President Carter has decided to withhold support for proposals by Justice Department officials and Sen. Edward M. Kennedy (D-Mass.) for overhauling the nation's antitrust laws to crack down on corporate mergers.
In a last-minute briefing for reporters on the eve of the opening of congressional hearings on the Kennedy proposal, White House officials said the president believes there are "questions that need to be answered" before he can endorse the controversial measure.
The officials said they had decided to allow Assistant Attorney General John Shenefield, who has called for similar legislation supporting strong curbs on merger activity, to go ahead with scheduled testimony today.
But, they added, "He will be speaking for the Antitrust Division of the Justice Department, not for the administration." Shenefield's remarks were approved in advance by Attorney General Griffin B. Bell.
"These initiatives would represent the biggest change in antitrust laws in 30 years," a key administration official said. "The proposals are fairly new, and the hearings could provide additional answers to questions raised by several agencies."
Judiciary Committee Chairman Kennedy's proposal, which has not yet been introduced in legislative form, would prohibit all mergers involving the 100 largest U. S. corporations, those having $2.5 billion in assets or revenues. Exceptions would be made for companies willing to spin off assets of the same size as the proposed acquisition.
It would also place other limitations on mergers between companies in the top 500.
The plan was sent to the White House for consideration in December, and was circulated to several departments in January.
Last Friday Carter was given a decision memorandum by adviser Stuart Eizenstat with Eizenstat's private recommendation.
Instead of deciding whether to support the Kennedy proposal, though, Carter directed Bell to work on the subject within the administration and coordinate efforts to develop an administration policy.
Officials said several questions would have to be answered, preferably during the hearing, before a stand would be taken.
The only specific area they would cite was foreign competition. The fear they say was most repeated within the administration concerning the proposed bill was that a large foreign company could merge with a U. S. company in certain instances where two U.S. firms of the same size could not.
Although the officials said that, to their knowledge, Carter had not been lobbied by business on this issue, they said that several industry groups, including the Business Roundtable, the U.S. Chamber of Commerce and the National Association of Manufacturers, had expressed their opposition to the proposal in meetings with White House aides.
The administration officials said Carter "knows that Shenefield thinks strongly" about the need for strong legislation limiting corporate mergers to help his division enforce antitrust laws.
But, they added, Carter has declined to endorse or oppose Shenefield's proposals, which he has made publicly and which are similar to Kennedy's plan.