Effective date. The regulation promulgated above, 16 CFR Part 1115, shall become effective March 21, 1974. (Secs. 15(a), (b), 27(b), (e), 30, 86 Stat. 1221, 1228, 1231 (15 U.S.C. 2064(a), (b), 2076(b), (e), 2079)) Dated: February 13, 1974. SADYE E. DUNN, Secretary, Consumer Product Safety Commission. [FR Doc.74-3847 Filed 2-15-74;8:45 am] ATTACHMENT 8 Hon. LEE METCALF, CONSUMER PRODUCT SAFETY COMMISSION, Chairman, Subcommittee on Budgeting, Management, and Expenditures, Committee on Government Operations, U.S. Senate, Washington, D.C. DEAR MR. CHAIRMAN: This letter is in response to your February 22 request for the views and recommendations of the Consumer Product Safety Commission with respect to the success of section 27(k) of the Consumer Product Safety Act and comparable provisions contained in S. 704, the "Regulatory Agencies Inde-, pendence Act.' The Commission believes that it is too early to determine the effectiveness of the budget process as outlined in section 27 (k) since we are still in the first budget cycle. The Commission is, however, pleased to describe its implementation of section 27(k) and offer its views on comparable provisions contained in S. 704. Section 27(k) (1) requires that whenever the Commission submits any budget estimate or request to the President or the OMB, it must concurrently transmit a copy to the Congress. Interpretation of section 27 (k) (1) varies among the parties involved, primarily with respect to the scope of the material that must be provided to the Congress. The Commission has taken the position that a budget request is a process, not merely the submission of a resource level statement. As such, the request includes supportive justification whether submitted formally in writing or presented orally in the course of hearings and negotiations. Thus, in the implementation of section 27(k) (1), Congress is assured of receiving all information relevant to the Commission's budget request, including information supplied to OMB and that arising in OMB/Commission budget sessions. On the other hand, S. 704 would have the agencies named therein submit directly to the Senate and House of Representatives their estimates and requests for regular, supplemental, and deficiency appropriations. Those estimates and requests would not be subject to change upon direction by any other government agency. Further, the language contained in S. 704 appears to prohibit the agencies from concurrently transmitting to OMB a copy of an appropriations estimate or request submitted to Congress. The Commission is unaware of any reason that would justify such restraint. The Commission considers the approach provided in section 27(k) (1) to be preferable since it permits concurrent transmission of budgetary information to the OMB and Congress. S. 704 would require that any communications to Congress respecting legislation made by the agencies named in the bill could not be submitted to, or be subject to change by, the OMB or any other authority. This appears to prohibit the agencies from sending information copies of their views on legislation to the OMB after those have been submitted to Congress. Further, S. 704 would permit the agencies to comment to the OMB upon legislation submitted by that office without providing a copy of such comments to the Congress. The Commission believes it preferable to have Congress and the OMB concurrently apprised of an independent agency's views on legislation regardless of who initially requests those views. This approach is reflected in the Commission's interpretation and implementation of section 27(k)(2). We trust that the above information is responsive to your inquiry. Sincerely, RICHARD O. SIMPSON, Chairman. ATTACHMENT 9 STATEMENT OF RICHARD O. SIMPSON, CHAIRMAN, U.S. CONSUMER PRODUCT SAFETY COMMISSION BEFORE THE COMMITTEE ON COMMERCE, COMMITTEE ON GOVERNMENT OPERATIONS, U.S. SENATE, APRIL 3, 1974 Mr. Chairman, the Consumer Product Safety Commission welcomes the opportunity to appear before this distinguished panel to express its concerns with respect to a Federal practice which appears to be diametrically opposed to the intent of the Congress when it created this Commission. The Commission takes quite seriously its charge to operate as an "independent regulatory commission". This charge was established by the language of the law and is supported by the legislative history of the act. It is our belief that Congress intended to create a strong agency, removed as far as possible from the influence of partisan politics or political controls. Indeed, it should not be captured by any special interests. We would point out that the Consumer Product Safety Act itself has unique provisions which bear on the subject of the independence of this Commission. We would first like to refer the committee to section 4(a) of the Consumer Product Safety Act which states that "an independent, regulatory commission is hereby established..." Later in that section Congress stated that the Chairman, when so designated, shall act as Chairman until the expiration of his term of office as Commissioner. As you are probably all aware, this provision is unique among federal regulatory agencies. Section 27 (k) of the Consumer Product Safety Act goes to further lengths to ensure independence by describing a different means of insuring that budget estimates and requests are concurrently transmitted to the Congress and OMB and that any legislative recommendations, testimony or comments by this Commission are also concurrently transmitted to OMB and the Congress. Section 4(g) (2), prohibiting employment by a Commissioner or senior official of the Commission with a manufacturer subject to regulation by CPSC for a period of one year after leaving the Commission, is clearly intended to discourage undue industry influence. The Commission's policy of openness in the conduct of its business furthers this intent. I refer you to these sections to demonstrate our bases for believing that the Consumer Product Safety Act is Congress' latest expression of what it considers an independent regulatory agency should be. We have sought diligently to adhere to that expression and believe, to date, we have been successful. This Commission is aware of the long-practiced, but unofficial system of politica. clearance of key management personnel in Federal agencies. We are further aware that the process is one which has not been totally without the approval of the Legislative Branch, as well as the Executive Branch. In fact, the system of political clearance has been discussed before the Senate Committee on Post Office and Civil Service during hearings relating to the Civil Service Commission. It may well be an appropriate process for non-regulatory agency personnel. Indeed, it would be almost impossible to imagine an Administration functioning without the ability to ensure that those in policy-making positions in the Executive Branch can and will be advocates of that Administration's policies and programs. It is not, however, in our view, an appropriate process with respect to regulatory agencies-independent regulatory agencies. And that, Mr. Chairman, is the keystone of our complaint. The Consumer Product Safety Commission has diligently and professionally handled personnel recruitment, and has made its selections for key management positions. Throughout the screening process, the overriding criteria were "interest and competence," and at no time did we ask for the political affiliations of the candidates. As required, we have forwarded to the Civil Service Commission all of the information and documentation required by its regulations in order to effect the appointment of our management selections. To date, we have not received Civil Service Commission concurrence in most of these appointments. We have been advised by the Civil Service Commission that White House clearance was required and has not been received on our non-career candidates. A letter of protest with respect to this clearance process was sent to the Chairman of the Civil Service Commission. Copies of that letter were made available to appropriate Members of Congress and to the White House. The thrust of the response from the Civil Service Commission was that this political clearance process is a custom which has been adhered to by all parties involved over a period of time, and should the Consumer Product Safety Com mission not agree that such a procedure is appropriate to its functions, the Civil Service Commission would suggest that those for whom clearance was required be submitted as candidates for career status, rather than "Schedule C" status. And there we find another side to the coin. Surely, it would not be appropriate nor proper to appoint an entire top management staff "set in concrete" through the career Civil Service, to provide support and direction for an independent, regulatory commission. Political and other changes in public attitude will be reflected in time by the changing make-up of the Commissioners. The Commissioners must have the ability to also bring about desirable changes in the Commission's management personnel. Unlimited tenure to key management personnel could result in making the staff more powerful than the sum of the Commissioners, or, in essence, cause the tail to wag the dog. This brings us to the point, Mr. Chairman, of seeing the total nondesirability and, in fact, conflict of interest involved in a political clearance process when independent regulatory agencies are involved. It is not only the "evil" we decry in this instance, it is the "appearance of evil" and the opportunity for loss of confidence. The average citizen believes independent means just that. The public's cynicism and growing lack of faith in the institutions of government must not be ignored. The policies and programs such key management personnel should advocate, however, are not Administration programs-or Congressional programs or any partisan programs. These people are representatives of a Commission charged with quasi-judicial regulatory functions, which can only be performed properly in a non-partisan atmosphere, an atmosphere of what is best, to remove or remedy "unreasonable risks of injury to consumers" than what is best to forward (or deter) the Administration's programs. A review of the regulations prescribed by the Civil Service Commission in Title 5 of the Code of Federal Regulations, Chapter 1, Part 9 at Section 9.20 shows that non-career executive assignments are allowed only when it has been determined that there is a need to fill the position by a person who will either advocate an Administration program; support or develop political policies of the Administration; or serve as a principal or personal assistant to a Presidential appointee or other key political figure. As previously mentioned, none of these three categories, in the opinion of the Consumer Product Safety Commission, fits precisely the non-career executive assignments we believe appropriate for an independent regulatory commission. I have asked our General Counsel to look into the system of appointing socalled "super-grade" non-career executives. We find that there is no statutory or even Executive Order basis for the three non-career categories described above. It therefore appears to this Commission that in the case of independent regulatory commissions the Civil Service Commission should create a separate category of non-career executive assignments solely for these independent agencies. The Commission has no desire to operate "in a vacuum" or to be removed from the realities of life. There is a political balance provided for in the appointment of the five Commissioners and, we believe, appropriately so. It should provide a bi-partisan balance, and we believe it does. The Commissioners are appointed by the President of the United States with the advice and consent of the Senate. The Chairman is designated by the President of the United States. In both of these procedures, it is expected that there will be scrupulous examination-by the White House through its clearance processes, and by the Senate through its confirmation hearings, and Floor vote. The Commission has an office of Congressional Relations which seeks to respond to the needs and requests of the Congress in a non-partisan manner. The directions and policies of the Commission are on view for all to see, to participate in, and to criticize. The independence we seek, Mr. Chairman, relates to policy direction, decision making, management activities, emphasis, attitude, tone. We do not seek independence from accountability, and, in fact, are finding the checks and balances both stimulating and helpful. The Commission was, as you know, the subject of oversight hearings last week before the House Committee on Interstate and Foreign Commerce. Oversight is a proper and appropriate function of the Congress, and certainly provides an accounting and a review. Further review is provided by the appropriations process which incorporates the review of the Executive Branch through the Office of Management and Budget; the assessment of the appropriate legislative committees in oversight and authorization; and the detailed inspection and guidance of the Appropriations Committees. And there is the ultimate opportunity, through the legislative process, to extend, amend, authorize, appropriate, or veto the programs and funds of the Commission. We do not view this issue as a partisan one, we are not suggesting that this Administration is seeking to control in some sinister way the activities and actions of the Consumer Product Safety Commission. We are saying that political considerations applied to staff are inappropriate and, in fact, wrong, when that staff serves in an advisory capacity to the Commissioners of an independent agency created to regulate consumer product safety in an even-handed, impartial, nonpartisan manner. We believe, in fact, that it is inappropriate in any independent regulatory commission, which has a political balance requirement of its commissioners, and performs a quasi-dudicial, regulatory function. In essence, Mr. Chairman, it is the principle with which we take issue, not the individuals involved. The "political clearance process" is not new: The Consumer Product Safety Commission is new, and the actions we take, whether we are totally aware of it or not, are precedent setting. We would be less than honorable, Mr. Chairman, if even as we strive to remain free of capture by those whom we regulate, we became willing captives of political partisans. Any "policy" clearance required for these individuals should be solely the judgment of the person or persons charged with the executive responsibility in the agency concerned. If the Congress agrees that a new type of non-career supergrade position description is needed for independent agencies, it would be helpful if the Congress would so inform the Civil Service Commission, perhaps by a simple "Sense of Congress" resolution. Absent a resolution of this problem by the CSC in setting up a new category for key, non-career staff positions in regulatory agencies, we believe legislation is desirable to bring about the change. If this Committee agrees, we would be pleased to propose legislative language or to comment on such legislation at an appropriate time. Mr. Chairman, we would be pleased to answer your questions. [Whereupon, at 4 p.m., the committee recessed, to reconvene at 10 a.m., Monday, November 25, 1974.] REGULATORY REFORM-1974 MONDAY, NOVEMBER 25, 1974 U.S. SENATE, COMMITTEE ON GOVERNMENT OPERATIONS, Washington, D.C. The committee met, pursuant to notice, at 10:05 a.m., in room 3302, Dirksen Senate Office Building, Senator Walter Huddleston presiding. Present: Senators Huddleston and Brock. Also present: Robert Bland Smith, Jr., chief counsel and staff director, W. P. Goodwin, counsel, Eli Nobleman, counsel, and Elizabeth A. Preast, chief clerk, Committee on Government Operations; Vic Reinemer, staff director, E. Winslow Turner, chief counsel, Alan Chvotkin, professional staff member, and Lyle Ryter, minority counsel, Subcommittee on Budgeting, Management, and Expenditures; Alvin From, staff director, and Lucinda T. Dennis, chief clerk, Subcommittee on Intergovernmental Relations; and Richard A. Wegman, chief counsel and staff director, Subcommittee on Reorganization, Research, and International Organizations. Senator HUDDLESTON. The committee will come to order, and we will continue with our inquiry into a possible commission on regulatory agencies. The first witness this morning is Mr. Thomas E. Kauper. Mr. Kauper, please identify yourself and your title and the gentleman with you for the record and proceed with your statement. STATEMENT OF THOMAS E. KAUPER, ASSISTANT ATTORNEY GENERAL, DEPARTMENT OF JUSTICE ANTITRUST DIVISION, ACCOMPANIED BY JOE SIMS, SPECIAL ASSISTANT Mr. KAUPER. Thank you, Mr. Chairman. I am Thomas E. Kauper, Assistant Attorney General in charge of the Antitrust Division, Department of Justice. I am accompanied by my special assistant, Joe Sims. I am pleased to be here today to discuss the views of the Department of Justice concerning a number of bills which would create a national commission to study the impact of the regulations promulgated by the various regulatory agencies. S. 4167 would establish a National Commission on Regulatory Reform to evaluate the effect of Federal and State regulation on inflation, competition and the public interest. The Commission would be composed of three representatives from the private sector, three senior officials of the executive branch, two Senators and two Members of the House of Representatives, all to be selected by the |