The Heritage Foundation has scrutinized the Reagan administration's midterm record on de-clawing regulatory agencies and found it wanting.
In a soon-to-be published agenda for the next two years, the conservative think tank takes the administration to task for failing to live up to its promise to overhaul those agencies completely.
"The failure to repeal outdated or unnecessary laws is analagous to leaving an open bottle of bourbon on the table in front of an alcoholic. It provides an unnecessary temptation for overzealous regulators of the future," says economist Catherine England in a chapter on regulatory reform in the 18-chapter Agenda '83. A copy of the chapter on regulatory reform was made available to The Washington Post.
Advance copies of the book have been sent to the White House, where Heritage Foundation views have often been well received during the past two years. (Presidential counselor Edwin Meese III has helped the foundation raise funds.)
The 12-year-old foundation gained prominence soon after Reagan won election by presenting him with a 3,000-page blueprint for swinging the government to the right and by being one of the prime sources of administration personnel. Despite those ties, however, it has continued to criticize Reagan, mostly when his policies have deviated from the conservative road it charted for him in 1980.
The president rode into office on a platform that called for massive reform of the federal regulatory agencies, which he and his supporters considered to be an arm of government unfettered by either executive or legislative control. They contended those agencies hamper business and hurt the economy without benefiting consumers.
"Upon taking office," says England, "Ronald Reagan began his regulatory reform campaign with a bang." But she contends that effort soon began sputtering.
"While the president and his aides certainly deserve praise for what has been accomplished, the job has just begun," England asserts.
England, a foundation policy analyst, faults the administration for failing "to take advantage of what has been called 'the most deregulatory Congress in 30 years' " to transform permanently the federal regulatory picture.
"The administration may have waited too long," she says, pointing out that the "deregulatory Congress has adjourned" and there is no evidence the new Congress "will be as enthusiatic [as the last] about regulatory reform." This is especially true in the House, where liberal Democrats gained seats in the November election, she says.
Further, she calls the administration "ambivalent" on across-the-board reform and "obstructionist" whenever executive branch power is threatened.
"In the meantime," she continues, "the career bureaucrats and those consumer and environmental groups opposing substantial reform have had the time and opportunity to regroup."
These groups, England says, have managed to depict "meaningful reform . . . as efforts to rape and ruin the environment and endanger the health and safety of every man, woman and child in the country with the possible exception of the 'rich Republicans' who are doing the reforming."
Turning to specific regulatory agencies, England applauds Federal Trade Commission Chairman James C. Miller III for bringing "a welcome sense of order and in-depth analysis to the FTC."
She says, as Miller does, that to curb abuses by FTC bureaucrats, such as an "overzealous attention to detail," Congress should limit the FTC's power to investigate "unfair" or "deceptive" practices.
England also urges an upper limit of $1 million on civil penalties imposed by the FTC and advocates relaxed antitrust rules for companies operating overseas.
Of the four agencies studied by the foundation, England ranks the Securities and Exchange Commission second in progress made toward deregulation--behind the FTC and ahead of the Federal Communications Commission and the Consumer Product Safety Commission. "We are not unhappy with the way it's going," she said of the SEC, "but we feel there is still room for more review."
Basically, the foundation would return the securities industry to the era in which the SEC had considerably narrower responsibility. The rationale, according to England, is more one of improving efficiency and cutting costs than reducing government interference.
The review takes a "back to business" approach toward promoting exports, not morality. It would "redefine" the Foreign Corrupt Practices Act, which forbids U.S. corporations doing business abroad from paying bribes. Only a "knowing failure" to comply would be considered a basis for prosecution. Other Western countries, England notes, "do not have the same tendency to export morality."
Meanwhile, England finds the FCC's moves toward deregulation of the telecommunications and broadcast industries "a welcome move in the right direction, but clearly more needs to be done."
The foundation report gave "fairly high marks" to FCC Commissioner Mark Fowler "for his role in reducing paperwork requirements for radio and television licensees," and said he was especially effective in making license renewals for radio stations "a more automatic process."
"The primary concern expressed by Fowler's critics is that he is a tool of existing broadcasters," England said. (Fowler is a former broadcaster himself.)
Fowler's opposition to reducing frequency spacings between AM radio stations has kept as many as 700 new stations from going on the air in the United States, according to England.
Fowler "can easily and effectively silence his critics" by acting on several proposals that are designed to increase competition in the broadcast industry, England said. One of the proposals would quicken the licensing process for low-power television stations that service individual neighborhoods. Another would increase the number of VHF (very high frequency) television stations.
The report also accused the FCC of moving too slowly to eliminate content rules that, for example, govern the kinds of topics discussed on business-owned radio stations.
("The FCC clearly is concerned about its role in examining the content rules," agency spokesman William A. Russell countered. He said the FCC has asked Congress to repeal the content requirements, but that the agency must operate under those requirements as long as they exist.)
England says that the Consumer Product Safety Commission's mandate "to protect the public from unreasonable risks of injury associated with the use of consumer products" represents an "impossible task."
Therefore, she wants the agency abolished.
Overall, England calls "impressive" but "transitory" those deregulatory accomplishments the administration has achieved--listed by the government as cutting rulemaking in half, reducing the size of the Federal Register by one-third, trimming paperwork by 200 million worker hours and saving between $9 billion and $11 billion in one-time costs and $6 billion in yearly recurring costs.
Nonetheless, England says, "if the Reagan administration expects to leave a lasting legacy of true regulatory reform, it must direct its attention during the third year toward achieving statutory change of the many laws which provide mandates to the regulatory agencies. Without these changes, there is no guarantee that regulatory business-as-usual will not be reinstituted as soon as the Reagan administration leaves office--if not sooner."
She implies that many regulatory reforms were accomplished only because Reagan appointees failed to enforce existing federal laws, leaving open the possibility of successful court challenges or the reinstatement of regulation by a more regulatory-minded administration.
England calls for passage of the legislative veto to keep bureaucrats under control of elected officials and for cost-benefit analyses of all regulations that have an impact on the economy of more than $100 million a year. Other laws, she said, are needed to streamline what remains of the regulatory process and to move court appeals on regulatory agency decisions to jurisdictions where "judges will be more attuned to the full impact of these decisions than those judges who live in Washington."