With some of Washington's most powerful lobbyists looking on, the Senate Commerce Committee yesterday voted overwhelmingly to keep the Federal Trade Commission out of such areas as children's television advertising, used car lots, the insurance industry and consumer products standards.
The action was a high-water mark for an anti-regulatory wave sweeping Congress this year. It was seen by the consumer movement as its worst defeat since Congress failed to approve the administration-supported consumer protection agency two years ago.
Responding in large part to intense lobbying by the affected industries, the Commerce Committee, through amendments to the commission's authorization bill, also sharply curtailed the agency's ability to issue subpoenas and fund public participation in agency proceedings.
Further curtailments of several FTC antitrust investigations were tabled until hearings could be held on the proposed amendments, perhaps as early as next week.
The moves come only weeks after the House voted similar legislation killing an FTC investigation into the funeral industry. The House will shortly take up another measure that would prevent the FTC from regulating agricultural cooperatives.
The various senators could hardly wait to propose their amendments, with Sen. Howell Heflin (D-Ala.) twice offering his before the appropriate sections of the authorization were brought up.
And, in making their porposals for curtailments, most of the senators also took oral swipes at the agency, which has been under an almost constant attack on Capitol Hill for the past year.
In proposing to end FTC involvement in the insurance industry, for example, Sen. John C. Danforth (R-Mo.) said, "We have to make absolutely certain the FTC will not investigate the insurance industry. We must say to it that we don't want it to investigate insurance. If this doesn't work, I don't know what will . . ., maybe criminal sanctions."
Danforth contended that FTC involvement in insurance violated federal mandates that the industry be regulated by the states.
Mark Green, director of Ralph Nader's Congress Watch, said yesterday's voting "destroys consumerism by the death of a thousand cuts. This year it was Kidvid [children's TV advertising], insurance, used cars . . . Next year it will be something else."
The members of the committee, Green added, "are not champions of the fight against overrugulation, they are chmapions of consumer fraud. They have capitulated to the various special-interest groups at the expense of the public."
As to the prospects for the FTC bill when it reaches the Senate floor, Green said somberly, "You can bet your family's wealth it will pass. And, you know why? Because widows, kids and people who buy used cars don't have trade associations."
Peggy Charon, director of Boston-based Action for Children's Television (ACT), which filed the original request leading to the FTC's controversial Kidvid probe, called the vote "the most significant consumer defeat since the consumer agency."
Only Sens. Bob Packwood (R-Ore.) and Warren G. Magnuson (D-Wash.) voted to allow the FTC to continue its Kidvid probe. The vote was 13 to 2.
The other votes were unanimous.
One FTC source said the votes went "about the way we thought they would." But, he added, "we are alarmed at the fact that a majority of committee members would embrace the possibility of cutting back anti-trust investigations."
He said such a move could effectively end major FTC antitrust probes of several key industries, including the oil, cereal and automobile businesses. o
Sen. Heflin has proposed an amendment, which will be considered by the committee shortly, to eliminate the authority of the FTC to order divestiture in antitrust actions.
The Kidvid inquiry was killed by an amendment from consumer subcommittee chairman Wendell H. Ford (D-Ky.) prohibiting the commission from acting against "unfair" advertising. Instead, the amendment substituted the word "false," for "unfair."
Since the entire Kidvid investigation has been based on the hypothesis that all advertising aimed at pre-teens was inherently "unfair," because children cannot tell the difference between advertising and programming, that probe would have to end.
But in case the point of the proposal was lost, Danforth said, after it was offered, "I don't want to leave any doubt in anyone's mind -- the intent of this action is to kill the Kidvid investigation."