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 historically fared poorly in the governmental 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. (See exhibit 7, p. 202.)

Secretary RICHARDSON. Thank you, Mr. Chairman.

5. From a functional point of view there are important interrelationships between FDA and HEW'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 disrupted, 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 HSMHA. FDA is providing technical expertise to enable the Maternal and Child Health Service in HSMHA 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 expansion 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

reported by the Commerce Committee in March, that its reorganization feature is regressive, will deal the consumer a crushing setback, and will sell him a phony bill of goods by moving away from, rather than toward, greater product safety. Now that my colleagues and I have had almost 6 weeks to examine the proposed legislation in greater detail, I can only add that my initial reaction was hardly overstated. I cannot urge you strongly enough, Mr. Chairman and members of this subcommittee, not to reorganize solely for the sake of reorganizing, under the banner of consumerism. The interests of the consumer should outweigh the transparent rhetorical advantages of the moment, and the interests of the consumer will clearly be served best by deleting titles I and II from the bill pending before you and by, instead, strengthening FDA as a key health-related agency within HEW.

Mr. Chairman, my colleagues and I would be happy to answer any questions the subcommittee may have.

Senator RIBICOFF. Thank you very much, Mr. Secretary.

Now, you compare the proposed Consumer Agency to the independent regulatory agencies, and I assume you are referring to FTC, FCC, CAB, and so forth.

CONSUMER SAFETY AGENCY COMPARED WITH EPA

Wouldn't it be more appropriate to compare the Consumer Safety Agency to the Environmental Protection Agency? Both agencies would be responsible for assuring a safe human environment. Food and drug and consumer products, like air, water and noise, comprise a physical environment in which human beings live. President Nixon said, in submitting the reorganization plan for EPA that the environment was a special priority which required a new agency outside the existing departments.

If this is so with EPA, why shouldn't it be the same with the Consumer Safety Agency?

Secretary RICHARDSON. The major distinction in our judgment, Mr. Chairman, is with respect to the relationship between the regulatory functions of the Food and Drug Administration on our proposed Consumer Safety Administration and other health functions of HEW on the one side, and on the other the fact that any Environmental Protection Agency would embrace functions previously lodged in a a variety of different Federal departments.

It would have been possible, and it was considered, to establish the Environmental Protection Agency in one of those departments but this would have, in effect, necessitated pulling into it various functions from others.

The logical department might have been the Department of the Interior but since the Department of the Interior has functions in the area of irrigation, for example, and other activities that were not entirely consistent with the functions of the Environmental Protection Agency, it was concluded that in the circumstances it was better to make it separate.

The related considerations here seemed to us to point the other way, because of the relationships I mentioned between the consumer safety functions and the other health activities of the Department.

Senator RIBICOFF. I don't quite follow you, Mr. Secretary. Let me give you a couple of examples which seem to refute your position.

NITRITES

An important issue in the food and drug area has been the use of nitrites as preservatives and color fixatives. Now, authority for the regulation and use of nitrites is divided between FDA and the Department of Agriculture. You clearly have a serious problem with nitrites. How would you describe the different areas of responsibility each of you has and why it is necessary to have two separate agencies involved in this process?

You have a difference of policy in which you have an important issue involving the Nation's health and the Nation's safety split between the FDA and the Department of Agriculture. This new agency would have undivided authority in this performing function. Secretary RICHARDSON. As you know, Mr. Chairman, the President has proposed in the reorganization that would establish a Department of Human Resources to transfer functions now in the Department of Agriculture with respect to food inspection and the chemical residues in agricultural products into the Department of Human Resources, where they would, if our views prevailed, become part of the responsibility of the Consumer Safety Administration.

The real question is, I think, whether the overall health mission of a Consumer Safety Administration, on balance, makes it desirable to have the kind of close relationships to other health functions of the Department that it could have if it stayed where it is, or if it remained within the health components of the proposed DHR.

Suppose we take, for example, the proposal to create a separate Department of Health. It would seem to me quite clear that that proposal would be weakened by simultaneously taking Consumer Safety responsibilities, including regulation of drugs, out of that proposed health department.

Now, the only difference between the administration and the proponents of the separate Department of Health, is that we think there is merit in maintaining an umbrella function in order to assure coordination and integration among health, education, and welfare activities. It is essentially for the same reason that there is a Secretary of Defense, with overall responsibility for the military services.

PROPOSAL FOR A NEW DHR OPPOSED

Senator RIBICOFF. Well, in accordance with your program, the President's proposal for a new Department of Human Resources would put these functions together in that Department and may I say-1 only speak for myself, personally-that of all of the President's reororganization plans, that is the one, in my opinion, that has the least opportunity and the least chance of being adopted and passed. If anything health-related programs would be more fragmented than they are now. But if the administration had proposed to take these functions whose separateness you are complaining about, and putting them in the Department of Human Resources, why not instead put those functions together now in what we are talking about? The Consumer Safety Agency?

Secretary RICHARDSON. Well, that, I think, presents a different kind of question. We have no objection to doing this. The question is one