On Wednesday, the House voted 286 to 133 to override a proposed Federal Trade Commission regulation requiring used-car dealers to disclose known defects to buyers. The Senate, by an even more lopsided vote of 69 to 27, had already voted to override, and so the regulation is rescinded. That's too bad. The FTC regulation was a useful, though limited, step toward providing consumers with information they need to make an informed choice in a market with a reputation for sharp practices.
Opponents of the rule--primarily the National Automobile Dealers Association--argued that it would increase the price of used cars by an amount far beyond the value any disclosure would give consumers. But was it their arguments that prevailed? NADA's political action committee was the fourth most generous contributor to congressional campaigns of all PACs in 1979-80: it gave a total of $1,035,276 to congressional candidates.
According to figures compiled by Congress Watch, an organization that supported the FTC regulation, the 286 House members who voted to kill the used-car disclosure rule had received $742,371 from NADA's PAC since 1979. In contrast, the 133 congressmen who voted against NADA's position received less than one-tenth of that: $73,025. The figures for the Senate, as compiled by Common Cause, are similar. Since 1975, the 69 senators who voted against the FTC regulation had received $386,360 from NADA, while the 27 senators who voted the other way had received $42,100.
These contributions are legal, and no one can say that in any particular case NADA purchased a favorable vote. But it is hard to avoid the conclusion that the contributions counted for something. The same law that permits these PAC contribtions also provides for their disclosure. Voters whose representatives and senators supported the NADA position no doubt will want to satisfy themselves that the legislators were swayed by NADA's arguments rather than its checkbook.