Reagan administration budget chief David Stockman yesterday accused the Federal Trade Commission of a "proclivity for self-aggrandizment," and charged that the beleaguered agency has sought to build its influence while ignoring sound economic theory.
Stockman, director of the Office of Management and Budget, also criticized the Consumer Product Safety Commission for ineffectiveness and failing to set priorities. At the same time, Stockman said the CPSC has has "considerable success" in issuing voluntary product-safety standards.
Noting that the agency was set up to "ferret out hazerdous products and correct the situation," Stockman said the CPSC has "largely accomplished" that mission and therefore has a "diminished need for resources." Stockman also proposed that the CPSC's program to monitor chemicals should be abandoned and handled instead by other aganecies.
In a blistering attack against the FTC and the CPSC, Stockman outlined the basis for proposed cuts in their budgets that if adopted by Congress, ultimately would result in a 25 percent staff reduction at the FTC, the closing of all 10 FTC regional offices and a 30 percent cut in the CPSC's budget. But Stockman refused to explain how the decisons on the proposed cuts were made and who was involved in the discussions.
He made his remarks during testimony before a House Government Operations consumer subcommittee that is looking into the budget cuts at the two agencies. Rep. Benjamin Rosenthal (D-N.Y), chairman of the subcommittee, said the cuts could leave the FTC's aintitrust powers "severly crippled" despite the OMB's retrenchment from an earlier proposal to wipe out the FTC's antitrust activities.
Stockman left no doubt that his ideological view of the agencies -- developed over 10 years as a congressional aide and a member of the House of Represenatives -- is the reason for the cutbacks.
"These budget reductions form an integral part of the administration's efforts to redirect regulatory policy in order to reduce the burdens that misguided efforts have imposed on the American economy," he said.
Later, activist Mark Green, former director of Congress Watch, accused Stockman of "obnoxious" and "Alice-in-Wonderland" proposals. Green said the proposal to close the agency's regional offices were contrary to "Republicdan orthodoxy of bringing govenment closer to the people."
Stockman accused the FTC of transforming "traditional antitrust doctrine to about a shambles." He did, however, note that he supported FTC efforts to loosen advertising restrictions on professionals such as doctors and lawyers.
Stockman said the FTC "has adventured into unchartered waters, looking for new causes, new doctrines and more influence." He accused the FTC of "stretching" its legal authority in so-called shared-monopoly cases such as its pending antitrust case against the cereal industry.
But he also incorrectly linked a now-limited FTC investigation of the automobile industry to the shared-monopoly theory and cited and FTC "complaint" against the auto manufacturers, although no complaint and only subpoenas have ever been issued in that matter.
Further, Stockman cited a "new doctrine of 'substantiation'" in advertising regulation, charging that advertisers are not forced to prepare "reasonable basis" reports, "even for claims that are known to be true." Stockman made that claim although advertisers as a matter of routine practice, generally check product claims.