Joe Pinga could scarcely believe his eyes when he opened the innocent-looking letter from the Occupational Safety and Health Administration. It charged him with twelve federal violations in his bakery in West Warwick, R.I., including electric plugs with two prongs instead of three and a safety railing four inches too low. Deeply hurt, Pinga asked himself: “My God, how can I be guilty? I haven’t even had a trial.” So he challenged the charges in court and spent $1,500 in legal fees to beat a $90 fine. His heart went out to the young OSHA inspector who broke down on the witness stand and admitted that her only qualification was a 40-hour series of OSHA seminars. But Pinga is convinced that his fight was worthwhile. Thumping a thick tome of OSHA regulations, he declares: “If this book existed when my dad came to this country in 1906, this nation would still be a prairie. Now it’s bureaucracy on top of bureaucracy. That’s not America.”
John Loughlin, assistant superintendent of schools in Portsmouth, N.H., is worried, as are most other U.S. education officials, about the U.S. Civil Rights Commission’s Forms 101 and 102. They demand that he list the number of black, Hispanic, female and handicapped pupils in each class in the city’s schools. Loughlin notes that the federal rules require gathering “a lot of data that we don’t keep and that is illegal for us to find out.” How does Loughlin cope? “Some of the answers we just make up,” he confesses.
Irving S. Shapiro, chairman of E.I. Du Pont de Nemours & Co. (annual sales: more than $8 billion), says, “It costs the company a lot of time and money to comply with Government reporting requirements.” Du Pont has to spend $5 million and 180 man-years of work annually to file 15,000 reports to the Federal Government. Among many other things, the company is held accountable not only for its own programs for hiring and promoting minorities and women, but also for the affirmative action programs of every supplier that sells it more than $2,500 worth of goods a year. As a Government contractor, it is required to provide such information and thus sends out 28,000 let ters a year to these suppliers. Shapiro contends that the regulations are so excessive that if Du Pont were starting out today, “perhaps the company wouldn’t make it. Even in the best of times, there is a high infant mortality rate for business. Today we compound the risk with so much Government intervention’ that it’s a wonder that anyone survives.”
Like Pinga, Loughlin and Shapiro, entrepreneurs, executives and local officials throughout the land are bewildered and outraged by the growing number of federal rules and regulations. They seem to float out from Washington as casually as children blow soap bubbles, and all too often contain about as much substance. No one can possibly keep up with all the pronouncements affecting him and his business or profession, and many people have given up trying. Each national Administration has promised to cut the paper burden, only to end up adding to it. The Commission on Federal Paperwork, created in 1974 to figure out how to control red tape, estimates that the Government cranks out enough documents every year to fill 51 major league baseball stadiums or eleven new Washington Monuments. “It’s unbelievable,” says a former commission member. “Washington is the source of so much red tape that you’d think it was working on a landfill somewhere. Like the Grand Canyon.”
The paper is backed up by the stern might of the law; it can be followed by fines, loss of federal aid, harassment and obloquy. The regulations are impeding and inhibiting Americans in almost all areas of endeavor and transforming the society in ways that nobody can quite foresee. Writing in a new bimonthly magazine, Regulation, published by the conservative American Enterprise Institute in an effort to keep track of federal rulings, Social Critic Irving Kristol argues that many of the zealous regulators have an “ideological animus against the private economic sector. They are inclined to believe that a planned economic system would create a superior way of life for all Americans. They detest the individualism so characteristic of a free society.”
Eighty-seven federal agencies and offices with 100,000 workers keep the private sector behaving as Big Brother sees fit. The most important 30 of these outfits have combined operating expenses of $2.9 billion a year. The older agencies—including the Interstate Commerce Commission (founded in 1887), the Federal Trade Commission (1914), the Food and Drug Administration (1931), the Civil Aeronautics Board (1938)—impose limitations on particular industries. The newer agencies—the Equal Employment Opportunity Commission (1964), the Environmental Protection Agency (1970), OSHA (1970), the Consumer Product Safety Commission (1972)—issue orders to institutions across the board. Their potential for change, and for damage, is far greater than their more circumscribed predecessors. Says Kristol: “This creates a lot of questions about who is running the country.”
Most of the agencies were created to meet a legitimate need. The question is how they are administered. Wisely or foolishly, punitively or conciliatorily, arrogantly or sensitively? Above all, regulations must be considered within the broader context of the whole society; hidden costs must be calculated. There is little effort made to determine tradeoffs. To what extent, for example, should environmental restrictions be imposed if the consequence is the loss of jobs? The problem is to find the happy medium, with which, of course, nobody will be all that happy. Says Harrison Wellford, the White House aide in charge of Government reorganization: “You have four or five agencies impinging on a particular industry. No one is considering the cumulative impact or the contradictions.”
The contradictions can be incredible and infuriating, as shown by just two conflicts between OSHA and the Department of Agriculture. OSHA demands grated floors in butcher shops to reduce the risk of employees’ slipping. The Department of Agriculture declares that the same floors must be smooth because grates increase the hazards of contamination. Last year OSHA also directed that the Made-Rite Sausage Co. of Sacramento, Calif, place protective guards on its meat-blending machine to keep employees’ hands out of it, even though the machine is too high for workers to reach. But such a guard would have violated Agriculture Department regulations because it would have made the machine too difficult to clean. The company did the only sensible thing: nothing.
Some of the most hard-pressed industries are the ones most penalized by overregulation. Already threatened by low-cost imports, the steel industry has been forced to spend $3 billion to control air and water pollution; industry leaders estimate that they will have to come up with another $5.5 billion in the next six to eight years to comply with EPA directives. These costs are eating up a high percentage of capital expenditures at a time when the industry desperately needs to invest in new plant and equipment in order to ease unemployment and become competitive in world markets. The low-profit textile industry estimates it will have to spend $6 billion over the next five years to comply with just two OSHA regulations intended to reduce noise and dust in the mills.
It is not only businesses that are under increasing pressure from Washington. The University of Pennsylvania found that the cost of complying with twelve federal programs jumped from $350,000 in 1972 to $3.2 million in 1977. Now the university is being forced to spend an estimated $2.5 million to make changes to meet new regulations aiding the handicapped. The Department of Health, Education and Welfare insists that the university install an elevator in College Hall, which would cost $100,000. Catch-22 is that if the university makes any change in the 100-year-old building, it must bring the entire hall up to standards set out in the local building code. Cost: $1 million. Says Donald Murray, professor of statistics at the university: “No institution has traditionally done more than higher education for the handicapped. We have educated the lame and the blind since we have been in existence. Now, to try to comply with the letter of the law, all the institutions would go broke.”
Everybody foots the bill. Bigger educational expenses push up tuitions; higher business costs are passed along to the consumer. Barry Bosworth, director of the President’s Council on Wage and Price Stability, feels that excessive regulation is a primary reason why the average annual increase in U.S. productivity slowed from 3% between 1948 and 1966 to 2% since then. Gerald Ford’s White House figured that the price of regulation—the cost of bureaucracy along with declining productivity—takes $2,000 out of the pocket of the typical American family each year, a larger sum than is collected in federal income taxes.
Robert S. Smith, professor of industrial and labor relations at Cornell, condemns the common assumption that “when you’re dealing with business, you are only hurting a small and very wealthy group of citizens. That is fallacious.” Adds J. Peter Grace, president of W.R. Grace & Co.: “The consumer is caught in a double squeeze. He pays the taxes that support the bureaucrats in Washington, and he pays higher prices for almost everything he buys, from automobiles to aspirin.”
Everybody’s favorite agency to hate is OSHA. “It is a four-letter word,” says Congressman George Hansen, an Idaho Republican. OSHA was set up to protect 50 million workers from safety hazards in their 4 million places of work. People who are self-employed are excluded from OSHA’s scrutiny; so are farmers with ten or fewer workers. Safety in some kinds of employment—mining, railways, airlines, highways, atomic energy—is regulated by other federal agencies. An estimated 4,500 workers died in 1976 from accidents or disease related to their jobs (down from 5,200 in 1975). But OSHA has overreacted by jamming every conceivable danger, however remote, into a 7-ft.-thick code that must be the world’s most boring reading. Consider this example, on the wood used in ladders in factories and shops: “Knots of less than l½ inch thick in diameter are permitted on the wide face of portable wooden ladders provided they are at least ½ inch back from either edge; the slope of the grain in side rails shall not be steeper than 1 in 12 inches…” Not exactly a stairway to paradise. With appropriate illustrations, an OSHA manual instructs farmers how to avoid slipping on cow dung.
OSHA inspectors have turned up in the most unlikely places with the most implausible demands. Michael Armstrong, manager of In-Line Inc., a North Carolina construction firm, recalls the investigator who insisted that he provide a portable toilet for his crew while they were digging a tunnel under a highway. In vain did Armstrong argue that his men never complained about using the bathroom at a filling station 50 yards away. OSHA was even determined to give cowboys a new kind of home on the range, complete with a portable flush toilet within five minutes walking distance. Ranch hands who felt that nature provided ample resources for their needs hooted the proposal down. “Can you imagine a cowboy carrying his own restroom on the back of his horse?” scoffed Doug Huddleston, president of the Colorado Cattlemen’s Association.
Businessmen contend that OSHA’s most pernicious habit is to sneak up on them unawares without search warrants, a practice that is drawing increasing scrutiny from the courts. Since last January, 18 state and federal court decisions have been handed down against the agency for violating the Fourth Amendment guarantee against unlawful search and seizure. A suit is pending before the U.S. Supreme Court challenging the agency’s authority to make inspections without a warrant. There is plenty of evidence that such tactics simply make enforcement all the harder. Says William Kemp, a furniture manufacturer in Goldsboro, N.C.: “If the OSHA inspector and I could work together to make my place safe, it would be O.K. But if he comes in to get me and fine me, I’m going to hide everything I can from him. You don’t try to use an atomic bomb when a flyswatter will do.”
Some steps toward disarmament are being taken by OSHA’S new boss, Eula Bingham, 48, a former science professor at the University of Cincinnati. Apparently she has heeded President Carter’s executive order of last November calling for “simple and clear regulations” and less interference with individuals and organizations. She pared by half the number of OSHA forms that employers must fill out, and virtually eliminated them for small businessmen who employ ten or fewer people. In December, she announced that OSHA is abolishing 1,100 of its more than 10,000 regulations; her hit list will require more than 250 pages of explanation in the Federal Register. By reducing trivia, Bingham hopes to concentrate on the genuine dangers that still exist in the workplace, notably in the heavy manufacturing, petrochemical and maritime occupations. She pledges that “OSHA’s going to be looking for the whales, not the minnows.”
But Bingham does not intend to reduce OSHA’s staff of 2,700, which has almost doubled in the past five years, or its annual $134 million budget, which has nearly tripled in that time. So far businessmen give her good marks for intentions, lesser ones for accomplishment. Says James D. McKevitt, Washington counsel for the National Federation of Independent Business: “Talking a good game is one thing, but getting those bureaucrats at the bottom to implement it is something else. They often wall off the most well-intentioned administrator. They have the traffic-cop attitude. They just like the power of giving tickets.”
No federal agency has responded more quickly to Carter’s anti-interference order than the Environmental Protection Agency, regarded as a special plague by business. Administrator Douglas Costle, 38, formerly Connecticut’s environmental commissioner, insists that every new rule proposed to him must include an economic impact statement and it is often submitted to state environmental offices for their comments. Costle always asks subordinates: “Have you looked at alternative ways, including doing nothing?” Though Carter’s well-touted zero-based budgeting has gone nowhere in most agencies, it has worked well at EPA. Holed up in a windowless room for three weeks, officials constructed a new budget from the bottom up; for example, they shifted half the funds for noise abatement to a program for screening drinking water for toxic chemicals.
Encouraging changes are also taking place at the Civil Aeronautics Board, which is steering toward deregulation.
Chairman Alfred Kahn, 60, a Cornell economist who was appointed by Carter in May, is one of the rare bureaucrats who is trying to put his agency at least partly out of business. Under him, the CAB has given the airlines more freedom to lower fares and expand charter flights. Kahn is impatient with bureaucratic obstructionism. He learned, for example, that a petition by the city of Columbus, Ohio, for more airline service had not been answered for eight years by the CAB. An aide recalls Kahn’s mastication of the responsible bureaucrats: “He bit them so hard you can still tell who they are and how they were bitten. They’re the ones not sitting down.”
Most of the Government, however, remains impervious to presidential commands. After all, Presidents come and go; the civil service endures. One of the most durable bureaucracies is HEW, with its $53 billion budget. A centralizer of the old school, Secretary Joseph Califano reversed the decentralization undertaken by the Nixon and Ford Administrations. The ten regional directors were shorn of their independence, which was returned to Washington for safekeeping despite Carter’s promise to restore “Government to the people.” HEW argues that its 370 programs need to be run from headquarters for the sake of consistency; divergent decisions, the department feels, confuse and mislead people. But St. Louis Mayor James Conway, a Democrat, is dismayed. “Everything is coming from Washington rather than the regional offices,” he says. “Under Nixon and Ford, decisions were frequently made in the field and quickly. We find less of that now.”
Centralization also leads to slowdowns and foulups. Three times in the past 18 months, the University of Alabama in Birmingham has sent copies of its affirmative action plan to HEW’S Office for Civil Rights. Three times the office has lost it. Says University Vice President Robert Glaze: “You’re talking about a document roughly the size of the Manhattan telephone book.” When the plan was finally found, the civil rights office declared regulations had changed, and the plan must be resubmitted—at considerable cost to the university.
Zealotry seems to be on the increase at HEW. Over the years, no city has surpassed New York in helping the poor and integrating minorities. Nevertheless, the city was cited by HEW’S Office for Civil Rights for permitting a racial imbalance of teachers. Last September, the agency demanded a reapportionment so that each school district would have the same percentage of minority teachers as the system as a whole. The school board was compelled to separate 3,500 teachers into two lines, one for whites, the other for blacks and Hispanics. Then they drew their new assignments by lot from a box. On the U.S. Senate floor, New York’s Daniel Patrick Moynihan assailed this racial nitpicking. “In the name of civil rights,” he complained, “the Office for Civil Rights is mandating practices which would have appalled us a decade ago, practices which mindlessly violate the most fundamental principles of this nation as set down in the Constitution. Such practices evoke one image in our lifetimes above all others: the sorting out of human beings for the death camps of Hitler’s Germany.”
This deepening revulsion among Americans against the excesses of bureaucracy suggests that a showdown is imminent. Opponents of bureaucracy have history on their side. The examples of nations and empires—from ancient Rome to modern Britain—that have been weakened or crushed by the weight of bureaucracy are too numerous to be ignored. The U.S., of course, is a long way from such a fate, but the warning signals have been flashed. Once bureaucracy has begun to grow, it is devilishly hard to restrain, much less reverse its advance. Such is the challenge that faces America. As he approaches his second year in office, Jimmy Carter could adopt no more crucial resolution than to keep his campaign promise to cut back Big Government.
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