The Federal Trade Commission, after a bruising reauthorization fight last year, is facing further massive budget cuts recommended by the Reagan administration.
The cuts endorsed by the Republican-controlled FTC, if adopted by Congress, would ultimately reduce the agency's fiscal 1984 budget from the Carter administration proposal of $81.7 million to $53.8 million, just above a figure of $51.1 million recommended by Reagan's Office of Management and Budget.
With only FTC member Michael Pertschuk dissenting, the commission has accepted the cuts, urged by new FTC Chairman James C. Miller III, the former regulatory czar at OMB who took the agency's reins only a month ago.
Implementing the 12 percent across-the-board cut at the agency proposed by OMB for the current fiscal year--fiscal 1982--will mean sharp cuts in the agency's work force and the closing of four of 10 regional offices. Pertschuk said in a dissent sent to OMB that the 1982 cuts "will seriously undermine the commission's enforcement authority." In a letter to key members of Congress, he argued that the cuts would encourage mergers and a disregard for laws regulating unfair advertising and marketing practices.
The action for the current year represents what Pertschuk told OMB was a cut of 40 percent in "real terms," a calculation, considering inflation, below those authorized by House and Senate committees. A Senate Appropriations subcommittee is considering a fiscal 1982 budget of $71.9 million for the agency, but the new target is $61.1 million.
According to a letter sent to key congressional committees late last week, the cuts will eliminate 79 of the FTC's 543 positions in its Bureau of Competition and 84 of the agency's 547 slots in its Bureau of Consumer Protection. In particular, the cuts would sharpy reduce the FTC's food industry monitoring program and its advertising and credit practices program.
The cuts come at a time of deep uncertainty and plunging staff morale after the controversial agency was stripped of significant powers a year ago and had its budget trimmed in a bruising reauthorization skirmish.
Miller has given the FTC staff no indication of where he plans to move the agency, although he has emphasized in congressional testimony his interest in stepping up its economic analysis function and filing comments on issues before other agencies.
There is, however, the widespread impression at the agency that Miller's interest is, in the words of one staff member, making the agency into "a federal AEI," a reference to the American Enterprise Institute, the think tank here in Washington where Miller, an economist, worked before joining the Reagan administration.
In fact, the administration's transition report on the agency, a paper prepared by a team headed by Miller, suggests that he is eager to move the agency from a law enforcement posture toward one emphasizing economic analysis.
"We believe that in allocating its scarce resources to various programs and activities, the commission should be guided by the effects of its actions on consumers, or more explicitly the effects on economic efficiency," the report said. "Obviously this means that a decision to take issue with a particular business practice transcends the question of legality."
But even the Republican majority of the FTC--Miller and members David Clanton and Patricia Bailey--were sharply critical of an OMB proposal to cut the budget from the 1982 target of $61.1 million to $53.8 million for 1983.
The commission instead recommended a figure of $58 million in fiscal 1983, but agreed to $53.8 million for 1984.