The House last night reined in the Federal Trade Commission by voting 223-147 to prevent the FTC from regulating the funeral industry.
The action came on a Federal Trade Commission authorization bill, which already contains some restrictions of FTC activities and which subjects all the agency's regulations to a congressional veto.
Under its outspoken chairman, Michael Pertschuk, the FTC has investigated business practices and proposed regulations for a wide range of industries, ranging from hearing-aid manufacturers to cereal companies, used car sales and TV advertising aimed at children. Its aggressiveness has caused the FTC to become a lightning rod for business hostility to government regulation and growing anti-regulation sentiment in Congress.
Many House members had a longer list of FTC actions they wanted to curtail, but the House Rules Committee voted to allow floor action on only two proposals, the funeral industry restriction and a vote that would order the FTC to get out of action against agricultural cooperatives and marketing orders.
The two votes, coupled with the congressional veto, clearly signal House disenchantment with the FTC and invite future attempts by business to halt FTC regulation.
The farm cooperative amendment also is likely to be adopted when the bill is taken up again, possibly today. That amendment, if it became law, would end the FTC's two-year-old case against Sunkist Growers Inc., the California fruit cooperative, which the FTC charges controls 75 percent of the marketing and production for western oranges and lemons. More important, according to legal experts would be an unprecedented interference by Congress in litigation.
In the Senate, a bill with even more sweeping curtailments of FTC powers is awaiting Senate Commerce Committee mark-up today. The bill, proposed by Commerce Consumer subcommittee Chairman Wendell Ford (D.Ky.), would limit the agency's subpoena powers and force the agency to stop or reassess its actions in nine major proceedings, including those governing children's TV advertising and used-car sales.
Lobbying on the amendment by Rep. Marty Russo (D-ILL.) to exempt the funeral industry from FTC regulation was intense. White House consumer adviser Esther Peterson and an array of consumer groups, labor unions, public interest lobbies and retirees' associations lobbied against Russo's amendment while the funeral industry and business groups lobbied for it.
Russo contended that funeral directors were small businessmen and that FTC investigation of the industry had been instigated by less than a dozen complaints and was conducted as if the FTC "bureaucrats . . . had the attitude that the funeral industry were a bunch of rip-off artists."
But Rep. Bob Eckhardt (D-Tex.) said, "If one special interest can beat the rules before final action, then we know every other special interest will ask for an exception. This will open the gate to taking apart FTC authority."
The proposed FTC rules would force funeral directors to provide consumers with complete pricing information, describe the true legal requirements surrounding such extras as embalming and attempt to eliminate other alleged abuses.
The FTC already is prevented from promulgating any new rules by an appropriations resolution for the next several months, or until both houses of Congress pass an FTC authorization. FTC authorizations have been blocked for the past two years because the House and Senate could not agree on a legislative veto provision. The House traditionally has voted for a one-house veto of all FTC regulations, while the Senate has refused to accept a congressional veto.