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George W. Bush attempts to break the Clintonian regulatory knot.

eorge W. Bush is in a bind. His administration is hamstrung by the huge list of new regulations issued by the Clinton administration during the eight years it controlled the executive branch, especially the more than 25,000 pages of rules agencies sent to the Federal Register in the last few months of Clinton's second term. While the big businesses that backed Bush's presidential campaign are eager to break the shackles created by the federal regulatory apparatus, it won't be as easy to convince the American public to join the crusade.

But Bush may be holding a secret key to escape the dilemma. He just needs to start small - perhaps with a fireside chat on laundry.

Yes, laundry. And not the dirty kind that most politicians are so fond of finding in an opponent's past. Tucked into the heap of regulations published in the last few months of Clinton's second term is a rule that will increase the cost of new washing machines by almost 60 percent and will make laundry days a little longer. The regulation would halt the manufacture of top-loading washing machines in seven years in favor of front-loading European models that will wash fewer clothes per load. The move is supposed to save energy, but it will annoy consumers who still aren't used to another mandated conservation device: the low-flow toilet.

A fireside chat about an appliance that might cost regular folks a few hundred dollars extra might seem silly to Bush's big-business allies. But economist Murray Weidenbaum, who helped craft President Reagan's first-term strategy for overhauling regulations and the agencies that produce them, says Bush would be wise not to forget that $100 means more than $1 billion to average Americans and that washing machines matter more than fuel-refining regulations.

"One of the reasons that the Reagan reforms failed to go as far as they could have was that there was limited public support for reform. It was seen primarily as relief for business," says Weidenbaum, who was chairman of Reagan's Council of Economic Advisers and now heads the Center for the Study of American Business at Washington University in St. Louis. "It's a challenge to educate the public on these issues. And it's an uphill battle."

No Easy Process

Bush has time and again expressed his commitment to fighting for real regulatory relief, especially for businesses and Western landowners who threw him their support with the expectation that he would roll back what Bush called "an avalanche" of Clinton's environmental, health and safety and land-use regulations. Bush has said he has a laundry list of specific regulations and executive orders that he intends to review. Among them are ergonomic rules requiring businesses to protect workers from repetitive stress injuries; Clinton's designation of 5.6 million acres of Western land as national monuments; the Forest Service's banning of road construction in almost 60 million acres of national forests; the Health and Human Service Department's sweeping safeguards on patient privacy; the cleanup of diesel fuel ordered by the Environmental Protection Agency; and regulations favored by labor unions requiring companies vying for federal contracts to show they have no record of "repeated, pervasive or significant violations" of federal or state law.

Clinton's foes complained mightily that his administration rushed the regulations through with little thought about unintended consequences. Businesses have threatened to go to court to stop some rules, such as the ergonomics regulations, from taking effect. "It doesn't take a government economist to figure out that the combined cost of these last-minute rules will have more than just a marginal impact on the cost of doing business," says Karen Kerrigan, founder and chair of the Small Business Survival Committee, a grassroots advocacy group for small companies and entrepreneurs.

Clinton's land regulations are particularly galling to Bush, who won sweeping support from voters in Western states that are most affected by the monument designations and forest rules. "There ought to be a balance between, obviously, the public interest and private property," Bush told The New York Times on Jan.12. "And a lot of people in my state and in the Western states feel that balance is not there." But even Bush acknowledged that he wasn't sure how to restore that balance.

Experts on deregulation caution that the new President is unlikely to peel back Clinton's regulatory legacy with a few bold pen strokes. It is not easy for a President to stop a final rule that has been published in the Federal Register short of putting the whole process in reverse and beginning a process of rule-making anew - with public notices, comment periods and agency reviews that could take years. The first clear step for Bush - as it was for Reagan and Clinton - is to order a three-month regulatory moratorium to allow a thorough review of all new rules that have been announced but that have not yet taken effect.

"What President Bush will be able to do beyond the moratorium is going to be a lot less explosive and dramatic than people think," says Angela Antonelli, director of the Roe Institute for Economic Policy Studies at the Heritage Foundation. Bush can strike any of Clinton's executive orders, but Antonelli and others who spent the past few months poring over the Clinton record found that the vast majority of Clinton's more than 300 orders did little more than create advisory committees. "Very few," she said, "fell into the category of controversial because of their philosophy or possible illegality."

Clinton wasn't reticent about using his executive power to overturn orders by his two Republican predecessors. He undid the Reagan order mandating rigorous reviews of the costs and benefits of all new regulations by the Office of Management and Budget, substituting his own order requiring reviews only of rules with an impact of $100 million or more. Clinton also revoked an order by the first President Bush requiring federal contractors to post notices informing workers they were not obliged to join unions and had the right to stop unions from using dues for political activities. Clinton's reversal of the labor order was seen as a huge victory for his supporters in organized labor. President George W. Bush can be expected to quickly revisit those orders.

"Executive orders are easy," says C. Boyden Gray. "They can be struck down with a stroke of a pen. It's not so easy to handle rules that are final by Inauguration Day." Gray served as counsel to Bush's father during his terms as President and Vice President and is now a lobbyist on regulatory matters. The Clinton administration, Gray says, was clever in getting its most controversial regulations into final form before Bush could have a clear shot at stalling them.

Nonetheless, the most important thing any new President can do is order a 90-day moratorium, Weidenbaum says. "This was perhaps the most useful thing we did in 1981," he said. "It gave us a chance to look at the regulations that were rushed through in the final days of the previous administration before they became effective. This is important. Once a regulation gets imbedded in practice, it's very difficult to yank it out."

Last-Minute Regulations

Though the rule-making process can take months or years, all outgoing Presidents since 1948 have left their successors with a thick stack of new regulations in the Federal Register. Jay Cochran III, a research fellow in regulatory studies at George Mason University's Mercatus Center, says regulations, measured by number of pages in the Federal Register, increase by almost 17 percent, on average, in the three months following a presidential election, compared to the final quarters of non-election years. The trend holds true for Republicans and Democrats alike as Cabinet officers and agency heads try to finish their business before returning to private life.

"A tremendous amount of regulation is just dumped on the public," Cochran says. "Whether the regulations are good or bad is beside the point. The phenomenon raises a question: Is this any way to run a railroad?" The Clinton administration produced more than 26,000 pages of new regulations between November 2000 and January 2001, Cochran says. "Those regulations . . . will have a combined impact of $6 billion to $10 billion a year," Antonelli says. "That's a significant impact on business in a very short period of time."

The Clinton team's heap of late-term regulations tops those of all who preceded him, including the previous all-time leader, Jimmy Carter, with 24,531 pages. The Reagan administration didn't just toss all the non-finalized Carter rules into the trashcan, Weidenbaum notes. "We used the moratorium to look at all the rules in an open-minded way," he says. The Reagan administration did eliminate some rules and modified others, but let most go through.

Those with high expectations that President Bush will reinvent the regulatory machinery need only look back at the Reagan administration. Overall, Reagan - who promised in his 1980 campaign "to get government off people's backs" - was ultimately unable to roll back or revise the environmental and safety laws that he and other conservatives so reviled. Though he announced a Presidential Task Force on Regulatory Relief within two days of his inauguration and imposed a review of all the regulations issued in the last three months of the Carter administration, Reagan was effectively boxed in by Congress and the courts.

To be sure, Bush and the 107th Congress will have some tools that Reagan lacked in the early 1980s. Congress has, in recent years, passed several oversight laws including the 1995 Unfunded Mandates Reform Act. This law requires the Congressional Budget Office to provide Congress with estimates of the costs that new regulations will impose on state and local governments. The 1996 Small Business Regulatory Enforcement Fairness Act requires agencies to assess the impact of regulations on small firms and the 1996 Congressional Review Act established a procedure that allows Congress to approve or disapprove agency rules.

The review law blocks major final regulations from taking effect for 60 calendar days after their submission to Congress, giving lawmakers time to pass a joint resolution of disapproval. But unless the President signs the resolution, the regulation takes effect unless Congress overrides the lawmakers' veto. Congress never used its oversight pow- ers during the Clinton years because of Clinton's veto power. "With Clinton in office, members of Congress felt that there was no use in sending a resolution up," says Susan Dudley, senior research fellow at the Mercatus Center.

Weidenbaum and others say that Congress also was constrained by public opinion and opposition from various interest groups. "Even a Congress that was a lot more Republican in its makeup than the present one was afraid of people saying that they didn't care about the environment or they didn't care about safety," he says.

Senate Majority Leader Trent Lott has said that Congress would have to act to repeal some of Clinton's last-minute regulations, but most observers say the 107th Congress is too divided to take significant action. "I'd be very surprised to see any legislative action to overturn these regulations," says the Cato Institute's Jerry Taylor.

Taylor suggests that although many members of Congress talk about their opposition to environmental rules, they have a strong interest in maintaining the status quo. They score political points with liberal and moderate constituents by voting for environmental bills such as the Clean Air Act, and then they score later with conservative constituents by complaining about the rules that agencies write to carry out such laws. "They get the best of both worlds," Taylor says.

A few members of Congress have been outspoken in their efforts to unravel environmental rules. Sen. Frank Murkowski, R-Alaska, chairman of the Senate Energy and Natural Resources Committee, has said he plans to promote an overall energy bill that would open federal lands, particularly the Arctic National Wildlife Refuge, to petroleum exploration, an idea that Bush supports. And Rep. James Hansen, R-Utah, the chairman of the House Resources Committee, said he plans legislation that would chip away at the Clinton-designated national monuments that Western governors and other state officials so vehemently oppose.

Defenders of the Rules

An army of environmental and consumer groups stand ready to make sure that their allies in Congress block any attempts by lawmakers or the Bush administration to allow industrial uses of public lands, whittle away at new national monuments or reduce consumer protections."By and large, what we expect to be doing this year is defending Clinton's legacy," said Dave Alberswerth of the Wilderness Society.

Environmentalists and other Clinton defenders expect the greatest potential for damage to resource and worker-safety protections to come from executive branch efforts to cut agency budgets and scale back regulation. "The President has a wealth of powers to utilize," says Gary Bass, executive director of the activist group OMB Watch. "You might see the federal agencies shifting enforcement powers to state governments, or you might see them putting the word out on the streets that they don't intend to do much in this or that area."

Defenders of Clinton's regulatory efforts contend that the term "midnight regulations," used by conservatives to describe the rules passed in the waning days of a President's term, is ridiculous. Bass notes that the rule making process is guided by law and requires extensive analyses, public notices and public comment periods. Some rules that Republicans oppose, such as the ergonomics regulations, were written after years of discussion. Bass does not expect the new administration to undo agency rules by taking the process in reverse. Rather, he expects to see a new executive order requiring a rigorous, or perhaps endless, OMB review of new rules, similar to the order Reagan issued in 1981. "It could be a process where rules go in and never come out," Bass said. Or there might be a new emphasis on the costs of regulations over and above the benefits they produce. "There isn't going to be a one-size-fits-all response," he says.

Acknowledging their inability to simply kill regulations, many members of Congress are pushing newly appointed heads of regulatory agencies to adopt a policy of what Sen. James Inhofe, R-Okla., calls "compassionate compliance" in dealing with regulated industries and property owners. During a Jan. 17 confirmation hearing for EPA Administrator Christine Todd Whitman, Inhofe talked about the owner of a Tulsa lumber company, who, he said, was "harassed" by EPA regulators over hazardous waste rules. "I hope," he told Whitman, "this is something you'll jump on right away and stop."

For her part, Whitman said she planned to instruct EPA compliance officers to give those they regulate a chance to come into compliance voluntarily before threatening to fine them. "Instilling fear does not solve problems," she told Inhofe.

Much of Reagan's regulatory success involved cutting budgets and relaxing enforcement policies at federal agencies. He also put in place at the Federal Trade Commission, the National Labor Relations Board and the Interstate Commerce Commission appointees who shared his disdain for regulations. His efforts showed in the costs of running the regulatory agencies. A study by Weidenbaum's Center for the Study of American Business showed that regulatory agency budgets were cut 8 percent and staffing 10 percent during Reagan's first term.

By contrast, the overall cost of administering federal regulations is expected to reach an all-time high of $19.8 billion this year, the center's latest report says. The proposed spending for regulatory agencies will jump 4.8 percent over President Clinton's eighth and last budget. Over the course of the whole Clinton presidency, regulatory spending grew 22 percent, the study says.

Those numbers might alarm conservatives and business leaders. But Antonelli says such data should be put into a context the public will understand. In a paper prepared in consultation with business groups, she outlined the theme for a public campaign President Bush could lead. Antonelli lays out two simple questions: "Are Americans better off when the government steps in and establishes controls?" and "What are the unintended consequences triggered by such government intervention?" "Asking these questions from the bully pulpit will help Americans understand why they should care about the lack of analysis and sound science in the federal regulatory process," she writes. "The absence of analysis clearly results in less optimal outcomes, leaving many people socially and economically less well off and ultimately doing more harm than good."

Washed Up

Which brings us back to the washing machine regulation. The Energy Department drew up the rule as part of what it says is an effort to save energy as well as save consumers money over the life of their machines. The department estimates that the front-loading machines required by the rule will cost 57 percent more than top-loading machines, but will ultimately save consumers money if they wash more than six loads a week. If they wash less than that, they will lose money. Of course, people may do more loads because front loaders wash less clothing at a time.

Mercatus' Susan Dudley says the rule was crafted under what might be called a "bootleggers and Baptists" theory, a reference to the unlikely alliance that backed federal Prohibition of alcoholic beverages. The washing machine rule was backed by appliance manufacturers, who will be able to sell more expensive machines, and environmental activists with little input from consumers, she says. The average front-loading machine costs between $700 and $1,000, while top-loaders start at $400. Front-loaders are available now, but 95 percent of Americans buy top-loading machines, she says.

"They didn't think about what consumers would prefer. They just decided to force people to buy a product they don't like," Dudley says. A Mercatus poll in December found the public opposed the regulation by a margin of 2.5 to 1. The poll found, moreover, that fewer than one in 10 households does more than seven loads of laundry a week; this tiny fraction of the whole is the only group that would save money under the rules.

A few hundred dollars over the average 14-year life of a washer may not mean much to an oil company executive, but regulatory reformers such as Antonelli want to enlist support from those who don't think in terms of billions. "It shows that the public loses. It's not just big business."

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