They would not be broad. You would not have an advisory committee for every problem. Where they might be useful is where value judgments rather than quantitative judgments were indicated. I think advisory committees are useful, and you use them as one of the tools in dealing with specific problems, so I think to the extent the bills are wise in providing for them. Senator METCALF. Would we have to put in a proviso that the Commission would be subject to the Advisory Committee Act, or do you think the legislation would take care of it? Mr. ROUSE. I cannot answer the question because I just do not know. Mr. TURNER. Well, I think it has a lot to do with whether this is an executive advisory commission. I think the Federal Advisory Committee Act has a very real role here in this commission. Senator METCALF. But sometimes we go down to the executive department, as both counsels well know, and they say, well, that is not one of the commissions or the committees that is governed by the act. So every time we try to use the disclosure procedures or the distribution of membership over various public interests that are concerned, they say, well, that is just for special sorts of things. But here, where we are talking about oil companies, we have to have expert input of oil information. Or here, where we are talking about bankers, we have to have the expert input from the people who are in the financial community. Or the one that sends me up a telephone pole, is where we are talking about utilities: we just have to have people with utility experience. These public people are just not very helpful, and that built-in bias and lack of objectivity sometimes destroys the whole activity of an overall, broad-based Commission. Mr. ROUSE. You are right, Senator, and I think the way to deal with it is to listen to it all-all, meaning on all sides of the issue-and utilize the Commission's own staff and others to prepare the materials for the commission making the best you can of all of those cases, but utilizing its own judgment. They, after all, are points of view. There is no way of getting around it. Senator METCALF. Mr. Statler. Mr. STATLER. Mr. Chairman, I am sure you will agree with me that the committee is most fortunate in having Mr. Rouse's testimony today. I think it has been some of the most illuminating testimony given by any witness. I say that with a personal bias because I worked with Mr. Rouse-or should say, under him-in preparing the Ash Council's regulatory recommendations, and I can attest to the fact that if we ever do form a study Commission, that Commission would be very fortunate to get somebody with his substantive and administrative expertise serving as a member or chairman, or executive director. Turning to substance and the most troublesome question, and you raised it, concerns what are the real priorities for this study? If you would, Mr. Rouse-and this really gets at the heart of the problems of the regulatory agencies-could you give us, perhaps in shorthand form, what you view as some of the most important areas for this Commission to be looking at? Mr. ROUSE. Well, I will try. Remember that the genesis of this idea stems from at least a preconception that a lot of people have that regulation in one way or another has a negative impact upon the economy, that it contributes to inflation, and so forth. There are some areas where that is not so much a preconception as demonstrable. One area that was raised by your list of questions, for example, and came up several times this morning, is the area of dual regulation. That is the regulation of the same area by the States and by the Federal Government. The utilities area is one; the securities area is another; transportation is certainly a third. My own business, insurance, is a fourth, at least in some areas. It is a problem because the rules are often in conflict, and people who are trying to comply with the regulation find themselves, as a practical fact, disobeying one or the other law. I think there is substantial payoff in dealing with the area of dual regulation because it is a burr under the saddle of every business in this country that is subject to dual regulation. It is also a relatively easy one to handle, or at least to identify how to handle, because the tools for dealing with it are well understood. There is Federal preemption; there are reservations to the States; there is a better definition of what the role of one or the other might be with respect to regulation of those industries, and those are areas where we have already done a considerable amount of work in defining roles. Now that is one area. The second area is one that has been mentioned often about which there has been a lot of study, and where there seems to be apparent insufficiencies in the transportation industry. As I said earlier and I repeat, you would make changes in the nature of that regulation very slowly and in accordance with a very careful plan that looks at the long-term implications of every move you plan to make. However, transportation regulation is an area where there is already much evidence, the commission would have a good start. But I think the real effort of the Commission needs to be on devising the kind of plan I have described. It is not so much, should the field be deregulated, at least in my mind. I think that is reasonably clear, at least through some of these things, not should, but how, at what pace, and so forth, and so on. That is something that has not been dealt with in any specific way. Mr. TURNER. If counsel would yield on that point, I think this would be a good time to ask a question that I had here for several of the other witnesses. That is, looking at areas which are regulated and trying to find out where deregulation might be helpful to the economy or where regulation should remain, do you not think it should also be the mission of this new Commission to look at areas where State regulation is inadequate and where Federal regulation is nonexistent, and I cite an example, the insurance industry. Mr. Rouse. I wish you had not cited that example. I guess I wouldlet me put it this way-this is already a very major undertaking. You are now adding a dimension to it, having added quite a few already, a dimension to it whose importance I will not deny, that is the question of inadequate regulation of certain things that ought to be regulated and might very well be regulated by the Federal Government. Mr. TURNER. I think you would have to look at their economic impact. I think if there was sufficient economic impact, then you would make a value judgment as to whether that were true or not. Mr. ROUSE. But I think that the thrust of this Commission's work ought to be what can we do to minimize the impact of regulation, to make regulation more efficient, not to try to resolve the issue of what ought to be regulated. That is not now. That is a valid question, but it seems to me it is the next question. 43-362-75-pt. 1—11 Mr. STATLER. Were there other priority areas you were going to refer to? Mr. ROUSE. I am not as confident as the four chairmen of the commissions were this morning on their own agencies and the porcesses under which they work. Mr. STATLER. I do not think this committee is quite that confident either. Mr. ROUSE. And so I think that there is a major job to be done, a pretty high priority job, in dealing with the way the regulatory process is organized and administered. It is speeding up, but it is not merely speeding up. It is making more effective the entire process of the agencies. I know, Stuart, that I might now repeat all of the Ash Council recommendations, but everybody knows what they are. Those who produced that proposal wanted to make the administrative process significantly more efficient and to bring to bear on that process considerations and perspectives that are not now used there, but I think this Commission should reexamine the question of single administrators and administrative courts, the consolidation and combination of some of those agencies, the separation of promotion and regulation, and the other issues that the Ash report dealt with. Those should be reexamined because there are valid points against all of them. Nevertheless, the question of making the agencies more responsive is a good one. I was frankly intrigued by the suggestion that somebody made here that the agencies be given a specific tenure, and their mandates and statutes reexamined at the end of that period with a view toward terminating them or continuing them with a revised mandate. One of the advantages of doing that and I think it is an important one is that it makes specific for the Congress a review of the policy under which those agencies operate and seems to me to be key to their operation. The ICC today is not sustaining the motor-carrier industry because they are badly intentioned or anything remotely like it. They are sustaining it because they can see that that is what their legislative mandate is. Mr. STATLER. You are one who has moved in and out of government, from government back to the private sphere and perhaps at some time in the future back to government. There is presently confronting the Congress the age-old problem of how you deal with conflicts of interest, and one way it takes form is the movement into a regulated industry from a regulatory agency that regulates that industry, or vice versa. Do you have any suggestions as to how that problem might be dealt with, or what should constitute grounds for qualification or disqualification along those lines? Mr. ROUSE. I feel we have to make a very serious effort to bring the level of the qualifications of men who serve on these commissions to-well, let me start again, I think we have to make an effort to encourage very qualified people to accept commission positions. I do not think it is ever going to be possible, not in the current framework of those commissions, to make them nonpolitical. So that it seems to me the next reasonable place to go is to make sure that whoever is doing the appointing is not appointing people who are not qualified, or are marginally qualified. As a consequence, I have thought from time to time that it would be useful to have a system similar to what now is utilized in the Federal court systems, and I think somebody alluded to that this morning. That would provide a continuing slate of qualified people from among whom the appointer could select. Now clearly, that all falls apart if whoever is making up these slates is himself subject to undue pressure from one level or another. So I suspect that something similar to the system utilized in the Federal court system might be used, but I would broaden the group of, if you will, electors or nominators to go much beyond. For example, the Communications Bar, the Federal Power Bar, that would be wrong, but you include, I suspect, representatives of the consumer interests, the regulated industries, also as nominators. You know, as I say it, I become overwhelmed with its impracticality but, in the idea of making available to the President a list of qualified people, working around that is what you want to aim toward. You should be able to come up with some good people relatively free of serious personnel errors that apparently have been made in the past. Mr. STATLER. Thank you very much. That is all the questions I have. Senator METCALF. Well, I want to concur. It has been a privilege to have you here, Mr. Rouse; to have the committee, and also to have the benefit of this discussion in your prepared statement, and your experience in setting up a commission such as is anticipated under this legislation. We will certainly carefully consider your advice, and it may be that at some future time you will be up here for confirmation and have some of these words thrown right back at you, as has happened to those of us who have been in Congress a long time; very frequently from some of the speeches we have made a few years ago have been looked up in the Congressional Record. But you have been very helpful, and you have made a contribution. I know that we all appreciate your participation. Mr. ROUSE. Thank you, sir. Senator METCALF. That will conclude the hearings for today, and the next meeting of this committee on this matter will be Monday, November 25, in this room at 10 a.m., at which time we will start off with Senator Taft. At this point we will enter additional information requested and submitted for the record. NATIONAL ASSOCIATION OF REGULATORY UTILITY COMMISSIONERS, Washington, D.C., November 21, 1974. Re NARUC Survey of State Freedom of Information (Sunshine) Statutes and Regulations, in relation to S. 4145, a bill to establish a National Commission on Regulatory Reform. Hon. LEE METCALF, Chairman, Subcommittee on Budgeting, Management and Expenditures, Committee on Government Operations, U.S. Senate, Washington, D.C. DEAR SENATOR METCALF: Pursuant to the recent telephone request of Mr. Vic Reinemer, Staff Director of your Subcommittee, enclosed are four copies of a tabulation, with footnotes, reflecting information the NARUC obtained from its member State agencies in a recent survey of State Freedom of Information (Sunshine) Statutes and Regulations. We earnestly hope the information will be helpful to your Committee in its consideration of S. 4145, a bill to establish a National Commission on Regulatory Reform. If we can be of further service, please let me hear from you. Sincerely yours, WALTER KURYLO, Secretary. |