Impact of Federal Rules and Regulations

Staff present: Bill Goodwin, staff director and chief counsel; Merrielou Howser, chief clerk; Rochelle Jones, professional staff member; and Robin Ellis, minority clerk.

Senator NUNN. The subcommittee will come to order.

OPENING STATEMENT OF SENATOR NUNN

I am pleased to be home in our great State of Georgia this week and to be able to be in Atlanta, the economic center of the Southeast, for this hearing on the impact of Federal rules and regulations.

The Subcommittee on Oversight Procedures is conducting this hearing in order to ascertain the impact of specific Federal regulations and administrative actions on businesses, consumers, industry and labor.

I am delighted Congressman Elliott Levitas will be with us, and he will coach these hearings as an unofficial ad hoc member of the U.S. Senate Government Operations Committee.

Congressman Levitas has taken the lead on this subject in the House, and I think has done a remarkable job in getting the ball rolling in a much needed area of reform.

Obviously there are many problems caused by Federal regulations, regardless of how laudable the purpose of any particular law. In order to carry out our responsibility to devise better methods by which Congress can oversee the operations of the executive branch and the regulatory agencies, we must first find out just which regulations are causing the problems. We also must determine whether specific problems stem from the law setting up a program or requirement, from the regulations issued pursuant to that law, or from administrative decisions made on a case-by-case basis by Federal bureaucrats.

These are not easy questions to answer, but in order to do our job we want to hear from individuals who have first-hand, front-line experiences with Federal laws, regulations, and administrative decisions. We have a series of distinguished witnesses scheduled to testify today, and I am looking forward to their testimony. I believe it will

dramatize some of the problems that are caused by regulators throughout the Federal Government who neither know nor care about the effect of the rules they make.

Politicians are talking a lot these days about regulatory reform. But rhetoric alone is meaningless, and willy-nilly reform is dangerous. Our proposals must be realistic, they must be realistic to have a chance of passage if we are going to do any good. Otherwise, we run the risk of killing the patient to cure the disease.

Some regulation is helpful and needed but much is not. The job of the Congress is to distinguish between the two. I hope our witnesses will give examples of some specific rules and regulations that, however well meant, do more harm than good. Their testimony will guide us in drafting good legislation that will implement meaningful reforms.

Two hundred years ago a few dozen men were able to write the U.S. Constitution that has sustained our country ever since. They wrote simply about basic principles of government. They talked about establishing justice, insuring domestic tranquility, promoting the general welfare. They believed, in the words of Thomas Jefferson, in

Wise and frugal government which shall restrain men from injuring one another and shall leave them otherwise free to regulate their own pursuits. Things are vastly different today.

Over 100,000 Federal bureaucrats are working full time in Washington to issue rules and regulations that attempt to define everything that can be defined and a few things that can't be. In 1975 it took 60.000 pages of very fine print to publish all of these rules and regulations in the Federal Register. I doubt when our Founding Fathers instituted a government to promote the general welfare that they envisioned a day when Government regulations would specify the proper height of toilet seats from the floor and define when a potato chip is, in fact, a potato chip. Yet, these are the kind of rules and regulations that are issued daily by the bureaucracy.

Regulatory reform is a issue that properly concerns all of us.

It concerns small businessmen who are buried under an avalanche of reporting forms. Small businessmen are required to fill out an estimated 5.000 Federal forms, not counting 64 different tax forms. The total cost of filling out these forms and complying with Federal rules is estimated between $45 and $60 billion per year.

It concerns consumers who bear the brunt of this cost to businessmen through higher prices that add to inflation and further reduce the buying power of the dollar. The Council of Economic Advisers estimates this cost of regulation to the average American family is $2.000 a year.

It concerns State and local officials who attempt to provide the best possible services to their constituents for the least amount of dollars. As former Dean Warren K. Agee of the University of Georgia School of Journalism said when he retired last year:

The intrusion of Federal government into our universities . . . carries a heavy cost in terms of dollars, energy and time. Carrying out these demands, which are supported by the threat of loss of Federal funds, is one major reason that administrators now may devote far less time to creative policy-making and the careful performance of their other duties.

It concerns the sick when doctors are required to spend substantial amounts of their time filling out forms instead of treating their patients.

And it concerns law-abiding citizens everywhere when Internal Revenue Service regulations cause so much redtape that potential witnesses are not referred to the proper authorities in time to help convict a gangland murderer. Yet, this is what happened a few months ago in Florida.

I fear, if we do not act quickly, we will soon reach a time when everything that is not mandatory is prohibited.

Congress must regain control over the runaway bureaucracy, Congress must learn to find a way to regulate the regulators who represent no one but affect everyone. It is time to start to return to the people the power over their daily lives.

Congressman Elliott Levitas, who is here with us this morning, and I have introduced legislation in Congress that would enable either House of the Congress to disapprove rules and regulations by a simple resolution. Congressman Levitas deserves our congratulations for his foresight and on the remarkable progress his bill has made in the House.

I am pleased that Congressman Levitas is able to attend this hearing today, and I am looking forward to his opening statement and to his full participation as an unofficial member of the subcommittee.

I also would like to acknowledge the interest of the other members of the Georgia congressional delegation in regulatory reform. Congressman Dawson Mathis of the Second Congressional District, although not able to be with us today, has a prepared statement1 which will be made a part of the hearing record, without objection. At this stage, I will ask Congressman Levitas if he has any opening remarks that he would like to make before we go to our first witness. OPENING STATEMENT OF HON. ELLIOTT LEVITAS, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF GEORGIA

Congressman LEVITAS. Thank you, Mr. Chairman.

I appreciate the honor that you have given me to be an ad hoc member of this subcommittee.

I do want to compliment you for your initiative in bringing these hearings to pass, not so much of the subject matter itself, but because of the fact that you have recognized that we must find out more about the impact of these regulations and the regulatory efforts-not from the vantage point of Washington, but from the vantage point of places where the people are having to live under it.

I have a prepared statement which I will now read.

Mr. Chairman, my distinguished colleagues-the junior Senator from Georgia-I would like to publicly express my appreciation for this opportunity to participate in these hearings investigating the impact of Federal regulations.

Many of us have watched with alarm as the Federal bureaucracy has evolved into a fourth branch of Government, with a thick tangle of regulations that carry the force of law without benefit of legisla

1 See p. 5.

tive consideration. In 1974 alone, 67 Federal agencies, departments and bureaus adopted 7,406 new and amended regulations while, during the same period of time, Congress enacted a mere 404 public laws a ratio of more than 18 to 1! Individual rights, consumer and environmental concerns, and business realities are ignored or dismissed by a frequently insensitive or unresponsive bureaucracy.

Senator Nunn has made reference to the over 5,000 Federal forms that have to be filled out.

Each year the Internal Revenue Service, the regulatory agencies and the new environmental and safety agencies send out 5,145 different forms requiring reports to individual consumers and businessmen. The Government Executive magazine recently estimated that over 130 million manhours are spent each year filling out Federal report forms-not counting tax reports.

Last year Vice President Rockefeller admitted to a group of businessmen that nobody in Government has the slightest idea of how much regulation as a whole costs the country. The General Accounting Office has put the yearly costs of Government regulation at $60 billion. A Federal Trade Commission report found $80 billion in economic waste in the American economy attributable to regulatory overkill. President Ford and the Council of Economic Advisers have estimated that the work done by Federal regulators is costing the taxpaying public some $130 billion annually, or approximately $2,000 each year for each American family. Estimates on the costs of regulation alone vary from about $4 billion to $9 billion each year. In short, the economic costs of regulations are exorbitant.

No one is spared by the faceless. unaccountable bureaucracy. For example, we have seen the Occupational Safety and Health Administration harass industry through rigid regulations which fail to adequately address safety problems and fail to account for procedural considerations of business operations. At the same time. OSHA is unresponsive to labor needs for a safe and working environment. A small businessman does not have the time to plow through volumes of complex and technical regulations or the resources to hire a lawyer to do the work for him in order to avoid stiff penalties. Similarly, regulations aimed at "protecting" the worker which have the effect of forcing a small businessman to close shop are of little benefit to the worker.

One year ago this month. I introduced a bill to establish the Administrative Rulemaking Control Act (H.R. 3658). The purpose of this proposal is to provide the Congress with the ability to curb abuses of this rulemaking activity by Federal agencies by providing a procedure under which either House of Congress could veto a rule or regulation proposed by an administrative or regulatory agency. Thus far, 156 of my colleagues in the House have joined me in cosponsoring this legislation.

Under my proposal, whenever an administrative rule is adopted under procedures of the Administrative Procedure Act, and a violation of that rule could result in a criminal penalty. then either House of Congress would have a period of time in which to pass a resolution disapproving of the adopted administrative regulation. Passing of such a resolution by either House will have the effect of preventing the regulation from becoming operative.

« Previous Continue »

Books

Impact of Federal Rules and Regulations: Hearing Before the Subcommittee on ...