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This file contains material relating to the Domestic Council Review Group on Regulatory Reform and President Ford's meetings with regulatory commissioners.
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Regulatory Reform (14)
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Regulatory Reform (14)
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This file contains material relating to the Domestic Council Review Group on Regulatory Reform and President Ford's meetings with regulatory commissioners.
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collections
James M. Cannon Files (Ford Administration)
James Cannon's Issues Files
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Aeronautics, Commercial
Antitrust law
Government regulation
Independent regulatory commissions
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The original documents are located in Box 29, folder "Regulatory Reform (14)" of the James
M. Cannon Files at the Gerald R. Ford Presidential Library.
Copyright Notice
The copyright law of the United States (Title 17, United States Code) governs the making of
photocopies or other reproductions of copyrighted material. Gerald Ford donated to the United
States of America his copyrights in all of his unpublished writings in National Archives collections.
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domain. The copyrights to materials written by other individuals or organizations are presumed to
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copyright claim, please contact the Gerald R. Ford Presidential Library.
Some items in this folder were not digitized because it contains copyrighted
materials. Please contact the Gerald R. Ford Presidential Library for access to
these materials.
Digitized from Box 29 of the James M. Cannon Files at the Gerald R. Ford Presidential Library
THE WHITE HOUSE
t
WASHINGTON
pu
Hold
May 28, 1976
MEMORANDUM FOR:
JIM CANNON
FROM:
STEVE McCONAHEY
80M
Attached is an advanced transcript of the remarks given by the
Vice President at the National Conference on Regulatory Reform
last Wednesday.
You will note that he prefaced his prepared remarks with a
brief discussion of government-to-government regulations, which
is a subject he termed "close to my heart. 11
As an initial step in launching our program, I believe it would
be useful for us to have a session with the Vice President, to
outline our program and get his thoughts and reaction. I am
attaching a copy of our memorandum for the President, which
you may wish to forward to the Vice President, along with the
suggestion that we meet with him.
Attachments
THE WHITE HOUSE
WASHINGTON
May 27, 1976
MEMORANDUM FOR:
THE PRESIDENT
FROM:
JAMES M. CANNON
JAMES T. LYNN
SUBJECT:
Government-to-Government Regulations
Reform Program
Attached to this memorandum is a plan of action and
related materials establishing a program to relieve
state and local governments of excessive Federal
regulations. This proposal is in response to your
request of May 7, 1976.
The proposed program includes the following key
elements:
Immediate attention focused on selected
priority problem areas, with initial re-
form results by September 1.
Consultation with and participation by
representative state, county and local
officials in the program, including the
final identification of program targets.
Initial focus on the three existing
block grant programs, which are experienc-
ing gradual "recategorization" through
regulations.
Primary responsibility for program results
assigned to the department and agency heads,
who will be tasked with drafting and imple-
menting individual agency action plans.
Joint Domestic Council/OMB oversight.
- 2 -
The specifics of the program are outlined and
discussed in Tab A. The program will be under the
general direction of Steve McConahey, your Special
Assistant for Intergovernmental Affairs, with day-
to-day management of the program directed by Ray
Hanzlik, who ran the Domestic Council public
hearings last fall.
Tab B is a memorandum to the Cabinet outlining their
role and responsibilities in the program.
Tab C is a suggested list of Presidential actions in
support of the program. We recommend a briefing and
discussion of this effort occur at the next Cabinet
meeting.
APPROVE
DISAPPROVE
COMMENT:
Attachments
ATTACHMENT A
QERALD R. FORD LIBRARY
GOVERNMENT-TO-GOVERNMENT REGULATIONS
REFORM PROGRAM
This proposal sets forth a plan of action in response
to the President's request of May 7, 1976, to initiate
a program that will relieve state and local govern-
ments of excessive Federal administration regulations.
THE SITUATION
Two major themes of this Administration have been the
reduction of big government, and the return of more
authority to state and local governments. A number of
Presidential actions has given substance to these
themes, with the block grant proposals and support for
the re-enactment of general revenue sharing being prime
examples. Moreover, this commitment to rebalance the
relationship between the Federal government and state
and local governments has gained strong bi-partisan
support.
Unfortunately, the President's initiatives and reforms
in Federal assistance to state and local governments
are seriously undermined by the administrative regula-
tions and procedures imposed on state and local officials
by Federal agencies. This problem is most acute in cate-
gorical grant programs, which represent eighty-percent
($48 of $60 billion) of the Federal aid that goes to
states and localities. However, evidence is also
available to suggest that the existing block grant
programs are becoming increasingly regulated by
administrative actions. Although some of these pro-
gram regulations reflect a Congressional mandate, a
substantial number are administratively initiated.
The administrative and management burden imposed on
state and local governments by these regulations has
reached the point where it is now the primary inter-
governmental issue for governors, mayors and county
officials.
- 2 -
Evidence of the seriousness and urgency of this
problem has come from many sources. Testimony on
the subject by state and local officials was heard
at each of the Domestic Council Public Forums held
last fall. Federal over-regulation and program
management were priority subjects discussed at the
February meeting of the National Governors Conference.
Secretary Simon, in his meetings with governors over
the past year, has collected extensive data supporting
this Federal imposition on state and local administra-
tions. The Advisory Commission on Intergovernmental
Relations, the National Commission on Productivity,
the Federal Paperwork Commission, the National Science
Foundation, and Brookings have studied this question
and urge remedial action. And, along with the profes-
sional literature, the media are giving this subject
increased attention.
The message from state and local officials can be
summarized essentially as follows: Many Federal ad-
ministrative regulations promulgated by the departments
and agencies are inconsistent, unnecessarily restrictive,
overlapping, inflexible, insensitive to local needs,
and/or unnecessary. Their impact increases program
costs, compromises program benefits, complicates pro-
gram administration, expands state and local bureau-
cracies, steals responsibility and decision-making
authority from state and local officials, and adds to
the beneficiaries' frustration and disillusionment with
government. As one Governor has stated: "The best
thing the Federal Government could do to help state
and local government would be to get some of the regula-
tions out of our hair and let us do the job."
Although the Administration is addressing the Federal
regulatory problem, the efforts to date have not focused
on government-to-government regulations. The focus of the
Agenda for Government Reform Act program, announced on
May 13, 1976, and the EPB task force effort to review
specific Federal program regulations in FEA and OSHA is
on the private sector and the general economy. Moreover,
the recent OMB proposal on management initiatives, though
including some aspects of regulatory reform, concentrates
on the control and oversight of the Washington bureaucracy.
- 3 -
As a result, a major gap exists in the overall
regulatory reform effort. To fill this gap, a
Presidentially directed and White House coordinated
effort is required to attack the burdensome problem
of government-to-government regulations, thereby
committing action and resources to the President's
policy of restoring to state and local governments
their lost authority.
The time is ideal for Presidential action on this pro-
blem. The President's long-standing position against
unnecessary Federal requirements on state and local
governments is fully consistent with the sentiments of
the people and their local officials. The current
situation provides a ready-made opportunity to take
the initiative on this big government issue -- an issue
that impacts on the lives of most Americans and has con-
tributed to the "anti-Washington" mood. Given the
supportive attitude that most governors, mayors and
county officials have for the President's intergovern-
mental policies, this opportunity affords a useful
tool to mobilize strong bi-partisan support from these
state and local leaders.
PROPOSED ACTION
In response to this situation, a joint White House-OMB
program is proposed to focus needed Presidential atten-
tion on the problems of Federal government-to-government
regulations. This program is designed to produce visible,
near-term substantive results, while simultaneously in-
stituting procedures to maintain a longer-term, compre-
hensive reform effort. Specifically, this effort is
aimed to accomplish threeobjectives:
1. Implementation of reform measures for
a select number of regulatory problem
areas, identified as the most onerous for
state and local governments, and adaptable
to prompt administrative reform.
- 4 -
2. Establishment of uniform guidelines
within the Executive Branch for con-
sultation, review and comment by
state and local officials concerning
proposed new regulations, and Secre-
tarial review and analysis prior to
promulgation.
3. Initiation of an on-going reform
program to emcompass additional
Federal assistance programs impact-
ing on state and local governments.
The timing of this program and the availability of
resources, along with the uniqueness of the problem and
the constituency affected, dictate that the proposed
program incorporate several essential elements:
Primary responsibility for the program
should be placed within the agencies
building upon existing reform activities
and stimulating new efforts where none
exist; in both cases, agency resources
and administrative mechanisms will be
utilized. The creation of a new, ad hoc
program structure should be avoided.
White House leadership (jointly by the
Domestic Council and OMB) and coordination
throughout the program are required, es-
pecially to coordinate inter-agency efforts.
The program should complement and not
duplicate the other Administration regula-
tory reform efforts in progress: the task
force program under Paul MacAvoy's direc-
tion; the management improvement effort
initiated by Jim Lynn; the Agenda for
Government Reform program headed by Ed
Schmults.
Final identification and selection of
program targets must include inputs from
state and local officials, who could also
perform an on-going advisory role. Con-
sultations with members of Congress may
also be advisable at the appropriate time.
- 5 -
PROGRAM END-PRODUCTS
As planned, this effort will aim at achieving specific
improvements in Federal government-to-government regula-
tions, including:
Reduction of grant application
paperwork and processing.
Simplification and elimination of
inconsistencies in planning require-
ments and documentation.
Elimination of unnecessary and/or
redundant reporting requirements.
Elimination of unnecessary mandates;
e.g., structural, service or organi-
zation requirements, not relating to
program performance.
Identification of legislative changes
necessary to achieve administrative
simplification.
PROGRAM TARGETS
The final selection of specific targets will in part be
determined through consultation with agency officials
and state and local government representatives. However,
at a minimum, four general target areas have been identi-
fied for initial attention:
1. The Block Grant Programs.
There is growing evidence that existing block grants,
designed to provide state and local governments maximum
flexibility in the use of Federal funds, are being en-
cumbered by administrative rules and procedures. One
frequently cited example is the reporting on Affirmative
Action/EEO compliance required by the CETA and LEAA block
grant programs; another is inconsistent rulings by
different agency regional offices through the ten Federal
regions. These programs are currently under study by
several organizations, including OMB, ACIR, Brookings and
the National Academy of Sciences, as well as the program
agencies. Results from these efforts will help determine
what changes in regulations and procedures are necessary.
- 6 -
Three existing block grants to be studied under
this effort are:
Omnibus Crime Control and Safe
Streets Act of 1968, administered
by the LEAA, Department of Justice.
Comprehensive Employment and
Training Act of 1973 (CETA),
administered by the Employment
and Training Administration,
Department of Labor.
Housing and Community Development
Act of 1974, administered by the
Department of Housing and Urban
Development.
2. Categorical Grant Programs.
The Federal categorical assistance programs for state
and local governments present a very broad target for
regulations reform, and the attention here will be
selective and limited in the initial program phase.
The breadth of this target, however, is partly offset
by the large percentage of programs administered by
one agency, the Department of Health, Education and
Welfare. Fortunately, HEW has recently initiated an
ambitious and comprehensive in-house regulatory reform
program aimed at programs considered most burdensome to
the states and localities. In this case, the White
House program is designed to further energize the HEW
effort, perhaps giving added focus to one or two key
problem areas, and to activate similar programs in the
other Federal agencies. Within this target area, specific
elements of categorical programs may be selected for ini-
tial attention, such as planning requirements and plan
utilization, reporting requirements, and audit procedures.
And, some attention will be given to the simplification
of categorical programs where block grant legislation
has been proposed but not enacted (e.g., health, social
services, education.)
- 7 -
3. Cross-Cutting Regulatory Problems.
Judging from comments and data available, one of
the regulatory problems most troublesome to the
states and localities is the inconsistencies and
overlap among regulations issued by different
Federal agencies. Several examples illustrate this
issue:
Guidelines differ across agencies
on the nature of public participa-
tion required in the development of
state plans necessary for Federal
funding.
Requirements imposed by Federal
agencies on a single jurisdiction
are in some cases duplicative,
uncoordinated and at times contra-
dictory.
OMB and GSA Circulars establish uniform
standards for Federal management prac-
tices, vis-a-vis state and local juris-
dictions. Yet in practice, Federal
rules, procedures and practices for
each program tend to evolve independently
and often at variance with the established
standards.
Agencies differ in their implementation
of the Uniform Relocation Assistance Act,
resulting in different assistance for
similar situations.
The effort in this area will focus on specific cross-
cutting regulatory problems in order to correct the
most serious duplications and inconsistencies.
4. New Regulations Procedures.
The regulations problem area that arouses the most
criticism from state, county and local officials is the
lack of opportunity to comment on proposed Federal regula-
tions and the lack of lead time to implement them. More-
over, some regulations do not receive a thorough Secretarial-
level review prior to issuance. The practices for
- 8 -
consulting and review of new regulations vary widely,
both among and within agencies. There is near-unanimous
opinion that the established comment procedures for pro-
posed new regulations are unevenly enforced, narrow in
jurisdiction (permits comment only by the major public
interest groups), and inefficiently administered by the agencies.
Specific improvements will be sought through consistent
guidelines for Secretarial review and state and local
government consultation.
PROGRAM ORGANIZATION
The White House
Although the major responsibility for achieving the
objectives of this program will rest with the agencies,
visible and active White House leadership is essential
to:
Give the effort a clear Presidential
mandate.
Signal this mandate to the departments
and agencies.
Demonstrate to state and local officials
the priority and seriousness of the pro-
gram.
Insure that the objectives are achieved in
a timely manner.
Provide coordination among the departments
and agencies.
White House oversight will be a joint Jim Lynn/Jim Cannon
responsibility, with general direction of the effort as-
signed to Special Assistant to the President for Inter-
governmental Affairs, Steve McConahey and daily program
management provided by Ray Hanzlik of the Domestic Council.
Limited staff support will be detailed from the partici-
pating agencies, as needed, and a budget of $10-25,000
from Domestic Council funds will be available for any
meeting, travel, consultant or related administrative
expenses.
- 9 -
Management of the effort will involve monitoring of
progress, coordinating inter-agency efforts, bridging
specific ideas with state, county and local experience.
Specific corrective action will be reviewed by the
normal channels of the Domestic Council, OMB, and
other selected staff.
Office of Management and Budget
Program implementation is dependent on OMB program
co-sponsorship and assistance, particularly from the
management side of the organization. OMB will provide
several essential elements of this program:
Program expertise and analytical
capabilities needed to insure quality
control in program results.
Linkage, where necessary, with the
Federal intergovernmental field network,
including the Federal Regional Councils
and the Under Secretaries Group.
Jurisdiction and supervision of the A-85
Circular program, which is currently under
OMB review, and which will be an integral
part of the regulations comment procedures
established by this program.
Coordination with the new management initia-
tives program, which includes some regulatory
reform elements.
Reinforcement of the Presidential mandate
given this program, which would be viewed
skeptically by the Federal agencies and
by state and local officials without OMB
involvement.
A close, day-to-day working relationship between White
House program personnel and appropriate OMB staff will
be maintained throughout the reform effort.
- 10 -
Federal Departments and Agencies
The heads of the departments and independent agencies
will be tasked with the responsibility of drafting and
implementing individual plans for agency regulations
reform, and with supporting the elements of the over-
all program involving cross-agency efforts. Each
department and agency head will be requested to appoint
a high-level subordinate, with direct access to the
Secretary or Administrator and with full authority to
direct and manage the agency program. These agency
program directors will collectively form a program
"working group" that will meet regularly with White
House and OMB program personnel to monitor and guide
the progress of the overall effort.
Advisory Resources
To insure an effective link between this effort and
(a) state, county and local officials, as well as
(b) White House policy, two advisory groups will be
utilized:
A. The New Coalition
Key to the acceptance and success of this program
is direct involvement by state, county and local offi-
cials. The New Coalition, a group of representative
governors, mayors, county executives and state legis-
lators (formed to provide coordinated response to
intergovernmental and programmatic issues) provides
an important source of ideas and advice for this effort.
(Governor Bob Ray of Iowa is its current Chairman.)
This group can assist in the identification of priority
problem areas and suggest workable reforms. It
will be called upon periodically to help select targets
and provide reactions to possible improvements.
B. White House/OMB Advisory Group
An ad hoc advisory group within the White House,
formed to provide policy guidance for the program, and
to act as a coordinative group vis-a-vis related projects
and efforts, will be convened periodically. Members of
the group will consist of representatives from the Domestic
Council, OMB, and other selected White House staff units.
- 11 -
On occasion, the Advisory Commission on Intergovern-
mental Affairs, the Productivity Commission, and other
outside resources may be of advisory assistance.
TIMETABLE FOR ACTION
The program will be implemented in three phases. Phase
I is the period between now and June 30, during which:
The Cabinet will be briefed, agency
resources assigned to the program,
and individual agency plans of action
drafted and reviewed.
Specific program targets will be
identified and selected; initial con-
sultation with the New Coalition and
other advisory groups will also occur
during this period.
Working plans will be drafted for
updating procedures for regulation
comment and review.
Inter-agency groups will be organized
as needed to attack high-priority cross-
agency regulations.
Phase II begins with the implementation of the individual
agency reform plans and will run through the remainder of
the year. Initial results of this phase should begin ap-
pearing by September 1.
Phase III, which will begin sometime during Phase II,
will focus on expanding this effort to other programs
and instituting the improved procedures for the review
of new program regulations prior to their issuance.
B
ATTACHMENT B
GERALD FORD LIBRARY
MEMORANDUM FOR:
THE HONORABLE
Secretary of
FROM:
JAMES T. CONNOR
SUBJECT:
Government-to-Government Regulations
Reform Program
The President has directed the implementation of a
program aimed at relieving state and local governments
of the growing burden of excessive Federal public assis-
tance program regulations. This effort is an important
and integral part of the President's overall regulatory
reform program. It is designed to support and build
upon the individual departmental and agency reform pro-
grams already underway, providing central coordination
and integration of the overall effort. The program has
three stated objectives:
1.
Implementation of reform measures for
a select number of regulatory problem
areas, identified as the most onerous
for state and local governments, and
adaptable to prompt administrative re-
form.
2. Establishment of uniform guidelines
within the Executive Branch for con-
sultation, review and comment by
state and local officials concerning
proposed new regulations, and Secre-
tarial review and analysis prior to
promulgation.
3. Initiation of an on-going reform
program to encompass additional Federal
assistance programs impacting on state
and local governments.
- 2 -
Attached as Tab A is the plan outlining this effort,
which includes the following key elements:
Primary responsibility for program
results to rest with the department
and agency heads, who are tasked with
drafting and implementing individual
agency plans.
Immediate attention to focus on
selected priority problem areas,
with initial reform results by
September 1.
Program targets to include regulations
and procedures for the existing block
grants, selected categorical programs,
and procedures for comment and review
of new regulations.
Consultation with and participation by
representative state, county and local
government officials in the program.
Joint Domestic Council/OMB program
management and oversight.
The President has requested full support and participation
by members of the Cabinet and heads of the independent
agencies in this effort, and specifically requests the
following actions be taken:
1. Appointment of a high-level subordinate
with direct access to the department
heads, to act as the departmental con-
tact with the White House management
group and as the in-house program
director.
2. Preparation of a departmental plan of
action based on the guidelines outlined
in the attached plan and provided by
the White House management group in a
meeting scheduled for
.
Plans should be ready for review by
.
- 3 -
3. Commitment of sufficient personnel
and resources to insure substantive
reforms in the selected target areas,
with initial results evident by
September 1, 1976.
The President recognizes the differences in program
administration and regulatory practices among the
various departments and agencies, and thus is giving
maximum responsibility to agency heads to design and
implement efforts tailored to individual agency re-
quirements. White House oversight will provide
necessary program coordination, inter-agency coopera-
tion and policy guidance.
White House oversight will be a joint Jim Lynn/Jim
Cannon responsibility, with general direction of the
effort assigned to Special Assistant to the President
for Intergovernmental Affairs, Steve McConahey, and
daily program management provided by Ray Hanzlik of
the Domestic Council.
ATTACHMENT C
BERALD R. FORD LIBRAST
PRESIDENTIAL ACTIVITIES
Presidential
Media
Date
Event/Location
Action
Reason
Activity
Cabinet Meeting
Briefing on
Kick-off
Possible Press
(Cabinet Room)
Regulatory Reform
effort
briefing
Program
Mid-to-late
Major Speaking
Speech on
Publicize
Full Coverage
June
Forum (Before
Big Government
Regulatory
State Legisla-
Reform effort
ture or similar
body)
June
Meeting of New
Discussion
Signal priority
Press Conference
Coalition
session with
of effort to
by New Coalition
(White House)
group
state and local
governments
ELITE
1.
2.
3.
4
FOR IMMEDIATE RELEASE
(May 26, 1976
5.
6_
Office of the Vice President
7.
(Washingtoh, D. C.)
8
9.
REMARKS OF THE VICE PRESIDENT
10.
11.
AT THE
12
NATIONAL CONFERENCE ON REGULATORY REFORM
13
GRAND BALLROOM, L' ENFANT PLAZA HOTEL
14.
WASHINGTON, D. C.
15.
16.
AT 9:35 P.M. EST
17.
18
19.
THE VICE PRESIDENT:
I am no longer governor, so you
20.
don't have to get up.
21.
22.
(Laughter)
23
24
Thank you very much, Mr. Naisbitt, Ms. Shannon,
25.
26
Mr. Smith and ladies and gentlemen. I am honored and delighted
27
to be here. I want to apologize for having held you up, but
28.
there was a group of eager members of the media who were
29.
interested in last night's developments. So we had a little
30
discussion on the subject.
31.
-
-
32.
These are exciting days, depending on where you
33.
stand. But this is the thrill of living in a free country,
34.
35.
and we are very fortunate. All I can say is let's keep it
36.
that way.
37.
38.
Now, I would like to say how delighted I am to
39.
welcome you to the National Conference on Regulatory Reform.
40.
This subject is dealing with the crucial growth and strength
41.
of our economy and, thus, the Nation itself.
42_
43.
44
Regulatory reform is an area of special concern
45.
and interest to me. I think that any of us who have a
46.
belief in our system and this Nation cannot help but have a
47.
deep concern.
48
49.
I would like to say that, while we are discussing
50.
51
here largely the business aspect, productivity in business,
52.
as one who served for a number of years in local government,
53.
-- that is, the State of New York--- regulatory reform is
54__
equally important relating to State and local government.
55.-
56.
While it is not in my text and not in your concern,
57.
there are 1,007 categorical grants that the Federal Govern-
58.
ment gives to State and local government, local agencies,
59.
60__
each one of which has Congressional legislative restrictions
61.
and then Administrative restrictions, and they are constantly
62.
changed, and each one of which says that the State must
63.
enrich and improve its program in order to get the funds from
64
the Federal Government. So if you feel you are set upon
65.
in business, just remember that governors and mayors and
66_
county executives and local legislators also are suffering
67
the same fate.
68.
69.
70.
I was talking to a head of a Latin American state
71
and I said, "We are increasingly beginning to feel we
72_
represent foreign governments at the State level in the
73.
United States." So we sympathize with you and your problem.
74.
6
75.
That is not part of ⁵my discussion this morning,
76.
77.
but this is such a sympathetic audience, I couldn't help
78_
mentioning a subject that is člose to my heart.
79
MORE
80.
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As many of you may kinow, I have the pleasure of
6
7.
serving as Chairman of the National Center for Productivity
.7
8.
and the Quality of Working Life, which is the new name the
8
9.
Congress has given it. They have given it a new life, a
19
10.
new name, but as yet have not appropriated any money, which
10
11.
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12_
is sort of standard procedure these days. But you know
12
13.
how life is.
13
14.
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15.
(Laughter)
15
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17.
Excuse my side comments.
17
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(Laughter)
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22.
In carrying out its |legislative mandate to help
22
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increase this Nation's productivity, the Center has chosen
.23
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regulatory refarm as an area for major concentration of its
_24
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efforts.
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26.
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27.
27
28.
Industry by industry, the Center is organizing
15.28
29.
task forces made up of management, labor, government regula-
.29
30_
tors and economic and other experts involved in a particular
_30
31.
industry. These. task forces will attempt to 'identify the
31
32.
objectives for the area.
32
33.
.33
34.
I happen to feel very strongly myself that this
34
35.
36_
is an important factor, that SO many of our regulatory
35
_36
37.
agencies have been in existence for 100 years or more with-
37
38.
out reviewing the objectives for which they were created,
38
39.
sort of a natural evolution of growth without taking a fresh
.39
40.
look.
40
41.
41
42_
If you take the aviation industry, for instance,
_42
43.
one could ask, should our objective be to have an Air Canada
43
44.
in the United States or do we want to preserve private
44
45.
45
46.
enterprise in the field? If so, what does it take to do it?
46
47.
Then you start from there and then you start to work back-
47
48_
wards.
_48
49.
49
50.
So if we are going to review regulatory activities,
.50
51.
52.
we have got to know what is the objective of the regulation,
51
what is our national interest, and how do we achieve it.
52
53.
And then you work back from that and come to the second --
53
54_
_64
55.
that is, identify the industry's major problems stemming
55
56.
from regulation; third, document the impact of regulation
.56
57.
on the industry; and fourth, make recommendations for
57
58.
regulatory reform to improve productivity in that industry
58
59.
with an eye to maximizing natìonal objectives in the area.
.59
60_
2
_60
61.
Now, this seems so simple that one wonders why
.61
62.
63.
one hasn't approached it on this basis before. But let's
.62
_63
64.
face it, if you have got an ongoing program of regulation
_64
65.
in one area or another or an ongoing program in most any
.65
66_
area, those involved don't automatically by themselves
_66
67.
tend to step away and take a fresh look at what they are
.67
68.
trying to do and where they are and then reexamine what
.68
69
70.
they are doing in the light of that.
.69
70
71.
.71
72
I think we have got the momentum to dolit, and I
72
73.
think the American people, whether it is in government or
73
74.
whether it is in business, private enterprise, or whether
_74
75.
it is even -- it is very interesting. held hearings
.75
76.
for the President around the country last fall and winter
.76
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in connection with his domestic programs and policies through
_6
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the Domestic Council. We found that universally people were
.7
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worried about the complexities of bureaucrati'c red tape in
.8
9.
Washington. And that went for governors, heads of corpora-
_9
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tions, heads of labor unions right to welfare recipients,
.10
11.
who were equally indignant about the indignities they
.11
12
_12
13.
suffered and the uncertainties.
13
14.
.14
15.
So I think this is s'omething that has the total
.15
16.
attention of the American people, and they are looking to
.16
17.
all of us to see how do we deal with this problem intel-
_17
18_
ligently in the best national interests and do it efficiently.
18
19
20
This country is known for efficiency, and I don't see why
19
.20
21.
we shouldn't apply it in this area.
.21
22.
.22
23.
I am optimistic that this is the psychological
.23
24
moment to approach this. And I think the Productivity
_24
25.
Center is one of the vehicles which can be very helpful
_25
26.
and useful in this.
.26
27.
.27
28.
29.
Now, because these task forces will be made up
.28
_29
30_
of the people directly dealing with government regulation,
_30
31.
the people on the regulatory front line in a particular
31
32.
industry, I have great confidence in the realism and the
_32
33.
relevance of the recommendations they are going to make.
.33
34.
.34
35.
I might say parenthetically that I had the
.35
36
privilege of being Chairman of a commission created by the
36
37.
.37
38.
Congress to review the 1972 Water Quality Regulations,
.38
39.
which had five Senators, five (Congressmen and five citizens
.39
40.
on the commission. We worked Ifor three years, spent
40
41.
$15 million of your taxpayers' money and found some very
41
42_
interesting things about the impact of the 1977 standards,
42
43.
the 1983 standards and the 1985 goal of no pollutants in
.43
44.
44
45.
navigable waters by that period.
45
46.
46
47.
This same could have applied to air quality
47
48
standards. I don't have to mention that when the air
48
49.
quality standards on smokestadk emission were applied to
49
50.
the foundries of the Nation, that 50 percent of the found-
.50
51.
ries went into bankruptcy. We found in the electroplating
51
52.
53.
industry, if they applied the 1977 standards and the 1983
52
53
54_
standards that are now on the books, 35,000 or the 70,000
54
55.
American companies in the elegtroplating business would go
55
56.
into bankruptcy, because they 6can't afford to fulfill their
56
57.
obligations as set out by the Administration.
57
58.
58
59.
So we are dealing in very real terms with the
.59
60 _
heart of American life. Many ²Americans, including many in
_60
61.
62.
government -- particularly in Congress -- don't realize the
61
.62
63.
implications of the laws they have passed, administrative
.63
64.
procedures and particularly the constant change in adminis-
.64
65.
trative procedures.
-65
66_
66
67.
I remember one governor, Governor Dan Evans of
67
68.
Washington, told a story when he was testifying before our
.68
69.
70.
committee, that they had prepared a program -- outstanding
69
.70
71.
governor, too. I won't say what party.
71
72_
72
73.
(Laughter)
7
73
74
6
74
75.
He had prepared a program asking for a $7 million
75
76.
appropriation under some Federal grant in aid program.
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They worked for months. and prepared all the details, sent it
_6
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to Washington and thought theyl had covered every angle.
7
8.
They got word, "Sorry; we changed the regulations since you
8
9.
prepared your program, so you will have to redo it." That's
_9
10.
one side of the coin.
10
11.
11
12_
12
13.
He told another side of the story and told how
13
14.
they worked out a way to save $1 million. They sent that
14
15.
in for approval and they said,| "Sorry; there is no provision
15
16.
in the regulations that call for savings."
16
17.
17
18_
(Laughter)
18
19.
.19
20.
20
21.
So we, really in our zeal to accomplish objectives
.21
22.
have got ourselves a little bijt tied up, if we can put it
.22
23.
that way. We have lost a little bit of our flexibility
.23
24_
which has been our strength and creativity and freedom of
_24
25.
America.
25
26.
_26
27.
28.
Today I would like to approach this whole issue
.27
.28
29.
of regulatory reform in terms of an historical perspective
.29
30_
-- in terms of the forces which have shaped America's growth.
_30
31.
This is a good year, our 200th birthday. Two hundred years
31
32.
ago brave men signed a landmark manifesto not only for
_32
33.
civil liberty but also for economic freedom. I think this
.33
34.
is too often overlooked.
.34
35.
.35
36_
_36
37.
Important as it is to commemorate the Declaration
.37
38_
of Independence as a landmark for civil rights, it is
_38
39.
equally important to recognize it as a charter for economic
_39
40.
freedom and opportunity.
.40
41.
.41
42_
The Founding Fathers recognized that individual
_42
43.
liberty required economic freedom, that these two were
_43
44.
wholly interrelated, and that one could not exist truly
_44
45.
.45
46.
without the other. They knew that human dignity is destroyed
46
47.
not alone by suppression of civil rights but also by economic
47
48_
bondage. Our forefathers struggled against a system which
_48
49.
sought to regulate their industry and commerce to a design
.49
50.
set in London for the benefit of the British -- no disrespect
50
51.
to the British.
.51
52.
.52
53.
53
54_
(Laughter)
_54
55.
7
.55
56.
They fought efforts to subject the vast American
.56
57.
domain and its people to plans that subordinated America's
.57
58.
growth and American aspirations to the service of an
.58
59.
oligarchy in a far-off land, England.
59
60_
2
_60
61.
The American Declaration of Independence, and the
.61
62.
.62
63.
American Constitution that followed 13 years later, were not
.63
64.
only historic milestones of a political revolution. They
_64
65.
signified a major economic revolution as well, one that
.65
66_
challenged government domination of trade, that broke the
_66
67.
bonds of British mercantilism, that wiped out the remnants
_67
68.
of feudal land laws imposed upon this country, and set
.68
69
loose the forces that ended indentured labor services and
.69
70.
.70
71.
ultimately ended human slavery.
71
72_
_72
73.
Two hundred years of human liberty and economic
.73
74.
freedom produced an American enterprise and social system
_74
Z5
that has given ordinary individuals the widest possible
_75
76.
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opportunity under which their drive and productivity have
_6
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achieved the highest standard of living in history. In
1.7
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these accomplishments, the United States developed a prag-
.8
9.
10.
matic balance between personal freedom and the common good.
_9
10
11.
.11
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A realistic examination of the history of the
12
13.
American enterprise system reveals that it was by no means a
_13
14.
totally private enterprise endeavor. Government has always
.14
15.
played not only a significant but a crucial part in American
.15
16.
economic life. The role involved not alone the negatives of
16
17.
restraints but the positives of promotion as well.
.17
18_
_18
19.
.19
20.
This system achieved a productive balance between
.20
21.
autonomy in enterprise and governmental direction and
.21
22.
restraints in economic activity. These relationships between
22
23.
government and the public have been dynamic, not static, a
.23
24
continuing evolution politically and economically.
_24
25.
_25
26.
And if you just want to think for a second, take
.26
27.
27
28.
the automobile industry, which is one of the greatest
.28
29.
industries in this country, based on roads built by govern-
.29
30_
ment, billions of dollars. One of the other great indus-
_30
31.
tries in this nation, -the aviation industry, is based on
.31
32.
research and military plane development and construction.
.32
33.
The farmers of America have all been related to government
.33
34.
policies, starting with the land grants, the railroads,
_34
35.
.35
36_
land grants of property. You go through the whole history
_..36
37.
of our country and there is a very interesting and exciting
37
38.
balance between the government and the private sector. And
.38
39.
government has never hesitated to do those things which
.39
40.
would stimulate national objectives and stimulate individuals
40
41.
and private enterprise in achieving those objectives.
.41
42_
_42
43.
44.
Now, how does that balance stand today? Are the
_43
.44
45.
basic concepts set forth by the Declaration of Independence
.45
46.
as sound today as they were 200 years ago? The Federal
.46
47.
Government has played an extraordinarily constructive and
47
48_
essential role throughout our economic history. The tremen-
_48
49
dous dedication of loyal civil servants has made government
.49
50.
work. And the need for Federal leadership and creative
.50
51.
52.
initiatives continues.
51
.52
53.
53
54_
Nevertheless, there are growing and legitimate
_54
55.
claims that a dominant central government in Washington is
.55
56.
already placing impediments and nonproductive restraints
.56
57.
upon individual activity, voluntary association and economic
57
58.
58
59.
enterprise. And, of course, the one that concerns me most
60_
is the willingness to take risks, the willingness to be
.59
_60
61.
creative. And that requires a framework of laws within
.61
62.
which the freedom -- certainly, if you are going to invest
.62
63.
$100 or $100,000 and you are not sure if the rules of the
_63
64.
game are going to be changed while you are making the
.64
65.
investment, you are just not going to make the investment.
.65
66_
What I worry about is this is going to have a serious
_66
67.
effect on the creative dynamic drive of our whole American
_67
68.
.68
69.
enterprise system.
69
70.
70
71.
There are those who see a danger that this central
_71
72_
government and its bureaucracy -- remote from the great
72
73.
productive regions of industry and commerce, remote from the
73
74.
farms, factories, mines and márkets, remote from communities
.74
75.
and their governments -- is enacting laws and laying down
_75
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edicts that unnecessarily stifle growth and bear little
_6
7.
relevance to the actual scene
.7
8.
.8
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There are those who warn that designs set in
_9
10.
_10
11.
Washington are stifling individual and corporate initiative,
12_
thereby constraining growth, productivity, and the necessary
11
12
13.
increase in job opportunities. And so we must ask'ourselves:
13
14.
Is there a threat to human liberties today because economic
14
15.
freedoms are being restricted, initiative discouraged and
.15
16.
individual creativity thwarted?
16
17.
17
18_
Here in our own land, we run the risk of falling
18
19.
into the trap of thinking that human liberties and economic
119
20.
.20
21.
freedoms can exist one without the other. They never have
.21
22.
and they never will. Throughout the world the thrust for
22
23.
individual liberty has been challenged and blunted by
.23
24_
doctrinaire assertions that edonomic security must be the
24
25.
prime object of society. It is held by some that only
25
26.
centrally-adopted and centrally-directed planning and
26
27.
programming, and implementation by an all-powerful government,
27
28.
_28
29.
can achieve economic security.
29
30_
_30
31.
The risk here in America is not SQ much that we
31
32.
will take up the worship of the false gods of totalitarian
132
33.
ideologies. It is more that we may drift into Statism by
_33
34.
government's progressively legislating such overwhelming
.34
35.
36_
and detailed responsibilities for the ordering of society
.35
37.
that liberty will be surrendered in the process.
_36
.37
38.
.38
39.
It was clear in the hearings on domestic policy
39
40.
that I held on behalf of President Ford around the country
.40
41.
that there is a growing concern on the part of people in all
_41
42_
walks of life -- that due to a great deal of well-intentioned
_42
43.
but hastily-enacted legislation, enormous authority has
43
44.
45.
already been delegated to a proliferating governmental
44
.45
46.
bureaucracy under myriads of statutes, administrative rules.
.46
47.
and regulations, resulting in a maze of red tape.
.47
48_
48
49.
To comply with this ever-changing complex of laws,
_49
50.
rules, regulations and orders has already become an ever-
50
51.
growing burden. It perplexes and inhibits individuals. It
.51
52.
stymies small business. It stifles initiative and compounds
.52
53.
the costs of large and small enterprises alike. Even deter-
.53
54_
_54
55.
mining the proper legal mode of conduct is becoming so com-
.55
56.
plex as to be unintelligible. 6
.56
57.
5
.57
58.
More and more the citizen or his lawyer or both
.58
59.
must go to the bureaucracy for the answers, and hope that the
.59
60_
answers are not contradictory when more than one agency or
_60
61.
62.
one level of government is involved. We run the danger of
.61
_62
63.
reaching that stãge at which too many other nations have
.63
64.
already arrived, where one must go to the offices of the
_64
65.
particular ministries to find out what the laws are and how
.65
66_
they are being interpreted, and to do this periodically
_66
67.
to be sure that the interpretations are still the same.
.67
68.
.68
69.
The genius of the American system lay in the fact
-69
70.
71.
that government established a broad framework of policy and
.70
.71
72_
law within which individuals, groups and enterprises could
_72
73.
operate with great flexibility. And that also is true for
.73
74
local government. It is timesto reemphasize this essential
.74
75.
concept to foster a climate within which enterprise,
.75
76.
individual and voluntary group endeavors are stimulated
.76
77.
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for the productive benefit of all Americans. This does not
_6
7.
mean a retreat into the past, la scrapping of social progress,
_7
8.
nor abandonment of goals of equity, fairness and progress,
.8
9.
It means the development of a framework of law and enlight-
.9
10.
ened regulation geared to today's needs and tomorrow's
.10
11.
11
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challenges, that will call into play the energies of the
12
13.
American enterprise system, the dynamism of our industry,
13
14.
the creativity of our labor, the ingenuity of our science
.14
15.
and technology. It means that government regulations
.15
16.
should not only achieve national social goals but should
.16
17.
also promote productivity and increasing job opportunities
_17
18_
19.
rather than hinder them.
_18
.19
20.
.20
21.
Toward that end, I specifically recommend that
.21
22.
the executive and legislative branches of government,
_22
23.
together with labor and management, science and technology,
.23
24_
should in each area of regulation:
_24
25.
_25
26.
(a) Establish clear national objectives and
_26
27.
.27
28.
criteria for regulations to achieve them;
_28
29.
.29
30
(b) Determine the effects of regulation, both
_30
31.
intended and unintended;
.31
32.
.32
33.
This is one of the most serious aspects, that we
.33
34.
moved so fast in so many areas that we are not clear about
.34
35.
36
the potential unintended side effects of these regulations
.35
36
37.
designed to create certain specific social objectives.
37
38.
_38
39.
(c) Change, where necessary, existing laws, rules
.39
40.
and procedures to assure that they are promoting, not
.40
41.
hindering, the attainment of our overall national objectives.
41
42_
42
43.
43
44.
In the future, any proposed new laws or regulations
44
45.
should be made in light of our broad objectives, instead of
45
46.
the piecemeal, ever-changing process of the past which has
46
47.
hindered productivity and progress.
47
48_
_48
49.
Twelve days ago the President sent legislation to
49
50.
the Congress that would make a major contribution towards
.50
51.
.51
52.
achieving these ends. This legislation called "The Agenda
.52
53.
for Government Reform Act" requires the President and the
.53
54_
Congress to jointly consider and act on reform proposals
54
55.
in each of the next four years. The President would analyze
.55
56.
the total effects of government regulation on major sectors
.56
57.
of the economy, and the Congréss would commit to act upon
.57
58.
4
.58
59.
these proposals.
3
.59
60_
2
_60
61.
By setting forth an agenda for action, we will
.61
62.
encourage individual Americans in all walks of life --
.62
63.
businessmen, workers, consumers, teachers -- to work in
63
64.
concert with their government to build a more rational
.64
65.
regulatory environment. The question is not and should-not
.65
66_
67.
be whether government should play an economic role. The
_..66
question is how government should be creatively involved in
_67
68
68
69.
protecting and promoting the freedom, well-being and
.69
70.
opportunity of American citizens as individuals as well as
70
71
protecting our environment and assuring our national
.71
72_
security.
_72
73.
7
73
74
In the Declaration of Independence the Founding
74
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expanding economic opportunity in a boundless America would
_6
7.
not only provide better living but would be a principal
7
8.
guarantee of human freedom. They saw an America that would
8
9.
not mandate the life style of its people but encourage them
9
10.
to develop their own. They saw an America that looked to
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dynamic economic growth for the future well-being of all.
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And I say, at this Bicentennial let us rediscover
14
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this America. At this conference you can make an important
15
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contribution toward that rediscovery.
_16
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I thank you very much for letting me be with you.
_18
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QUESTION: Mr. Vice President, we have heard a
.21
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great deal of talk here concerning the difference between
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economic and social regulation. If you could address your-
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self to perhaps the issue of, say, the Environmental Pro-
_24
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tection Agency, is it possible to meet the goals established
_25
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by the EPA, the social goals of a clean and protected environ-
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ment, while at the same time not stifling the economic
.28
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ability of business and industry to grow and provide jobs?
.29
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THE VICE PRESIDENT: I -think- the answer is yes,
31
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if we are realistic and if we are willing to be a little
32
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flexible.
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Just take one case.
Everybody said Lake Erie was
36
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dying and that there was no chance of its ever coming back
37
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to life again. Don't ask me to explain what it means for
.38
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a lake to die, but neveromind.. Well, what has happened is
.39
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that by the control of sewage disposal in the lake from
40
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New York and Ohio and surrounding areas, the lake is coming
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back to life at a very much more rapid rate than anybody
_42
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had anticipated.
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One of the things and it is somewhat contro-
46
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versial, naturally - the 1977 standards which applied ---
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it is the best practical elimination of pollution, that it,
48
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may well be that that will go la long way to achieving the
49
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1983 standards, wAscalliyoucbusinessmen know, as you
.50
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eliminate anything -- all these curves are the same -- the
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.52
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bulk of elimination is relatively inexpensive. Then as you
.53
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get down to the last 20 percent, last 10 percent, the
_54
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curve goes up, and the last 10 percent may cost you more
.55
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than the first 90 percent to eliminate.
.56
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Se we may be in a pdsition where we can achieve
.58
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social goals and not put this inordinate burden on the
-59
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_60
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Now, there is a fascinating thing; I happen to
.63
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live in New York, and Con Ed has built two atomic power
.64
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plants and they are now in the process of trying to be able
-65
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to build a third. This water goes into the Hudson River
_66
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from their cooling operation. It does heat the water, and
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this is a very controversial issue about the fish.
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So they have come up with a plan to avoid putting
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hot water into the Hudson because some fish, when they
72
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first put it in, are killed. Although, I have to say to
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you, one of the best fishing spots is where the hot water
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comes in from the atomic power plants. We changed one on
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the lake on Lake Erie and all the fish died after we took
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So this is one of the exciting things, three sides
_12
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to every coin. But they have come up with a plan to meet
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this problem of not putting the hot water into the Hudson.
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They have got a cooling tower that is 1,000 feet tall, that
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300 feet across, the top. It puts steam up another 1,500
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feet, so that is 2,500 feet sticking up in the air.
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When I was governor we set up a commission to
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protect the beauty of the Hudson River Valley. Well, this
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has got to be the most unbeautiful and monstrosity that ever
.23
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happened. Now you have got a question of aesthetic pol-
_24
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lution, but you have got another problem.
25
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We have a variableiclimate in New York, and in
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the fall and spring you get that point where it is just at
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the freezing point. Now, you put tons of water up in the
_30
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air in the form of vapor in_a period when it is freezing
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- some of you have been in ice storms -- and that comes
.32
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down on the highways and freezes. We may have the most
.33
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serious highway proglem of accidents because of skidding
-34
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on the highway. So these are the very questions you are
.35
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asking about.
37
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_38
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Now, this thing gets| back to how flexible can we
_39
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be in this society? And I don't blame the ecologists, and
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I have a tremendous admiration for them. They have made
.41
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a tremendous contribution to our country, and they have had
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a tough battle to fight and they have won tremendous
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victories. But we have gotten to a point where people have
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gotito have a little flexibility.
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Their rigidity was what made it possible for them
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to make the gains. But if they maintain the rigidity, I
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think we are going to find we are going to pay a very
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serious price in this country and not serve the long-term
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best interests.
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With science and technology there is no problem
.55
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relating to pollution we cannot solve. We may not be able
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to do it yesterday or today, but it will be easier to do
.57
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it tomorrow when the scientists have had a little more time.
.58
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We can balance these things out. I have total confidence
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we can do both. And the research ought to be done together
60
not separately, so you don't det these clashes which result
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in the blocking of any progress.
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QUESTION: Mr. Rockefeller, what is your opinion
65
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of Senator Muskie's so-called Sunset proposal, which would
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require regular review of the functions of regulatory
67
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agencies? Do you support such legislation?
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THE VICE PRESIDENT:
Well, I support regular
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review of regulatory agencies.
I hope the Sunset isn't for
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New England.
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(Laughter)
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I hadn't heard about! that, and I don't know what
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the Sunset means. But I am for regular review of regulatory
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agencies.
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He and I served on this commission together, and
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I am a great admirer of his. He and I are both Mainiacs.
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That means we were both born in Maine.
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(Laughter)
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I like the idea of regular review of regulatory
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agencies, but I don't understand the Sunset business.
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QUESTION: I asked a question of Dr₁. Friedman and
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Mr. Nader last night on which there was an evasive answer
.22
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given.
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THE VICE PRESIDENT:
26.
I wouldn't have thought
25
Mr. Nader was evasive.
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.28
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QUESTION: He didn't get a chance to answer. He
.29
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was monopolized by Dr. Friedman. I got a cnance to read a
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little more on the theme of- the question in last night's
_31
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paper. I will read you the two paragraphs.
.32
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35.
"Agencies find themselves pulled from one crisis
34
to another with little time to look ahead or behind.
35
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Traditional lack of emphasis on long-term chronic dangers,
37
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Regulatory emphasis has generally been on the obvious
_38
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short-term problems rather than the more invisible ones
.39
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such as cancer."
.40
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_41
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This gets back to my question of last night. In
_42
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anticipatory management how would you instill that, sir?
43
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I am very, very sympathetic to what you are
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saying. I am a great believer in long-range planning. You
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can't do anything in less than five years, probably ten
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years. So you have got to plan.
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The public likes to have things done, as I said,
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yesterday or today, which is impossible, and we waste a lot
.53
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of money when we try to do them.
_54
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Now, John Glenn, who was an astronaut, when he was
.56
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a Senator and he is a great believer of this -- through
.57
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the Government Operations in the Senate, called a hearing on
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long-range planning in government, which is what you are
.59
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talking about. He asked Senator Humphrey and myself to be
_60
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the first witnesses, both of us being very much interested
.62
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in this subject. There were a distinguished group of
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Senators there and a large group of public.
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I went and Senator Humphrey was there for the
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pictures and then he got called off.
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(Laughter)
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So I am testifying and one Senator after another
_72
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had to slip off to a committee meeting and so forth. Now
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we are down to John Glenn and ⁶myself and the public. Every-
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thing was going well and then one of his aides came over
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and whispered in his ear. He said, "Please forgive me.
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There is a roll call. 11
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So I stood up and turned around and I spoke to
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the audience, a very sympathet ic audience. I said, "Now
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you understand why there is no longer any long-term plan-
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ning in government. Nobody has time to sit still long
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enough to think." I don't mean to say "think," but "to plan."
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They think while they are on the run. And this
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is really the problem. Everybody is running from one
.17
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crisis, one roll call, one committee meeting to another.
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And this is really very serious. This is why the Commission
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on Critical Choices for Americans -- because I deeply believe
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the only way we can intelligently reflect on our best long-
.22
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term interests is to get views from people in all walks of
_23
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life, thrashed these things out. And there isonothing we cań't
_24
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do in this country if we set our minds to it.
_25
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I am totally in agreement with you, and that when
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you are talking about something ten years from now, there
_28
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isn't the same danger of confrontation that you have when
_30
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you are talking about something today where everybody is
.31
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upset. But ten years from now we have got time to work it
.32
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out, reconcile differences, find new solutions and do it on
.33
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a sound basis. So I am delighted with your question and
.34
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totally in agreement with you.
.35
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.37
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I will take one more over here.
_38
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QUESTION: Mr. Vice President, I believe that
_40
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periodic review of agency purposes is desirable. As a
_41
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practical matter, how much do you thinkait maccomplish in
_42
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the vested interest in the agencies?
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THE VICE PRESIDENT: Don't limit it to the vested
_46
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interest in the people of the agencies. There are vested
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interests on the Hill, in stafifs, in members of the Congress
_48
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who sponsor programs very popular at home, and there are
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vested interests in every group.
.50
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_51
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.52
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Therefore, the only way this can be done, in my
.53
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opinion, is to bring in all of the interested parties --
_54
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business, labor, executive branch, legislative branch -- to
55
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sit down to say, "Where do we ewant to be in this industry?
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What are our objectives?"
5
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4
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Now, we have grown up under what many people feel
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is a free market system and that the government hasn't had
_60
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anything to do with it. Well, of course, they are really
.62
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wrong, because government does have a lot to do with these
.63
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things. But we don't think of it that way.
_64
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Therefore, the first thing we have got to do is
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recognize government has a leditimate role and that that
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role should be creative and stimulative in terms of
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incentives and penalties as well as regulatory in terms of
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protecting people's interests and this balance we have
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found.
_72
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.73
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Now, I think it is time we did this more con-
_74
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sciously, because life has gotten much more complicated.
_75
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We are totally interdependent "on the rest of the world
_76
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not totally, but extremely interdependent -- and change
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is moving very rapidly. I think you cannot have just an
_6
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agency of government reexamine its own program because -
1.7
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you are absolutely right -- they have got a vested interest.
.8
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Now can you take a regulatory agency, which is like a hothouse,
_9
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plant, and take it out of the greenhouse and put it in the
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snow and expect it to live. This has got to be something
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done with intelligence.
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I think this is a very exciting challenge to our
.15
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country and that it would be very stimulating and very
_16
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worthwhile for all of us to consciously think together as
.17
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to what we want to accomplish, how we can do it, how we can
_18
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maximize our extraordinary resources, talents, abilities,
.19
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both human and natural, in this country and restore our
.21
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strength at home and our leadership and ability to meet our
.22
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responsibilities in the world.
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I thank you very much.
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END
(AT 10:12 A.M. EST)
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6/5/76 Art -Exallet with idea - could megs
THE
WHIREHOUSE MA group
the To
WASHINGTON
5 wost hoted
June 1, 1976
equlations?
MEMORANDUM FOR:
JIM CANNON
ED SCHMULTS
Jun
PAUL McAVOY
PAUL LEACH
FROM:
ART QUERN ThoCQ
SUBJECT:
Regulatory Reform
As we have discussed, until recently we have not been able
to generate real interest or attention for the President's
regulatory reform program. It occurred to me that one
possible way of approaching this would be to pursue reform
by focusing our attention on the "institutional" targets
of regulation such as:
--- universities
-- hospital
-- banks
-- farmers
This would mean that an effort parrallel to the broad
review occurring in the departments would be initiated to
examine all Federal regulations and paperwork requirements
which impact on universities. Another effort could focus
on hospitals, etc. Each review would be from the point
of view of the effected "institution" and would deal with
all Federal regulations affecting that institution no matter
what department they originate from.
I would be pleased to discuss this with you if you think
it worthwhile.
Reg Reform
COUNCIL OF ECONOMIC ADVISERS
WASHINGTON
ALAN GREENSPAN, CHAIRMAN
July 20, 1976
PAUL W. MACAVOY
BURTON G. MALKIEL
DRAFT MEMORANDUM TO THE PRESIDENT
FROM:
Paul W. MacAvoy pm
SUBJECT: Status of Task Forces to Improve Government
Regulation
Presidential Task Forces in OSHA, FEA, and the Export
Administration are now at work revising present regulations.
Each has a somewhat different objective and time schedule.
But it is expected that at least preliminary indications of
improved regulatory procedures or practices will be available
before Labor Day.
OSHA Task Force
The Task Force working with the Occupational Safety
and Health Administration (OSHA) of the Department of Labor
began operations on July 1 under the direction of Philip
Harter of the Administrative Conference and Joseph Kirk
of the Department of Labor. The immediate goal of the
Task Force is to recommend revisions and simplifications
in the regulations pertaining to machinery, machine
guarding, and hand held power tools. The Task Force is
currently reviewing each regulation line-by-line to determine
why it is required, what effect it is having, and what
alternative ways there are to accomplish its goals. The
results of this effort will be an analysis of the regulation
and a proposal for its revision. The document containing
the analysis and proposed changes has to then appear in the
Federal Register as an invitation for the public to express
its ideas on how to revise the regulations. After public
comments have been received, the officials of OSHA will
consider the work of the Task Force and will then propose
and adopt appropriate revisions in the regulations.
The general approach of the Task Force to date has been
to consider moving towards regulatory criteria based more on
performance or results and less on physical conditions in
REVOLUTION the work place. One way of doing this is to put in place
AMERICAN
BICENTENNIAL
FORD is LIBRARY 0ERALD
1776-1976
®
-2-
general requirements with currently used detailed physical
design regulations being listed only as examples of ways of
complying with the general requirements. In that way,
business, labor and enforcement officers would have guidance
as to what is required but would be free to determine other
ways of providing the requisite level of safety.
FEA Task Force
Effort is underway to improve and simplify FEA regulations
on prices and sales allocations for refined products. A Task
Force directed by Donald Flexner of the Department of Justice
comprised of nineteen professionals, including lawyers,
economists, and regulation specialists, has commensed research
with FEA's cooperation to determine the extent to which
current FEA regulation of refined products has achieved the
economic and social purposes intended under the governing
statutes. On the basis of that analysis the Task Force will
consider alternative modes of regulation for potential future
application. The current timetable for research is to have a
draft report by September 30, 1976, recommendations by
October 31, 1976, receipt of FEA comments by the middle of
November, and recommendations of final report on or before
December 10, 1976.
Export Administration Task Force
The Task Force on the Administration of Export Controls
has now been established under the auspices of the Export
Administration Review Board which is chaired by the Secretary
of Commerce. The Task Force will review the procedures and
mechanisms involved in interagency consultation respecting
export license applications. The goal is to identify and
institute such improvements as are necessary to enable
license applications to be processed within ninety days.
Significant improvements in the Office of Export
Administration have already been made as the result of
an intensive management review in the Department of Commerce.
The Task Force will extend these efforts with an analysis of
the interagency review of export applications, particularly
in the areas of computer and other electronic equipment,
numerically controlled machine tools, and nuclear related
equipment which have required the longest processing in
the past.
FORD & GERALD LIBRARY
-3-
The Task Force Director is Carl Hystad, formerly with
OMB, and the Deputy Director is Major James Golden, USA,
currently on temporary duty with the Council of Economic
Advisers from his position as Associate Professor of
Economics at the Military Academy. The Task Force includes
two other members from agencies which are not involved in
the application review process, and five members representing
the principal agencies involved in interagency review (DOD,
ERDA, Commerce, State, and CIA). Administrative support for
The Task Force is being supplied by the Department of Commerce.
The Task Force has already begun screening Export
Administration files to document delays, interviewing key
personnel in the application review process, and discussing
problems with industry representatives. A preliminary report
outlining major problem areas is scheduled for the end of
July, and the final report with recommendations for new
procedures will be submitted in September.
&
FORD
GERALD
LIBRARY
THE WHITE HOUSE
WASHINGTON
July 30, 1976
MEMORANDUM FOR:
PHIL BUCHEN
JIM CANNON
DICK CHENEY
DAVE GERGEN
BOB HARTMANN
JACK MARSH
BILL SEIDMAN
FROM:
ED SCHMULTS
SUBJECT:
Regulatory Reform
Attached is a column that I have sent to the National Association
of Manufacturers for inclusion in a special regulation issue of
NAM reports. The column outlines the Administration's approach
to regulatory reform. Attached also are two recent one-page
articles from the National Journal on airline reform and
"Busing-Big Government Link" which may be of interest.
FORD & LIBRARY GERALD
National Association of Manufacturers Report - Special Regulation Issue
The Administration's Approach to Regulatory Reform
The Ford Administration is firmly committed to achieving
fundamental reform of our nation's regulatory system
which, over the years, has become sluggish, self-serving,
and stereotyped.
Almost two years ago, President Ford announced his intention
to eliminate regulatory inefficiency as a part of the effort
to halt inflation. His goal was not de-regulation but
rather the development of a more enlightened, streamlined
regulatory system which better serves the economic
and social needs of modern society.
Since that time, the American people have become increasingly
aware of the unnecessary costs and inequities produced by
the present system and as a result, some significant
progress has been made towards reform.
For example, in the past 8 months, we have reduced the
number of Federal forms by more than 12.5% and we are now
working to reduce the burden which Federal paperwork
requirements places upon the American public. We have
successfully encouraged the major independent regulatory
agencies to improve their regulatory practices. In the
past year they have made notable progress in reducing
costly regulatory delay, improving economic analysis and
placing greater reliance on market competition as a
regulatory tool. One agency has even asked Congress to
legislatively reduce its regulatory authority so that
natural competitive forces are allowed to operate.
Throughout the Executive Branch, the Administration has
worked hard to make decision-makers more aware of the
consequences of their actions. Agencies are required
to analyze the economic impact of their regulatory
actions before they are put into effect. And actions
are being taken to increase public participation in
regulatory proceedings. In addition, the President has
established several short-term task forces to re-write
and simplify existing regulations and streamline regulatory
procedures in the Occupational Safety and Health
Administration, the Federal Energy Administration and the
Commerce Department's Export Administration. These task
forces have been directed by the President to make it
easier for businessmen and consumers to deal with government
requirements.
FORD & GERALD LIBRARY
2
On the legislative front, we have also made some progress.
Federal laws sanctioning State fair trade laws have been
repealed. Fixed rates for securities brokerage commissions
have been abolished. Federal regulation of railroad
rates has been reduced, and civil and criminal penalties
for antitrust violations have been increased. In addition,
the Administration is continuing to press for congressional
action on proposals to reform airline, motor carrier,
banking and natural gas regulations.
But progress does not come easily. While recognition of
regulatory problems is bipartisan and widespread, agree-
ment on specific issues and solutions is less clear.
At every step, specific reform attempts are met with sharp
and vocal opposition from a variety of interests seeking
to preserve the status quo. In some cases, even asking
the question "Is there a better way" evokes sharp protests
and further progress toward meaningful reform is forestalled.
The real question facing both the Administration and Congress
is not the need for reform but whether or not current
public indignation and concern over government inefficiency
can be translated into productive and lasting reform.
Too often in the past, we have been content with organizational
or procedural solutions to complex economic or social
problems.
But the Administration believes the American people can no
longer afford to accept rhetoric as a substitute for results.
Therefore, President Ford has proposed to Congress the Agenda
for Government Reform Act which would guarantee the systematic
re-examination and reform of Federal regulatory activities
within the next four years. This legislation requires Con-
gress and the President to agree to undertake a fundamental
reassessment of the combined effects of all government regu-
lations on individual sectors of the economy. And it requires
them to adhere to a disciplined timetable to assure annual
results.
We believe this plan will produce several desirable results.
First, it will enable Congress and the Administration to focus
on the real-world consequences of their decisions. It will
foster increased public understanding of the costs and ineffic-
iencies of regulation and help to build an active public con-
stituency for change. Consumers, businessmen, workers, and
academics will have a better idea of what Government is trying
to do and be able to plan and participate accordingly. Finally,
this legislation will help assure concrete results.
This Administration is serious about reform. The present
system demands fundamental change. The American people
deserve no less.
LIBRARY GERALD R. FORD
REGULATORY FOCUS/RICHARD E. COHEN
FORD is LIBRARY GERAL
Up, Up and Away with Airline Reform
REGULATORY FOCUS/LOUIS M. KOHLMEIER
The Busing-Big Government Link
LIBRARY GERALD R. FORD