The drawing is of a frowning Statue of Liberty, torch aloft, a hangman's noose around her neck.
Government overregulation doesn't dampen inflation," proclaims the fullpage ad in the Wall Street Journal. "It fuels it."
The message, sponsored by Gould, an electrical and indutrial products company, reflects the latest twist in the decade-long battle over environmental regulation.
And the Carter administration, which has chosen the inflation fight as its first priority, is listening.
Administration economists are pressuring the Environmental Protection Agency, the Occupational Health and Safety Administration, the Interior Department and other agencies to reduce the cost of new health and safety regulations.
So far, proposed cotton dust standards, oil tanker rules and several air pollution regulations have been altered. Billion-dollar battles now are being waged over strip-mining rules, regulations to control can cer-causing chemincals in the workplace. and standards for power plant smokestacks and city smong.
"It seems like we're going to the barricades evry week," said Robert Rauch, an atorney for the Environmental Defense Fund.
The administration is "moving to the right to get business support," said Markely Roberts, an AFL-CIO economist.
But to Alfred Kahn, the administration's chief inflation fighter, it makes perfect practical sense. "We can't have cleaner air and cleaner water and safer products and reduced industrial accidents while at the same time having just as much of everything else as we had before," he told the Joint Economic Committee recently.
While the environment-economy debate has gone on for years, the finamcial stakes have never been higher. Oil, coal, utility and chemical companies are expecially affected, as are hundreds of cities which must spend money to comply with proposed air and water pollution rules.
The cost of each new regulation is strongly disputed by all parties and the overall costs are almost impossible to determine. However, the President's Council on Environmental Quality estimates that pollution control expenditures will total $289.1 billion for 1976 through 1985, not counting OSHA's workplace rules, which will add billions more.
And the benefits of regulation are virtually impossible to quantify. Scientific judgments must often be made on confusing evidence. While the health lf millions of Americans is affected by environmental regulations and workplace rules, no one can say by how much.
The impetus for cutting back regulations comes directly from the president. Business and labor are being asked to fight inflation, so government must "take the lead in fiscal restraint," Carter said in his October anti-inflation message.
"We must realize everything has a price -- and that consumers eventually pick up the tab. Where regulations are essential, they must be efficient. Where they fight inflation, they should be encouraged. Where they are unnecessary, they should be removed," he said.
Carter ordered agencies to analyze the costs and benefits of their proposals. The Regulatory Analysis Review Group (RARG,) a half-dozen economists under the leadership of the White House Council on Economic Advisers, was set up to challenge expensive new regulations.
For all the controversy over whether the burdens should be eased, ther is remarkably little disagreement over the actual effect of regulation on the inflation rate. Both environmentalists and inflation fighters cite a study Chase Econometrics, a private group, which shows environmental regulations adding a half percentage point to the 1978 rate.
The arguments come afterwards. "Any quarter of a percent is eagerly sought," said Thomas Kopkins, and administration economist."We're looking under every rock we can find... Some things have got to be deferred until we get inflation under control."
Envoronmentalists contend that since no once advocates abolishing all restrictions on pollution, partial relaxations do little for the economy, but are damaging to the environment.
"If you were to wipe away pollution control laws today, you would see hardl a dent in the consumer price index," said Duglas Costle, head of the Envionmental Protection Agency. "The four price leaders last year were housing health care, energy and food."
Costle, who has been appointed cahirman of the new regulatory council, is caught in the middle. "People often think of regulators as entreprenurs who have to figure out a way to make everybody else's life miserable," he complained in a recent interview. "Its just not so.
"Congress sets out to redress grievances and problems. Eighty percent of the regulations that came to me in the first 90 days I was here, came because the statute said the agency shall promulgate or a court ordered the rule by a certain date."
White House economists, however, accuse the agencies of inflexibility and of egnoring the tradeoffs when they draft regulations.
The battles over specific regulations are waged through exchanges of complex legal and economic memoranda between RARG and an agency, and on occasion through questioning telephone calls from Charles Schultze, the President's chief economic advisor.
Schultze intervened personally, for example, to change the proposed air quality standard for lead and the proposed overall rule to prevent deterioration of clean-air regions, EPA officials said. On both issues, the agency fought Schultze's recommendations, but agreed to compromise.
In the case of the lead standard, EPA maintained the restrictions of 1.5 micrograms of lead per cubic meter of air, but legthened the number of day's during which lead is measured in the air -- thus "watching down" the standard, according to Rauch. The Regulatory Agency Review Group maintained the cost of the standard to the ailing lead and copper smelting industry -- estimated at $650 million by 1932 -- was too high. Lead is a serious health harzard for children, causing learning disabilities and emotional disturbances, federal researchers say.
In the case of clean-air region rules, EPA had proposed to require 4,000 industrial plants to install the best available pollution equipment on their smokestacks. After Schultze intervened, the agency reduced the number of industries affected to 1,600. Environmental groups said the compromise would mean dirtier air, but EPA officials said the difference will be marginal.
Some agency insiders say tradeoffs are given too much weight.The inflation-fighters "are forcing us to be more cautions," said EPA legislative director Charles Warren. "It's gotten to the point where we are in danger of losing our primary focus. We're trying to package our regulations to emphasize how to save costs -- not necessarily what's going to get the best environmental solution.
Costle bristles at the suggestion that the agency is compromising too much. "We're not going to walk away from out responsibility to carry out the laws," he sadi. "But we're going to make damn sure we do our homework.
"Its not unfair to ask that government get its act together. We should go back and ask the question, should (a regulation) be wiped off the books, does it still make sense or have circumstances changed"
Already, EPA has cut reporting requirements and loosened some noncontroversial water pollution regulations, saving industry $200 million, Costle said. Echoing Carter, he asscrted, "It's important to preserve the benefits of regulation, but to be sure we're not imposing unnecessary costs."
So far, only one inflation-regulation controversy has gone to the president: the cotton dust rules which produced a well-publicized confrontation between Schultze and Labor Secretary Ray Marshall and resulted in compromise. But in the future, "the presidnet doesn't want to be deciding cotton dust standards," Costle said."That just brings all the special interests right down on the White House. It's nutty."
The euphoria of Earth Day is over, the pundits are saying, and interest in the enviornment has waned in the face of competing concerns over inflation and other economic issues.
But the polls -- remarkably consistent on this queestion -- seem to reveal something different:
A March Louis Harris poll showed the public strongly opposed to slowing environmental cleanup either to produce more energy (65 percent to 22 percent) or to improve the economy and create more jobs (64 percent to 22 percent).
A 1977 national telephone survey by Opinion Research Corp. found 68 percent favoring higher prices and taxes to protect the environment. Renarkably, 55 percent agreed with the statement, "Protecting the environment is so important that requirements and regardless of cost." (emphasis in original)
A national survey by Resources for the Future, conducted at the height of the Proposition 13 furor this summer, showed that given a choice between paying higher prices to protect the environment, or paying lower prices but having more air and water pollution, protecting the environment is chosen by a six to two margin.
Robert C. Mitchell who conducted the RFF survey and studied previous polls on the issue, said, "The predictions of some that environmental support would fade away once the costs become known simply have not been realized. Various polls, including this one, reveal that Americans watn economic progress, but not at the expense of quality of life."
So why the fuss about environmental regulations? One answer might be that the inflation-fighters are heeding the October Gallup poll that shows 76 percent of the public feeling that the government is generally spending too much, rather than the more specific polls (conducted by Opinion Research Corp) showing that 52 percent think the government is spending too little on environmental programs.
These polls may seem contradictory, but they aren't, according to Douglas Costle, head of the new U.S. Regulatory Council.
"The day that California voters approved Proposition 13, there was on the same ballot a bond issue of $375 million for new money for water pollution cleanup. They passed it," Costle said.