In addition, on August 29, 1974, we issued a notice of rulemaking in Docket No. RM 75-7 to require the disclosure of all officerships and directorships held by officers and directors of reporting companies. These rulemaking proceedings are still pending before the Commission.

Title III of S. 770 directs Federal agencies to make full use of automatic data processing in their data gathering and reporting activities. The FPC has made significant progress in this area in recent years. Order No. 494, adopted on September 26, 1973, established a Regulatory Information System (RIS) to adapt FPC reporting procedures and report forms to computer regulatory format. Our system complies with the requirements of Title III of this bill and may serve as a useful guide for other agencies' efforts in this area.

This concludes my statement, Mr. Chairman, I will be pleased to respond to questions.

Senator METCALF. We are delighted to have the next witness, Mr. Richard O. Simpson, Chairman of the Consumer Product Safety Commission. While your Commission does not have the antiquity of, say, the Interstate Commerce Commission, it is certainly very important, and the activities that you are engaged in the very significant to this study and this investigation. So we are delighted to have you here, Mr. Simpson, to talk to us about some of the recommendations you have.

STATEMENT OF HON. RICHARD 0. SIMPSON, CHAIRMAN, U.S. CONSUMER PRODUCT SAFETY COMMISSION

Mr. SIMPSON. I am delighted to be here. As you say, our Commission is 18 months old, and I feel like it is going on 18 years.

I am pleased as Chairman of the Consumer Product Safety Commission to appear before this committee to express my personal views on S. 4145, a proposal to create a Commission on Regulatory Reform. May I at the outset state that I believe that such a regulatory review is not only warranted, but also highly desirable. I have noted that S. 4145 addresses itself to activities of the independent regulatory agencies, and I am pleased to note that specific agencies are not cited by name. I am pleased because in addition to the independent regulatory commissions, which have been clearly established and defined as such, there also exist within the broad framework of our executive branch other regulators, agencies, councils, Ford administration commissions, et cetera, that are found in Cabinet-level departments. All such governmental regulators should be reviewed so that their actions can be assessed, their independence established if it is found to be necessary, and most importantly the train of accountability for these agencies should be clearly understood and followed.

The Consumer Product Safety Commission is, as previously stated, the newest of the regulatory commissions in Washington, one in which the Chairman has been given a mandate which one Member of Congress has described as "more power than a good man should want or a bad man should have," and I would agree with that Congressman's assessment, and because I agree with that assessment and I see that there are possibilities for abuse, for circumvention of the public interest, and for self-aggrandizement, I doubly welcome this opportunity to come before you today.

The Consumer Product Safety Commission has jurisdiction, as you know, over more than 10,000 individual consumer products, and new products are entering the marketplace continuously. The Commission

is required by statute to develop and promulgate, when warranted, either from its own initiative or in response to citizens' petitions, safety standards to guard against unreasonable risk of injury to the consumer.

In addition the Consumer Product Safety Act itself mandates a blanket safety standard, if you will, cor.tained in section 15 of the statute. To paraphrase, section 15 says that no manufacturer shall manufacture a product which contains a defect which creates a substantial product hazard. Manufacturers and distributors, retailers, and importers are under legal requirement by the Consumer Product Safety Act to report to this Commission, under penalty of law—I might add, a $500,000 penalty of law-they are required to report when they have reason to believe that such a product has been entered into commerce and could create such a hazard. Section 15 has been described as a tattletale provision.

The Commission further has authority, after following certain procedures, to order public notice and either repair, repurchase, or replacement of the pending product at no cost to the consumer. At this point the scope and authority of the Commission would appear to some to be overwhelming. It is, and yet this is but a portion of the mandate and the authority vested in the Consumer Product Safety Commission. Vigorous congressional oversight is necessary and essential to insure that such broad authority is properly used and not abused.

The Consumer Product Safety Act contains some unique features, at least one of which appears in S. 704, the Regulatory Agencies Independence Act. A copy of the comments of the Commission's views on that provision is attached to my statement.'

This provision, which has been discussed earlier, requires concurrent budget and legislative reporting. That provision has been in operation in our Commission for 18 months. It is mandated by section 27 of the Consumer Product Safety Act.

This unusual budget feature brings into focus the fiscal game playing that sometimes, and I might add perhaps oftentimes, takes place among the executive agencies, the Office of Management and Budget, and the Congress. We, as a commission, after 18 months of experience under that provision, are currently experiencing some pretty rough sledding with respect to our budget, largely, I believe, because of this new concept, but we are committed to continuing to treat this provision in a candid and straightforward manner.

Unfortunately, our most recent and measured fiscal requirements, however, are caught in the time-honored arena where other Federal agencies fight for funds. We find ourselves faced with extraordinary appropriations cuts, which we believe we cannot absorb within our operating plan, and I am not here to defend the budget, Mr. Chairman, but to point out some current experience and indicate to you that all is not rosy with the concurrent budget provisions.

We have had only 1 full year with the provisions of section 27, and I would suggest it is too soon for us to draw any rational conclusion as to the merits of such a provision or the desirability of imposing such requirements on other agencies. Perhaps the road would be smoother, however, if more were traveling it.

J See p. 225.

I feel that the question of from whom and of what the independent regulatory commissions are considered to be independent is a key question and one which should be addressed and defined. It has been stated variously that such commissions are neither the child of the executive nor the child of the Congress, that such commissions are part of the Executive and therefore are expected to reflect administration's views and advance the administration's policies, that they are arms of the Congress and are expected to be totally responsive to and vigorously overseen by the Congress.

At the present time, there is no widely agreed upon definition that I am aware of to whom or to what such commissions belong, and I believe that lack of clear agreement on that issue clouds the chain of accountability of independent agencies, and perhaps that is why we are here today.

Perhaps we should leave it ambiguous, and we should leave the independent agencies reporting, as our Commission currently does, concurrently on our activities to the executive and the legislative, acting in a quasi-judicial capacity and standing alone within the Government, with narrow support from without ourselves. One might speculate, however, whether the strange area is one which could become a fertile ground for special interest groups; that is, if independent commissions may find that independence does not necessarily equate with survival and may not pay the bills, and some broader base of power is needed in order to survive and grow. I believe the committee. is aware of the openness policy adopted, and, we believe, effectively implemented by the Consumer Product Safety Commission.

am proud of the Commission for adopting such a direction, and I am especially pleased to report that we feel it is working. We recognize we are doing the public's business, and we believe, very sincerely believe, the public has a right to know what we are doing, how we are conducting our affairs, and where we are allocating our priorities. Openness of an agency can be an effective check against the extraordinary powers vested in regulatory agencies, for the continuous scrutiny of every facet of activity by the public, by the press, by the affected industries, by the Congress, and by other Federal agencies leaves few if any areas unexplored and opens to discussion even the most minor of activities.

The question of independence generally is probably one of the key questions addressed by the Consumer Product Safety Commission. This Commission, as you know, Mr. Chairman, has been engaged for more than a year in a pulling contest concerning five policyoriented super-grade positions within the Commission, five positions which we maintained, as we interpret the Consumer Product Safety Act we maintain they should not be protected by the normal Civil Service, for their services are largely advisory and oriented to the chairman who serves for a limited term. We are talking about noncareer appointments and yet because the Commission is a regulatory independent body, these positions should not, we maintain, require the political sanction or clearance, actual or pro forma, or the White House. I think this is part of the dilemma of the lack of definition and accountability of independent agencies.

Hearings have been held in the Senate

Mr. TURNER. Mr. Chairman, may I suggest a short question here, just on that point, on the clearance?

Now this committee along with the Commerce Committee held some hearings on that, and several members have expressed a concern as to whether or not that problem has been cleaned up. Is it still the same problem where your top executive officials in the Commission must be cleared, or can be vetoed, by the White House?

Mr. SIMPSON. Yes. The problem still exists, and we are probably going to have some of the longest consultants in the history of the Federal Government. It has not been cleared up, no.

Mr. TURNER. Well, what happens after 1 year when they can no longer be consultants?

Mr. SIMPSON. Well, we consult our general counsel and try to work around it.

Mr. TURNER. Has the general counsel been approved by the White House vet?

Mr. SIMPSON. No, sir, he has not.

Mr. TURNER. I think you have a problem.

Mr. SIMPSON. We recognize we have a problem when we testified before this committee. It was a joint committee. We asked for congressional help. This committee, the chairman of the Senate Commerce Committee, and the Senate Committee on Post Office and Civil Service then did send a joint letter to the President, urging that the President use his executive authority to create a fourth category, that is, noncareer appointments for independent agencies where they would have the noncareer status, but would not require any White House clearance, only that of the agency, but so far that has not happened.

Mr. TURNER. So this is an independent regulatory matter that can be solved by law right now if Congress wishes to take some legal steps. Is that correct?

Mr. SIMPSON. Yes; it can, and we offered to help draft a provision if there was any interest in that.

Mr. TURNER. We do not need any study on it?

Mr. SIMPSON. I do not believe so, but that is a personal opinion. Others have differing views on that.

Senator METCALF. Have you submitted a draft of such a proposal? Mr. SIMPSON. No. Mr. Chairman, when we testified, we said that we believed that it could be solved three different ways: one within the discretionary authority of the Civil Service Commission itself; one by Executive order with the discretionary authority of the President; and one by a change of statute.

Senator METCALF. Was the second direction attempted by a joint letter from the chairmen of the three committees having jurisdiction? Mr. SIMPSON. Yes, and the answer was that the Office of Management and Budget would study the problem, and my understanding is that they are doing that now. We have not been contacted on such a study, but my understanding is that they are conducting a study, but meanwhile, back at the ranch, we are still faced with the problem. Senator METCALF. And after their study, we are going to set up a commission to further study it? And who is going to study the study of the commission's study? Go ahead.

Mr. SIMPSON. Well, I am glad you said that, Mr. Chairman, because it prevented me from having to say it. We interpret the statute in one particular way, but there are, in fact, arguments on the other side.

If I might, just touch on this question. I think it is a central one that we trouble ourselves with all the time. It is the question of accountability. Clearly in a Cabinet-level agency, the President is accountable and should and can be held accountable. In the independent agencies, accountability is not so clean. We interpret the Consumer Product Safety Act as making this agency probably more independent than the other independent agencies. There are some unique features that were written into our bill to insure independence. The legislative history supports that intention, and we so interpret the act.

But our interpretation causes some problems. I have previously stated that I think it is dangerous for a Commission to be created and interpret their act the way we do, unless the Congress steps up and assumes a vigorous oversight function. Unless you do that, I think you can create dangerous fiefdoms in independent agencies.

So we are in favor of active and vigorous oversight. And I must say that we have had it so far, but we are only a year-and-a-half old. Perhaps if other agencies had had similar oversight, we may not be up here today. I suggest in conclusion that Congress should consider the option, rather than setting up a National Commission on Regulatory Review, of accomplishing that review itself. To me it is the definition of oversight.

You might want to beef up your committees, assign clear responsibility, give them some definitive direction, and perhaps after a period of time-it may be a year or 2 years-then you may want to take the comments out of those committees into a joint Committee of the Congress and institute the reforms. I might say that I am even a little troubled by the word "reform" because it seems to prejudge that reform is needed. If the word were "review," you might come out with reforms. If we know that certain reforms are needed now then I suggest that we ought to get on with it and review the others.

Senator METCALF. That, of course, is a very important and a very strong point-to admonish all of us in the Congress to continue to do something about the supervision of our special agencies. I know that we have in other legislative duties neglected that very important obligation.

Mr. SIMPSON. Mr. Chairman, might I just comment that you have used the words "our special agencies."

Senator METCALF. Well, I do not agree with Mr. Ash that these are executive agencies. These are legislative. These regulatory commissions are agencies of the Congress, and except for a half-a-dozen people who make assertions that they are agencies of the Executive, the historical observations do not bear that out. Ever since the Interstate Commerce Commission was created, these have been agencies of the legislative body, and they are our agencies. I think that we should do more to protect them and assert our jurisdiction over them.

Mr. SIMPSON. And support them.

Senator METCALF. And support them, absolutely. And that is why you are here, to tell us how we have failed. Are you through? Mr. SIMPSON. Yes, I am, thank you very much.