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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 (4)
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Regulatory Reform (4)
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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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James M. Cannon Files (Ford Administration)
James Cannon's Issues Files
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Aeronautics, Commercial
Antitrust law
Government regulation
Independent regulatory commissions
Intergovernmental relations
Legislation
Regulatory reform
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1976
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1975
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The original documents are located in Box 29, folder "Regulatory Reform (4)" 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States of America his copyrights in all of his unpublished writings in National Archives collections.
Works prepared by U.S. Government employees as part of their official duties are in the public
domain. The copyrights to materials written by other individuals or organizations are presumed to
remain with them. If you think any of the information displayed in the PDF is subject to a valid
copyright claim, please contact the Gerald R. Ford Presidential Library.
Digitized from Box 29 of the James M. Cannon Regulation Files at the Gerald R. Ford Presidential Library [vuly 1975]
UP.
refore
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FORD & 07683 LIBRARY
THE WHITE HOUSE
WASHINGTON
July 10, 1975
MEMORANDUM FOR:
THE PRESIDENT
THROUGH:
JIM CANNON
FROM:
ROD HILLS
SUBJECT:
Additional Items for Your Meeting
with Independent Agency
Commissioners
At our meeting yesterday several questions and
issues were raised. Attached are some Q's and A's
which may be helpful.
We have alerted Secretary Dunlop that he should be
prepared to discuss progress on improving the
OSHA program.
Finally, before your arrival at the meeting, Rod
Hills will tell the Commissioners the ground rules
for the session in order to minimize any
misunderstandings.
Question:
The major attention of your Administration has been on the
independent regulatory agencies. What are you doing to get
your own house in order, particularly OSHA and its many
problems?
Answer:
We have not been focusing only on the independent agencies, but
rather have launched a major effort to require all agencies to
prepare economic analyses of their regulatory actions before
they promulgate them. Secretary Dunlop can speak more specifi-
cally about OSHA. However, I would point out that this area
was of particular concern to the Congressmen I met with two
weeks ago. We are moving to recruit able people who are
sensitive to the effects of our safety standards on both
employer and employee. Furthermore, we have a comprehensive
review underway at that agency to resolve the problem of
compliance with these standards, particularly by small business.
Question:
Why has the Administration been SO slow to fill vacancies on
the regulatory commissions?
Answer:
Presently there are three vacancies in the 10 independent
agencies. We are actively working to recruit the very best
people to serve as Commissioners. I consider the quality of
membership on our regulatory agencies an extremely important
matter and I can assure you that the Administration is giving
top priority to filling these jobs.
Question:
Why has the Administration delayed the submission of its airline
regulatory reform legislation?
Answer:
The legislation the Administration will be forwarding will be
the first major reform of airline regulation since the creation
of the CAB. Consequently, there has been considerable interest
especially in the Congress in the reform measures to be proposed.
Administration officials have been working closely with interest
groups to develop the best possible legislation in this area. We
are now in the final stages of drafting the bill which should be
submitted to Congress in the next several weeks.
FORD
ilatory
Dom
rnal rnalot G
AND COMMERCIAL
Twin Coast Newspapers, Inc., 1975
NEW YORK, THURSDAY, JULY 3, 1975
Beyond Independent Agency Control
Regulatory Reform's
Scope, Power Defined
By DAN SKARTVEDT
Journal of Commerce Staff
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.
THE WHITE HOUSE
WASHINGTON
MEETING WITH THE
COMMISSIONERS OF THE INDEPENDENT REGULATORY AGENCIES
Thursday, July 10, 1975
11:00 a.m.
The East Room
(90 minutes)
Thru:
Jim Cannon June
From:
Rod Hills
I.
PURPOSE:
To discuss your regulatory reform program and enlist
the support of the Commissioners in a joint effort to
reform the procedures and policies of their regulatory
agencies.
II. BACKGROUND, PARTICIPANTS, AGENDA, AND PRESS PLAN:
A. Background:
You have stated on several occasions that you would
meet with the Commissioners of the Independent
Regulatory Agencies. On June 25th you met with
Congressional representatives as a prelude to the
meeting with the Commissioners.
This meeting provides an excellent forum to educate
the public on the need for regulatory reform. You
will be able to demonstrate leadership in a vital
area and articulate the joint resolve of your Admin-
istration and the Congress to an independent and
important portion of the regulatory bureaucracy.
An open meeting with full-scale press coverage has
the usual risk that a participant may attempt to
grandstand. However, your meeting with Congress and
meeting between the White House Staff and the staffs
of the regulatory agencies mitigate against such an
occurrence. The advantage of an open meeting is that
FORD LIBRARY
it provides a clear and effective signal to the
public at large that you are deeply concerned about
this problem.
B.
Participants:
1. Cabinet Members: Morton, Coleman, Dunlop, Levi,
Simon, Hathaway, Weinberger.
2. Commissioners:
See Tab D
3. White House Staff: Marsh, Rumsfeld, Lynn, Greenspan,
Seidman, Hartmann, Buchen, Hills,
Friedersdorf, Cannon, MacAvoy,
Nessen, Bennett
C. Agenda:
1. The President-Prepared Opening Remarks - See Tab A.
Summary of the Concerns of the President and
Congress (10 minutes).
2. Program - (Moderated by Rod Hills. Each topic
will be introduced by Paul MacAvoy).
Topic A: "Improving Economic Analysis in
Regulatory Decisions"
-Key Note Comments by Lew Engman, Chair-
man, Federal Trade Commission (4 mins.)
-Trade Commission (4 mins.)
-General Discussion (15 mins.)
In order that discussion will continue
after this topic is presented by Lew
Engman, you may want to say:
--I understand Chairman Wiley
of the FCC is quite concerned
about the need for this kind of
analysis and is proposing to under-
take a general economic analysis
of aspects of the communications
industry. Dick, would you like
to comment further?
Topic B: "Regulatory Procedures"
-Key Note Comments by William Anders,
Chairman, Nuclear Regulatory Commission
(4 mins.)
-General Discussion (15 mins.)
In order that discussion will continue after
this topic is presented by Bill Anders, you
may want to say:
--Chairman Stafford of the ICC has just
had an internal study completed which
I understand recommends a strengthened
role for economic analysis in the regula-
tory process. Do you care to comment
further, George?
Topic C: "Encouraging Competition in the Regulated
Industries"
-Key NOte Comments by Ray Garrett, Chairman,
Securitites Exchange Commission (4 mins.)
-General Discussion (15 mins.)
In order that discussion will continue after
this topic is presented by Ray Garrett,
you may want to say:
Chairman John Robson (CAB) is proposing
to take action that would test various
competitive approaches in the area of
airline regulation. Would you like to
comment, John, on this aspect of CAB
activity?
Topic D: "Reducing the Scope of Regulatory Activities
Where No Longer Necessary"
-Key Note Comments by John Nassikas, Chairman,
Federal Power Commission (4 mins.)
-General Discussion (15 mins.)
3. President's Closing Remarks - See Tab B.
D.
Press Plan:
To be determined after final discussion between you
and Ron Nessen.
Attachments:
Tab A: President's Opening Remarks
Tab B: President's Closing Remarks
Tab C: Summary of Independent Regulatory Commissions
Tab D: List of Regulatory Agency Members
27
INDEPENDENT REGULATORY AGENCIES
MEMBERSHIP
Civil Aeronautics Board (5 members)
Position
Name
Term Expires
Chairman
John Robson
December 31, 1977
Vice Chairman
Richard J. O'Melia
December 31, 1980
Member
G. Joseph Minetti
December 31, 1979
Member
Lee R. West
December 31, 1978
Member
Robert D. Timm
December 31, 1976
Commodity Futures Trading Commission (5 members)
Chairman
William T. Bagley
April 15, 1980
Member
John Vernon Rainbolt II
April 15, 1977
Member
Read Patten Dunn, Jr.
April 15, 1978
Member
Gary Leonard Seevers
April 15, 1979
Member
Robert L. Martin
April 15, 1976
Consumer Product Safety Commission (5 members)
Chairman
Richard O. Simpson
October 27, 1975
Commissioner
Barbara H. Franklin
October 27, 1979
Commissioner
Lawrence M. Kushner
October 27, 1976
Commissioner
Constance E. Newman
October 27, 1978
Commissioner
R. David Pittle
October 27, 1977
Federal Communications Commission (7 members)
Chairman
Richard E. Wiley
June 30, 1977
Commissioner
Robert E. Lee
June 30, 1981
Commissioner
Benjamin L. Hooks
June 30, 1979
Commissioner
Charlotte T. Reid
June 30, 1978
Commissioner
Glen O. Robinson
June 30, 1976
Commissioner
Abbott Washburn
June 30, 1975+
Commissioner
James H. Quello
June 30, 1980
Federal Maritime Commission (5 members)
Chairman
Helen Delich Bentley *
June 30, 1975
Vice Chairman
James V. Day
June 30, 1979
Commissioner
Ashton C. Barrett
June 30, 1977
Commissioner
Clarence Morse
June 30, 1976
Commissioner
vacancy
*
Resigned effective June 30, 1975, but will remain until another
Commissioner is named.
+ Nomination for reappointment submitted to Senate but not yet
confirmed
28
INDEPENDENT REGULATORY AGENCIES
MEMBERSHIP
Federal Power Commission (5 members)
Position
Name
Term Expires
Chairman
John N. Nassikas *
June 22, 1975
Vice Chairman
William L. Springer
June 22, 1977
Commissioner
Don S. Smith
June 22, 1978
Commissioner
vacancy
Commissioner
vacancy
Federal Trade Commission (5 members)
Chairman
Lewis A. Engman
September 25, 1976
Commissioner
Paul Rand Dixon
September 25, 1981
Commissioner
Mayo J. Thompson
September 25, 1975
Commissioner
M. Elizabeth Hanford
September 25, 1980
Commissioner
Stephen A. Nye
September 25, 1977
Interstate Commerce Commission (11 members)
Chairman
George M. Stafford
December 31, 1980
Vice Chairman
A. Daniel O'Neal Jr.
December 31, 1979
Member
Kenneth H. Tuggle
December 31, 1975**
Member
Rupert L. Murphy
December 31, 1978
Member
Virginia Mae Brown
December 31, 1977
Member
Willard Deason
December 31, 1979**
Member
Dale W. Hardin
December 31, 1977
Member
Robert C. Gresham
December 31, 1981
Member
Robert J. Corber
December 31, 1976
Member
Alfred T. MacFarland
December 31, 1978
Member
Charles L. Clapp
December 31, 1980
Nuclear Regulatory Commission (5 members)
Chairman
William A. Anders
June 30, 1976
Member
Victor Gilinsky
June 30, 1979
Member
Richard T. Kennedy
June 30, 1980
Member
Edward A. Mason
June 30, 1978
Member
Marcus A. Rowden
June 30, 1977
* Resigned effective June 22, 1975, but will remain until another
Commissioner is named.
**Subject to mandatory retirement because of age on December 31, 1975
29
INDEPENDENT REGULATORY AGENCIES
MEMBERSHIP
Securities and Exchange Commission (5 members)
Position
Name
Term Expires
Chairman
Ray Garrett, Jr.
June 5, 1977
Commissioner
Philip A. Loomis, Jr.
June 5, 1979
Commissioner
John R. Evans
June 5, 1978
Commissioner
A.A. Sommer, Jr.
June 5, 1976
Commissioner
Irving M. Pollack
June 5, 1975+
+Nomination for reappointment submitted to Senate but not yet
confirmed
OPENING REMARKS
I feel deeply that we must seriously consider
the costs to American: consumers of all government activities.
This includes our regulatory activities. Regulatory reform
is a theme that arose=repeatedly in the course of last fall's
economic summit meeting. It is a theme that is finding
growing attention and support in both popular and economic
literature, in the Executive branch, in the halls of Congress,
and, I am pleased to note, among government regulators them-
selves.
A short time ago, I met with twenty-four Members of
Congress on this matter. There was unanimity among this
bipartisan group that we must examine our regulatory practices
to make sure they are meeting our present needs. There was
agreement that competition should be relied on whenever
possible and that, where regulation is unnecessary, it should
be avoided. Also, there was a persistent concern that some
FORD i LIBRARY GERALD
-2-
government regulation costs the country more than it
returns in benefits and that the regulatory process often
benefits special interests at the expense of the general
public. Finally, there was consensus that the important
public service role of the Commissions must be reflected
in the attitude of the regulators and the welfare of the
consumer must always be the first concern in their minds.
I have a strong belief that the costs which regulation
imposes on private citizens should be faced squarely. Every
citizen should be aware that in some cases these costs mean
higher prices, reduced efficiency, less consumer choice,
and fewer innovative ideas.
In calling today's meeting, I do not mean to suggest
that the problems reside exclusively in your agencies.
Regulations that impose costs on consumers can also be
found in Cabinet departments and in the intricate, some-
times invisible, web of laws and regulations at the State
and local levels.
FORD is LIBRARY 938870
-3- -
My Administration is focusing public attention on
the need to minimize unnecessary controls. We should
recognize that occasionally government policies which
appear to be in the short-term public interest are in
fact detrimental to the long-term best interests of
consumers. I am asking for your continued and intensi-
fied help in identifying ways the Commissions can
assist in our collective efforts to restore innovation
and growth in the American economy. As we look for
short-term solutions, we must also chart a course that
permanently relieves the economy of unnecessary long-
term impediments.
FORD & LIBRARY GERALD
-4-
In some instances, the circumstances which caused
government to institute a regulatory scheme have changed.
You should be the leaders in identifying areas where
regulations should be eliminated or substantially revised.
You have been given extraordinary authority to
regulate the economy for the public good. With these
unusual powers and responsibilities, you must function
as models of effective and open government.
There are four major areas that deserve careful
attention:
First, there must be a constant effort to improve
each Commissions' ability to identify the costs and
benefits of current and proposed regulation. You should
make sure that the quality of your economic analysis
matches your high standards of legal professionalism. In
particular, the costs -- as well as the benefits --- of
restricting competition must be considered. Also, the
BERALD FORD LIBRARY
benefits of worthwhile social goals must be weighed against
-5-
their costs to the Nation. As you know, I have ordered
all Departments and Agencies to prepare an Inflation Impact
Statement for their major proposals. I am pleased the House
has changed its rules to require similar analyses and I note-
the Senate has several pieces of legislation under review
which have similar objectives. I ask you to give this
matter the highest priority.
Second, we must take every possible step to make sure
that backlog and delays in regulatory proceedings do not
weaken the public belief in an equitable and efficient
regulatory system. If legislation is needed, you may be
certain that the Congress and the Administration will
provide such laws.
Third, the public can rightfully expect that you
should be leaders in suggesting appropriate legislative
changes in your authorizing statutes.
LIBRARY GERALD R. FORD
-6-
Fourth, I have asked all Departments and Agencies to
re-examine their present procedures for assuring that the
consumer's interests prevail. I believe that competition
in product quality and price is the best consumer protector.
By freeing entry, adding to rate flexibility and promoting
service competition, the consumer can be given the choices
that only the market place can provide. I also urge you to
insure clearer communications with consumers so they will
better understand your actions.
Our joint efforts in these areas will move us a long
way towards the efficient and useful regulatory system
that we all seek.
In addition to achieving these administrative reforms,
my Administration specifically will be seeking further
legislative changes that are also intended to reform our
system of regulation.
LIBRARY GERALD R. FORD
-7-
It is my strong conviction that the consumer is
best able to signal his wants and needs through the market
place. The government should not dictate what his economic
needs should be. Therefore, I have proposed, and will
continue to sponsor legislation to relax or eliminate the
Federal Government control over areas where I believe the
market place can do a better job.
I believe the government should only intrude in the
free market when well defined social objectives can only
be obtained by intervention or when inherent monopoly
structures prevent a freely competitive market system
from operating. Government should foster rather than
curtail competition and give maximum freedom to private
enterprise.
FORD i LIBRARY 93RALD
- -8-
Agencies engaged in regulatory activities can
expect that the Antitrust Division of the Justice
Department will continue to argue for competition and
lower consumer prices as a participant in your agencies'
proceedings. Furthermore, the Attorney General will
continue to insure vigorous antitrust prosecution to
remove private sector barriers to competition.
We have or will be proposing regulatory reform
legislation in such areas as energy, securities markets,
transportation, financial institutions, and communications.
FORD is 938470 LIBRARY
- -9-
I have asked the Congress for its cooperation in giving
these bills early consideration and I ask for your support
in achieving needed reforms.
The legislation I am proposing would reduce the
government's role in the setting of prices. Also, it
would enhance innovation by making it easier for new
businesses to compete with existing firms and it would
remove barriers from existing firms to allow them to
develop new services and lower prices, as well as abandon
unprofitable or unnecessary services.
This meeting and my earlier meeting with Congressional
representatives should be only the beginning. Today, we
will continue the dialogue begun at the Congressional
meeting. Roderick Hills and Paul MacAvoy will briefly
describe our agenda for the meeting this morning. I will
be interested in hearing more about the steps you are taking
to improve our system of regulation as well as the problems
FORD is GERALD LIBRARY
-10-
you face in this effort.
I am particularly hopeful that we will be able to
identify those practices which are most deserving of
attention and reform. If this meeting does foster a
program of action and a new spirit of cooperation between
all of your Commissions, Congress and the White House,
we will be responsive to the public interest.
FORD & GERALD LIBRARY
B
CLOSING REMARKS
This meeting has been very useful in giving me a sense of the
importance of your mission and the problems you face. I consider this to be
a first step toward ensuring that our regulatory system is truly meeting our
present economic and social needs.
I have been gratified to see some of your initial efforts at regulatory reform.
There are five follow-up actions that I wish to emphasize: First, I ask each
Chairman to give further attention to cost-benefit analysis of his Commission's
major regulatory program areas. It is essential that we all fully understand the
economic costs of your activities in order to take concrete steps to achieve reforms.
To facilitate this understanding, I would hope that you would issue cost-benefit
analysis of your major programs. This would parallel the "Inflation Impact
Statements" required of the departments and agencies of the Executive Branch
and similar Congressional initiatives.
Second, I ask you to undertake a comprehensive and specific review of all
areas where regulatory delays presently occur in order to eliminate
impediments to a speedy and effective process. You should set as a goal today
that in six months there will be a demonstrable reduction in regulatory delays
in your major cases and rule making proceedings.
Third, I ask that you study and revise your procedures as appropriate
to ensure that you are responsive to the legitimate consumer interests and
that your actions are intelligible to the average American.
FORD is 07V839 LIBRARY
-2-
Fourth, you should consider the most fundamental changes that would
move us toward deregulation in areas where the regulatory process no
longer makes sense. In some areas it is increasingly clear that more
competition is a better regulator than the Government. We are moving in
this same direction with respect to the deregulation of certain aspects of the
CAB's activities And I was pleased to note in the paper Tuesday that the
CAB has begun an experiment in this field. Deregulation of natural gas
is necessary. You must all ask yourself the question: "Is regulation better
in this case than the unregulated market?"
Finally, I will continue to meet with the designated Members of Congress
to review with them your progress and areas of mutual concern. I am also
asking the Members of my Administration to work closely with each of you
and the Congress to respond to all of these concerns. These regular contacts
will permit us to establish priorities for regulatory reform over the months
ahead and eventually enable us to accomplish our goals.
Thank you for your participation and cooperation in this important
endeavor.
LISA GERALD ? FORD
C
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET
WASHINGTON, D.C. 20503
SUMMARY OF INDEPENDENT REGULATORY COMMISSIONS
(Revised July 8, 1975)
SERVICE FORD 18
INDEX
PAGE
Interstate Commerce Commission
1
Civil Aeronautics Board
5
Federal Communications Commission
8
Federal Power Commission
10
Nuclear Regulatory Commission
13
Federal Communications Commission
15
Federal Trade Commission
18
Securities and Exchange Commission
20
Commodity Futures Trading Commission
23
Consumer Product Safety Commission
25
List of Regulatory Commissioners
27
1
Interstate Commerce Commission
Established:
1887
11 Commissioners
Chairman:
George M. Stafford, appointed Chairman in 1970.
Campaign Manager and Executive Assistant to
former Senator Carlson of Kansas 1946-1967.
Appointed by President Johnson in 1967. He is
a strong advocate of the present system of
surface freight and passenger transportation
regulation. Term expires in 1980.
Major Commission Activities:
The Commission regulates the economics of railroad, truck,
barge and pipeline transportation, including entry, pricing,
service offerings and corporate financial matters such as
merger. The Commission's specific activities include:
1. Issuance of certificates of operating authority con-
trolling entry into a market, exit from a market,
the specific route to be travelled and particular
commodities to be transported.
2. Approval of rates and supervision of the rate-filing
system.
3. Analysis of carrier financial data and statistics and
regulation of certain financial transactions such as
consolidations and mergers.
4. Supervision of compliance with common carrier
obligations.
Assessment of Agency Performance:
1. As a result of present law, tradition and inertia, ICC
decisions are slanted toward preservation of the
status quo in the industry rather than encouraging
experimentation. and new service innovation which could
lead to better, less expensive service for the consumer.
It has opposed past Administration reform proposals
and has criticized the recently submitted Railroad
Revitalization Act. It is expected to oppose the
upcoming truck reform bill. The Agency has recently
announced some changes designed to reduce the unnecessary
mileage traveled by trucks and liberalize ratemaking
procedures, and while these actions demonstrate a
positive response to the need for regulatory reform,
they fall far short of the Administration's proposals.
2
2. The ICC has been inflexible in rate cases where the
largest economic effects could take place. It tends
to approve the rates offered by privately organized
rate bureaus and disapproves most independently com-
petitive rate requests. There is little "public"
participation in rate cases, for the ICC has tended
to consider "consumers" as only shippers, and has
responded to the public's real interests only under
pressure (e.g., the household movers regulations).
The citizen wishing to become involved must incur
substantial costs, and is not guaranteed an objective
hearing.
3. Extensive cross subsidies tend to distort the
relationship of rates to shippers' costs, particularly
where proposed rate changes would place one mode in
a competitive advantage to another. A recent decision
not to suspend minor rate changes is a useful beginning,
but does not guarantee that such rates won't later be
disallowed. Experience shows the average age of motor
carrier rate cases to be approximately 8.7 months;
railroad rate cases - 18.6 months.
4. New entrants could be a major factor in trucking and
water carriage. The ICC has tended to be very
protective of the existing industry, and usually
rejects new applicants (after a 1-2 year waiting time)
on the grounds that they have not proved the market
needs new service, or that existing firms can and will
provide it. Minor changes in industry participants
are usually allowed if nobody objects, but the ICC
could greatly liberalize its requirements for proof
of "need" and thereby permit much more service/entry
competition.
5.- With the Administration's urging, the ICC created an
internal staff "blue ribbon panel" to examine ways
of improving both the economic regulation of surface
freight transportation and the Commission's productivity.
While this panel has identified key targets for change,
indications are that there will be substantial resistance
to major change. The Chairman has appointed a three
Commissioner task force to consider implementation of
the panel's recommendations.
Administration-sponsored Legislation Affecting the Commission:
1. Railroad Revitalization Act
Status: Submitted by the President on May 19. S.1876
introduced by Senators Hartke and Pearson June 5,
3
H.R. 7681 introduced by Representative Staggers.
House Interstate and Foreign Commerce Committee
hearings are scheduled July 15-17, 22-24.
Major Provisions:
Pricing flexibility - Would create an expanding "zone
of reasonableness" within which railroads would be
free to adjust rates up or down without ICC inter-
ference.
Ratemaking and Abandonment Procedures - Would more
clearly define the ICC's ratemaking powers to specify
prohibited actions (e.g., the ICC could not find rates
too low if they cover a carrier's costs). It would
require more adequate prior notice of proposed rail
abandonment actions.
Antitrust Immunities - Would prohibit rate bureaus
from engaging in certain ratemaking activities which
serve to stifle competition and discourage innovation,
e.g., it will prohibit rate bureaus from discussing
and agreeing on rates involving only one railroad.
Financial Assistance and Restructuring - Would authorize
up to $2 billion in Federal loan guarantees for the
purpose of improving road beds and equipment, con-
ditioned on the applicants' agreement to engage in
specific restructuring actions.
2. Trucking Regulatory Reform
Status: Legislative drafting will be complete when
differences over two remaining issues (mergers and
entry) are resolved. Submission to Congress anti-
cipated by the end of July.
Major Provisions:
Pricing Flexibility - Creates a no-suspend zone
comparable to the rail bill.
Antitrust Immunities - Reform measures will be
comparable to those in the rail bill, and will also
prevent the use of across-the-board percentage rate
increases to cover increased costs of inflation,
fuel, labor, etc.
FORD
4
Entry - Proposes a three-year phase-in of liberalized
entry requirements which would grant certificates to
all truckers capable of proving their financial
strength and covering direct costs.
Commodity and Route Restrictions - Directs the ICC
to take steps to liberalize or eliminate current
restrictions on commodities and route structures.
5
Civil Aeronautics Board
Established: 1938
5 Board Members
Chairman:
John E. Robson. Mr. Robson was a senior partner
in the Chicago law firm of Sidley and Austin prior
to his appointment to the CAB by President Ford.
He is highly qualified due to previous experience
with the transportation industry and is expected
to be a singularly. effective force in improving
the Commission. From 1967- 1969 he served in
several key positions in the Department of Trans-
portation, including Under Secretary, General Counsel,
and Interim Administrator of the Urban Mass Transit
Administration. Appointed by President Ford in
April 1975; term expires in 1981.
Major Board Activities
The Board regulates the economics of the airline industry and
also has a statutory mandate to promote, encourage and develop
U.S. civil aviation. It is important to note that the respon-
sibility for safety regulation does not rest with the Board,
but rather with the Federal Aviation Administration. The Board's
principle activities include:
Issuance of certificates of operating authority which
license air transportation service between interstate
points.
Regulation of carrier freight rates and passenger fares.
Jurisdiction over acquisitions, consolidations, mergers,
interlocking relationships and various intercarrier agree-
ments involved in providing air transportation to the
public; e.g., fuel, terminal arrangements, etc.
Design, prescription and administration of uniform ac-
counting and reporting systems for airlines.
Enforcement and consumer advocacy including the preven-
tion of unfair and deceptive practices and assuring the
prompt and effective consideration of consumer complaints.
Determining and making subsidy payments to eligible U.S.
air carriers (mostly local service operations to ensure
air transportation to small communities).
6
Assessment of Agency Performance:
1. The CAB has been criticized for placing too much
emphasis on its promotional responsibilities when
the industry no longer requires such encouragement,
and for protecting industry profits and keeping
consumer prices unnecessarily high. An internal
staff group and a recently appointed outside Advisory
Committee are reviewing the Board's mandates and
procedures. Senator Kennedy has shown a great deal
of interest in needed reforms and will be a major
participant in obtaining new legislation.
2. The Board has traditionally been very responsive to
industry wide requests for rate increases, and tends
to approve them fairly quickly (less than 1 month).
It has favored pricing experiments that make all
carriers better off, but has adopted load factor
standards which are intended to make fares conform
to "reasonable" costs. The CAB has generally prevented
price reductions, especially when protested by other
carriers, and such applications require much longer
to process. The Board has authority to adopt a "zone
of reasonableness" for domestic air fares but has
rejected this approach.
3. The Board has several times changed its position on
new route authorities for existing carriers but has
consistently opposed new entrants which threaten com-
petition for the trunk lines. It has justified this
posture on the questionable arguments in favor of
employees, stockholders and low density markets which
might lose some air service. Time to process formal
route proceedings has increased to an average of nearly
20 months for those cases settled in 1974. The CAB
has enormous route/schedule flexibility, but has shown
little disposition to allow more price/quality options
for various carriers.
4. CAB has been criticized for neglecting consumer
interests in areas such as baggage liability, timeliness
of service, etc. In response, the CAB has established
an office to provide for improved advocacy of con-
sumers' positions. Economic impacts of actions are
usually discussed, but direct citizen involvement is
discouraged by elaborate Board requirements for paper-
work. Although a great deal of material is available
to the public, some important information supplied by
7
the carriers is available only to the Board. The
CAB maintains close contact with the industry, and
some of these associations have been characterized
as de facto policymaking, without opportunity for
public comment.
Administration-sponsored Legislation Affecting the Commission:
Status: Currently being drafted by an Executive Branch
Task Force.
Major Provisions:
Will provide for increased pricing flexibility to permit
the airlines to engage in more effective price/service
competition.
Will provide for liberalized regulation of market entry/
exit.
Will eliminate the Board's power to approve certain
anti-competitive agreements among airlines while retaining
those agreements needed to meet a serious transportation
need.
FORD
8
Federal Maritime Commission
Established:
1961
5 Commissioners
Chairman:
Helen Delich Bentley, Reporter for the Baltimore
Sun 1945-1953; Maritime Editor for the Sun, 1953-
1969; Appointed by President Nixon in 1969; She
resigned June 30, 1975, when her term expired, but
will remain until a replacement is confirmed.
Major Commission Activities:
1.
Regulates the rates, classifications and other
pricing practices and agreements of international
shipping firms which participate in rate setting
conferences. Regulates all domestic offshore commerce
between points within the United States.
2. Licenses independent ocean freight forwarders, large
cargo vessels, and all large (over 50 passengers)
vessels, and requires owners to establish and maintain
evidence of minimum financial responsibility.
3. Renders decisions, issues orders, rules and regulations
governing and affecting common carriers by water in the
foreign and domestic offshore commerce, terminal
operators, freight forwarders, and other persons sub-
ject to the shipping statutes.
Assessment of Agency Performance:
1. The FMC has a smaller scope of regulatory authority
than the ICC or the CAB because many international
shippers do not participate in shipping conferences.
However, all subsidized U. S. carriers belong to these
pricing cartels and there is no evidence that the Com-
mission gives significant consideration to the broader
national economic impact of its actions governing these
shippers. It clearly is interested in promoting and
protecting the interests of the U. S. merchant marine
which may not be in the best economic interests of the
Nation. It has a Bureau of Hearing Counsel which is
supposed to represent the public's interest in formal
cases before Administrative Law Judges. It does not,
to our knowledge, perform cost/benefit analyses prior
to decisions.
9
2.
The Commission tends to accept most rates filed by
international rate conferences, largely because it
lacks clear information on which to base a disapproval.
Domestically, it has permitted some pricing flexibility,
but has required 2-4 years in most cases to settle major
rate cases. It could greatly simplify its current
rate structure which assigns (like the ICC) a different
rate to every category of cargo. Though it has twice
debated substantial rate simplification, it has never
implemented any of these proposals.
3. The FMC has proposed legislation which would give it
authority to approve rates for all international
carriers shipping goods to or from the U. S. even though
they do not belong to rate setting conferences. If
granted, this authority would probably be used to
eliminate the option of lower shipping fares offered
by some foreign competitors. The Administration has
consistently opposed this.
4. The Commission strongly endorsed the Oil Cargo Preference
legislation which President Ford vetoed in December 1974.
Status of Administration Sponsored Legislation:
Although there is presently no significant FMC legislation in
process, an Administration Task Force is examining the possibility
of seeking changes in the Rate Conferences' immunity from anti-
trust prosecution.
FORD
10
Federal Power Commission
Established:
1920
5 Commissioners
Chairman:
John N. Nassikas, 1950-53 Assistant and Deputy
Attorney General of New Hampshire; 1953-69 senior
partner in a Manchester, New Hampshire law firm;
1968-69 chief counsel for the Republican Minority
of the Senate Committee on Commerce. He has
supported the deregulation of new natural gas,
usually combined with a limited price monitoring
role for the FPC. Appointed by President Nixon
in 1969. He has resigned effective June 22, 1975,
when his term expires, but has agreed to remain until
another Commissioner has been confirmed.
Major Commission Activities:
Consistent with the Nation's needs for electric power and
natural gas and protection of the environment, the Commission:
1. Sets prices for interstate wholesale sales of natural
gas (about 67% of the gas sold in the U. S.).
2. Regulates the construction and operation of inter-
state natural gas pipeline facilities.
3. Authorizes private hydroelectric power projects on
navigable rivers.
4. Regulates interstate wholesale electric power sales
(about 15% of the electric power generated in the
U. S.).
Assessment of Agency Performance:
1. In response to growing natural gas shortages, the FPC
has shown flexibility toward pricing of pipeline gas
transmission but has been much more inflexible with
the price of gas at the well head. Almost all rate
changes must be approved directly by the Commission,
which usually makes judgments based on average
historical costs. FPC takes 2-3 years to rule on cases,
often using data that has been outdated by inflation.
FPC could decontrol well-head prices without legislation,
but will not even though interstate gas is nearly four
11
times cheaper than the equivalent energy producible
from a barrel of oil, and is substantially below
prices charged in the State regulated intrastate gas
market. However, the FPC has established nine priority
uses for natural gas and has allocated the available
interstate supply (during peak winter demand periods)
on this basis.
2. The Commission has neither fostered nor inhibited
pipeline entry or electric power pooling. It has
been generally objective in considering applications
and has processed requests with reasonable dispatch.
The agency does not appear to use an industry protection
policy to reject new applicants.
3. For the most part, FPC has maintained open hearings
and given the public ample time to comment. It was
recently criticized for ignoring the staff's recom-
mendations on well head pricing, but generally the
FPC has shown great interest in the ultimate effect
of its decisions on consumers. (Energy prices have
tended to be maintained at artificially low levels,
whereas many transportation prices have been maintained
at artificially high levels.)
4. There is little or no standard setting with direct
consumer participation at the FPC. Regulated energy
prices have been set on the basis of historical average
costs, a fact which has helped keep them too low to
provide adequate capital for replacement and new
exploration.
Status of Administration Sponsored Legislation:
The Administration is seeking to:
1. Deregulate the price of interstate sales of new
natural gas;
2. Require State Public Utilities Commissions to allow
rate changes to take effect if administrative proceedings
have not been completed within 5 months. (This parallels
a new FPC procedure; rates are subject to future adjust-
ment if proven to be too high or low.)
12
3. Allow electric power generating and transmission
firms to include construction in progress as part
of their rate base, thereby allowing greater revenues
in order to meet desired ROI figures.
Some hearings have been held in the Senate Government Operations
Committee but firm action appears unlikely this year. On
June 19, House passed an energy bill without an increase in the
gasoline tax, a vote the Administration supported.
13
Nuclear Regulatory Commission
Established:
1975
5 Commissioners
Chairman:
William A. Anders, 1955-1964 U. S. Air Force;
1964-1969 National Aeronautics and Space
Administration - Astronaut (Apollo 8 cir-
cumlunar flight) ; 1969-1973 National Aeronautics
and Space Council - Executive Secretary; 1973-
1974 Atomic Energy Commission - Commissioner.
He has a balanced record with responsible con-
cern for safety and for the environment combined
with interest in a strong and economically sound
nuclear industry. Appointed by President Ford,
1974, term expires January 1976.
Major Commission Activities :
In order to insure protection of public health and safety,
protection of the environment, and conformance with anti-
trust laws, the Commission:
1. Sets overall standards and makes rules for the
conduct of the nuclear industry.
2. Makes technical reviews and studies and conducts
confirmatory research.
3. Issues construction permits and operating licenses
for nuclear power reactors and other nuclear industry
facilities and products.
4.
Provides day-to-day surveillance and enforcement
of regulations, operating licenses, and construction
permits.
Significant Developments :
1. On January 19, 1975, NRC became an independent
regulatory agency. This separation from former
association with AEC ended a long standing conflict
of interest between developmental and promotional
responsibilities as contrasted with regulatory
responsibilities.
14
2. The Commission has taken a number of administrative
steps to lessen the burden of regulations; reduced
time for environmental reviews from 12 to 6 months;
provided for limited start of construction in
advance of construction permit; given priority to
issuance of operating licenses to coincide with
completion of facilities.
Status of Administration Sponsored Legislation :
In early May, NRC forwarded proposed legislation to speed
up licensing procedures for nuclear facilities, including
pre-designated construction sites and standardized power
plants, without sacrificing thorough environmental, safety,
and antitrust reviews. Some hearings were held June 25 by
the Joint Committee on Atomic Energy, and others may be con-
ducted after the August recess.
15
Federal Communications Commission
Established:
1934
7 Commissioners
Chairman:
Richard E. Wiley. Appointed by President Nixon
February 1974. FCC Commissioner 1972-1973. FCC
General Counsel 1970-1971. Assistant Corporation
Counsel, Bell & Howell Company. Practiced law
in Chicago and taught at John Marshall Law School.
Regarded throughout the regulated industry as a
fair and capable Chairman; has a strong personal
interest in the management of the Commission and
focuses staff time on definable issues and
resolution of long-standing cases. Maintains
demanding well-organized Commission schedule. He
has made the elimination or simplification of
regulatory burdens a priority. Although some
progress toward this goal has been evident, major
changes in cable industry regulation are not
expected before two years. Commissioner Robinson
has been the most vocal proponent of deregulation,
especially in cable television. Term expires, June 1977.
Major Commission Activities:
Communications Act of 1934 created FCC to insure effective
U. S. and worldwide communications system. Although not
specifically addressed in the 1934 Act, regulation of
television content and cable industry have been assumed as
ancillary to specific powers of the Act over radio and other
communications services. The Commission:
1. Allocates radio spectrum space to non-Federal uses;
licenses all non-Federal users of the public airwaves,
cable, common carriers such as telephone, telegraph,
and satellites, and sets operating environments of
each.
2. By setting tariffs, regulates the rate of return for
common carriers--telephone, telegraph and specialized
voice and data transmission services for hire.
3. Requires publication of financial and business
statements by regulated industries.
4. Levies fees, enforces actions through fines and
penalities; subject to Court review.
16
Assessment of Agency Performance:
1. FCC has tended to encourage new entrants to the
field of common carrier communications (telephone,
telegraph) and examples such as use of domestic
satellite transmission reinforce the belief that
consumers' interests are generally well represented
in this area of FCC jurisdiction. On the other
hand, the Commission has tended to protect the
established mass communications industry (televi-
sion, radio) at the expense of consumers. FCC
decisions have lagged (sometimes for many years)
and although the agency could administratively
adopt more liberal entry requirements for common
carriers, it will probably require new legislation
to force it to make cable TV a more competitive
market.
2. All common carriers are required to file rate
changes with the FCC; they take effect unless
challenged by another party or investigated by the
agency. Some pricing flexibility has been
permitted, but FCC has not done an adequate job in
reducing the time period for deciding rate cases
(often years). A major problem exists in assigning
joint costs to individual services, and FCC could modify
its uniform system of accounts to reduce the time
period for decisions and better allocate overhead
costs.
3. There is no separate consumer liaison at the FCC,
but the agency has followed the requirements of the
Administrative Procedures Act with little apparent
complaint from the public. Commission meetings,
however, are generally closed to outsiders. FCC
does not formally prepare cost benefit analyses
prior to issuing its rules.
4. FCC standards usually deal with engineering and
technical qualifications relating to equipment.
Concerned industries, rather than the general public,
tend to participate in hearings and standard
setting proceedings which are described as generally
timely and realistic. However, the FCC has used
its authority to revoke the licenses of the Alabama
Educational Television Network for failure to
serve community needs. "Ascertainment" of community
&
needs was a major issue in debate of broadcast
license renewal bill in 93rd Congress-- no bill
passed.
17
Status of Administration Sponsored Legislation:
The Office of Telecommunications Policy has proposed some
revisions to FCC's authority to regulate cable TV, but the
legislation is opposed by FCC for going too far without
adequate study data, and by the Justice Department for not
recommending total deregulation of cable industry. If
major Justice-OTP differences could be arbitrated, legislation
could be introduced within a month.
FORD
18
Federal Trade Commission
Established: 1915
5 Commissioners
Chairman:
Lewis A. Engman, practiced law in Grand Rapids,
Michigan, 1961-1970; general counsel, Office of
Consumer Affairs, 1970-71; assistant director,
Domestic Council, 1971-1973. He has publicly
advocated increased enforcement of the antitrust
laws as an anti-inflationary weapon and has
criticized several regulatory agencies for their
anti-competitive practices. Appointed by
President Nixon, 1973, term expires September 1976.
Major Commission Activities:
Established under the Clayton Act to help preserve the health
of the free enterprise system by enforcing the antitrust laws
and by eliminating practices unfair or deceptive to consumers,
the Commission:
1. Investigates and rectifies monopolistic practices
and unreasonable restraints of trade (price-fixing
conspiracies, boycotts, price discrimination, and
illegal mergers and acquisitions).
2. Promulgates rules defining what trade practices
are deceptive and unfair, and what information,
particularly advertising, must be disclosed to the
consumer. Enforces the regulations through civil
penalty actions.
Significant Developments:
1. Antitrust investigations and enforcement have
generally tended to emphasize industry structure
rather than illegal conduct, such as price-fixing.
The FTC has initiated a divestiture suit aginst
the eight largest integrated oil companies. Their
anti-merger activity, which had been increasingly
important in recent years, has slowed down as a
result of the recent economic decline.
FORD
19
2.
The Commission provides adequate public notice and
conducts public hearings in connection with its rule-
making and adjudicatory proceedings. Although there
is no office of Consumer representation, the FTC
encourages public participation in rulemaking, and
now has authority (though unfunded) to pay legal fees
for consumer representation. In adjudications, the
Commission could adopt a more liberal policy for public
intervention (petitions are generally rejected), but
full scale participation in these proceedings is an
expense most consumer groups can not afford. Recent
legislation requires a "business impact" statement
prior to adoption of rules, and although the precedent
appears to be a good one, there is substantial staff
resistance to the idea.
3. The FTC sets informational or "nomenclature" standards
designed to guarantee uniform reference terms within
a market (e.g., hi-fi amplifier wattage, gasoline
octane rating). Much of its work to prevent false
advertising follows this objective. The Commission
does not perform economic impact analyses in connection
with these standards. Except for public comment sub-
mitted in conjunction with the process of trade
regulation proceedings (e.g., labeling), standards
are usually adopted with little consumer input.
4. Against a substantial level of criticism from business
interests, the FTC has sought to increase the
specificity and usefulness of its quarterly financial
reports by requiring "line of business" profit data
from 350 of the largest manufacturers. Numerous
private suits have sought to forestall this action.
5. The FTC has recently endorsed the idea of permitting drug
stores to advertise prescription drugs, an innovation
which could have significant beneficial impacts on
these retail prices.
Status of Administration Sponsored Legislation:
Repeal or Reform of the Robinson-Patman Act.
Alternative proposals drafted by the Justice Department
for repeal or substantial reform of this Act are presently
under review by all concerned Agencies. Final recom-
mendations to the President are expected by July 30.
20
Securities and Exchange Commission
Established:
1934
5 Commissioners
Chairman:
Ray Garrett, Jr., 1954-58 Director of Division
of Corporate Regulation, SEC; 1958-73 partner
in major Chicago law firm; active in studies of
corporate finance by the American Bar Association.
Appointed by President Nixon, 1973, term expires
June 1977.
Major Commission Activities:
In order to insure that the public is provided the most accurate
investment information and that those individuals/firms in the
securities industry adhere to responsible conduct, the Commission:
1. Requires companies issuing publicly held securities
to disclose pertinent financial information;
2. Supervises the rules and operations of national stock
exchanges and securities associations;
3. Requires publicly owned companies to file periodic
financial reports and disclose certain operations,
including stock holdings and trading by officers and
major owners;
4. Promulgates rules and supervises the operations of
securities brokers, dealers, and investment advisers;
5. Regulates major financial and management practices of
mutual funds and other investment companies.
Assessment of Agency Performance
1. The Commission was heavily criticized for its failure
to foresee the major paperwork and financial crisis
in the securities industry during 1969-71. Since then,
it has greatly increased its audit and supervision
functions, and supported legislation which created the
1
Security Investors Protection Corporation (SIPC) which
functions much like the FDIC to protect investors in
the event of brokerage house failures;
21
2.
Private antitrust suits against minimum brokerage
rates and successful industry efforts to avoid or
minimize high commission fees forced Congress and the
SEC to push for negotiated rates. An SEC order
abolishing fixed rates as of May 1, 1975 preceded
legislation signed in June 1975 requiring similar
action. The SEC retains authority to reinstitute fixed
rates, but industry and public awareness of brokerage
costs and profits makes such an event unlikely. Price
competition between stock exchanges (facilitated by the
emergence of a National Securities Market System) will
also influence the industry's commission structure.
3. The securities industry has been forced to consolidate
operations and reduce the number of member firms more
because of economic necessity than because of govern-
ment regulation. Though the Commission has recently
supported abolition of exchanges' restrictive member-
ship rules, the new securities law did not mandate this
action. Although the agency retains authority to
increase the number of exchange seats, new price and
service competition will probably develop mostly from
a Congressionally mandated central securities market,
over which the SEC will have ultimate jurisdiction.
4. The Commission has adequately publicized its hearings,
which tend to be very long and detailed, and always
open to the public. Though the agency does not have
a separate Office of Consumer Affairs, it has pushed
the exchanges into electing more public members to
their governing boards. The agency's disclosure
requirements and market supervision activities are
geared specifically to inform and protect the investing
public from deceptive or illegal practices. The Agency
does not have an official internal requirement to perform
cost/benefit analyses, but public comment always includes
an assessment of the industry's perception of these costs.
The SEC's response to the President's inflation impact
letter was very sympathetic to the objective, if not
the method, of the program.
22
5. The SEC invites public comment on fiduciary and
accounting standards used to enforce its market and
corporate regulation activities. Though some cost
analyses have been done in the past, the agency is
attempting to upgrade the quality of its understanding
of the costs of registration. Its ultimate responsi-
bility for shaping a central securities market will
provide a new opportunity to invite and make use of
comments from the investing public.
Status of Administration Sponsored Legislation:
The Securities Act Amendments of 1975 (S. 249) were signed into
law on June 4, but a technical correction will be required in
order to preserve New York City's power to tax transfer agents.
The legislation:
1. Requires the SEC to supervise the adoption of new
electronic technologies which will, (a) provide more
accurate information on stock prices to prospective
investors, and promote greater competition in the
industry; (b) help reduce the costs of stock trans-
actions and record processing, and (c) reduce the risk
of securities' theft;
2. Gives the SEC authority to expand the membership on
securities exchanges in order to do away with existing
anti-competitive practices;
3. Gives SEC new jurisdiction to regulate dealers in
municipal securities;
4. Prohibits institutional investors and money managers
from self-dealing and requires new reports on their
assets and operations.
23
Commodity Futures Trading Commission
Established:
1974
5 Commissioners
Chairman:
William T. Bagley, 46, of California (Republican)
is the first Chairman. 1960-1973 member,
California State Assembly. His major legislative
interests were tax reform, criminal justice, con-
servation, and public right to know. Prior to his
election, Bagley headed his own law firm in San Rafael.
Term expires April 1980.
Members:
John V. Rainbolt, 35, of Oklahoma, Vice Chairman,
formerly Associate Counsel for the House Committee
on Agriculture, term expires April 1977; Gary L.
Seevers, 37, of Virginia, formerly member of the
Council of Economic Advisors, term expires April 1979;
Read P. Dunn, 60, of Maryland, formerly Executive
Director of the International Institute for Cotton,
term expires April 1978; Robert L. Martin, former
Vice President of Cook Grain Company, term expires
April 1976.
Major Commission Activities:
The Commission was created by Congress to administer the
Commodities Futures Trading Commission Act of 1974 (P.L. 93-
463). That Act constitutes a complete overhaul of, and further
amends the Commodity Exchange Act of 1922. The new law and the
Commission are designed to:
1. Insure fair practices and honest dealing on all com-
modity exchanges. Previously, only some parts of some
exchanges were subject to regulation.
2. Bring all commodities, (to include agricultural and
others) under Federal regulation.
3. Give full authority to the Commission to regulate all
aspects of commodities futures trading, including but
, not limited to, setting fitness standards for operators
and floor brokers, requiring changes in market rules,
establishing penalties for violations, setting brokerage
rates, etc.
24
Significant Developments:
Since the Commission was created on April 21, 1975, there
have been no significant developments. However, the
Chairman's public statements have emphasized his desire to
see that the Commission become a strong and independent
body responsive directly to the Congress. The Commission
has both legislative and budget by-pass authorities, and is
required to nominate its own Executive Director, subject to
Senate confirmation.
Status of Administration Sponsored Legislation:
The Administration has submitted legislation to repeal these
by-pass and confirmation requirements but no action is likely
to be taken by either body.
1
25
Consumer Product Safety Commission
Established:
1973
5 Commissioners
Chairman:
Richard O. Simpson. Acting Assistant Secretary
of Commerce for Science and Technology 1972-1973;
Vice President for the electrical/electronics
divisions in the Rucher Company, 1966-1969. He
has been a strong advocate of CPSC's independence
from the Executive branch. Appointed by
President Nixon in 1973; term expires October 1975.
Major Commission Activities:
The Commission is responsible for attempting to reduce injuries
and deathswhich might result from consumer products by:
1. Promulgating mandatory safety standards for individual
consumer products (including labeling and instructions),
and encouraging industry to develop voluntary standards.
2. Taking action against individual products found to be
hazardous.
3. Collecting and analyzing consumer product injury data,
investigating causes of injuries, and disseminating
information to consumers on the safe use and comparative
safety of consumer products.
4. Enforcing its standards through market surveillance.
Assessment of Agency Performance:
1. The Commission is one of two independent regulatory
agencies which have statutory authority to by-pass the
normal budget and legislative clearance processes.
It submits budget requests and legislation to OMB and
Congress simultaneously. It is seeking to expand its
independent status by requesting statutory authority
(already possessed by the ICC) to employ its own
counsel in civil litigation, rather than relying on
the Justice Department. It has also requested authority
to by-pass normal personnel channels in hiring non-
career super grade employees.
1
2.
The Consumer Product Safety Act requires the Commission
to develop economic impact statements for all its
proposed standards. It is, therefore, the only
Commission currently carrying out the kind of economic
analyses required by the Executive order on Inflation
Impact Statements.
26
3. Since its establishment in 1973, the Commission has
promulgated four final standards for consumer products
(bicycles, children's sleepware, general package
labeling, and iron additive or medicinal package labeling).
It has created a good record of public participation in
those products under investigation by asking for and
receiving substantial comment. CPSC has not fully devel-
oped requirements for internal cost/benefit analyses,
and has been criticized for its slowness in adopting
standards, a fact which may benefit some, but which only
postpones industry and consumer uncertainties.
4. Although the Commission has no specific entry/exit
authorities, CPSC decisions will ultimately affect the
number, size, distribution, etc. of firms capable of
meeting standards and, therefore, competing within an
industry.
Status of Administration Sponsored Legislation:
The Administration has not introduced legislation to repeal the
Commission's legislative or budget by-pass authorities.
D
FOR IMMEDIATE RELEASE
JULY 10, 1975
OFFICE OF THE WHITE HOUSE PRESS SECRETARY
THE WHITE HOUSE
REMARKS OF THE PRESIDENT
Review George
TO THE
CHAIRMEN AND COMMISS ONERS OF THE
INDEPENDENT REGULATORY AGENCIES
THE EAST ROOM
1:01 P.M. EDT
At the outset, in the closing remarks, let me
thank each and every one of you for your participation.
You have a great responsibility individually
and collectively. Some are old in origin, some are
relatively new, but each of you have a very definite
mission and you have some momumental problems to face.
As I said at the outset, this is the first
meeting of this kind, and I do get a sense that perhaps
subsequent meetings would be in order.
I do feel that the Congress will be responsive
to the effort that is being made by you and by us, and I
am certain that your relations in this area with the
Congress will be improved, particularly if you respond to
what they are suggesting and what we are approving.
Actually, there are five follow-up actions that
I would like to emphasize. Each chairman, I hope, will
give further attention to the cost to benefit analysis
of the commissions under their chairmanships.
I think it is absolutely essential that we
fully understand the economic costs of your activities in
order to take concrete steps to achieve these reforms.
To facilitate this understanding, I would hope that you
would actually issue a cost to benefit analysis on your
major programs.
This would parallel the inflation impact state-
ments that are required of the various Federal departments
and agencies in the Executive Branch of the Government.
They would coincide with the requirement now in the House
of Representatives for an inflation impact statement on
every major legislative proposal that is submitted to the
House as a whole.
MORE
Page 2
Secondly, I would ask that you undertake a
comprehensive and specific review of all areas where
regulatory delays presently occur in order to
eliminate any of the impediments to a speedy and
effective process.
I think it makes sense to set a goal of six
months to see if you can, in a demonstrative way, show
a reduction in any of the regulatory delays that you
know better than I and better than others take place.
Third, I would ask that you study and revise
the procedures as they are appropriate to insure that you
are responsive to the legitimate consumer interests
and that your actions are more clearly understood by the
American people.
Fourth, you should consider the most fundamental
changes that would move us toward deregulation in areas
where the regulatory process no longer makes sense.
I think Chairman Nassikas has made a very valid
point in the case of deregulation of natural gas.
In some areas, it is increasingly clear that more
competition is a better regulator than the Government
itself. I know some of the agencies are moving in this
same direction with respect to deregulation of certain
aspects, such as in the case of the CAB.
This experiment in one or more agencies, born
of more recent vintage, I think, can produce substantial
results. I strongly urge every commission to undertake
an analysis to see if you can't do something in this
area.
It is my judgment that in every case you have to
ask yourself individually as commissioners and as a
commission, is regulation better in each case than an
unregulated market.
Finally, I will continue to meet with the 24
designated Members of the House and Senate, both
Democratic as well as Republican, to review with them
the progress in the areas where we think action can be
taken, must be taken, and I am asking the members of my
Administration to work closely with each of you and each
of your commissions, as well as to respond for the
Executive Branch in their areas of jurisdiction.
MORE
FORD
LIBRA,
Page 3
It is my judgment that with the cooperation of
the Congress --- and I am sure it will be there -- with
the cooperation of each of you and your respective
agencies, and with the full participation of the Executive
Branch, we can make some very substantial headway.
We will all be applauded, in my judgment, by
the American people, and we will have a healthier and
a far more efficient economy.
I thank you very, very much.
END (AT 1:08 P.M. EDT)
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THE WHITE HOUSE
WASHINGTON
July 10, 1975
MEMORANDUM FOR:
THE PRESIDENT
THROUGH:
JIM CANNON
FROM:
ROD HILLS
SUBJECT:
Additional Items for Your Meeting
with Independent Agency
Commissioners
At our meeting yesterday several questions and
issues were raised. Attached are some Q's and A's
which may be helpful.
We have alerted Secretary Dunlop that he should be
prepared to discuss progress on improving the
OSHA program.
Finally, before your arrival at the meeting, Rod
Hills will tell the Commissioners the ground rules
for the session in order to minimize any
misunderstandings.
STATE FORD
Question:
The major attention of your Administration has been on the
independent regulatory agencies. What are you doing to get
your own house in order, particularly OSHA and its many
problems?
Answer:
We have not been focusing only on the independent agencies, but
rather have launched a major effort to require all agencies to
prepare economic analyses of their regulatory actions before
they promulgate them. Secretary Dunlop can speak more specifi-
cally about OSHA. However, I would point out that this area
was of particular concern to the Congressmen I met with two
weeks ago. We are moving to recruit able people who are
sensitive to the effects of our safety standards on both
employer and employee. Furthermore, we have a comprehensive
réview underway at that agency to resolve the problem of
compliance with these standards, particularly by small business.
Question:
Why has the Administration been so slow to fill vacancies on
the regulatory commissions?
Answer:
Presently there are three vacancies in the 10 independent
agencies. We are actively working to recruit the very best
people to serve as Commissioners. I consider the quality of
membership on our regulatory agencies an extremely important
matter and I can assure you that the Administration is giving
top priority to filling these jobs.
Question:
Why has the Administration delayed the submission of its airline
regulatory reform legislation?
Answer:
The legislation the Administration will be forwarding will be
the first major reform of airline regulation since the creation
of the CAB. Consequently, there has been considerable interest
especially in the Congress in the reform measures to be proposed.
Administration officials have been working closely with interest
groups to develop the best possible legislation in this area. We
are now in the final stages of drafting the bill which should be
submitted to Congress in the next several weeks.
LIBRARY GERALD R. FORD
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THE WHITE HOUSE
WASHINGTON
July 11, 1975
MEMORANDUM FOR:
ROD HILLS
FROM:
SUBJECT:
JIM Regulatory CANNOM Jm Reform
After yesterday's Regulatory Commission meeting,
Jim Connor suggested to the President that
departmental regulatory matters be taken up at
the Cabinet meeting on Wednesday, July 16.
One of the things we might do at that meeting is
to direct each Cabinet officer and head of
Executive agency to appoint an Assistant Secretary
to go over all existing regulations and report on
those which might be eliminated, with a report to
come in to you by September 1.
I suggest you prepare a paper for Jim Connor's
use in putting together the agenda for next week's
meeting.
bee: Jim Connor
Paul Leach
FORD i LIBRARY 9ERVLD
THE WHITE HOUSE
Suby
WASHINGTON
July 14, 1975
MEMORANDUM FOR:
FROM:
SUBJECT:
JIM RON Regulatory NESSEN CANNON Jun Reform
At last Friday's 8 a.m. staff meeting you asked
for a "talker" on regulatory reform that the
President could refer to prior to his meetings
with columnists and reporters as he approaches
the completion of his first year.
Attachment
FORD i LIBRARY 97V839
REGULATORY REFORM
Since last fall I have been discussing the need for a
thorough review and modernization of government regulation.
This effort must not only be in the economic regulation areas,
but also in health, safety and environmental regulation. More-
over, we must improve regulation by the Executive Departments
and Agencies as well as the Independent Regulatory Commissions.
I feel that the mass of regulation has expanded to the point
where it is needlessly increasing consumer prices, impeding
economic growth and reducing innovation. My concern about
inept or unwise regulation is shared with the Congress, the
economics profession, many regulators themselves and ---
importantly
---
the American people.
In late June I met with twenty-four Members of Congress and
then met in early July with all of the Commissioners of the
Independent Regulatory Agencies on the subject of regulatory
reform. In our candid discussions, we have emphasized that
all agencies --- both Independent and Executive Branch ---
must improve their cost/benefit analysis, reduce regulatory
delays, be more responsive to valid consumer concerns, place
increased reliance on competition and eliminate unnecessary
regulation.
In the effort to modernize regulation, my Administration
already has proposed or supported legislation in such areas as:
- energy
- securities market
- rail transportation
- financial institutions
- fair trade law repeal
Over the coming months we will seek further legislation in areas
such as:
- trucking
- airlines
- cable television
- Robinson-Patman Act prohibition of
price discrimination
Also, I have ordered all Executive Branch Departments and Agencies
to prepare an inflation impact statement on each of their major
proposals. And as vacancies arise in the Commissions and the
Executive Branch agencies, I will be careful to appoint ---
or
reappoint --- only those people who share my concerns about
regulation. Finally, I have established a Domestic Council
Review Group under the leadership of my Counsel, Rod Hills, to
direct every aspect of this reform effort.
LIBRARY BERALD R. FORD
THE WHITE HOUSE
suy
WASHINGTON
July 14, 1975
MEMORANDUM FOR:
FROM:
SUBJECT:
JIM RON Regulatory NESSEN CANNON Jui Reform
At last Friday's 8 a.m. staff meeting you asked
for a "talker" on regulatory reform that the
President could refer to prior to his meetings
with columnists and reporters as he approaches
the completion of his first year.
Attachment
LISSARY GERALD FORD
REGULATORY REFORM
Since last fall I have been discussing the need for a
thorough review and modernization of government regulation.
This effort must not only be in the economic regulation areas,
but also in health, safety and environmental regulation. More-
over, we must improve regulation by the Executive Departments
and Agencies as well as the Independent Regulatory Commissions.
I feel that the mass of regulation has expanded to the point
where it is needlessly increasing consumer prices, impeding
economic growth and reducing innovation. My concern about
inept or unwise regulation is shared with the Congress, the
economics profession, many regulators themselves and ---
importantly --- the American people.
In late June I met with twenty-four Members of Congress and
then met in early July with all of the Commissioners of the
Independent Regulatory Agencies on the subject of regulatory
reform. In our candid discussions, we have emphasized that
all agencies -- both Independent and Executive Branch
must improve their cost/benefit analysis, reduce regulatory
delays, be more responsive to valid consumer concerns, place
increased reliance on competition and eliminate unnecessary
regulation.
In the effort to modernize regulation, my Administration
already has proposed or supported legislation in such areas as:
- energy
- securities market
- rail transportation
- Financial institutions
- fair trade law repeal
Over the coming months we will seek further legislation in areas
such as:
- trucking
- airlines
- cable television
- Robinson-Patman Act prohibition of
price discrimination
Also, I have ordered all Executive Branch Departments and Agencies
to prepare an inflation impact statement on each of their major
proposals. And as vacancies arise in the Commissions and the
Executive Branch agencies, I will be careful to appoint ---- or
reappoint - only those people who share my concerns about
regulation. Finally, I have established a Domestic Council
Review Group under the leadership of my Counsel, Rod Hills, to
direct every aspect of this reform effort.
BERALD FORD LIBRARY