petition should obviate the Consumer Product Safety Commission's primary statutory tasks. No one is suggesting that. I think that would require an irrational reading thereof to read that into the bill. So, I think that the broader the scope of coverage the more effective the bill will be as to all departments within the economy.

Mr. BOIES. Mr. McKevitt, do you agree that the act should apply to health and safety regulations?

Mr. McKEVITT. Yes; I do. I think Big Boy Meats is a good example. I think another example is OSHA, the exit signs, the fire extinguishers, that enables the inspectors to really pick on the small business and not go after the real problems of safety and health, whether it is a foundry, a paint shop, or the construction industry. It is too easy to go to the numbers game. As a result of that I think we see a trend-for example 928 regulations have been abolished in OSHA and also now we are talking about SIC Code exemptions in the Department of Labor based on reports of several months ago on safety that showed that small businesses of 25 employees or less had a 90 percent high safety rating.

I think these things should be taken into account as well because it is highly anticompetitive when small businesses have to submit to a variety of very unreasonable inspections just to accommodate a person's goal in making inspections.

Mr. BOIES. Mr. Dennis, do you agree?

Mr. DENNIS. I can give you another example from OSHA, the issue of performance versus specification or design standards. Performance standards set a goal to be achieved. Design or specification standards tell you how you must accomplish that goal-in other words, what type of technology you are going to apply and things of that nature. Smaller firms have to be innovative and find a way to accomplish the goal it wasn't the generally accepted or generally thought of way of doing things. Use of performance standards makes them more competitive and the objectives are achieved just as well as if someone came in and told them how to do it.

So, yes, by requiring performance rather than design standards, agencies can achieve their health and safety objective while doing things perhaps in a more competitive way.

Mr. BOIES. Thank you.

Senator HEFLIN. Do you consider that in carrying out this that there is a need for some watchdog approach towards regulatory agencies to carry out the intent of this act either in the form of a separate agency or divisions within, as opposed to the provisions of the act by which the Attorney General, of course, can intervene?

Mr. ROTHWELL. Senator, of course, the bill addresses itself to that question by giving to the Attorney General some additional jurisdiction in the case of the independent regulatory agencies, minus one or two. Insofar as the creation of another agency is concerned, I reserve the right to correct the record. I have not discussed this with the client, if you will, but the client's general policy I think would be adverse and inimical to that idea.

Now the other suggestion the Senator makes to the effect that each of the agencies should create within itself under its current budget, a task force, if you will, to monitor their competitive control versus anticompetitive activities such as giving an audit to the Congress, or

some group under the supervision of the Congress, given on an annual basis, perhaps that would be a helpful input, also.

You know, things have a great habit of missing the mark. As a gross example, the greatest experiment in morality, in this country's history, the prohibition amendment, the 18th amendment, who could have predicted that would lead to the organized crime that we thereafter encountered? So, I think we obviously have to stop and consider that the arrow shot at a particular target, it doesn't always hit, or there are some unexpected side effects.

I would suggest that if this bill becomes law, and we fervently hope it will, with the addendum we have had the audacity to suggest, that we should sit back and wait for a year or two. Wait for the time and weathering and so forth and then take a look see and find out if you need that kind of a watchdog. It would seem to be unnecessary at this point, Senator.

Senator HEFLIN. Let me say, I didn't think this was a suggestion. This was an inquiry. I think there is a distinction between watchdog and policing too.

Mr. ROTHWELL. Yes.

Senator HEFLIN. I just was inquiring whether in your opinion and in the opinion of the people here, the so-called teeth that the Attorney General will acquire, will be sufficient to cause a slow moving regulatory agency to follow the intent of the law. Do you think the Attorney General's posture in this and the powers given him are sufficient?

Mr. ROTHWELL. Yes. I think the Senator puts his finger on the vital matter. That, of course, is the first point we made in reference to our prepared statement; that is, how to get people to pay attention, heed and respond to, and we have to expect a time lapse.

Now the question suggests something that I would rather not contemplate. I would not like to think the Attorney General himself would ignore the bill and ignore the law and not proceed with the powers that he has and with his additional powers, supervisory powers, if you will, over the independent regulatory agency. As a matter of fact my conjecture is that the Attorney General would be prompt to move out and test the waters in some court or proceeding, to see just how far he could go. This puts him in a stage, in some respects, a half a stage up in reference to some of his fellow Cabinet members. I think the Attorney General is going to enjoy that opportunity. I suspect that he would find occasion to at least test the waters in reference to this.

Mr. McKEVITT. Senator, having served in Justice I do not know how fast moving Justice will be or how effective they would be on something like this.

I would like to see the machinery in place and address itself first and such as the agency pick up this attitude within their own structure and also they have the assistance of the courts. You now have a competitor, as well as arbitrary and capricious, in addition you also have an office in place that is called the Office of Advocacy of the mali Business Administration which I think would be a good watchdog already created to pursue the anticompetitive aspects of the regulation. Senator HEFLIN. Let me ask you this: Are we getting into, from a viewpoint of a watchdog, are we getting into centrad.ctory philosoph

ical approaches. A regulatory agency is created to be independent. Granting to the Attorney General, which represents basically, the philosophy of the majority party or the party that is in power, an oversight function, is this a contradictory philosophical approach to this problem?

Mr. ROTHWELL. Mr. Senator, I do not think the "independence" of the regulatory agencies is a limitless role, if you will. Now the Attorney General, acting under the powers that this bill grants, is not subtracting from the independence of the regulatory agencies any more than Congress has decided. It was Congress, in conjunction with the President, that gave these independent regulatory agencies their "independence." Congress, with the conjunction of the President, has a perfect legal right to take it away in whole or in part.

So there is really no philosophical contradiction insofar as it was Congress which makes the policy and not the Attorney General. I think it is clear that Congress is making the policy and asking in certain limited instances, for the Attorney General to assist in its implementation. Now whether that impacts on the executive or judicial or the independent regulatory agencies, I firmly believe it is not philosophically inconsistent whatsoever and it is well within the scope of the legislative power.

Senator HEFLIN. Well, procedurally, but how about from a rationale basis?

Mr. ROTHWELL. Only if one spells the word "independence" with full capital letters. I think the independence of the regulatory agency was designed to not have them shift course with every passing wind or every political storm that swept across the country, so as to give some stability and so forth.

That is why I suspect that many of the terms of the Commissioners of these agencies is 7 years. That leaves time for at least one national election. I do not believe the word "independent' philospohically or in terms of political science extends so far that Congress has disabled itself from declaring a set of policy guidelines to be followed by the independent regulatory agency as well as other departments.

Mr. CHUMBRIS. Mr. Chairman, this may not be entirely on point, but in 1963, Senator Kefauver was chairman of the Senate Antitrust and Monopoly Subcommittee and he introduced a bill which would amend the ICC law that the Commission would have to put more emphasis on competition rather than the public interest provision in the ICC law when it made its decisions as to railroad mergers. Now there is the case, as the Senator brought up, there is a case where the law, and as you pointed out too, where Congress itself, if it wished to do so, could have passed that law that Senator Kefauver suggested. But the Congress did not and did not accept that theory, feeling that the congressional law for years had been that antitrust implications would be just one aspect, but overriding would be the public interest. That is the way the ICC made its rulings. As I say, this may not be entirely on point, but it points out both ends of it where Congress can change the law to give competition a greater impact than public interest as is now in the law.

Senator HEFLIN. Well, my direction was not necessarily toward anti-I mean toward competition approach, but was the relationship to the Attorney General in relationship to the independent agencies which was in a watchdog effect.

Mr. ROTHWELL. Yes. Senator, if the word "watchdog" came to mind let me withdraw it. I do not come from that quarter at all. I think, however, perhaps the independent regulatory agencies do notdo they not have to work through the General Services Administration in supplying their needs, the supplies, the desks and paper and typewriter and so forth. Isn't this a parallel situation?

Mr. Chumbris, on the occurrence in 1963, is not at all off point. Since the independent agencies do not have the constitutional status as the other legislative, executive, and judicial levels of Government, I should think that the constitutionally organized levels of Government considerably control and lend direction to the independent regulatory agencies.

Mr. Senator, what I think the independence of the regulatory agencies was designed to accomplish in the Government plan was to stop a call from the Oval Office of the White House that would result in a 180-degree turnabout in terms of policy decision. That is really what the independence of the agency was all about. It wasn't independent of policy direction taken by a law which has as much peer group effect, if you will, as the organic law creating the agency.

That is, S. 382, if it becomes the law-for example, the Federal Reserve Board, it has the same legal muscle, if you will, as the law that created the Board.

Mr. CHUMBRIS. Senator Heflin's point is the power of the Attorney General. We have had instances in the past, where the Attorney General would intervene in the FCC. I think the case was the ITT and the network, ABC. Although the Attorney General did not intervene successfully in a sense, it did delay the matter before the ICC for about 6 months. The stock market and the economy changed and the two companies decided between them that they would nullify that agreement they had made.

There were several instances where the Attorney General tried to intervene in ICC cases. I think that is the point that Senator Heflin is trying to bring out as to how far an Attorney General should go.

Senator HEFLIN. Well, I just raised the issue. The concept is that you create an independent agency and there is no question that Congress can do what it wants to, give it directions. It can give it directions as to competitive approaches. I just raise the issue just as an inquiry.

Mr. ROTHWELL. Yes.

Senator HEFLIN. As to whether or not you are eroding the independence concept by allowing a political agency under the administration to watchdog that independent agency. There may not be anything wrong with it. I just raised that question. It is a philosophical approach, I suppose.

Mr. SWAN. Senator, I think we are all interested in the least intrusive way of achieving a mechanism whereby the goals of the bill are served. There are several ways of achieving that. You may create an independent agency. You can create an independent advocacy office within each agency with the goal of monitoring this. I think this is what the bill does.

Senator HEFLIN. Well, that is largely dependent upon the zeal of or the lethargy of the Department of Justice on the issue.

Mr. SWAN. Yes.

Mr. ROTHWELL. Senator Heflin, if I may make one further comment. Senator HEFLIN. Yes.

Mr. ROTHWELL. There is in the bill itself, of course, the giving of a sort of oversight responsibility also to another regulatory agency which is the Federal Trade Commission. Also, there is the oversight function of Congress that supports the measure at hand. That is what Congress is doing. It is saying to both the independent regulatory agency and other agencies in the executive branch that competition be made of paramount concern. That is what this S. 382 is all about. This without doubt can be enacted pursuant to the oversight responsibility of Congress.

Now, in giving specific guidance to the Federal Trade Commission and the Attorney General in the exercise of its statutory responsibility, I think goes a long way to avoiding that difficulty. Perhaps there is a limit put on the authority of the regulatory agency if S. 382 would become law that didn't exist before. Perhaps there is some incursion into the scope and thrust of the word "independent." But, I not only think it is within the power of Congress, but the overriding benefits to be achieved by the legislation at hand are certainly well worth that little how should I say, mental inconsistency, you set up an independent agency and then subtract from its independence, giving to the Attorney General instruction and language.

I would say in total agreement with where I perceive you are coming from sir, I would agree wholeheartedly to give the Attorney General of the United States oversight responsibility without specific directions would certainly pose a question of constitutional language would be a totally inconsistent thing. I do not believe that is what is proposed by this measure.

May I add in conclusion, that that is a burden and most legally compelling argument why Congress should articulate in the measure itself what it means by procompetitive as distinguished by from anticompetitive so that decision is not left either to the regulators or to the Attorney General.

Mr. CHUMBRIS. Mr. Rothwell, the very point that I raised earlier about the ICC, I raised that point with Mr. Cocker at that time who was head of the Antitrust Division and whether there was the wisdom in the bill to give the Department of Justice the authority to use the anticompetitive aspect rather than the public interest which is exactly what Senator Heflin was bringing out.

Mr. ROTHWELL. Yes.

Mr. CHUMBRIS. I tried to show that you could do it by Congress, but at the same time that was a concern we had.

Senator HEFLIN. I believe we covered this pretty well. I did not mean to create a long discussion on it. Are there any other statements from any of the group that is testifying now? [No response.] [The prepared statement of Mr. McKevitt follows:]

PREPARED STATEMENT OF JAMES D. "MIKE" McKEVITT

Mr. Chairman, I am appearing this morning on behalf of the National Federation of Independent Business (NFIB), a national association of more than 560,000 small independent business members. We are grateful for this opportunity to appear before the Senate Judiciary Committee, and express our views on S. 382, the Competition Improvements Act of 1979. This proposal would impose on all Federal agencies the specific requirement that they take into account the possible