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Despite recent accomplishments, we recognize that more needs to be done. We are aware that government regulation of economic activity may introduce distortions and inequities into the economy. Both Federal legislation and implementing regulations have sometimes resulted in a lessening in competition, a reduced ability to deal with economic change, and a higher and more rigid structure of costs and prices which the consuming public must inevitably bear. Accordingly, the Board supports the basic objectives of Titles I, II, and III of S. 1291 dealing with regulatory reform.
However, some provisions of the bill would seem to work against more effective regulation and would appear to make the regulatory process more inefficient. For example, section 102 (c) (5) suggests the expansion of informal rulemaking proceedings to include the creation of expert advisory councils, mediation techniques and presentation of studies, documents and arguments for written comment and rebuttal, all of which could contribute to delay and inefficiency in rulemaking. Section 803 of Title III relating to regulatory review would establish a new Committee on Regulatory Evaluation that would appear to add further delay, paper work and expense. We question the need for these provisions and would suggest their reconsideration.
The Board also has some reservations about the provisions for funding public participation expenses. The Board has tried to involve all affected groups, including consumers, in early stages of regulatory review, as well as in the formal public comment periods. Several years ago, as provided for in the Equal Credit Opportunity Act of 1975, the Board appointed a Consumer Advisory Council consisting currently of 27 members with broad representation of consumer and borrower groups to assist us in our regulatory and supervisory responsibilities. On a number of occasions the Board has directly solicited the views of consumer groups and consumer protection agencies.
The Board has not provided funds directly for public interest testimony because of the problems associated with selecting eligible representatives. The very selection process by which an agency would decide which individuals or groups to assist could give rise to conflict of interest problems and have discriminatory implications. has been the Board's view that its funding of the Consumer Advisory Council, together with other procedures to increase the participation of consumers and others affected by our decisions has made it possible for those concerned to be well represented in our rulemaking.
We are also concerned that section 104(a) appears to involve the Administrative Conference in the authorization to pay public interest representatives appearing before an agency in rulemaking proceedings. We believe it would be inappropriate to authorize another agency to make these decisions.
Title I would mandate a procompetitive standard for Federal regulations. A number of statutes administered by the Board now require consideration of procompetitive standards. However, these standards are weighed along with financial, managerial and other considerations. We do not believe that procompetitive standards should override all other considerations and urge that proposed section 602(b)(2) be amended to add standards of safety and soundness for financial institutions to the exemption for health and safety standards now specified in this section.
Title III proposes a review of regulatory agencies by the President and the Congress. The Board believes that a number of the provisions in Title III are improvements on proposals in other regulatory reform bills. The proposed 10-year time span for completing the regulatory review is much more realistic than the shorter periods in other bills. The greater flexibility given the President in presenting review programs, particularly the recognition that no reform of an agency or its regulations may be necessary, appears desirable. Of most importance, the proposed action-forcing or triggering mechanism is preferable to proposals in other bills that would terminate an agency's regulations or even the agency itself. We believe that the proposed triggering mechanism directed to the procedures of the Congress, and based upon the provisions of the Congressional Budget and Impoundment Control Act, is more likely to achieve the desired reviews.
With regard to Title IV, relating to the Administrative Conference, we would question the desirability of giving the Conference authority to participate in regulatory proceedings, or authority that would overlap the work of other agencies of the government. It appears to the Board that the Conference could be of the greatest assistance by serving as a clearing house for information and acting in an advisory capacity.
It is hoped that these comments will be helpful to your Committee in its consideration of S. 1291.
MEMORANDUM FROM THE UNITED STATES INTERNATIONAL TRADE COMMISSION
CONCERNING S. 382, THE COMPETITION IMPROVEMENTS ACT OF 1979
The United States International Trade Commission (the Commission) is pleased to comment on S. 382, the Competition Improvements Act of 1979. The Commission is an independent agency of the United States and is not subject to all the statutory procedures imposed on agencies within the executive branch. See, Sections 330-333 of the Tariff Act of 1930 (19 U.S.C. 1330-1333) and Section 175 of the Trade Act of 1974 (19 U.S.C. 2232). Notwithstanding its statutory independence, the Commission is pleased to comment upon the impact of this bill, particularly with respect to the possible inclusion of certain of the Commission's activities under Sections 3 and 4 of the bill. The Commission believes that none of its proceedings should be encompassed within the requirements of the bill. The independence of the Commission is, indeed, so important that we believe it would be improper to have Commission
proceedings supervised in any sense by the Executive Branch. Accordingly, we disagree with the inclusion of the Commission under Sections 3 and 4 of the bill, and believe that it may be desirable to exempt the Commission from the bill as offered.
THE ORIGINAL BILL
S. 382, a bill to amend the Clayton Act, was initially introduced in the 93rd Congress and was introduced again as S. 2028 in the 94th Congress and as S. 2625 in the 95th Congress. The bill was substantially amended and favorably reported by the Senate Committee on the Judiciary in the summer of 1976, but no action was taken in that Congress.
As originally proposed, Section 3 of the bill established an antitrust standard for federal agencies. An agency would have been forbidden to take "any action" which may have the effect of substantially lessening competition, creating a monopoly or creating or maintaining a situation involving a significant burden on competition unless it made certain findings, which must be included in any opinion accompanying the agency's order or statement of basis for a rule or regulation. "Action" was (and is) defined in the bill as follows:
...the whole or a part of an agency rule, order, license,
United States Code.
Section 4 of the bill as originally proposed would have created additional antitrust requirements with respect only to certain independent agencies, including notifying the Attorney General of important agency action subject to Section 3, making the Attorney General and the Federal Trade Commission parties as of right in agency proceedings subject to Section 3, and requiring agencies to have a hearing or "other appropriate proceeding" in the
event the requirements of Section 3 have not been met and a hearing pursuant to the Administrative Procedure Act has not previously been held. In addition to their party status under Section 4, the Attorney General and the Federal Trade Commission were to render "advice" to agencies regarding the antitrust impact of their actions.
Section 5 of the original bill, dealing with judicial review, would have placed upon all agencies, in any proceeding for judicial review of the agency's orders involving action that is subject to Section 3. the burden of establishing by "substantial evidence based on the record as a whole" that the requirements of Section 3 have been met.
THE AMENDED BILL
The Commission. 1/ and apparently other agencies as well, objected to many provisions of the original bill. Especially troublesome were. 1) the unbending imposition of a competition standard in areas of the law where Congress expressly established other overriding standards, 2) the requirement for unnecessary and burdensome hearings and records, 3) judicial review on such records, and 4) the insertion of the Justice Department and the Federal Trade Commission as parties of right in certain agency proceedings. The amended bill (hereinafter. S. 382) addresses some of these problems.
1/ See letter dated February 12, 1979 from Chairman Joseph O. Parker, to Mr. Steven Needle, Executive Office of the President.