The White House's regulatory reform campaign, launched with great vigor only two days after President Reagan assumed office, appears to be grinding slowly to a halt.
One setback after another has stymied Reagan's drive to eliminate red tape and paperwork, leading many executives to become increasingly disappointed about what they had considered one of the most promising efforts ever undertaken to get the federal government off their backs.
Although they have applauded Reagan's regulatory appointments and his efforts to place greater White House scrutiny over federal rule-makers, business people now complain that the administration's reform campaign has fallen far short of its goals and promises.
For one thing, they note, the administration has failed to push hard for underlying changes in the laws that prompted the burdensome regulations in the first place.
What's more, they complain, many of the actions they have taken are now being overturned by the courts, partly because of insufficient legal work and partly because of the administration's failure to adhere to the administrative procedures required by law in its attempts to change the rules.
"Regulatory reform does not have the emphasis we thought it would have," says Hank Cox of the Chamber of Commerce. "The top men just haven't had the time to get involved."
Another business lobbyist who declined to be named complains, "The administration does not have a very good story to tell."
Yet, the administration on the whole seems pleased with its efforts to date. "It's true we haven't done enough," comments Christopher DeMuth, the head of the Office of Management and Budget's office of information and regulatory affairs. "But we've done more than any other administration. I'm proud of that."
By far the biggest business complaint stems from the administration's failure live up to the promises Reagan made during his campaign and first days in office to get Congress to rewrite any environmental laws, food and drug standards or labor laws.
Many corporate lobbyists are also upset that Congress has not yet acted on legislation to force regulators to pay greater attention to the costs of their rules. Although they pin part of the blame on the Democratic leadership in the House, which opposes key parts of the bill, they also fault the administration's initial ambivalence toward this comprehensive regulatory reform legislation, saying that is one reason why it is increasingly doubtful that the legislation will pass this year.
"We're very disappointed in Reagan's legislative regulatory reform program," says James P. Carty, vice president for regulatory reform and government organization for the National Association of Manufacturers. "To really effect change, it has to be done legislatively . . . All the things they have done up to now have been transitory. They have appointed good administrators and commissioners and issued a good executive order" directing regulators not to issue rules unless their benefits clearly outweigh their costs.
Yet, says Carty, "all these things could be overturned in a minute if a new president comes in 1984 or 1988. That's why these changes are just as important as taxes and budget," which have preoccupied the administration since its early days.
But it is more than just the administration's failure to get the laws changed that is discouraging business people. A host of other problems have beset the regulatory reform program, making it an ever-growing target for criticism.
Of the 111 regulatory programs the administration pinpointed for review and change in the first few months in office, less than half the reviews have been completed.
And those rules that have been changed are now being overturned by the courts. Last Tuesday, for example, a U.S. Court of Appeals ruled that the Reagan administration acted illegally when it loosened air pollution rules to help industries build plants in areas that don't yet meet clean-air standards.
This ruling came just a month after another appeals court faulted the Environmental Protection Agency for not holding any public hearings before it suspended federal rules on toxic waste discharged into municipal sewage systems.
A federal judge has also blocked the Department of Labor's regulatory changes that would have reduced the minimum wages the government sets for federally financed construction projects.
But by far the biggest court setback to date has come from the U.S. Court of Appeals in Washington where a three-member panel handed down a harshly worded opinion against one of the centerpieces of the administration's regulatory relief program -- its decision to help the ailing automobile industry by repealing a controversial rule requiring airbags or automatically closing seatbelts in all cars.
The court found that the administration acted arbitrarily and illegally in revoking the rule and with insufficient evidence to support its decision. As a result, the court ordered the National Highway Traffic Safety Administration to reinstate the rule so these passive safety restraints would be in all new cars sold after September 1983.
As if these court rulings were not enough, the administration's regulatory reform advisers also face large hurdles from within the administration itself.
For one thing, many of the rules these advisers had hoped to change are being modified, but not to the advisers' liking.
For example, OMB's Christopher DeMuth has objected to EPA's attempt to force some small oil refiners to meet tighter lead standards for gasoline by Oct. 1.
Additionally, DeMuth has made it known he is unhappy about the administration's decision to shelve two controversial Labor Department proposals until after the November elections. One of the proposals would have eased job-discrimination rules for companies with federal contracts, while the other would have expanded the hours and types of jobs 14-and 15-year-olds could work.
Meanwhile, the efforts by OMB and the Presidential Task Force on Regulatory Relief to target new rules for review and change have all but come to a standstill. Although the administration had been working for more than a year on a "hit list" of rules that could hopefully be changed to ease the regulatory burden imposed on state and local governments, only eight regulatory programs were contained on the list when it finally was released earlier this month. And despite its continuing desire to target more rules for change, the administration contemplates no new "hit lists."
Additionally, OMB's efforts to reduce the paperwork burden imposed on business and individuals received a sharp setback this summer when the Justice Department ruled that OMB did not have the power to order agencies to reduce their record-keeping and reporting requirements that were issued before 1980. This ruling will adversely affect OMB's efforts to meet a congressional order to reduce by 25 percent within the next two years the number of hours businesses and people must spend in filling out government forms.
Administration officials concede that overall, these setbacks have not helped the administration meet its regulatory goals.
Nonetheless, they believe that these obstacles are only temporary and will ultimately be overcome. "I'm completely confident" that we will be able to overcome the adverse court rulings when a higher court considers the issues, says DeMuth, who also serves as the executive director to the presidential task force on regulatory relief, which is headed by Vice President George Bush.
To counter his growing critics, DeMuth points out that even though the administration has not completed even half of the rules it has targeted for review, the changes it has succeeded in making will save Americans more than $70 billion over the next decade by reducing investment costs, increasing productivity and creating new jobs.
According to administration statistics that do not take into account all the benefits that may have been reduced as a result of changes, the administration's regulatory decisions to date have saved the public $9 billion to $11 billion in one-time investment costs and at least $6 billion in annually recurring costs that would have been needed to comply with rules.
"There is no question that regulatory agencies today are far more conscious of the impact of their decisions," DeMuth adds. He attributes the raised consciousness to President Reagan's order requiring federal regulators to submit all proposed rules to the OMB for scrutiny before they are made public.
During the first 19 months of the Reagan administration, OMB reviewed a total of 4,309 rules. Of these, nearly 560 were returned to the agencies that wrote them, with orders that they be rewritten or withdrawn because they did not meet Reagan's directive that the cost of any new rules must be outweighed by the benefits they bring.
As a result of this review process, DeMuth says, the government, for the first time in more than a decade, has not issued any major new regulatory plans during the past 20 months. Perhaps more than anything else, DeMuth says, that has been the major accomplishment of the administration.
Even so, DeMuth and other regulatory advisers to Reagan acknowledge that their major deficiency to date has been their failure to win any legislation changing laws or regulatory procedures.
But they blame that problem on the Democratic House leadership, which they contend blocked their programs, as well as on the administration's priority with taxes and budget. "It was purely a judgment of the president that budget problems have top priority," leaving regulatory reform behind, DeMuth says.
Even so, DeMuth and others have not given up hope yet. "We're going to have a lot of legislative proposals next year," he promises.
C. Boyden Gray, counsel to the vice president who specializes in regulatory reform adds: "The last ball has not been hit."