Nobody won the debate between White House inflation-fighters and congressional environmentalists, but each side relished its licks at a lively Senate hearing yesterday.
Pounding the podium and pointing crossly at presidential advisers Alfred E. Kahn and Charles E. Schultze, Sen. Edmund S. Muskie (D-Maine) demanded to know why White House contacts with the Environmental Protection Agency must be "state secrets."
Shrugged Kahn: "Things go on behind the closed doors of an agency all the time... You can't conduct all the business of government in front of a microphone in the middle of RKF Stadium."
The peevish exchange went to the heart of the controversy over recent White House efforts to relax regulations involving air pollution, stripmining, cancer-causing chemicals, lead, cotton dust, and water pollution.
The White House advisers insisted that they have the right to influence an agency's proposed regulations, even after the close of the official public comment period. Muskie and other members of the Senate Environmental and Public Works subcommittee suggested that is illegal.
"I'm an ally in the anti-inflation fight," Muskie said, "but I can't stand by and let public health standards go down the drain."
Muskie told the two economists that he helped set up EPA 10 years ago as a new agency so that "environmental objectives would not be compromised... Now you're telling me the EPA administrator is not the top dog and regulations can be influenced without accountability, without minutes, without a record."
Suggesting that perhaps EPA should be converted to an independent agency like the Civil Aeronautics Board, Muskie told Kahn, "I know what our legislative intent was. You don't."
While the senators and the advisers were debating on the Hill, Rresident Carter was telling a press conference: "We have an excellent record on the enforcement of air and water pollution standards. It is important, however, that the regulations be administered in the most effective way and that economic considerations be taken into account when necessary."
Carter added that "I have not interfered in (the regulatory) process. I have a statutory responsibility and right to do so. But I think it would be a very rare occasion when I would want to do so."
The administration's focus on regulation comes at a time of increasing complaints from industry that the cumulative burden of government interference is weakening the economy and causing inflation.
Schultze said the cost of complying with environmental rules alone will rise from $19 billion in 1977 to $52 billion in 1986. "Resources devoted to paying for the cost of complying with one set of regulations cannot be used for consumption or for investment in new plants or machinery," he said.
The White House is drafting a Regulatory Reform Act for submision to Congress next month requiring extensive economic analysis of new regulations and creating a broad role for the presidential staff in agency rulewriting.
The new procedures, many of which are already being followed under recent executive order, would create "a new bureaucracy," Muskie charged, and would allow "potshot one-man reviews that carry political clout."
Muskie and Schultze differed sharply on whether economics should be considered in the setting of public health standards -- for example, the amount of smog allowed in the air, a standard recently relaxed by EPA after White House intervention.
The Clean Air Act "clearly prohibits the use of economic considerations in setting the health standard," Muskie said. "That was the result of a long, agonizing appraisal. The public has a right to know what the health requirements are." Then, he indicated, it can "decide whether we can afford to be healthy."
Schultze contended that the economic and social consequences of regulations stemming from the health standards are so great that costs should be considered.
While Sen. Lloyd M. Bentsen (D-Tes.) defended the economists' right to intervene in regulations, Sen. Gary Hart (D-Colo.) questioned the quality of White House analysis when only four staffers are assigned to the complex environmental, health and safety area. He suggested that Congress close the "loophole" allowing intervention.