of their official duties are in the public\ndomain. The copyrights to materials written by other individuals or organizations are presumed to\nremain with them. If you think any of the information displayed in the PDF is subject to a valid\ncopyright claim, please contact the Gerald R. Ford Presidential Library.\nASSISTANT ATTORNEY GENERAL\nANTITRUST DIVISION\nDepartment of Justice\nMashington, D.C. 20530\nNovember 26, 1975\nMEMORANDUM FOR: CALVIN COLLIER\nPAUL MacAVOY\nMICHAEL MOSKOW\nROGER B. PORTER\nDAVID HARTQUIST\nPAUL LEACH\nFROM:\nTEK\nTHOMAS E. KAUPER\nASSISTANT ATTORNEY GENERAL\nANTITRUST DIVISION\nSUBJECT:\nANTITRUST IMMUNITIES TASK GROUP --\nROUND TABLE MEETINGS ON INSURANCE\nAttached is a schedule of the meetings on insurance\nto be held during the week of December 1st, in the Andretta\nConference Room, Department of Justice, which is located on\n10th Street at Constitution Avenue, N.W. The schedule indicates\nthe list of invitees for each of the meetings. Also enclosed\nis a copy of the letter mailed to the invitees and an attach-\nment indicating the issues to be discussed at the meeting.\nGERALD LIBRATY GERALDR. FORD\nREVOLUTICA\n/\n:\nDigitized from Box 29 of the James M. Cannon Files at the Gerald R. Ford Presidential Library\nSCHEDULE OF ROUND TABLE MEETINGS\nMonday, December 1, 1975 - 1:00 p.m.\nThe state regulators invited to this meeting are\nas follows:\nMr. James J. Sheeran\nCommissioner of Insurance\nMr. Phil Stern, accompanying\nState of New Jersey\nMr. Sheeran\nMr. Wesley J. Kinder\nCommissioner of Insurance\nMr. Mark Kai-Kee, accompanying\nState of California\nMr. Kinder\nMr. James M. Stone\nCommissioner of Insurance\nState of Massachusetts\nMr. John G. Day\nCommissioner of Insurance\nState Corporation Commission\nCommonwealth of Virginia\nRobert E. Dineen, Esquire\nConsultant\nMr. Jon Hanson, accompanying\nNational Association of\nMr. Dineen\nInsurance Commissioners\nMilwaukee, Wisconsin\nMr. Ark Monroe, III\nCommissioner of Insurance\nState of Arkansas\nMr. William H. Huff, III\nCommissioner of Insurance\nState of Iowa\nMr. Dick L. Rottman\nCommissioner\nState of Nevada\nMr. Robert B. Wilcox\nDirector of Insurance\nState of Illinois\nFORD\nLIBRARY\nTuesday, December 2, 1975 - 1:00 p.m.\nRepresentatives of mutual insurance companies\ninvited to attend this meeting are as follows:\nMr. Donald P. McHugh\nVice President & General Counsel\nPro\nState Farm Insurance Companies\nMr. John K. Dane\nVice President & Counsel\nLiberty Mutual Ins. Co.\nMr. William McCrae \"BiLL\"\nSenior Vice President - General Counsel\nUnited Services Automobile Association\nof San Antonio\nMr. Roland J. Wendorff\nVice President - General\nCounsel and Secretary\nEmployers Insurance of Wausau\nMr. Edmund J. O'Brien\nGeneral Counsel\nKemper Insurance Companies\nMr. Dean W. Mitchell \"MITCH\"\nExecutive Vice President\nFarm Bureau Insurance Companies\nMr. Lorne Worthington\nVice President\nPreferred Risk Insurance Companies\nMr. George Reall\nPresident\nNational Council on Compensation\nInsurance\nMr. Samuel C. Cantor\nSenior Vice President\nMutual Life Ins. Co. of New York\nMr.\nGorman\n2\nMr.\nMassonpierre\nFORD LIBRARY\nMr.\nMertz\nMr. Manuel Gorman\nVice President & General Counsel\nAmerican Life Insurance Association\nMr. A. D. Sappington\nPresident\nMF A Insurance Companies\nMr. Arthur C. Mertz\nExecutive Vice President\nNational Association of Independent\nInsurers\nMr. Andre Maisonpierre\nVice President\nAmerican Mutual Insurance Association\nWednesday, December 3, 1975 - 1:00 p.m.\nRepresentatives of stock insurance companies invited\nto attend this meeting are as follows:\nMr. Newell G. Alford, Jr.\nSenior Vice President - General Counsel\nChubb & Sons, Inc.\nMr. William O. Bailey\nExecutive Vice President\nAetna Life & Casualty\nMr. B. P. Russell\nChairman of the Board\nCrum & Forster Ins. Cos.\nMr. Donald Schaffer\nVice President - Secretary and\nGeneral Counsel\nAllstate Insurance Co.\nMr. Edmund Rondepierre\nVice President\nINA Corporation\nMr. John Carton\nVice Chairman of the Board of\nPHF Insurance Co.\nFORD\nChairman of the Boards of Wolverine\nand Riverside Insurance Cos.\nLIBRARY\n3\nMr. Frank Barrett\nExecutive Vice President and\nChief Counsel\nMutual of Omaha and Its Affiliates\nMr. Y. Lawrence Jones\nPresident\nAmerican Insurance Assoc.\nMr. J. Maurice Miller\nSenior Vice President\nLie Insurance Co. of Virginia\nMr. Daniel J. McNamara\nPresident\nInurance Services Office\nMr. Leslie P. Hemry\nPresident\nHealth Insurance Assoc. of America\nMr. James M. Tulloch\nPresident\nDairyland Insurance Company\nThursday, December 4, 1975 - 1:00 p.m.\nRepresentatives of the insurance agents associations\ninvited to attend this meeting are as follows:\nMr. Jay Wanamaker\nPresident\nNational Association of\nInsurance Agents\nMr. Bruce T. Wallace\nExecutive Vice President\nNational Association of\nCasualty & Surety Agencs\nMr. R. L. Remington\nExecutive Director\nNational Association of Insurance Brokers\nMr. Ralph J. Marlatt\nVice President\nGovernment Affairs\nNational Association of Mutual\nFORD of LIBRARY\nInsurance Agents\n4\nMr. Tom C. Johnson\nExecutive Vice President\nFlorida Association of Insurance Agents\nFriday, December 5, 1975 - 9:00 a.m.\nRepresentatives of state legislatures, consumer groups\nand the academic communities invited to attend this meeting\nare as follows (list incomplete) :\nMr. Thomas A. Harnett\nSuperintendent of Insurance\nMr. Stanley Dorf, accompanying\nState of New York\nMr. Harnett\nState Senator Walter Briston\nState of South Carolina\nState Senator Daniel J. Foley\nState of Massachusetts\nState Representative Bernard Epton\nState of Illinois\nDr. Paul L. Joskow\nAssociate Professor\nDepartment of Economics\nMassachusetts Institute of Technology\nDr. Willimam H. Wandel\nDirector, Ohio Retirement\nStudy Commission\nMr. Spencer Kimball\nAmerican Bar Foundation\nMr. Michael Gildea\nAssistant to the Director\nLegislative Department\nAFL - CIO\nMr. Howard R. Wilde\nCommissioner\nDepartment of Insurance\nState of Wisconsin\nMr. Herbert Denenberg\nFORD LIBRARY\nDear [\n]\nAs you may be aware, the President has established\na Task Group on Antitrust Immunities as part of the\nAdministration's overall regulatory reform effort. The\nTask Group is charged with analyzing existing exemptions\nand immunities from federal antitrust laws and making\nrecommendations as to their modification, if appropriate.\nIn this connection, we have under consideration the\nextensive antitrust exemption conferred upon the insurance\nindustry by the McCarran-Ferguson Act, and its effect on\nmeaningful price competition.\nAs Chairman of the Task Group, I extend to you an\ninvitation to meet with us, in order to discuss certain\nspecific issues which we have identified in the attachment\nto this letter.\nThe meeting will be held [Monday, December 1, 1975,\nat 1:00 p.m. ] in the Andretta Conference Room, Department\nof Justice, which is located on 10th Street at Constitution\nAvenue, N.W., Washington, D. C. We would also appreciate\nyour written comments on these specific issues. It would\nbe very useful if you could bring such comments with you,\nbut if this is not possible, we would very much like to\nhave them before the holiday season.\nIn view of our very limited seating accommodations, I\nwould appreciate your informing us as to whether or not you\nwill be able to attend the meeting. Please confirm by\ncalling Mrs. Dorsey or Mrs: Hill at (202) 739-2512.\nI look forward to meeting you at our round-table\nsession.\nSincerely yours,\nTHOMAS E. KAUPER\nAssistant Attorney General\nAntitrust Division\nFORD LISNARY\nATTACHMENT\nISSUES FOR DISCUSSION\nAT THE\nROUND-TABLE MEETINGS\nON INSURANCE\nThe study of the Presidential Task Group on Antitrust\nImmunities has raised a number of questions concerning the\neffectiveness of state insurance regulation in achieving\nreasonable prices, maximum efficiency,\" and innovation in the\nsale and distribution of property-liability (\"P-L\") insurance.\nThese goals are relevant to both state regulation of insurance\nand federal antitrust policy:\nIn particular, the Task Group is concerned that the\ninsurance rates may not be closely related to costs, that\ninsurers are unnecessarily restricted in their ability to\nmarket their services, and that, as a consequence, the public\nis being denied the benefits of an efficient system for the\nsale and distribution of P-L insurance. The fundamental issue\nbefore the Task Group is whether unrestricted price competition\nenforced through the application of the federal antitrust laws\nis, at this time, a necessary and appropriate alternative to\nconflicting state regulation.\nFORD & 07V839 LIBRARY\nIn this connection, we raise the following questions for\nyour consideration:\n(1) Has rate regulation generally produced a price\nstructure reasonably related to costs, including a fair return\non capital?\n(2) Is there a significant difference between the\nextent of independent pricing by P-L insurers in \"open\ncompetition\" and \"prior approval\" states?\n(3) Are the rates for life insurance and health insurance\nregulated by the states? If not, has competition provided\neffective controls over the price for such services?\n(4) Can competitive forces in the sale of P-L insurance\nserve as an effective substitute for rate regulation in pre-\nventing (a) excessive rates, (b) inadequate rates, or (c)\nunfairly discriminatory rates?\n(5) Identify and explain the specific lines of P-L\ninsurance or conditions, if any, where price competition\nmay not provide effective controls.\n(6) Do the assigned risk and FAIR plans, or workman's\ncompensation, require special consideration with respect to\nstate controls in a fully competitive rate environment?\n2\napril\nSTATE R FORD CIBRENT\n(7) Has rate regulation adversely affected the availability\nof P-L insurance, i.e., the ability of nonpreferred risks to\nobtain adequate insurance protection through standard channels\nat prevailing market rates, or at rates they can afford?\nWould a fully competitive rate structure significantly affect\nthe availability of insurance?\n(8) Would any necessary pooling of loss experience in\nP-L insurance (or, perhaps, mortality experience in life\ninsurance and morbidity experience in health insurance)\nrequire a special exemption if the federal antitrust laws\nwere to be fully applicable to rate making?\n(9) Would full application of the federal antitrust\nlaws to the pricing of insurance services have adverse effects\non the ability of the industry to pool large risks?\n(10) What is the justification, if any, for the perpetu-\nation of various state restrictions on collective merchandising\n(e.g., \"fictitious group\" statutes, \"guide line\" legislation) ?\n(11) Has the relatively unrestricted collective\nmerchandising of life and health insurance generally resulted\nin benefits to the consuming public?\n(12) What are the impediments in the P-L field to an\nagency company converting its method of marketing, in part,\nto direct writing? What are the impediments to a direct\nGEORGE FORD LIBRAR\n3\nwriter relying, in part, on independent agents to market\ntheir insurance?\n(13) What is the justification, if any, for the\nperpetuation of state antirebate laws with respect to agents'\ncommissions in a competitive rate environment?\n(14) What is the relevance of investment income in the\ndetermination of rates by insurers?\n(15) Would the application of the federal antitrust\nlaws to the determination of rates affect regulation or the\noperations of life or health insurers?\n(16) What bearing, if any, do state no-fault laws have\non the effectiveness of price competition in controlling\nrates?\nFORM LIBRARY 19\nTHE WHITE HOUSE\nWASHINGTON\nDecember 19, 1975\nDear Mr. Chairman:\nAt my hearing before your Committee on October 22, 1975, we\ndiscussed Executive Branch reporting and paperwork require-\nments. I am submitting the following information and\nselected examples for your consideration.\nAs you may know, in March of this year, G.A.O.'s Office of\nProgram Analysis began a survey of recurring reports which\nthe Executive Branch must transmit to Congress. Although\nthis information has not yet been correlated, executive\nagencies have already identified more than 1,200 recurring\nreports per year, and G.A.O. estimates that the final total\nwill exceed 1, 700. The reports range from 1 to 600 pages;\nfive legal size filing drawers are required to hold one\ncopy of each report filed in FY 1975.\nThe President must submit 124 reports to Congress each year\nin addition to the 118 reports which are prepared by\nDepartments for presidential signature and transmitted by\nhim to Congress.\nThere are a number of reports now required by law to be\nfiled by the Executive Branch which might be eliminated with\nno loss of information to Congress or the general public.\nA few examples follow.\nThe Department of Health, Education, and Welfare has one of\nthe heaviest reporting burdens in the Executive Branch, and\nalso imposes heavy reporting burdens on the public. For\nexample, in FY 1975, HEW received 180.4 million responses\nfrom the general public on forms required to be filled out\nby the Federal Government. This corresponds to 43.6 million\nperson hours, or 21, 702 person years required for filling\nout governmental forms. Approximately 66% of this burden\nis attributable to the Social Security system's 28 million\nbeneficiaries, and to hospital insurance claims.\nis\nFORD\n-2-\nHEW is also required to submit approximately 102 annual\nreports to Congress including:\n1. The Report to Congress on the National Advisory\nCouncil on Health Research Facilities, (PHS Act,\nSec. 710). Congress has not funded any activities\nsince FY 1969 under this Act, the Advisory Council\nhas not met since 1970, and the information trans-\nmitted in the Report could be shared in an appro-\npriations hearing.\n2. The Annual Report on the Administration of the\nRadiation Control for Health and Safety Act of\n1968. In the 1975 Report the Department made the\nfollowing recommendation:\n\"All of the information in the Report is available\nto Congress on a more immediate basis through\nCongressional Committees, Over-Sight and Budget\nHearings. The Department and FDA have concluded\nthat this Report serves little useful purpose and\ndiverts Agency resources from more productive\nactivities.\n\"\n3. The Annual Report on the Administration of Sections\n304-307 of the PHS Act. Most of the information\nfrom this report is also found in Congressional\nbudget justifications, and pamphlets published by\nthe National Center for Health Services Research\nand the National Center for Health Statistics.\n4. NIH is required to submit 20 reports, 10 of which\nare annual. According to HEW recommendations now\nundergoing OMB review: \"Two of the ten, the Annual\nReport of the National Heart and Lung Advisory\nCouncil and the Annual Report of the National\nCancer Advisory Board (Appendix, page 11, No. 5\nand 7), should continue as separate reports. How-\never, the remaining eight could be covered in the\nannual report of all of the Institutes, the NIH\nAlmanac. The eight reports are:\nNumber\nTitle\n1\nReport of the International Health\nResearch Act of 1960\n2\nSickle Cell Anemia Report\nFORD\nLIBRARY\n-3-\nNumber\nTitle\n3\nCooley's Anemia Report\n4\nAnnual Report of the Director of the\nNational Heart and Lung Institute\n6\nAnnual Report of the Director of the\nNational Cancer Institute\n14\nReport on the Activities of Diabetes\nResearch and Training Centers\n15\nAnnual Report on Arthritis\n18\nAnnual Report on Activities of\nComprehensive Arthritis Centers.\"\nThree report requirements of the Department of Housing and\nUrban Development might be eliminated.\n1. No report has ever been prepared for the Status of\nDemonstration Projects Concerning Housing Abandonment,\n84 Stat 1788, because Section 505 (f) has never been\nimplemented.\n2. The Solar Energy Research and Demonstration Report,\nPL 91-609, Section 506 (e) seems no longer necessary:\nEnactment of PL 93-409 means that no projects will\nbe undertaken under 506 (e).\n3. ERDA's creation and reporting requirements may\neliminate the need for the Federal Activities Under\nthe Solar Heating and Cooling Demonstration Act of\n1974, PL 93-409, Section 12 (c).\nTwo reports required by Congress which GSA feels it does not\nneed and which it has found no evidence of use by Congress are:\nThe Report on Violations by Federal Agencies of the Federal\nRecords Act of 1950, and the Report on Services Provided to\nState and Local Governments. Two reports on GSA procurement\nduplicate each other -- Procurement by Civilian Executive\nAgencies, and Report of GSA Procurement.\nThe Department of Transportation has recommended the following\nreports for discontinuance:\n1. On approved projects re urban area traffic operations\nimprovement programs (TOPICS)\n2. On management improvements and review of positions\nvacated; required by Government Employees Salary\nReform Act of 1964. (Semiannual)\nFORD & 078849 LIBRARY\n-4-\n3.\nOn findings re performance of Federal-aid highway con-\nstruction work that a method other than competitive-bid\ncontract is in the public interest (Semiannual)\n4. On effectiveness of anti-hijacking measures and recommend-\nations (Semiannual)\n5. Joint report by Secretaries of DOT and HUD on how Federal\nactivity can assure that urban transportation systems\nbest serve national transportation needs and urban\ndevelopment\n6. On use of USCG housing authority\n7. On activities under the High Speed Ground Transportation\n8. On nonappropriated Fund Facility Construction\n9. SLS Annual Report\n10. On implementation of National Transportation Policy\n11. On management improvements and review of positions vacated;\nrequired by Government Employees Salary Reform Act of 1964\n(Semiannual)\n12. On DOT personnel (\"Whitten Amendment\" review report)\n13. On location of new offices and other facilities (to Dept.\nAgri.)\n14. On effectiveness of anti-hijacking measures and recommenda-\ntions. (Semiannual)\n15. On extent to which Ready Reserve units and individuals have\nmet training and mobilization readiness requirements in\nthe FY\n16. . On disposal of foreign excess property; required by Federal\nProperty and Administration Services Act of 1949 (Sec. 404)\n17. On status of the FHWA Equal Employment Opportunity Program,\nits effectiveness, and progress made by the States and the\nFHWA in carrying out Section 22 of the 1968 Highway Act\n18. On military incentive awards programs\nFORD\n-5-\nThe Department of Defense considers the following reports\nsuperfluous, too costly to prepare, or unused by Congress:\n1. Report on Minor Construction\n2. DOD Cataloging Standardization Program\n3. DOD Consolidated Certification\n4. Waiver of Requirement for Inclusion of the Examination\nof Records by Compt. Gen. Clause\n5. Military Manpower Training Report\n6. Annual Report of the Secretary of Defense on Reserve Forces\n7. Independent Research and Development and Bid and Proposal\nNegotiations and Results\n8. The Federal Voting Assistance Program (Number) Report\n9. Medical and Dental Continuation Pay Program Report to the\nCongress\n10. Separations from United States Service Academics\n1 July 19-- - 30 June 19--\n11. Section 603 (d) Report, Annual Military Construction\nAuthorization Act\nAmong the annual reports required to be filed by the Department\nof Labor is the Annual Report of Labor Statistics in the\nTerritory of Hawaii, 29 U.S.C., Sec. 7. Hawaii, of course, has\nbeen a state since August 21, 1959, and all data for this report\nis also included in other Labor Department reports for the 50\nstates.\nThe National Science Foundation is required to prepare for\nPresidential review, signature and transmittal the Annual\nFederal Ocean Program Report, pursuant to PL 94-90, Sec. 3.\nThis reporting requirement is the only remaining operative\nportion of PL 94-90. NSF officials feel there is no need for\nPresidential oversight of this report.\nThe National Endowment for the Arts and the National Endowment\nfor the Humanities are bound by the statutes to issue separate\nreports. It has been claimed that it would be difficult to\nFORD\n-6-\ncombine these two reports because the two agencies are located\nat opposite ends of town. However, some accommodation might\nbe worked out because GPO does the printing for both.\nAs you know, some lessening of Executive Level paperwork has\nalready begun. By the end of 1975, the Environmental Protection\nAgency will have discontinued 33 public use repetitive type\nreports. Moreover, the Commission on Federal Paperwork has\nrecommended that detailed quarterly wage reporting under IRS\nForm 941 (numbers 4,5,6, and 7) be reduced to once a year.\nThe Secretary of Treasury and the Secretary of Health, Education,\nand Welfare estimate that this will eliminate 24 million pages\nof wage data annually, and save approximately $250 million to\nbusiness and $20 million to Government. NASA issues about\n2,000 on-going management reports a year, 400 of which are\ncontrolled and inspected by NASA headquarters. Although NASA\nfeels that none of the 400 controlled reports could be reduced,\nthey are trying to reduce the 1,600 reports from the field and\nexpect 5 to 10 percent reduction by the end of next year.\nThe Domestic Council has recently concluded a series of six\nregional Public Forums, chaired by the Vice President, and\ndesigned to obtain information and ideas from State and local\nofficials and from the public at large on national problems.\nA strong and recurring theme at every Forum was the paperwork\nmountain and the red tape jungle in Washington. As Governor\nDan Evans of Washington put it on Tuesday, December 9, in\nLos Angeles: \"If we have one message for the Federal Govern-\nment today, it's 'Get off our backs, and let us do our job. \"\nYou are to be commended for your efforts to reduce the Federal\npaperwork burden. The reporting examples I have listed may be\nof some help in those efforts. As additional examples come to\nmy attention, I will forward them to you. If I can be of\nfurther assistance in this regard, please feel free to call\nupon me.\nSincerely,\nJames M. Cannon\nAssistant to the President\nfor Domestic Affairs\nThe Honorable Tom Steed\nHouse of Representatives\nWashington, D.C. 20515\n#\nTHE WHITE HOUSE\nINFORMATION\nWASHINGTON\nDecember 24, 1975\nMEMORANDUM FOR THE PRESIDENT\nTHROUGH:\nJIM CANNON\nFROM:\nEDWARD SCHMULTS\nPAUL MacAVOYPane\nman any\nSUBJECT:\nCurrent Regulatory Reform Efforts and Future\nInitiatives of the Domestic Council Review Group\nThe Domestic Council Review Group on regulatory reform would like to\nmeet with you to discuss our current progress. We need your personal\nviews and guidance on our future efforts and would like to establish\na better sense of your priorities in order to direct our limited\nresources to those areas that you want to pursue in the second year\nof regulatory reform. To continue the group's enthusiasm, we would\nsuggest inviting a few members of the DCRG to participate in the\nmeeting.\nINITIAL PROGRAM\nIn your October 8, 1974 address to the Congress, you began the reform\nof government regulations by announcing a four-point program. First,\nyou assigned the Council on Wage and Price Stability a watchdog\nrole over inflationary costs of government actions and they continue\nin this role. Your second proposal was for a National Commission\non Regulatory Reform to examine the independent regulatory agencies.\nAlthough this proposal was not acted upon, Congress has recognized\nthe need for such a review and several committees in the House and\nSenate have major studies underway. The third proposal required\nagencies to prepare inflation impact statements on all major proposals\nand this effort has been implemented. Finally you encouraged State\nand local governments to review their own regulations and some interest\nhas been expressed by State and local organizations in pursuing these\nissues.\nCURRENT INITIATIVES\nSince our initial efforts, two legislative proposals have been\nLIBRAR\nTHE WHITE HOUSE\nWASHINGTON\nDecember 24, 1975\nMEMORANDUM FOR THE PRESIDENT\nTHROUGH:\nJIM CANNON\nFROM:\nEDWARD SCHMULTS\nPAUL MacAVOY\nSUBJECT:\nCurrent Regulatory Reform Efforts and Future\nInitiatives of the Domestic Council Review Group\nThe Domestic Council Review Group on regulatory reform would like to\nmeet with you to discuss our current progress. We need your personal\nviews and guidance on our future efforts and would like to establish\na better sense of your priorities in order to direct our limited\nresources to those areas that you want to pursue in the second year\nof regulatory reform. To continue the group's enthusiasm, we would\nsuggest inviting a few members of the DCRG to participate in the\nmeeting.\nINITIAL PROGRAM\nIn your October 8, 1974 address to the Congress, you began the reform\nof government regulations by announcing a four-point program. First,\nyou assigned the Council on Wage and Price Stability a watchdog\nrole over inflationary costs of government actions and they continue\nin this role. Your second proposal was for a National Commission\non Regulatory Reform to examine the independent regulatory agencies.\nAlthough this proposal was not acted upon, Congress has recognized\nthe need for such a review and several committees in the House and\nSenate have major studies underway. The third proposal required\nagencies to prepare inflation impact statements on all major proposals\nand this effort has been implemented. Finally you encouraged State\nand local governments to review their own regulations and some interest\nhas been expressed by State and local organizations in pursuing these\nissues.\nCURRENT INITIATIVES\nSince our initial efforts, two legislative proposals have been\nFORD\nSERALD\nLIBRARY\n2\npassed by Congress. The Securities Acts Amendments that you signed\nin June restored competition in brokerage fees in the securities\nmarkets after nearly two hundred years of fixed fees. In addition,\nthe repeal of the fair trade laws signed last week removed significant\nrestrictions on offering discount prices to consumers.\nAction on other initiatives is still pending:\nFinancial Institutions - A revised Financial Institutions Act was\nsubmitted to the 94th Congress. On December 11, 1975 the\nSenate passed legislation similar to most of the Administration's\nproposals, but new tax laws for banks must be considered\nfurther in Committee before the total package is complete.\nThe House Banking Committee is studying similar reforms.\nProspects for some legislation appear fairly good in this\nCongress.\nRailroad Revitalization Act - The final Senate version of the rail\nbill contains unacceptable financing provisions; however, it\nachieves most of the regulatory reform objectives of the\nAdministration's bill. While the House version is more to our\nliking, the conference bill may still be a candidate for veto.\nAviation Act of 1975 - The bill has been introduced in both Houses.\nHearings in the Senate and the House are expected early in\nthe next session.\nMotor Carrier Reform Act - The bill has been introduced in the House.\nPending introduction of the bill in the Senate, the Department\nof Transportation has received a tentative commitment for\nSenate hearings in March or April next year.\nNew Natural Gas - The Senate has passed a measure dealing with\nexpected shortages which included long-term deregulation of\nnew natural gas. The House is also expected to include dereg-\nulation provisions in its bill. Prospects for passage are\nencouraging.\nForms Reduction - The Commission on Federal Paperwork has been\ncreated and its members appointed. Its report is due on\nOctober 3, 1977. In the interim, OMB has prepared draft\nguidelines to reduce the number and the burden of Federal forms.\nFORD & LIBRARY\n3\nSimolification and Modemization of Pegulatory Activities - In\naddition to these highly publicized elements of the program,\nthe Administration has proposed legislation to eliminate and\nsimplify anachronistic and unnecessary regulatory procedures\nand paperwork in some of the oldest Federal agencies: Patent\nreform legislation will improve and simplify procedures in the\npatent system and accelerate disclosures of technological\nadvancements; simplification of detailed Coast Guard regulations\nand procedures established nearly 200 years ago will result\nin a savings of $1 million; proposed modernization of the\ncustoms laws will reduce unnecessary paperwork and ease\nrestrictions governing goods brought into the United States.\nPOSSIBLE FUTURE INITIATIVES\nHealth and Safety - Alternative approaches to achieving environmental,\nhealth and safety goals are currently under discussion. The\nrange of possibilities include broadening exemptions for small\nbusiness, improving cost-benefit analysis, and using taxes and\ncharges as incentives as opposed to detailed agency specifica-\ntions and enforcement of standards to achieve our health and\nsafety goals.\nDependent Agencies - The regulatory activities of six Executive\nbranch departments and agencies are currently under review.\nThe agencies will be recommending both administrative and\nlegislative reforms in the next month.\nAdministrative Procedure - The independent commissions will be\nreporting by Dec. 31, 1975 on their efforts to achieve\nimproved administrative procedures and to give greater weight\nto the importance of competition in their decisions. DCRG will\nanalyze their responses and will make recommendations on possible\nfuture actions including the possibility of a follow-up meeting\nwith the commissioners.\nSubstantive Review of Regulation - More analyses of the costs\nand benefits of existing regulation could provide the basis\nfor substantive changes in areas where legislation has not yet\nbeen proposed. DCRG will consider the desirability of submitting\na comprehensive legislative proposal requiring a \"zero-based\"\nreview of major regulatory agencies, both the independents\nand those in the Executive branch. The end result of such a\nreview could be the elimination of regulatory overlap and\nduplication or the abolition of some regulatory agencies.\nSimilar legislation is currently under consideration by the\nCongress.\n&\nFORD\nLIBRARY\n4\nCable Communications - Federal Communications Commission regulations\ngoverning cable television have restricted the growth of the\ncable industry. DCRG has considered a number of options for\nreform. A status report on this matter has already been\nforwarded to you.\nRobinson-Patman - This legislation raises consumer prices by\nmaking it difficult to offer discount prices on particular\nsales at the wholesale level. The DCRG has held public\nhearings on possible modification or repeal of the Act. A\ndecision memorandum will be prepared for your review.\nInsurance - Currently the McCarran-Ferguson Act allows States to\ngive antitrust exemptions to insurance rate bureaus. Meetings\nhave been held with industry groups, State regulators, and\nconsumer groups to discuss the desirability and effects of\nrestoring competition to insurance rate setting. Next steps\nin this area include analyzing the benefits of competition and\nweighing the effect Federal action might have on the State\nprerogatives with respect to insurance regulation.\nMaritime - The maritime laws currently sanction rate setting by\nshipping conferences. A study of this issue is underway and\nan interim report to the DCRG is due in the next week.\nIn addition to the above initiatives, we are concerned with improving\npublic understanding of the issue of regulatory reform. We are planning\nto meet with a number of leading business leaders, journalists and\nothers who have given thought to the appropriate relationship between\ngovernment and business. We would hope that such meetings would help\nus in formulating and explaining your program thereby increasing\npublic support. We would like to meet with you soon after the\nfirst of the year and preliminary to scheduling these outside\ndiscussions.\nFORD LIBRARY\nTHE WHITE HOUSE\nWASHINGTON\nFebruary 2, 1976\nMEMORANDUM FOR THE PRESIDENT\nTHROUGH:\nJAMES CANNON\nFROM:\nEDWARD SCHMULTS\nPAUL MacAVOY\nPhang\nSUBJECT:\nRegulatory Reform - Problems,\nPerspectives and Opportunities\nIn response to our December 24, 1975 memorandum (Tab A), you\nagreed to meet with several members of the Domestic Council Review\nGroup who believe the program is now at a threshold and that there are\nseveral alternative directions which we might take.\nThe regulatory reform program, as it now exists, is the result of a\nnumber of events and circumstances: The 1974 Economic Summit,\nCongressional proposals, our search for ways to curb inflation and\nthe increased public attention generated by your earlier speeches on\nexcess government intervention.\nThe job of implementing reform initiatives outlined in your October 8,\n1974, speech brought together a number of people in the Executive\nOffice and the Departments concerned with the regulated industries.\nOver the last year, the effort has become organized as the Domestic\nCouncil Review Group on Regulatory Reform (\"DCRG\"), consisting of\nWhite House and Department executives who devote a portion of their\ntime to regulatory reform issues.\nProgress to Date\nSince reform efforts began, two legislative proposals have been passed\nby Congress and signed into law. The Securities Acts Amendments\nrestored competition in securities market brokerage fees. The repeal\nof fair trade laws removed significant state restrictions on retail\ndiscount pricing.\n1080 i LIBRARY 078839\n-2-\nFar-reaching proposals have been made for reform of railroad,\nairline and motor carrier regulation. Phased deregulation of\nnatural gas prices has been proposed as well. Each of these\nproposals is expected to be the subject of vigorous debate in this\nCongress. The Financial Institutions Act was submitted and has\nbeen acted upon by the Senate. However, new tax laws remain to\nbe considered in the Senate and House approval has to be obtained\nbefore the total package is completed.\nWe are now at a critical point in the program. Sources of difficulty\nare as follows:\n-- Consumer groups have only been lukewarm supporters\nof the program to date.\n-- The business community has only begun to assist in the\nsystematic analysis and presentation of well-documented\ncases of excessive and costly regulation.\nBoth the unions and the corporations in the regulated\nindustries have begun well-financed campaigns against\nreform proposals in transportation and communications.\n-- More factual evidence is needed to support a credible\nargument against overzealous and unnecessarily costly\nhealth, environmental or safety standards.\nAdditional support must be forthcoming from business and consumer\ngroups if substantial progress is to be made in passing even the\nlegislation previously proposed. More support is necessary from\nnewspapers, public opinion leaders and university thinkers, as well.\nThis support can probably be obtained if special efforts are targeted\non each of these groups. Also, we must better educate those who have\nnot been party to the debate and devise a strategy to overcome existing\nand anticipated opposition.\nNext Steps\n1. We must secure enactment of legislative proposals already before\nthe Congress which will increase competition in regulated industries\nsuch as banking, transportation and natural gas. This will take a\nconcerted effort on the part of the responsible agencies and Executive\noffice organizations.\nFORD\nGERALD\nLIBRARY\n-3-\nContinuous Presidential reinforcement of the importance of these\nefforts will be needed. A special message to Congress on regulatory\nreform could provide substantial assistance.\n2. We must expand the scope of the present program. Action is\nalready underway to examine new areas of economic regulation such\nas the communications, insurance, and maritime industries and\nRobinson-Patman and develop appropriate recommendations for reform.\nReform actions will take the form of specific legislative recommen-\ndations or Administration reports.\nA noticeable gap in the present program exists in the areas of safety,\nenvironmental and health regulation. We must determine whether\nor not our social goals might be achieved through more efficient,\nless costly means.\nConsideration should be given to expanding the organization of the\nregulatory reform group in order to get more work done. Should a\nCabinet officer be named as the official head of the effort? How do\nwe assure fair, more complete and more numerous hearings of the\nreform issues within the Administration? What organizational\narrangement will best accommodate any new initiatives or new\ndirection in the effort?\n3. We must work to mobilize public support for the program. Cabinet\nmembers and other top level policy officials should be more actively\ninvolved in giving speeches and testimony in support of the program.\nIt is important now to demonstrate that our efforts do not stop with\nsimply reducing the size of government, but that you have a positive\nprogram to promote economic growth by restricting government to\nits proper role in the economy.\nTo that end, we are preparing a \"white paper\" which summarizes\nthe philosophical assumptions underlying the reform effort and sets\nforth a clear statement of our long-term goals, such as: encouraging\nindividual choice and initiative and reducing government intervention\nin the private sector; assuring efficient use of scarce economic\nresources and achievement of our social goals at minimum cost;\ndirecting government expenditures to the broadest possible public\nbenefit; assuring efficient and equitable enforcement of government\npolicies; and minimizing the ability of special interest groups to\nprevail against the public interest.\nFORD\nGERALD\nLIBRARY\n-4-\nSuch a paper would be used as the basis for informal discussions\nwith several thoughtful leaders businessmen, journalists and\nacademics to get their views on the direction of the program and\nhow best to achieve and articulate our goals. We might also want\nto plan for a major Presidential address or several newspaper or\nmagazine articles to explain our philosophy and generate a broader\npublic understanding of the reform effort. Additional meetings\nshould be scheduled with Congressional members and staff and the\nindependent regulatory commissioners to demonstrate our continuing\ninterest and obtain their thoughts on how best to achieve reform.\nFuture Directions\nThe DCRG is currently considering a two-phase plan to overcome\nopposition from the special interests and maintain our momentum.\nThe first element is a short-term mobilization of individual agency\nreviews to improve the present regulatory process. The second\nphase would call for a broader, more fundamental review of govern-\nment's role in the economy.\nThese efforts are intended to begin to shift the burden of proof away\nfrom those who advocate reform toward those who stubbornly resist\nany change in the status quo. The building of a broader constituency\nto support reform is essential if we are to counterbalance increasingly\nvocal opposition from the special interests.\nPhase I. A fulltime, sustained effort would be undertaken to achieve\nadministrative reform in each agency. This effort would be aimed\nat eliminating archaic and obsolete regulations, reducing regulatory\nlags, rewriting in understandable English all regulations and attempting\nto reconcile conflicting regulatory overlaps. The primary focus would\nnot be on legislation and it would not greatly alter the degree and scope\nof regulation. However, it should generate broad public and Congressional\nsupport. Such an effort is what most people mean by getting government\n\"off the backs\" of the people.\nEach agency head would designate a senior agency official and necessary\nfulltime staff to work with concerned public interest groups, e. g.,\ncommittees of bar associations, labor organizations, consumer groups\nand others to revitalize the agency's regulation process. Some funding\nfor outside assistance must be found. The key to such effort would be\nsustained Presidential interest and follow-up.\nGERALD FORD LIBRAST\n-5-\nPhase II. The Administration would propose or support legislation\ncalling for an Executive-Congressional phased review of key regulatory\nareas such as energy, communications, transportation, health,\nenvironment, and banking within a specified time table. The Executive\nbranch would provide legislative proposals for reform and the Congress\nwould be required to enact reform legislation.\nThe need for a longer-term examination of government's role in the\neconomy was articulated most recently in the introduction of legislation\nsponsored by Senators Percy and Byrd. Whether or not such legis-\nlation is ultimately enacted, the development of a long-term agenda\nwould have a number of benefits: It would provide a clear indication\nthat we intend to examine all areas of government activity which have\nmajor economic effects. This would encourage the intellectual\ncommunity to devote attention on upcoming issues and develop concrete\ndata on alternative reform proposals. Announcing such an agenda now\nwould also provide an organizing perspective to the efforts already\nunderway in individual Department reviews and assure that the nec-\nessary data becomes available for the longer-term study. Such an\napproach would be oriented to results and less apt to be viewed as\njust another study effort.\nSummary\nIf this plan appears reasonable, we will begin to explore more fully\nthe means by which it could be implemented and outline the substantive\nelements of an agenda. Our forthcoming meeting is not intended to\nreach decisions on the specifics of the program, but rather to obtain\na better sense of your priorities and an indication of the approaches\nand areas you feel should be more fully explored.\nAttachment (Tab A)\nFORD & LIBRARY\nTHE WHITE HOUSE\nWASHINGTON\nFebruary 12, 1976\nMEMORANDUM FOR JIM CANNON\nFROM:\nED SCHMULTS\nSUBJECT:\nRegulatory Problems\nYou asked for a reaction to the suggestion that a two-\nyear moritorium be declared on new Federal regulations.\nWhile it may appear on the surface to be an appealing\nidea, I am concerned that, like most government-wide\nsolutions, it would soon prove to be overly simplistic\nand unrealistic.\nIt is easy to understand the suggestor's concern over\nthe proliferation of government regulations. However,\nhis suggested moritorium, including the \"loophole\"\nclause might easily result in adding to the complexity\nof Federal regulations. Given the patchwork nature of\nour regulatory system, I'm afraid that we'd end up\napproving exemptions for everything to the point where we\nactually defeat the purpose of a moritorium.\nI suggest that a better solution would be to more care-\nfully examine the need for new regulations before they\nare put into effect. The inflation impact analysis\ndoes this in part. Continued efforts to achieve better\neconomic analysis in the independent commissions and\nExecutive agencies will also help. In addition, in the\ncoming months we will be taking additional steps to\nencourage these agencies to examine existing regulations\nto eliminate those which are conflicting, duplicative,\nand unnecessary. For example, the DCRG is currently\nworking on a plan to implement the President's suggested\ntask force approach to improve existing regulatory\nprocedures within the Executive Branch.\nWhile this approach does not provide an \"instant\"\nsolution, I feel it will produce much more satisfactory\nand lasting results in the long-run.\nFORD\nTHE WHITE HOUSE\nWASHINGTON\nJanuary 23, 1976\nMEMORANDUM FOR:\nED SCHMULTS\nFROM:\nSUBJECT:\nRegulatory Jun Problems\nJIM CANNON\nAt the briefing with corporate executives yesterday\nafternoon, one suggested that the President and the\nCongress declare a moratorium on writing any new\nFederal regulations for two years.\nThe executive, whose name I did not get, said he\nfelt that employers should be given an opportunity\nto \"digest the regulations we have\" before more and\nmore Federal regulations are imposed.\nHe also commented that many regulations seem to be\npublished in the Federal Register as trial balloons\nto test the reaction of regulatees, rather than as\nserious proposals.\nWhat is your reaction to the suggestion that the\nPresident propose to the Congress such a moratorium\nfor a stated period of time?\nTo provide for emergency situations, such a resolution\nmight include a loophole to exempt specific matters\nthat might be agreed upon at the time by the President\nand Congress.\nFORD is GERALD LIBRARY\nTHE WHITE HOUSE\nWASHINGTON\nFebruary 17, 1976\nMEMORANDUM FOR:\nJIM CONNOR\nFROM:\nED SCHMULTS\nW\nSUBJECT:\nNext Steps in the Administration's\nRegulatory Reform Program\nAs you requested, I have combined the two cover memos\non the regulatory reform program into one decision memo\nfor the President. It recommends that he preside over\na follow-up session with the heads of the independent\nregulatory commissions and lays out a schedule of next\nsteps to be accomplished this spring.\nFORDO & LIBRARY 538870\nTHE WHITE HOUSE\nRaport\nWASHINGTON\nFebruary 24, 1976\nMEMORANDUM FOR THE VICE PRESIDENT\nTHROUGH:\nJAMES CANNON Jun\nFROM:\nEDWARD SCHMULTS\nSUBJECT:\nMeetings on Regulatory Reform\nAs you recall, we talked briefly within the last ten days about the\nimportance of improving the Administration's effectiveness in\ncommunicating to the public the purposes and benefits of our\nregulatory reform program.\nAt the present time, we are working to lay out some shorter\nrange task forces which the President wants to see streamline the\npresent regulatory procedures and make existing regulations more\nunderstandable to the average person. We are also developing\nthoughts on a longer range study to assess the ways in which the\nFederal government impacts the private economy and to develop\nuseful legislative and administrative recommendations to lessen\nthis burden wherever possible.\nSince our discussion, I have talked to Jim Cannon, Bill Seidman,\nJack Marsh and others to get their initial views. I believe, and\nthey concur, that one very important step in designing our future\nregulatory program would be three meetings with small groups of\nprivate citizens to gain their insights. Specifically, we want to\nobtain their views on better ways to communicate the President's\nobjectives and to test our notions on both the short and long range\nstrategies necessary to accomplish this task.\nWe would expect about six thoughtful people who have an interest\nin the subject to attend each session. In order to elevate the\nimportance of these meetings, to attract the most knowledgeable\npeople, and to gain your valuable advice, I think it is very\nFORD is LIBRARY\n-2- -\nimportant that you chair them. Attached is a tentative schedule\nproposal and a suggested list of invitees. We would appreciate\nyour thoughts on additional people, and if you agree to preside,\nwe will work with your staff and the White House Public Liaison\nOffice to establish the most convenient times.\nI had a nice talk with Heath Larry last week about the work of the\nProductivity Center. He explained their program and resources\nin some detail and we agreed to work closely with the Center in\nfurther developing the President's regulatory program.\nAttachments\ncc: Bill Baroody\nBill Seidman\nGERALD FORD LIBRARY\nProposed Outline for White House Meetings\non Regulatory Reform\n1. Objectives\nA. To gain the views of knowledgeable and concerned private\ncitizens about ways in which the Administration can better\ncommunicate the purposes and benefits of the President's\nregulatory reform program to the public and;\nB. To ask for advice on suggested short and long range programs\ndesigned to improve our understanding of the effects of\ngovernment intervention in the private economy.\n2. When:\nBeginning the week of March 1\n3. Where:\nRoosevelt Room\n4. Time:\nTwo hours in the morning,\npreferably 10:00 - 12:00\n5. Major Administration Participants\nThe Vice President, Chairman\nJames Cannon, Assistant to the President for Domestic Affairs\nWilliam Seidman, Assistant to the President for Economic Affairs\nWilliam Baroody, Assistant to the President for Public Liaison\nEdward Schmults, Deputy Counsel to the President\nPaul MacAvoy, Council of Economic Advisers\n6. Possible Participants for Three Sessions\nI\nI\nII\nIII\nGeorge Lodge\nJoseph Pechman\nWalter Wriston/ or\nKingman Brewster\nAnthony Downs\nGabriel Hauge\nPhillip Areeda\nArjay Miller/or\nRichard Neustadt\nHerb Stein\nKermit Gordon\nIrving Kristol/ or\nGeorge Shultz\nJohn Gardner\nDaniel Bell\nMark Green\nAmitai Etzioni\nJames Q. Wilson\nWillard Wirtz/ or\nArthur Goldberg\nFORD & LIBRARY 07VH39\nReg Reform\nTHE WHITE HOUSE\nWASHINGTON\nFebruary 24, 1976\nADMINISTRATIVELY CONFIDENTIAL\nMEMORANDUM FOR:\nED SCHMULTS\nFROM:\nJIM CONNOR JEE\nSUBJECT:\nNext Steps in the Administration's\nRegulatory Reform Program\nThe President reviewed your memorandum of February 17 on the\nabove subject and approved your recommendation for a follow-up\nmeeting with the Commissions.\nThe following notation was also made:\n\"Good - proceed\".\nPlease follow-up with appropriate action.\nCC: Dick Cheney\nJerry Jones\nto f. FORD LIBRARY"
}