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POLITICAL RHETORIC BUT LITTLE TO DO WITH REALITY
Speaking from the vantage point of HEW, I believe these arguments are attractive as political rhetoric but have little to do with the reality of governmental responsiveness. Far from enhancing FDA's effectiveness in enforcing consumer safety laws, independent status would instead substantially impede that effectiveness. Let me be specific:
1. An independent agency is no more visible or accountable to the public than an agency within a Cabinet level department. Indeed, just the opposite would appear to be true; the Cabinet officer and agency head who reports to him are always publicly visible and accountable for their actions to the Congress, to the President and to the public. While the actions of independent agencies are equally visible, the heads of independent agencies are often insulated from such accountability by their fixed terms of office.
2. Independent agencies are no more insulated from political and other pressures than agencies within departments. The independent regulatory agencies have not historically shown greater resistance than other agencies to the pressures that often cause agencies to identify their interests with those of the industries they regulate.
3. Independent agencies do not have any greater access to the President than do executive departments. Quite to the contrary, they undoubtedly have less access since there are a total of 62 separate entities presently reporting directly, in a formal sense, to the President. Only 11 of these 62 are Cabinet departments; the remaining 51 entities clearly are at a disadvantage as compared with the departments. And this disadvantage is compounded each time a new independent entity is created. Indeed the growing proliferation of separate entities, in theory reporting to the President, has led all the bipartisan, blueribbon commissions which have studied the organization of the executive branch, from the Hoover Commissions to the Ash Council, to recommend that the existing entities should be combined into fewer larger Cabinet-level departments organized along functional lines. The President's pending executive reorganization proposals were based on all these sound analyses and recommendations.
Claims are continually made by one interest group or another that independence is what is needed by the agency they have an interest in. But as every dispassionate student of the problem has concluded, the reality is that greater consolidation, not fragmentation, is what is needed not only to use the President's time more effectively but also to insure that agencies are truly responsive to the needs of the people they serve, to guarantee accountability, to reduce overlaps and duplication of functions, and to insure that conflicts between agencies with necessarily overlapping functions are properly resolved.
4. Independent regulatory agencies have ħ istorically fared poorly in the gorernmental competition for resources, particularly, as compared with FDA. It has often been noted that the independent regulatory agencies are really the stepchildren of both the Congress and the executive branch. Examination of the budgetary records over the period of fiscal year 1970 through fiscal year 1973 shows that the percentage growth of six independent regulatory agencies ranges from a low of 6 percent to a high of 38 percent, with the average at less than 26 percent.
This compares with growth of 89 percent for FDA over the same period, even without taking into account the increase for enforcement of the pending new legislation, and 146 percent for FDA once the new legislation is enacted and funded. Mr. Chairman, I would like to insert in the hearing record at this point a table on these comparisons prepared by the Office of Management and Budget.
Senator RIBICOFF. Without objection, so ordered.
5. From a functional point of view there are important interrelationships between FDA and HÈW's other major health agencies, the National Institutes of Health and the Health Services and Mental Health Administration, and these ties should be further strengthened, rather than disrupied, in the interests of consumer safety and public health. I have, since becoming Secretary of HEW, increasingly stressed as a prime objective of my stewardship of the Department the drawing together of what would otherwise be separate agencies into an interrelated entity, greater than the sum of its parts and capable of being responsive and responsible to the needs of the people it serves. In a speech to HEW employees late last year I sought to explain in some detail why I believe this drawing together is so critically necessary to the Department's greater effectiveness and how it could be achieved. I will not summarize that statement here but I ask, Mr. Chairman, that it be printed in the hearing record.
Senator RIBICOFF. Without objection, so ordered. Secretary RICHARDSON. Thank you, Mr. Chairman. (See exhibit 8, p. 203.)
HEALTH AGENCIES WITHIN HEW
Secretary RICHARDSON. The three existing health agencies within HEW are very much part of the objective I described in that speech. Because the health and well-being of consumers cannot effectively be compartmentalized along bureaucratic lines, we are making progress in establishing mutually reinforcing relationships between FDA, NIH, and HSMHA. For example, FDA and the National Institute of Mental Health, a subagency of HSMHA, are now carefully coordinating their activities with regard to drug abuse; the recent methadone controls to which I referred earlier are an important outgrowth of that interaction. A new policy on diagnostic equipment is being developed jointly by FDA and the Center for Disease Control in HSMĦA. FDA is providing technical expertise to enable the Maternal and Child Health Service in HSMHÀ to make the nutritional component of its programs more effective. I have directed NIH to transmit their relevant research results to FDA as quickly as possible, for example, where NIH finds that experimental drugs have contraindications, that is, unwanted side-effects. These linkages should not be limited to HEW's health agencies. We are, for example, also taking steps to insure that the consumer education activities of the Office of Education benefit directly and promptly from the knowledge and experience of FDA. It may be argued that such interrelationships can also be achieved across departmental lines. They can, but the effort required, including necessarily limited Presidential and White House staff time, is far greater, and the chance that the effort will be continuously monitored is far less, than in the case of similar intradepartmental interrelationships. This is an important part of the rationale for executive reorganization in the reports of the Ash Council and the predecessor commissions.
TAKING FDA OUT OF HEW
6. Splitting FDA out of HEW, and drastically reorganizing it along the lines of titles I and II of S. 3419, would not only impede closer relationships with other HEW agencies and functions but also seriously disrupt FDA regulatory activities during an important period of erpansion of its regulatory authority. Title I would substitute for FDA's single Commissioner appointed by the Secretary an unwieldy quartet consisting of a presidentially appointed Administrator serving for a fixed term and three presidentially appointed Commissioners serving at the pleasure of the President. Title I would also mandate the delegation of certain independent authorities to the Commissioners, including subpena power and even overlapping scientific and research capabilities. It is highly questionable whether any such arrangement could be made to work; but even if it could over time, there can be no doubt that it would disrupt ongoing regulatory activities in the short run, and just as the newly expanded authority would become effective. In addition, support services now shared by FDA and other HEW agencies, such as those related to personnel, space allocation, budget, and audit, would all have to be divided, transferred and supplemented by the new agency; economies of scale would be lost and, again, disruption in ongoing activity would be inevitable. Finally, title II would leave the new agency in great uncertainty about the scope of much of its regulatory authority.
For example, title II would repeal the Poison Prevention Packaging Act; but since title III excludes drugs, the net effect would seem to be to exclude authority to require safety closures on drugs, which had been the primary purpose of the Poison Prevention Packaging Act. Similarly, cosmetic misbranding provisions of the Federal Food, Drug, and Cosmetic Act would be repealed and could not be reestablished by regulation under S. 3419. Labeling presently required for toxic, flammable, and irritating substances under the Federal Hazardous Substances Act would have to be reestablished through the standardsetting system created by title III of the bill. And there is no substitute for provisions of the Federal Hazardous Substances Act which are effective with regard to children's articles under the terms of the statute and require no issuance of regulations. In short, the bill is hopelessly confusing as to which existing authorities and regulations would be repealed and which would remain in force. This, too, will cause disruption of ongoing regulatory activities. All these elements could together lead to a serious vacuum, perhaps lasting as long as 3 years into which exploiters of the consumer could move while the new agency is set into motion.
CONCLUSION In view of all these truly fundamental problems raised by titles I and II of S. 3419, I was moved to state, when the bill was ordered (3) In March 1972, I released a GAO study of vaccine regulation revealing that over a period of 3 years, the DBS approved the release of millions of doses of subpotent influenza vaccine.
These reports and others show that the time for talk is past. Now Congress must act. And the action we take must be strong and effective. Reshuffling the boxes on the organization chart is not enough.
This morning, we want to hear what constructive action the Nixon administration will take to prevent the 110,000 disabling injuries and 30,000 deaths which occur each year from products.
OPENING REMARKS OF SENATOR PERCY
Senator PERCY. Mr. Chairman, thank you very much indeed.
I join with you in welcoming the Secretary and his very able colleagues. One of the disadvantages of being the opening witness is that you have to hear our statements. I think the advantage is, that by our making statements, we indicate perhaps our prejudices, our questions, and give you, then, a chance to respond.
Our purpose in examining S. 3419 is to move away from what I would consider to be the folly of Federal regulation in the area of consumer products. To date, and largely the fault of Congress itself, such regulation consists of piecemeal pablum which provides little more than a morsel of protection for the American consumer.
My own feeling, as an industrialist for 25 years and a public official for 6, is that the public presumes a great deal more regulation is accorded to products than actually is the case.
The Senate Commerce Committee has identified the problem. It has certified that Federal safety regulation is hampered by indecent statutory authority, miniscule budgets, timid investigative power, inadequate and ill-fitting sanctions, and misdirected priorities. Title III of S. 3419 contains that committee's substantive response, which I believe to be both wise and well-conceived.
The question before us today is how best to house the related functions of food, drug, and consumer product safety regulation. One thing is certain. If we accept a straw house for protection, we'll have to rebuild it year after year. And if we accept a scarecrow to oversee the terrain, we'll have to prop it up so often that it will hardly be worth the effort.
The Commerce Committee proposes an alternative to the house of straw and the man of straw by offering an independent Consumer Safety Agency headed by an Administrator with a full panoply of powers. As to the advisability of the latter, there can be no disagreement. But whether, to accomplish our purpose, we need build a new and uncertain structure whose foundation may be more symbolic than real, raises serious questions. Clearly the history of such agencies as the Interstate Commerce Commission, the Federal Power Commission and the Federal Maritime Commission, among others, attests all too sadly to the fact that "independent regulatory agency” is not some kind of magical formulation which will eliminate for all time lackluster performance in the name of public protection.
In the event that we in the Government Operations Committee determine that there is good reason for keeping food, drug, and consumer product safety regulation together under the rubric of the Department of Health, Education, and Welfare, instead of in an independent agency, it may be helpful based upon my study of the issue to date, to set forth certain minimal guidelines for organizing around this vital purpose and assuring virtual regulatory independence.
Most important of all, authority for regulating in the area of consumer safety would have to be elevated within the Department and vested in an Assistant Secretary or Administrator for Consumer Safety reporting directly to the Secretary. I presume that would be through the Under Secretary, of course. I can think of no higher concern, or any function more deserving of immediate attention by the secretary of this or any other department of the Federal Government, than the protection of public health and safety. Notwithstanding how we have treated this subject in the past, if we cannot now afford the highest level attention to this concern, then I can only conclude that our priorities are somehow woefully askew.
By vesting authority directly in the Assistant Secretary or Administrator for Consumer Safety, I mean that he should have final authority to establish standards to promulgate regulations, to decide when and whom to prosecute, and to enforce agency rules and orders. This would promote certainty in decisionmaking and hopefully avoid future cyclamate snafus or vacillation over phosphate detergents, which illserves the consuming public as well as affected industries.
Consideration should also be given to the other important facets of independence which are reflected in S. 3419 in order to fully insulate this peculiar safety function from foreseeable political influences and economic and other tradeoffs. These factors include a fixed term of office for the agency head, and his removal only for cause; permitting him to appoint those who will serve under him, flexibility and an absence of interference in his budget submissions and legislative recommendations.
Finally, to facilitate an ongoing exchange of information and healthrelated research within HEW, I would suggest the formation of a Health and Safety Council consisting of the Secretary, the Assistant Secretary—or Administrator-for Consumer Safety, the Assistant Secretary for Health, the Directors of HSMHA and NIH, and the Commissioners of Food, Drugs, and Product Safety.
Subject to qualification and refinement upon hearing from Secretary Richardson today, I offer these points as guidelines only, with the caveat that these hearings will help us determine whether an independent agency wouldn't perhaps be the best idea after all.
There are virtues to literal independence just as there are benefits to virtual independence within HEW. Whatever the arrangement, we must avoid mere box shuffling, title changes, and pay raises which give the illusion of substance but in fact amount to straw piled upon straw.
Thank you, Mr. Chairman.