Mr. STATLER. The effect may relate, for example, to consumer

costs.

Is there any one agency as to which you most commonly either do intervene or would like to intervene?

Mr. KAUPER. No, I do not think I should try to single out a particular agency at this point. We have intervened before the ICC, the CAB, the Federal Communications Commission. We have been involved with the SEC, but I do not think that I will try to single one out in particular.

Mr. STATLER. How about EPA or the Department of Agriculture? Mr. KAUPER. We had some involvement with both but not in terms of making any formal intervention.

Mr. STATLER. Any other departments?

Mr. KAUPER. Of the executive branch?

Mr. STATLER. Executive branch departments or other agencies. Mr. KAUPER. There are very few of those that really run any kind of formal proceeding in which we would intervene. We supply our views on a variety of matters in other departments, but there are not very many of them that are directly involved in economic regulation as such.

Where we are dealing with other kinds of programs, they may ask for our views on a particular matter and we supply them, but it is not a matter of formal intervention.

Mr. STATLER. The Department of Agriculture clearly has jurisdiction over areas of economic regulation.

Mr. KAUPER. Yes. Much of that may be done through informal procedures. There are some formal procedures with respect to marketing orders and so on. I am not sure that we ever formally intervene in one of those proceedings.

Mr. STATLER. Intervene may be too formal a word; but participation in any way, such as a letter of advice?

Mr. KAUPER. What you are asking us to do is provide information which I think is going to be pretty hard to categorize. Here again there may be examples, but I doubt if we can give you an exhaustive list of correspondence, for example.

Mr. STATLER. What I am also getting at, and I did not see it in your testimony, relates to one of the provisions of S. 4167, which you commented on extensively. One of the major differences of that bill is the fact that it includes in its ambit of jurisdiction many of the regulatory activities which are exercised by Government departments that are outside the so-called seven or eight traditional independent regulatory agencies-among them the Environmental Protection Agency, the Occupational Health and Safety Administration. The economic impact of regulation in these areas may be even greater than that of some of the independent regulatory agencies that you have cited.

Mr. KAUPER. You may well be right in terms of impact. However, I think our concern, indeed, our impression of what this Commission was supposed to set out to do was to examine essentially economic regulation. I do not necessarily mean by that regulation which imposes an economic cost, but regulation which goes to the basic economic structure and economic decisions within a given marketplace such as entry, pricing and so on.

I am sure one could say that logically one ought to look at things such as occupational safety control, food and drugs, but it seems to me that there is a marked distinction between that kind of activity and the kind of activitity that is designed and has as its reason for existence the actual betterment of economic performance as such. My own feeling is that the Commission would be better limited to that than going over into some of these other areas that are also a form of regulation, but with a different reason for existence.

Mr. TURNER. If Counsel would yield on that point, this is one concern Senator Metcalf had during the hearings, that we have over here a body of economic regulators who are concerned with prices. and rates and costs, and that in turn has an effect on the inflation or stagflation. Then over here there are a number of independent agencies that are responsible for safety and health, and you are saying that you do not see this study commission moving into that area, except as it relates directly to economic evaluation.

Mr. KAUPER. I think the major thrust ought to be in the former area. The question was put in terms of looking at several other agencies, where I think generally-I think I would be right about this are the agencies that are listed in the bill. None of them have direct economic regulatory function but are instead worrying about issues of health and safety.

Mr. STATLER. The Food and Drug Administration: Market entry is involved there in terms of what drugs you can put on the market. Mr. KAUPER. Yes, that is true, and you can find other areas where that is probably true, as well. But presumably the reason for denying entry is not a notion of how one achieves the best economic performance of the industry, but instead that the drug is unsafe. I would assume that would be the reason.

Mr. STATLER. I just have a few more questions.

As chief of the Government's antitrust responsibility, what is your personal view concerning the fact that antitrust responsibilities are split between the Justice Department and the FTC? Would enforcement be improved, if those functions were to be merged in any one agency?

Mr. KAUPER. That has been a subject of debate, I suppose, for many, many years. My own feeling is that the existing relationships are reasonably good ones, that there is something to the notion that each one keeps the other on its toes, to some extent. It is always suggested that it creates a high degree of confusion. I really do not think that is the case, and I would be most reluctant, I think, to see a change in some really dramatic form from that jurisdiction.

Mr. STATLER. In other words, after you leave government, you will not be writing an article saying that the functions ought to be merged?

Mr. KAUPER. I would doubt it.

Mr. TURNER. You do feel that the Department of Justice should have continuing communication with the regulatory agencies informing them of Justice Department policy, do you not?

Mr. KAUPER. Of course.

Mr. TURNER. If that is so, then why did you not inform the Federal Communications Commission that you were going to bring a case against A.T. & T.?

43-362-75-pt. 1-17

Mr. KAUPER. I think the position we would take on that basically is we were filing an antitrust suit. The question you put to me, at least in the terms of the way I answered it, was would we keep them informed on matters within their regulatory jurisdiction? Would we appear before them and so on?

The answer is yes.

Mr. TURNER. They are currently conducting an in-depth investigation or hearing into the divestiture of Western Electric from A.T. & T., the very subject and nature of the case that you filed in

court.

Do you intend to utilize them as a witness for you in court on this case?

Mr. KAUPER. I am not going to comment any further on the A.T. & T. case.

Mr. TURNER. Do you see any litigating obstacles to your going forward with your case while they are going on with theirs?

Mr. KAUPER. I do not.

Mr. TURNER. Do you see any litigating obstacles for their going on with their investigation while you are conducting your discovery and your litigation in the Federal courts?

Mr. KAUPER. Probably not.

Mr. TURNER. Would you agree that this is something that should be of substantial oversight for this Committee?

Mr. KAUPER. The particular case?

Mr. TURNER. The particular objectives of both the regulatory commission and the Justice Department concurrently being pursued. Mr. KAUPER. Obviously the question is of jurisdiction.

Mr. STATLER. To follow up on another question, which I believe the chairman raised, do you presently feel that the resources and the funds in the Antitrust Division are sufficient, leaving Nick Johnson's comments aside, to carry out the mandates that Congress has given your agency?

Mr. KAUPER. Clearly we can always use more. We seem to be able to keep our personnel occupied. At the same time, one has to recognize that the Department's request is a part of the overall budget request, and I am simply not in the position to make an intelligent comment as to how one trades off extra people here against the cuts somewhere else.

So I think probably we can use more people, sure, but I am not sure that that is the final judgment; that has to be made.

Mr. STATLER. How about the laws we are administering?
Do you feel they are sufficient?

Mr. KAUPER. Generally they are. There are some things we are still pushing for. At the moment we are pushing for increases in the penalties for antitrust violations. We are pushing for an amendment to the CID statute, to hopefully broaden our civil investigating authority, where I think we are much weaker than we should be. But I think, generally, they are probably adequate.

There are some other things that we are looking at.

We are looking at the interlocking provisions with an eye toward possible amendments, and the question of the fair trade laws. I think the basic antitrust statutes themselves are pretty good.

Mr. STATLER. A final question.

Getting back to regulation in the traditional independent regulatory agencies versus regulation in some of the other independent agencies that are not in the traditional realm of the seven or eight you referred to, or Roy Ash has referred to, do you think it is wise that Congress be excluded from the consideration of problems within the regulatory ambit of those other, the nontraditional independent regulatory agencies?

In other words, should that responsibility of overseeing those agencies and reporting on their regulatory deficiencies be left entirely to the executive branch, to your Antitrust Division or a Council on Wages and Price Stability that has 14 employees, including clerical assistants about whom we are told that there is presently one person working on this project?

Mr. KAUPER. Here again there are two parts to that. I would assume in terms of the operations of those agencies, if what we are talking about is operations, that Congress has some oversight authority as they do over any executive branch agency. I am not sure whether your question is aimed more specifically at this Commission, which I guess I do not view as a congressional oversight kind of operation but rather a study Commission. To me the reason for treating those executive agencies somewhat different for that purpose is, (1), I think there is ongoing study in the executive branch itself, and (2), most of those agencies are not really involved in economic regulations. That goes back, I think, to what you and I discussed a few minutes ago. Mr. STATLER. Is your own Department study limited to the selected independent regulatory agencies?

Mr. KAUPER. In large part it is; yes.

Mr. STATLER. Finally, does your testimony today have to be cleared through the Office of Management and Budget?

Mr. KAUPER. I assume it does; yes.

Mr. STATLER. Thank you.

Senator HUDDLESTON. Thank you, Mr. Statler.

On the question of the effort your Department is putting into and anticipates putting into antitrust activity, is it accurate to say that you will be devoting more of your budget allocation and more personnel to this area regardless of future appropriations.

Mr. KAUPER. Yes, sir.

Senator HUDDLESTON. Can you give me an indication to what degree political interference is involved with your activity?

Is this one of your probems?

Mr. KAUPER. No; it has not been. That may be the blessing of the particular time when I arrived, but it most assuredly has not been a problem.

Senator HUDDLESTON. But it has occurred.

Mr. KAUPER. I am not an expert on the file. Certainly there is some reason to think from time to time in the past it has.

Senator HUDDLESTON. You have not encountered it since you have been in your present position?

Mr. KAUPER. No, sir.

Senator HUDDLESTON. One final question.

In some regulatory agencies that have been established, Congress has been rather specific in limiting the type of regulations that they are to devise; in others it has given the agencies almost carte blanche authority to set up whatever regulations they see fit.

Has Congress been too restrictive or not restrictive enough, or is there a happy medium we should try to achieve?

Mr. KAUPER. This is probably not the happiest answer of all, but I would suspect there is a happy medium somewhere. I think in circumstances where the Congress has been very specific, has mandated very precise regulatory goals, it has probably achieved those goals, but at the same time, the inflexibility which it creates in the agency makes it extremely difficult to respond to changed conditions. The only way to change them is to come back to the Congress, which is not always an easy thing to do.

On the other hand, extremely generalized delegations I think have posed some difficulties, too. So it is very important, and I would hope this would really be a major part of the thrust of this Commission, to define goals precisely, goals against which regulation is measured, and leave the Commission then, or the agency, to the extent that it does have a program, free to reach those goals with some mandate that it do so in a way that it takes into account competitive consideration and gives very heavy weight to that.

There are difficulties in being very precise.

Senator HUDDLESTON. Does that indicate a desirability that Congress maintain some kind of veto power or a type of approval or disapproval of proposed regulations?

Mr. KAUPER. That is a very difficult thing to make work, Mr. Chairman. I think basically if you are going to have a regulatory scheme, it pretty much has to be entrusted to someone who is going to regulate it. To try to say, you have to have congressional approval or to put it the negative way, the right of disapproval, would probably make the system just incredibly inflexible.

Senator HUDDLESTON. Thank you very much, Mr. Kauper.
We appreciate your lengthy session with us.

The next witness is Mr. James Turner.

Mr. Turner among other things is the author of a book entitled "Chemical Feast."

Would you identify yourself for the record and proceed with your statement.

STATEMENT OF JAMES TURNER, ATTORNEY, WASHINGTON, D.C., AUTHOR OF "CHEMICAL FEAST"

Mr. JAMES TURNER. Mr. Chairman, my name is James Turner. I am an attorney in Washington, D.C., specializing in representing consumer groups and groups interested in advancing the consumer interest. I was a consultant to the Nader organization, Center for the Study of Responsive Law, and wrote the book "The Chemical Feast" which is the Nader report on the Food and Drug Administration. Subsequent to that time I have been involved in questions of food and food regulation, and in that capacity attended the recent inflation summit on food in Chicago where some of these issues were raised. The issues are part of the hearing today.

I believe from my experience in the area of food regulation, on which I was invited to testify here today, I can offer some comments on regulation and what it means to an efficient economy which does not have inflation. I have a statement which I have prepared, and it was