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Quayle's Council Worries Congress

The Council on Competitiveness is coming under fire for accountability, conflict of interest. POWER STRUGGLES OVER REGULATIONS

FROM a cluttered suite of offices across a driveway from the West Wing of the White House, Vice President Dan Quayle's Council on Competitiveness has emerged as one of the most aggressive policy shops in the Bush administration.It is drawing increasing fire in recent weeks from opponents denouncing the council's power as underhanded and skirting the limits of legality. But the larger battle involves a balance of power between Congressional committees and White House conservatives over billion-dollar stakes. Both sides want maximum leverage in writing the rules that protect the environment, allow new drugs on the market, and limit lawsuits, among many other matters. Conservative allies see the council as an ambitious group of deregulators trying to loosen the growing bonds of social and environmental regulation on American enterprise. Many in Congress and liberal interest groups see the council as special pleader for business interests, undercutting laws by gutting regulations, hiding behind secrecy as White House staff, and pushing the limits of conflicts of interest. The council, chaired by Mr. Quayle and run by his staff, reviews rules and regulations that federal agencies are developing to ensure they impose the least possible burden on business activity. Every administration since Nixon has had such a council lodged somewhere in the bureaucracy to vet regulations for cost and settle disputes between agencies. But since Quayle brought in an aggressive young businessman, Allan Hubbard, to run the council staff, it has asserted itself on a broad front that ranges from defining wetlands to rules that carry out the Clean Air Act. "There seems to be a change in tone," says David Hawkins, an air-pollution expert at the Natural Resources Defense Council. While White House councils used to show more deference to experts in the agencies concerning regulations, now agencies are overruled unless the Quayle council's position is plainly illegal, he says. "It's a raw exercise of power." "They try to win in the regulatory process what they lose in Congress," says Christine Triano, who monitors the council for the consumer-oriented Office of Management and Budget Watch. "All kinds of health and safety and environmental regulations are in serious jeopardy." Congress is not taking this quietly. In the past several weeks, the council has come under investigation by three congressional subcommittees. They have two main concerns. One is accountability. When regulations are developed by a federal agency, law requires public review and comment. The council does not consider itself an agency but White House staff, which can keep its dealings private. The other concern is conflict of interest. Both Mr. Hubbard and Quayle himself have come under scrutiny for participating in decisions that have some impact, however minor, on their holdings. No one has yet accused either official of breaking conflict-of-interest laws, however. Robert Crandall, a regulation expert at the Brookings Institution, is not especially sympathetic to the aims of the Competitiveness Council, but, he says, "I think what you're seeing here is not a concern for justice, but a turf battle." Richard Schmalensee, who recently left the Bush Council of Economic Advisers to return to the faculty of the Massachusetts Institute of Technology, describes two world views. In the White House, people see themselves as all working for the president, so "what matters who's looking over whose shoulder?" In Congress, members have oversight over the agencies, such as the EPA, but no control at all over White House staff. Even those who are most sympathetic to the work of the council have some qualms about the secrecy of its dealings. Irwin Stelzer of the American Enterprise Institute believes the council is an important voice for deregulation and market solutions against a swelling tide of inefficient regulation. But, he adds, "I understand this is really an attempt to bypass the agency process." Says Mr. Crandall: "As a matter of good politics, it's a good idea to make everything above board." On the other hand, even the sharpest critics of the council acknowledge that vetting regulations for efficiency needs to be done. For business interests, especially small business, the work is as critical as it is threatening to groups seeking regulation. Academic studies have placed the cost of regulation to the private economy from $123 billion to as high as $510 billion. The average member of the National Federation of Independent Businesses is a company with 12 employees, says spokesman Terry Hill. "What members are telling us, even in a recession, is 'Things are tough and we're suffering but we can handle the business end of it. What's really killing us is this regulatory overload.' "

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