Although prodded for months by Senate Judiciary Chairman Edward M. Kennedy (D-Mass.), the administration has not taken a stand on his legislation to require federal agencies to consider the competitive effects of their decisions.
Despite the White House indecision, the measure attracted support yesterday from the Justice Department, long in favor of the bill, and, for the first time, the Environmental Protection Agency, whose actions would be affected should the measure become law.
In hearings before the Judiciary Committee, EPA General Counsel Joan Z. Bernstein said that EPA is charged primarily with protecting public health and safety, but said she also likes to think the agency is "sensitive" in trying to avoid anticompetitive effects of their actions. She said she supports legislation outlining a "clear set of guideposts" for agencies to follow when considering certain kinds of actions. Agencies' adherence to a competitive standard should be subject to judicial review, she said.
John H. Shenefield, assistant attorney general in charge of the Antitrust Division, said the administration was "committed" to implementing the pro-competition "goals" of the legislation but stated that his testimony on details was solely the view of the Justice Department.
Shenefield said legislation along the lines of the Kennedy bill was "over-due" but suggested some "refinements" designed to reach the agency decisions with the greatest potential for competitive injury without jeopardizing legitimate social goals of regulation.
He said agencies should be required specifically to consider competitive effects of their proposed actions and to pick the least anticompetitive alternative whenever the agency:
Regulates entry under a scheme in which the level of entry is limited.
Sets or reviews prices.
Sets, limits or allocates economic output.
Reviews agreements among competitors.
We believe that these recommendations will enhance the ability of the bill to achieve its objective as well as minimize the possibility of inadvertent derogation of important, legitimate regulatory goals," he said.
As drafted, the Kennedy bill would prohibit agencies from taking actions that may have anticompetitive effects unless they found (1) the action was necessary to accomplish an overriding statutory purpose; (2) the benefits to the general public clearly outweigh the anticompetitive effects; and (3) the proposed action is the least anticompetitive option available to accomplish the ststed regulatory objective.
EPA is the first of the environmental, health, safety-type agencies to endorse the legislation. The Justice proposal would cover all the traditional economic regulatory agency actions but only some of the actions of the so-called "social regulatory" actions.