tions Commission, which has been in existence for 40 years, has bee: trying for 33 of those years to settle a single dispute between two radi stations. In this case, the jurisdictional dispute over broadcasting frequencies between the two stations has been decided several time by the FCC, only to be overruled by a court decision.

Regulatory proceedings such as this one are not only inefficient they also tend to produce huge litigation costs for the regulated in dustries and often may result in the imposition of higher rates an prices on the consuming public. Therefore, the practices and proce dures of these agencies must also be reviewed to determine who inter ests are being served and how best to serve the public interest.

A final task of the Regulatory Reform Commission will be to ex amine State and local regulatory activities as they relate to the Feder: system of regulation. As at the Federal level, it is important that Stat and local governments begin to look more carefully at the goals ‹ regulation and whether they are being achieved in the public interes As Senator Metcalf has so accurately pointed out, most of the costs regulating our public utilities which in turn affect the pocketbooks ( most Americans are imposed not by the Federal agencies, but by Stat and local regulatory activities. Thus, we cannot ignore this segment the regulatory system. The question that the Commission should a dress is: How best can Federal, State, and local governments use reg lation to effectively equate private and public costs and resolve comple and interrelated problems which arise in the context of transportatio land use, energy, and other important sectors?

I think we should acknowledge that the pathway to regulato reform will not be an easy one, that we will face a number of painf steps if we are to take a serious and unbiased look at our regulato system.

We will need to confront squarely the possibility that some sacr social and institutional cows may have to be modified or eliminat We must be prepared to recognize that transition costs must be iden fied and paid in the process of modernizing our regulatory system meet our needs. We will have to develop a better public understandi of the complexities of our regulatory system if we are to achieve ( desired reforms.

As we begin this effort, I would like to echo the President's the when he called for a collective effort on the part of both individu and governments to fight our public enemy No. 1-inflation. Winn this battle requires that we recognize that nearly all aspects of Am. can life are changing faster than ever before but not with equal spe Technical and economic factors are shifting much more rapidly th our legal and social institutions. The traditional patterns of behav in these institutions must be changed if we have any hope of winn the fight ahead. More so than in perhaps any other area of Ameri life, the reform of Government regulation requires a collective resp sibility. Perhaps Pogo's remark best captures the attitude we n adopt, if, together, we are to be successful in this undertaking: have met the enemy and he is us."

The Commission, once it is established, faces an arduous taskthat will bring it face to face with many entrenched interests that the system as it is. Therefore, it is particularly important that

tions Commission, which has been in existence for 40 years, has been trying for 33 of those years to settle a single dispute between two radio stations. In this case, the jurisdictional dispute over broadcasting frequencies between the two stations has been decided several times by the FCC, only to be overruled by a court decision.

Regulatory proceedings such as this one are not only inefficient; they also tend to produce huge litigation costs for the regulated industries and often may result in the imposition of higher rates and prices on the consuming public. Therefore, the practices and procedures of these agencies must also be reviewed to determine who interests are being served and how best to serve the public interest.

A final task of the Regulatory Reform Commission will be to examine State and local regulatory activities as they relate to the Federal system of regulation. As at the Federal level, it is important that State and local governments begin to look more carefully at the goals of regulation and whether they are being achieved in the public interest. As Senator Metcalf has so accurately pointed out, most of the costs of regulating our public utilities which in turn affect the pocketbooks of most Americans are imposed not by the Federal agencies, but by State and local regulatory activities. Thus, we cannot ignore this segment of the regulatory system. The question that the Commission should address is: How best can Federal, State, and local governments use regulation to effectively equate private and public costs and resolve complex and interrelated problems which arise in the context of transportation, land use, energy, and other important sectors?

I think we should acknowledge that the pathway to regulatory reform will not be an easy one, that we will face a number of painful steps if we are to take a serious and unbiased look at our regulatory system.

We will need to confront squarely the possibility that some sacred social and institutional cows may have to be modified or eliminated. We must be prepared to recognize that transition costs must be identified and paid in the process of modernizing our regulatory system to meet our needs. We will have to develop a better public understanding of the complexities of our regulatory system if we are to achieve the desired reforms.

As we begin this effort, I would like to echo the President's theme when he called for a collective effort on the part of both individuals and governments to fight our public enemy No. 1-inflation. Winning this battle requires that we recognize that nearly all aspects of American life are changing faster than ever before but not with equal speed. Technical and economic factors are shifting much more rapidly than our legal and social institutions. The traditional patterns of behavior in these institutions must be changed if we have any hope of winning the fight ahead. More so than in perhaps any other area of American life, the reform of Government regulation requires a collective responsibility. Perhaps Pogo's remark best captures the attitude we must adopt, if, together, we are to be successful in this undertaking: "We have met the enemy and he is us."

The Commission, once it is established, faces an arduous task-one that will bring it face to face with many entrenched interests that like the system as it is. Therefore, it is particularly important that the

Congress and the Executive adopt a spirit of cooperation in reviewing the recommendations of the Commission and pursuing needed reforms. As Boss Kettering once said, "We should be thankful we don't get all the government we pay for." Today, we must make sure we do not get more government than we pay for and more than we can afford. Thank you, Mr. Chairman.

Senator RIBICOFF. Thank you, Mr. Ash.

Before I ask you any questions, Senator Allen has an opening statement he would like to make. Senator Allen?

OPENING STATEMENT OF SENATOR ALLEN

Senator ALLEN. Thank you, Mr. Chairman.

I have another commitment that I had to pay my respects to before coming to this hearing.

President Ford's request that we create a national commission on regulatory reform has met with an immediate and comprehensive response from Congress.

As I look at the number of bills to be considered by us here today and during the remainder of these hearings, I wonder if the President might consider the response too good.

But I suppose coming to Congress with a request that we look into the problems of the executive branch is like walking into a pigeoninfested park with a handful of peanuts.

This is one subject upon which there can be a broad spectrum of support in the Congress. In fact, I would not be surprised to see some agencies start to take serious reform steps voluntarily now that they know we are serious. That, of course, could be too little, too late.

There are three bills before us which would directly establish a reform commission. S. 4145, S. 4167, and S.J. Res. 256, introduced by me. There are also three bills which apparently parallel in intent much of what is contained in the reform commission bills, S. 3604, S. 704, and S. 770.

Finally, there is a printed amendment by me to S. 4145, the original reform commission bill, which would assure that the major differences between my bill and that bill are overcome.

The major differences between the Allen bill and the original bill go to the commission's structure, jurisdiction, and consumer representation determinations. And I note that Senator Percy's new bill concentrates on some of these areas as well.

First, as to structure, my bill would specifically stipulate that the commission members from the executive branch not be chosen from regulatory agencies, but come from nonregulatory agencies which the commission will not be studying, such as the Office of Management and Budget or the Administrative Conference.

The Allen bill would also stipulate that consumer, labor, and business expertise be represented among the private sector members on the committee, rather than leave such appointments to chance.

Senator Percy's bill would stipulate that consumers, at least, be represented.

As to jurisdiction, the Allen bill would allow the commission to study agencies which are not independent, as well as those which are independent. Senator Percy's bill does this also.

Finally, as to consumer representation, the Allen bill would mandate that the commission evaluate the adequacy of consumer representation in the decisionmaking process of other agencies and to report to us and the President on ways to improve this.

Specifically, as one of the alternatives for improving consumer representation, the Allen bill would require the commission to report on the viability of establishing an agency for consumer advocacy. I do not feel that there would be a need for an agency for consumer advocacy, because I think the deficiencies in the agencies gave rise to some of support and some of the demand for an agency for consumer advocacy. I believe that if reforms are broad enough, and this is certainly an area that we are in common agreement on, if they are broad enough, if the agencies are required to function and function properly, then there will be no need for an agency for consumer protection to point out to the agency the decision that it should make.

I notice that Senator Percy's new bill also mandates that the commission study some possible other areas for improving the consumer's lot in agency decisionmaking. Some of these areas chosen by him. appear to look very promising.

I hope that we can set an example for the regulatory agencies by handling this complex subject expeditiously.

Senator RIBICOFF. Senator Brock, did you want to make a statement? Senator BROCK. I will just summarize my statement, if I may. Senator RIBICOFF. Without objection, your entire statement will go in the record.

OPENING STATEMENT OF SENATOR BROCK

Senator BROCK. I would like to express my gratitude for the chairman for calling these hearings. They are not only necessary, but I think they are long overdue. One of the biggest middlemen in the world is the Federal Government, whose regulatory policies too often reduce competition and increase costs to the consumer without offsetting advantages. Ten percent of our industry is regulated by some agency of Government. Certainly, many of them are major concerns, which hardly need to be protected from competition. On the contrary, there is considerable abuse in the regulatory process. All too often, it is small business which is effectively denied the opportunity to compete.

Business is having to operate under an umbrella with so many holes in it that it neither protects the consumer nor allows for free and open competition, the backbone of our progress for 200 years. Nineteen out of twenty businesses fall into the category of small business, but they are unable to compete because of the stifling regulatory policies. I am afraid they will be ultimately driven out of business or swallowed up by big business, which has the money to operate under these circumstances.

Our economy at this moment is entirely suspect. We have inflation and declining productivity. It is time for us to remove the impediments of overlapping regulations and outdated congressional mandates for a free market and effective competition. These hearings can create a new era to take the shackles off business, and increase our productivity. I hope we can move effectively and quickly in establishing this commission.