Regulatory agencies to see impact of Republican contract

Published: March 01, 1995, By MacArthur, Malcolm D.

It's already apparent the Republican House of Representatives' Contract with America and other proposals to limit the size of the federal government aren't just idle talk.

For the first time in more than 50 years, it appears efforts to reduce the size ot the government, frequently talked about but never accomplished, could be successful.

Housing and Urban Development Secretary Henry Cisneros, perhaps, seeing the handwriting on the wall, recently announced the agency would seek to cut about 4,500 employees, a significant portion of its work force. Such cuts will substantially impact the agency's ability to administer programs under its jurisdiction.

These efforts will significantly reduce the size and scope of executive departments like HUD, and many regulatory agencies where activities directly affect converters. They include the US Environmental Protection Agency Occupational Safety and Health Administration and the Food and Drug Administration.

The Republican Revolution has taken place in the Congress, in the Senate and House, and with respect to their staffs and committees, which have already been significantly reduced. However, the Republican majority will be able to exercise power in downsizing the regulatory agencies and their operations.

The two ways Congress has exerted its influence over regulatory agencies has been to limit the size of the agency's budget and to conduct oversight hearings with respect to agency practices.

In the past, whether the Senate or House was controlled by the Republicans or the Democrats, there was a reluctance to reduce the size of government agencies. Even during the so-called antigovernment Reagan era, the federal government continued to increase. Thus, while Congress had the power through its budget review to reduce the agencies, it rarely did so.

Oversight hearings by committees having jurisdiction with respect to specific agencies were and continue to be a major method of influencing policies. The prospect of an agency head having to testify before a congressional committee and to answer for conduct considered antithetical, has caused agencies to be more responsive and careful. This is true when the agency makes a controversial decision on whether to regulate or prosecute a company or industry. Then officials know they must go to greater lengths to justify a decision.

The third method will be a risk assessment measure designed to require agencies to conduct an analysis of the risk posed by a substance or activity and the cost of regulating that risk. If such a law is enacted, it could have important implications for agency policies.

The key will be in defining the nature of agency activities that require analysis. Will it be required every time the agency proposes regulations? Or will it only affect major policy decisions by the agency and not every regulatory effort?

Only time will tell how far and with what impact such a law would have on regulatory agencies. The requirement of a risk and cost/benefit analysis will slow the regulatory process in many cases, particularly if the number of personnel has been reduced. In some cases this could be bad for industry, as, where industry needs the guidance provided by the regulations in business conduct.

The Republican victory will have an effect on the EPA environmentalist agenda. It's believed the compromise Superfund and drinking-water legislation, which the Administration supported in the 103rd Congress, is now academic. Those and other environmental issues, proposals floated by Republicans last year and rejected by the Administration, might be the starting point for rewriting environmental laws.

One of the biggest impacts will be the massive staff turnover on the key committees that write environmental legislation and oversee EPA's operations. The House Energy and Commerce Committee, which had a large staff, will lose most of its personnel when Republicans take over. This means environmentalists and EPA could lose some of their strongest allies in the battle for Superfund reorganization, Safe Drinking Water Act reauthorization and most other bills.

Superfund might be a difficult fight for EPA, because taxes that fired it expire at the end of 1995. This gives Republicans an opportunity to pass a bill that environmentalists and the Administration don't like, but President Clinton would probably have to sign it to keep money going to the program.

The Republican Congress is likely to delve quickly into risk assessment with its required cost/benefit analysis.

It remains to be seen how the FDA will be affected by all of this. It's well known that conservative Congressional leaders would love to have FDA Commissioner David A. Kessler's scalp, though he has strong support in the Clinton Administration.

Attempts at gutting the agency, by reducing its budget, could be a two-edged sword. Delays in obtaining FDA clearances for food-contact packaging, such as food-additive petitions, are already a serious problem and will get worse if the number of FDA personnel is substantially reduced.

Malcolm D. MacArthur is legal counsel to the Flexible Packaging Association, other trade groups and corporations.