The Carter administration has charged that the Federal Trade Commission's ability to protect consumers from deceptive advertising would virtually be killed if Congress adopts a proposal by the agency's chief Senate overseer.
The administration's letter from Stuart Elizenstat, Carter's chief domestic affairs adviser, to Sen. Wendell Ford (D-Ky.) intensifies the raging debate about the FTC's powers and puts the White House at odds with a vital subcommittee chairman.
Ford, chairman of the Senate consumer subcommittee, has issued a number of dramatic proposals to cut the FTC's power, including one which would limit the commission's authority to restrict "false and deceptive" advertising, presumably ending the FTC's mandate to investigate such abuses on a case-by-case basis.
In addition, the proposal, scheduled to be marked up by Ford's subcommittee tomorrow, would end the FTC's controversial investigation of advertising directed at children.
"Even if the committee believes that the broad authority over advertising held by the commission for the past 60 years has occasionally been unwisely administered, it would be tragic to respond by cutting the heart of a law that is a bulwark of consumer confidence in our national marketplace," Eizenstat wrote Monday.
The letter was released yesterday by the FTC, which is involved in a major brouhaha with both the Senate and the House over its funding and its broad historical authority.
The FTC also released a 25-page response to the Ford proposals, which all five commissioners signed yesterday.
"The commission is deeply concerned," they wrote in their letter to Ford, "that some of the measures that you have proposed, singly and in combination are likely to damage severely, and perhaps irreparably, the ability of the commission to protect consumers and competition."
Like the administration, FTC said their most serious concerns with the Ford package revolve around the commercial advertising proposal.
"Enactment of this provision," the commissioners wrote, "would mean that the commission would no longer be authorized to prevent unfair advertising -- be either adjudication or rulemaking -- unless it was also false and deceptive."
According to the FTC, Ford is proposing a new standard for advertising compliance, rules that would curtail FTC efforts to crack down on "unfair" advertising, such as unsupported product claims.
The standard, the commissioners wrote, would "render it virtually impossible for the commission to afford the public any meaningful protection against various forms of misleading advertising."
Both the administration and the FTC were critical of Ford's proposals to cut the commission's subpoena power and set criteria for judicial review of such subpoenas.
Further, both the commission and Carter were critical of Ford's proposal to grant attorneys fees to parties that defeat FTC initiatives in either the courts or before the commission.
Eizenstat said that proposal would only encourage lawyers to "charge ever more extravagant fees -- since the taxpayer will have to shoulder the cost.
"It will deter the commission from starting investigations into potentially severe marketplace abuse," Eizenstat wrote.
But Eizenstat praised Ford's continuing opposition to the legislative veto and his incorporating facets of the administration's regulatory reform proposals into the FTC legislation.
The two letters come at a critical time in the continuing debate about the FTC's authority and increasing congressional support for legislation that would broadly alter the regulatory process.
The administration has supported intensified congressional oversight, like Ford's recent in-depth FTC hearings, and efforts to revamp the statutes which govern the FTC's work.
Administration officials acknowledged yesterday that the Eizenstat letter, although at odds with key provisions of the Ford proposal, issues support for much of the subcommittee's oversight efforts.
A key test of the FTC's congressional support is scheduled to take place today, when the House takes up the FTC's authorization bill.
The House is expected to consider the controversial legislative veto proposal, in addition to amendments that would bar the commission from continuing its inquiry into the funeral industry and end its work in regulating agricultural cooperatives.