Document LvOEaE4v6X4jZ9q020EB3635

PLAINTIFF'S EXHIBIT * THE ADMINISTRATION A hard apprenticeship for Labor's Donovan Can an ardent salesman for a conserva tive Republican President succeed as La bor Secretary? Raymond J. Donovan, President Reagan's new Labor Secre tary, says he can. But he faces an uphill battle. Donovan's experience and his in stincts indicate that he will be a skilled manager and will do well in promoting smooth collective bargaining, one of the three key responsibilities of the depart ment. But in the other two major areas, manpower development and regulation, Donovan has barely begun to learn. And he still lacks the experienced subordi nates he will need if he is to take charge of the politically sensitive department. Donovan survived bitter confirmation hearings in which allegations of deals with organized crime were declared un substantiated. Now he must walk what a Republican former Labor Secretary Calls a "very difficult tightrope" between Reagan and labor. His first attempt to "build bridges," on Feb. 20, was an awk ward one. After meeting with the aflcio's executive council, he said, some what nervously, that-perhaps half of the council at least partly supported Rea gan's new economic plan. But Lane E Secretary Donovan: Controversial aides and an early run-in with the AFL-CJO. Kirkland, the federation's president, said Donovan was "mistaken" and pri vately called his overselling of the coun cil's support "fairly miserable." Not a `relerae.' But the soft-spoken Don- old former loan vice-president at Uhase Manhattan Bank and a fellow campaign' er for Reagan in New Jersey, to be assistant secretary for employment and training. He also chose Thorne G j ovan has an ambitious agenda, and he is Auchter, 35, a construction executive turning first to issues with which he from Jacksonville, Fla., to administer feels most comfortable, improving the OSHA. Neither man is an expert is his management of his department "We want to do what you do with any busi ness, get the lines of communication running out and down into the bowels of the department" he says. Some of this must wait however, because Donovan and the White House have yet to name an Under Secretary and three assistant new field. But Donovan chose both be cause he thinks they are good managers, which, he says, is more important than what either "knows about the product." Donovan initially gained points with Kirkland and other union leaders by promising to emulate James P. Mitchell, President Eisenhower's Labor Secre secretaries, appointments that he hopes tary, who was extremely popular with will be made within a few weeks. organized labor. Mitchell contemporar Donovan hopes to offset his first run- ies point out that he, too, chose his aides in with the AFL-CIO with a bargaining approach he hopes will please labor. "Our job is to facilitate bargaining, to Donoyan lacks experience In key areas: Manpower development and regulation lend our offices and services, but not to . become a referee," Donovan told BUSINESS week. He has a reputation as a skilled bargainer among the building trades, with whom he negotiated in New primarily for their management ability. But Mitchell was also well-known to labor when he was appointed in 1953, and he was a strong advocate for worker interests, earning the title of the "social conscience" of the Eisenhower Adminis tration. "If Donovan wants to be like Mitchell, he's got his work cut out for | him," says Walter C. Wallace, a top Mitchell aide for seven years who is now in private business. "Mitchell was his own man in every way." Jersey as executive vice-president of Schiavone Construction Co. He feels that in most cases "there is not enough communication in advance" of negotia tions, and he will work behind the scenes to remedy this and push for the creation of labor-management committees. But Donovan's positions on other mat ters of Labor Dept polity seem unlikely to ingratiate him with workers, whose interests he is charged by law with pro tecting. He admits that he is still learn ing on issues of employment and train ing. Nevertheless, he wants to eliminate more than 300,000 public service jobs for disadvantaged workers and put more federal money into business-sponsored programs that train these workers for jobs in private companies. Donovan sees a "great opportunity" to rewrite the Comprehensive Employment & Training Act (ceta) when it comes up for renewal in 18 months to make it more "result oriented." He also plans to cut Labor's budget by at least $6.8 billion, or 18%. On regulation, Donovan echoes Rea gan. "We have been on a regulatory binge," he says, promising to change the Occupational Safety & Health Adminis tration so that it creates "less confronta- j tion" with business. He also promises j strong prosecution of union officials who j violate federal labor law. i Controversial sides. Appointments the new Secretary has made so far are also attracting criticism. Despite the. reluc tance of some White House officials, he insisted on Albert Angrisani, a 31-year- BUSINESS WEEK: March 9. 1981 UCC 013358 - GOVERNMENT A fast start lor the Reagan strategy Less than six weeks after tak ing office, the Reagan Admin istration is bringing into focus its strategy for combating a problem that candidate Rea gan proclaimed one of the most serious besetting the U. Sj overregulation. As it be gins its war against the tens of thousands of rules, restric tions, and requirements that affect American business, the White House is mindful that the success of the Reagan Presidency will be measured in large part by its ability to reverse the half-century-long wave of federal intervention into nooks and crannies of American enterprise. Of course, most recent Presidents have decried the panoply of business regulation that hampers efficient pro On Jan. 29, Reagan froze all "midnight" regulations that I Government regulations impose an enormous burden on large and small business in America, discourage productivity, and con tribute substantially to our current economic woes___ It is my intention to curb the size and influence ol the federal establishment r3| became final but not effective in Carter's last days. Then on Feb. 17, Reagan issued an executive order concentrating in the Office of Management & Budget a veto-and-rewrite power over executive agencies; , ; \ the order also requires the agencies to perform an exten sive economic*analysis of present and proposed rules. Further, Reagan designated _ Vice-President George Bush to lead a White House task force to oversee the deregula tion effort. The Administration's strat egy for regulatory control boils down to this: appoint regulators who clearly sup port Reagan's determination i to reduce government inter- ; duction and job -creation. vention; use the power of the : Former President Jimmy executive order and seek bud Carter even made significant get cuts to rein in agencies strides in deregulating certain industries--airlines, trucks, under the President's direct control; and- ask Congress to railroads, and financial insti-. enact fundamental reforms tutions. The new Administra that would also apply to inde tion will seek to remove still pendent agencies not under more price and entry restric tions, but its eye is on bigger executive control. Obviously, all this will not game: the pervasive social be easy. There is politically regulation that affects busi potent opposition to virtually ness large and small. Reagan every change in rules that is betting that he can take the Reagan wants to make. The political heat and risk of slow first test is the forthcoming ing social progress in such debate over renewal of the areas as workplace safety and Clean Air Act and of sewage health, equal employment, en treatment provisions of the vironmental cleanup, and con sumer protection. Clean Water Act Neverthe less, a combination of factors : The core of the Administra gives Reagan a better-than- tion's regulatory philosophy is that gov productive. As one close aide describes even chance of achieving substantial reg ernment intrusion in the private sector Reagan's frame of mind; "He's seen the ulatory reform: is justifiable if--and only if--it produces way regulations haven't worked. You The mood in Congress, where many of benefits that outweigh the costs and the don't have to read that in a book." the reforms must be approved, is run- . regulation chosen is the least expensive Although Reagan believes that the ning in Reagan's favor. With a Republi of the alternatives. These economic no case against most regulation can ulti can Senate and a relatively conservative tions provide the standard against which mately be made on economic terms, cost- Democratic House, even many liberal to measure the ultimate success of the benefit analysis--a technique econo legislators are now ready to prune the effort to deregulate. And they represent mists use for measuring the costs and bureaucracy. the personal views of the most deregula benefits to society of government pro Unlike Carter, Reagan owes little to tion-minded President ever to hold of grams--is inherently uncertain and the traditional constituencies of regulafice. Reagan has felt for more than 20 hugely time-consuming. For that reason, tion--unions, environmental interests, years that most regulation 13 intrinsical the Administration has moved quickly to " and consumer groups. He has much ly burdensome, inefficient, and counter- seize control of the regulatory process, more political freedom, for example, to 52 BUSINESS WEEK: March 9, 198t ' 7 ^'^.- *--*j**\il-V UCC 013359 GOVERNMENT  fy.-r cwr e* ' */* ' ':-v>^These principles will guid8 Reagan's deregulation push I./.::-.' r *.n,V ' -~ " ---- " ...........J...Jlr: .7-' Eliminate rigid compliance rules by relying.^rf; Congress periodically to assess.the current ^ r fb; on economic incentives and penalties refevance of regulatory laws >:,? .encourago^anieslj^ee^n^sglJ^^^,^^^^^^^,;';.^ Tailor regulatory burdens to the size and^' ?*^lTeasier for'Congress or the President to veto nature of companies affected * ^ * $ apply cost-benefit analysis to proposed rules. * Business groups are firmly behind will have to make when he gets in the job," White House personnel director E, Pendleton James says. "Once he's ap prong in Reagan's deregulation strategy gives his White House more official con trol over agencies and their bosses than' Reagan's deregulation goals and are pointed and once he's confirmed, we're any President has ever had. "Sometimes poised for a massive lobbying effort to locked in." you don't know your appointees until persuade Congress to limit the authority But drastically changing the goals of ` after they're in," says a White `House of such bodies as the Environmental agencies with thousands of employees in official. Protection Agency. both Washington and field offices This control was made concrete by Reagan's regulators and their initial around the country will take more than Reagan's executive order. It gives the actions reflect the ideological goals of his an expression of adherence to the new OMB the power to rewrite or veto rules Administration. Housing & Urban De regulatory philosophy by top adminis that are in early stages of proposal by velopment Secretary Samuel R. Pierce trators. For that reason, the second executive agencies such as the epa, osha, Jr., for example, froze all his department's proposed m and pending rules two days f; ^>5 and the National Highway S"-1 Traffic Safety Administra tion. By one estimate, after the inauguration and seven days before the Pres ident's governmentwide freeze. Likewise, Labor Secretary Raymond J. ' Agency- E..n..v..i.r..o..n..m. .enta..l ^ away from technology-forcing [ Protection Agency- ^standards, such as smokestack1 ^scrubbers for all coal-fired plants^i^S -v;;^;v^:if|.rX*ovyar^ performance standafdI^~?-vj these rules account for 70% of the costs imposed on the private sector by regulation. Although the legality of putting those Donovan has already with drawn a proposed rule that \ would have required the labeling of all hazardous workplace materials. Much of the detailed work will be in the hands of the regulators. "The new appointees will solve a lot of problems, problems we hope wilt never surface to the task-force level," Occupallonal Safety Emphasize personal-protectionjlevlces Health Administratlon-SiSrather than costly engineering controls j f - '. achieve workplace salety^^^ 'j'-.'c- ConsumerProduct >^lEmphasUedangerous-product-- Jr Salety Commission warnings' over product regulation % Food & Drug Reviewthe lawthat prohibits food AdministraUom|^^55^'?,,addftfyes that may cause'cancer-f-ria^ ri.-Agriculture -'^fw-'Tnn'atter how low the' Deptj^^j^gEase^.meat-labeling risk:5?fe'j.'' "requirements i National Traffic agencies so firmly under the thumb of the White House will almost certain ly be challenged in the courts. Administration of ficials maintain that a law Congress enacted last fall reducing government pa perwork gives the White House that authority. Enlisting the help of Congress in his antiregula says task-force counsel and Administration^ tion drive, Reagan will Bush aide Boyden Gray. t Energy Relax requirements for utilities and^- For this reason, poten tX. ;' ;-^Jn^^\>^^^^industry to convert to coal poworr-.--.^-. tial appointees to the | Interior Dei 'soon propose revamping the process by which rules are created. He wants his Reagan Administration executive order enacted in have undergone personnel a statute that will extend screenings unprecedented `I Nuclear RegiHato'ry^y?^-9;Streamnn~e licensrng of nijclearipower >J OMB review authority to in in their ideological empha dependent agencies, such sis. For instance, John W. as the Federal Trade Com Hernandez, newly named mission and the Equal deputy administrator of Employment Opportunity the EPA, spent four hours Commission. being grilled by domestic A bill that would have policy chief Martin C. An required agencies to ana derson and at least four more with omb officials. "We want to make sure each individual is philo sophically committed to making the decisions he ; Federal Energyp-":^* Sp-'. Speed upjdecontrol of natural gas j' Regulatory Commission vr-.* J Equal Employment for case^by-case discriminatory-.^ : Opportiinnity Commission^practicesVather than seeterH^^v->^VSa `Industrywide patterns of discrimination-* lyze the economic effects of proposed major rules died in the 96th Congress, but this year's legislators are expected to be more recep tive to virtually any. move GOVERNMENT ^ UCC 0B360..;'. ~ __ . t BUSINESS WEEK: March 9, 1981 63 to soften the economic impact of regula tion. "Gradually, there has been a real ization that regulation can damage very important interests. Even the more pro gressive members of my party under stand that," says Senator Carl M. Levin (D-Mich.). However, the difficulties that tripped up the legislation last year may persist and thereby impair the chances of Reagan's new proposals. Congress was not averse to reining in the regulators, but it wanted its own control over specif ic regulations. And the so-called legisla tive veto, which in its most extreme form would permit either house to overturn without the signature of the President any proposed rules, is expected to be attached to the regulatory reform bill again this year. The Administration may thus find itself forced to share pow er with the legislative branch to get its procedural changes. Any regulatory-reform legislation that passes Congress, moreover, is likely to include provisions requiring agencies to perform cost-benefit analysis on pro posed rules. This is politically controver sial. Environmentalists and others con tend that the benefits of a particular regulation--fewer cases of cancer or cleaner air, for instance--cannot be mathematically balanced against the cost of achieving those socially desirable goals. Reagan's economic advisers agree that some benefits of regulation cannot be expressed in dollar figures, but they deny that cost-benefit analysis is in tended to be a mere numbers game. "To be against cost-benefit analysis is to be in favor of regulating with less informa tion," says James C. Miller III, adminis trator of the omb's Office of Information & Regulatory Affairs and executive di- Bush: `We must get this country back to work' As one of his first official acts. Presi cies has been adversarial. What's the groups are already geering up lor opposi dent Reagan created a Presidential task force on regulatory relief find, named Vice-President George Busk to . head it. Serving with Bush on the reg ulatory task force axe seven members with Cabinet rank. Following are ex cerpts from an interview in which Bush discussed the Administration's regulatory goals with Herbert IT. Che shire, deputy bureau chief of the McGraw-Hill World News bureau in Washington, and correspondent Anne Swardson. beet word for whet that relationship is going to be now? We're going to welcome suggestions, not just from businesses that are regu lated' but* [also] from those groups which have other interests as their prime concern. We are going to act in an evenhanded fashion as best we can and do things to encourage real growth and real productivity. So I would ex pect that business should be excited about this prospect. Leber, environmental, end consumer tion drivea. They geared up for an opposition drive against us in the election, a strong one; a lot of them, not all. But many of these people are reasonable. . . . We've-already met with some of the top labor leaders. They feel very, very strongly-about certain provisions of laws affecting safety in working places. But every single one has ac knowledged that in some areas there have been excesses. It's our perception that everybody in this country knows that we've got some enormous economic problems What strategy will the Adminis tration follow In trying to achieve its goal of lessening regulation7 The goal is regulatory reform and relief, obviously, and the strategy is simply to go through the channels available. That would include executive orders, legislation, and working with various individuals in various levels of the federal bureaucra cy. We thjnk something can happen with this task force. We aren't going to write a 500-page I The goaf is regulatory reform and relief-- We aren't going to write a 500-page report and file it . and that we've got to compete abroad and we've got to pro duce again. Even those in some of the special interest groups you're talking about must un derstand that We're not look ing for a. fight. We're not out to rape, pillage, or plunder the en vironment or anything else. And it's not all pure dollars and cents. There are human compo nents to be considered. But we must get this country back to work. report and file it, When might we see results from What will the task lores be doing the' Administration's deregula in Ihs next few months? . Drafting a legislative pack tion drive In terms ot helping the economy--one year, two years? age of regulatory reform pro posals and formulating execu It all depends. If a regulation can be removed that totally tive orders to the agencies, holds up the construction of which the President will enthu some kind of productive facili siastically sign . . - [and] work ty, it could happen pretty fast. ing with people who share the In general, I think regulatory President's view on excessive relief will have a rather quick regulation. So some of [the so lution] is people, some of it is impact on the economy. Part of it will come from the anticipa executive action, some of it is tory effect If an investor is law. convinced the President is real ly determined to bring regula The peat relationship between business and regulatory agen tory relief, that in itself will have an effect 64 BUSINESS WEEK: March 9, 1981 UCC 013361 GOVERNMENT rector of the Bosh task force. "Cost-ben Within reason, however, Reagan regu Air Act has spawned hundreds of regu efit analysis is not a panacea, but it's lators may be able to circumvent court lations, and hundreds more are in the way ahead of what we have today," Mill er says. None of these changes will come with scrutiny on changing a rule by enforcing the regulation little or selectively; judges are generally reluctant to override pros offing. It has significantly reduced air pollution--but, if industry is to be be lieved, at the price of thousands of jobs out a tough fight. The AFL-Cio's Industri ecutorial discretion. and widespread plant closings. al Union Dept, (iud), for example, has Important as the debate over proce The steel and coal-mining industries joined several environmental groups to dure is, the make-or-break issues for maintain that complying with The law form political action committees in 12 specific industries will come as Congress forces companies to invest huge sums of states and to organize grass-roots back moves to rewrite each particular statute cash that could be spent on modernizing ing to publicize the benefits of regula and reform particular agencies. Espe plants. William J. De Lancey, chairman tion. Says Howard D. Samuel, president cially significant are the 1970 Clean Air of Republic Steel Corp., says that envi of the lUtr. "We think there are a lot of Act and its 1977 amendments, together ronmental spending last year equaled people in Washington who are not aware the most sweeping environmental stat $20 for each ton of steel the company of the constituent support" for health ute ever enacted by Congress. The Clean produced. In 1977 the industry's cost for and environmental laws. Reagan will also find that changing regulatory laws already on the books-- How Iawsmts might slow, deregnlatioa especially when it comes to undoing such hard-won past compromises as the Clean Air Act amendments of 1977 and sched uling the phaseout of natural gas price controls--will open a Pandora's box on K .* EvMM k'.,iCf,?^ Aa-ssr^.eT_pwX ^iJ^'V;.ItLhke' ^>ex^tivaV'. >#'1aI AlsAo/g'^AWvAe|Uc\bMnAsltwuwgm-e- *rijka.guitLh*o-vritytAoMs.,ude t, branch curtafls its^ole^'overseer of ; ^directly manufacturers ' who do"noi r'.'.busrne^.it;does;nbiT^lo^.ttajt/Mm-/^liyeJnp\tQi lire rulM.lAmendment3;'to , l'. psniesware.off tibe^VegjjIatoiyrJ^k'T.thef E^ual, Credit^Opportunity- Act Capitol Hitt. "The laws and regulations , ThVcour& wdll'almStxer^nJ^Jfii^g\'ppen&d-the' wayjivJL976,for suit?`by -= we now have represent the perfect ex- jc priyate^liti^ntevcalling^prt/them tb.^lboritiwori whose loans were rejected' > pression of the political conflict of ideas C'actas subsritute^td'enfqrce. exTsting ^ BecaUse.bf'sexbi^^Amendments'toi- and pressures," says a former Carter l\ ruTta'and. the' federal product7sa?ety law^jalsq^J Administration official. "Can Ronald Reagan really develop a national constit * " Increasingly during th'e` past'decade;p.. pectirig'&ft'-j^ Noer^e^Wvi uency to override the provincial and sec toral political power centers?" Headed for court ... ^M^iwSe0^^gjti5MS.:;'cait:.jSringci>rivatf C /.'ulationsj A ' nurhtmr-'of^Iawyera" in/ ;'suits underfs'ucHJawa'zi the Occup "diverse fiel&'jndJ&tej'noiv,1^however^;^tioftel ^Safety! Healtii'A'ct'wher<.- Nor is modifying existing regulations that^private'pa^iM'^rill^more'^mdj^..Enforcement>has`^nefsdl^been as- an easy process. If a rule has become more ^accept" that' invitation . theT; Turned.to Be a. government'monopoly. ' filial--and OSHA's $1 billion standard to years immediatefy/aTieadr^.^L;-;*'^-^; Fqif^corporatioh3i.\there? are clear " control workplace lead exposure is a i:In pollution, amtniversies^for: ex-% differences, between, fighting the: gov-,. prime example--it can be changed only /,, ample;;"the'fact''thatthe federal govV; ' ernment anS a private plaintiff. Most through the same administrative process er^ent is,cuttiiig backite litigatioilU "who'have been involved in both kinds-'.; by which it was created: a series of pro- :may.very'wellincreasepriyatelitigitTof battleSiopt for th'eriatter,-`T.wouId-'; \posals, hearings, written comments, and negotiations that often takes years. "Our '.tion/''jij^^..W{^iungt^ attoriiey Tratber/face a private litigant any. day ; ' James ^ ITourihaj^.<ffteimaifofThe.-Athan''ffie"'government,'^ says' 'Clear- major problems are with regulations that are already in place," says Reagan health adviser and Washington (D. C.) lawyer C. Joseph Stetler. The Reagan deregulators will ulti mately fight their battles in an arena until now used primarily by industry in opposing regulations: the courts. Con jTmenVjob?' ^ ..... ^ gress has written many of the major rlitigahts jrather^ffian by `the EquaU^usually"tries to establish a~general; i environmental and health laws in Re ^EmploymentiOpportunity,i.Cpmmisi^^'[principle, forcingaringle target.com-;- tailed fashion specifically to deny the "sionl'And" a" host / of'other.'lawsiv1:' rianv to defend a'.'practice for the- implementing agencies room to maneu `tin government liti- ver. These laws also open the way for ralfy.can't 'just-pay.. citizens to complain to the courts if the statutes' mandated goals are not fully - *. -- ^ ridTf theml.They' 'A'p^ferable eayeri'^.'T^V cbncept'bfjwantT lot'more than .that,"'explainsv2 carried out Several laws administered _ 'private at^rn^V^neral dafe'. back`h ^Peter ;;B.rFreem'ajv;fpf .;Chreago/. ao" :; by the epa, for example, dictate the lev t *t^%^.Cl^^n.du^ftrI&XO4!^>,.^.r"ii^.,itaon.jconsumef' litigation.pA els of technology required to achieve well lembeddediinahritriisfTaw.'tiiat'^" broad order Von by^the'government clean air or water, instead of leaving the method to the agency's discretion. Many of these same laws include provisions making it easier for people to sue. "It's a result! -3 try'foe? federal* gofferainehL^Durinf.^^av[be far'more.expensive thantheV] r the 1970s. the notion' gained `general :','cohsequences' of; a."private?suit in'7; serious possibility that the courts could . 'ipopularitylm.Congress- Thus,; when .f ..which,';'says. Mozart G7. Ratner,''a" prevent the Administration from achiev [ . the lawmakers in 1974 gave the Fed-,: - Washington . (D. C.) - labor lawyer,.' ing its deregulatory ends," says Ronald Levin, administrative law expert at Washington University in St Louis. GOVERNMENT BUSINESS WEEK: March 9. 1981 65 UCC 013362 Calculating the cost of government regulation In his televised report to the nation on the economy on Feb. 5, President Reagan said that "altogether, regula tions . . . add $100 billion or more to the co3t of the goods and services we buy." Reagan's estimate--which is highly controversial--had its genesis in the computations of Robert DeFina, an economist formerly with the Center for the Study of American Business at Washington University in St. Louis and now at the Federal Reserve Bank of New York. According to Murray L. Weidenbaum, the new chairman of the Council of Economic Advisers and a former director of the St Louis center, DeFina made a "pioneering effort" in 1976 to compute an aggregate .mea sure of the total cost of regulation. In the book The Future of Business Regulation: Private Action and Public Demand, Weidenbaum wrote that De Fina "culled from the available litera ture the more reliable estimates of the C03ts of specific regulatory programs. By using a conservative estimating procedure, he put the figures on a con sistent basis and aggregated the re sults. He found the total [for 1976] to be approximately $66 billion, consist ing of $3 billion of taxpayer costs to operate the regulatory agencies and $63 billion, or 20 times as much, for business to comply with regulations. Thus, on the average, each dollar that Congress appropriates for regulation imposes an additional $20 of costs on the private sector." The compliance costs included an estimated $25 billion for paperwork alone. Multiply by 20. In a paper published last November, Weidenbaum prepared a "rough update" of the DeFina estimate by applying the multiplier of 20 to budgeted administrative costs for more recent years. He came up with total compliance costs of $115.5 billion for 1979 and $126 billion for 1930, includ ing paperwork costs. The total is, of course, an approxi mation that does not stem from a rig orous cost-analysis. Moreover, the off setting economic benefits of regula tion--usually more difficult to measure than costs--play no part in the calcula tion. . every additional 1% reduction in air Commission. Unlike the epa, the cpsc is The case for personal protection, how borne pollution was $45 million, accord wholly independent . of the executive ever, has been significantly weakened by ing to the American Iron & Steel Insti branch, although Reagan can appoint a the National Institute for Occupational tute. The industry claims that it has now new chairman. Hearings begin this Safety & Health's recent recall of removed 96% of the air pollutants and month on renewing the CPSC's funding, 300,000 faulty firefighting and mining that the cost for each additional 1% will which expires on Sept. 30. There is seri respirators. And on Feb. 17, a niosh- be $1.2 billion by 1982. ous talk on Capitol Hill of abolishing the funded study found that some hazardous Congress must decide by Sept. 30--the agency altogether or limiting it to an substances can easily penetrate protec Clean Air Act's expiration date--what educational body that would perform tive gloves used by millions of workers. changes it will make. Utilities, steel pro studies and print brochures about dan Reagan's deregulation strategy' will ducers, and coal companies say they gerous consumer products but would not also affect most other areas of govern believe in the goal of the act and do not have power to set regulatory standards. ment want it dismantled. -However, industry Senator Robert W. Kasten Jr. (R-Wis.), energy. As one of his first acts on will ask for some significant changes-- chairman of the Senate Commerce Com becoming President, Reagan eliminated for example, relaxation of air-pollution mittee's consumer subcommittee, has price controls for oil, and he is planning compliance deadlines, simplification of asked Reagan not to appoint a new CPSC to speed up the decontrol of natural gas some technology-forcing standards, and chairman until the agency's fate is de wellhead prices. The Administration far more reliance on independent panels cided. also wants Congress to weaken the 1978 of scientists to set standards. But Repre Reagan's biggest regulatory headache Fuel Use Act, which requires utilities sentative John D. Dingell (D-Mich.), is likely to be OSHA because that agency and large industrial plants to convert chairman of the House Energy & Com touches more individual companies than from oil and gas to coal. Until Congress merce Committee, and his counterpart. does any other arm of government ex acts, the Energy Dept.'s Economic Regu Senator Robert T. Stafford (R-Vt.), cept the Internal Revenue Service. Con latory Administration (ERA) will ease up chairman of the Environment & Public gress will do little to untangle osha's on enforcing the programs and be more Works Committee, are opposed to major myriad regulations this year. Senate La generous in allowing companies tempo changes in the law's goals. bor Committee Chairman Orrin G. rary- exemptions to use natural gas. Protecting consumers Hatch (R-Utah) Says he is taking a wait- In the nuclear area, the Administra and-see attitude. Likewise, osha's new tion will move to promote wider use of administrator, Thorne G. A uchter, talks nuclear-generated electric power by- No matter what Congress does with only in'general terms of trimming back. streamlining the Nuclear Regulatory the clean air law, Reagan can have a sig But economists including the omb's Commission licensing process, which nificant effect on the epa, which by mid Miller have long argued that worker pro now takes as long as seven years. summer must issue more than 100 new tection can be most efficiently achieved autos. The industry is asking the regulations, all of them extensive and through personal-protection devices such Reaganites to roll back some emissions complicated. He has already taken the as earplugs or respirators and not standards from 1981 to 1930 levels, first step by appointing Ann M. through osha's approach: altering the streamline the process for certifying Gorsuch, a Colorado attorney who has workplace by means of noise-dampening compliance with those standards, and participated in suits against epa regula equipment and emission-reducing de freeze safety regulations. Ford Motor tions, as administrator. Through his ex vices. The Supreme Court will take up Co. estimates that these changes would ecutive power over the agency, Reagan this issue for the first time when it rules save the industry as much as $5 billion can also to some degree control the this year on osha's $656 million cotton- annually by 1985. Says Thomas A. course of environmental rules. dust standard, which orders the textile Staudt, vice-president of marketing at But Reagan has far less power over industry to install controls to reduce American Motors Corp.: "We've carried the agency that will confront Congress chronic lung disease among workers. the biggest burden in the world market with its second major debate on deregu The industry contends that respirators in regulations on the production of vehi lation: the Consumer Product Safety are enough. cles. We see a far greater future pros- 66 BUSINESS WEEK: March 9. 1981 UCC 013363 GOVERNMENT pect for an alliance [with government]." food. Congress is likely to modify the Delaney Amendment, which bans food additives bearing any trace of sub stances that have been shown to cause cancer in animals. employment. The eeoc is likely to change its course by defending individu als rather than pursuing its recent policy of suing on behalf of large classes of workers. "Well be claims adjusters, pure and simple," says a commissioner. The eeoc can also be expected to move away from hiring goals and timetables. transportation. The department's urban mass transportation rule rcquir- i ing that mass transit be accessible to j handicapped and disabled persons-- which has the effect of compelling ex pensive subway modifications and new bus purchases in many cities--is a prime target of the Bush task force. economic regulation. Under the Car ter Administration, substantial price- and-service deregulation was achieved in the airline, trucking, railroad, and bank ing industries. Communications will un doubtedly be next, though the initiative will come more from Congress, especial- j ly from Senate Commerce Committee j Chairman Bob Packwood (R-Ore.), who is particularly interested in the broad cast area. The Administration is likely , to delay action on telecommunications deregulation, however, until the six- year-old antitrust lawsuit against Amer- ' ican Telephone & Telegraph Co. is final ly resolved. The Securities & Exchange Commis sion will probably continue streamlining : and simplifying disclosure processes. Chairman-designate John S. R. Shad is likely to downplay corporate governance 'and put greater emphasis on the ability of companies to raise money. Business would like to see the SEC push for weak ening the Foreign Corrupt Practices Act and prod its Enforcement Div. to con- j centrate on major violations of securities law rather than pursuing and often j settling many minor cases. Controversial Enforcement Div. chief Stanley Sporkin J may stay on. j If all these regulatory changes are. made, the effect on the economy and on the operating environment for business j could be enormous. And even though the political process will doubtless force j modifications in the grand design, the j chances of substantial reform are never theless bright. Says Alexander B. Trow bridge Jr., president of the National Association of Manufacturers; "I don't think the election was a mandate to undo the entire framework of regula tions. But it was a general statement that we've overdone this process and overburdened the private sector. This Administration will push that view far more than [have] previous ones." GOVERNMENT LICC 013364 Mf * . BUSINESS WEEK: March 9. 1981