During the past four years we have made tremendous progress in regulatory
reform. We have discarded old economic regulations that prevented
competition and raised consumer costs, and we have imposed strong
management principles on the regulatory programs the country needs, cutting
paperwork and other wasteful burdens. The challenge for the future is to
continue the progress in both areas without crippling vital health and
safety programs.
Our economic deregulation program has achieved major successes in five
areas:
Airlines: The Airline Deregulation Act is generating healthy competition,
saving billions in fares, and making the airlines more efficient. The Act
provides that in 1985 the CAB itself will go out of existence.
Trucking: The trucking deregulation bill opens the industry to competition
and allows truckers wide latitude on the routes they drive and the goods
they haul. The bill also phases out most of the old law's immunity for
setting rates. The Congressional Budget Office estimates these reforms will
save as much as $8 billion per year and cut as much as half a percentage
point from the inflation rate.
Railroads: Overregulation has stifled railroad management initiative,
service, and competitive pricing. The new legislation gives the railroads
the freedom they need to rebuild a strong, efficient railroad industry.
Financial Institutions: With the help of the Congress, over the past four
years we have achieved two major pieces of financial reform legislation,
legislation which has provided the basis for the most far-reaching changes
in the financial services industry since the 1930's. The International
Banking Act of 1978 was designed to reduce the advantages that foreign
banks operating in the United States possessed in comparison to domestic
banks. The Depository Institutions Deregulation and Monetary Control Act,
adopted last March, provides for the phased elimination of a variety of
anti-competitive barriers to financial institutions and freedom to offer
services to and attract the savings of consumers, especially small savers.
Recently, I submitted to the Congress my Administration's recommendations
for the phased liberalization of restrictions on geographic expansion by
commercial banks. Last year the Administration and financial regulatory
agencies proposed legislation to permit the interstate acquisition of
failing depository institutions. In view of the difficult outlook for some
depository institutions I strongly urge the Congress to take prompt
favorable action on the failing bank legislation.
Telecommunications: While Congress did not pass legislation in this area,
the Federal Communications Commission has taken dramatic action to open all
aspects of communications to competition and to eliminate regulations in
the areas where competition made them obsolete. The public is benefitting
from an explosion of competition and new services.
While these initiatives represent dramatic progress in economic
deregulation, continued work is needed. I urge Congress to act on
communications legislation and to consider other proposed deregulation
measures, such as legislation on the bus industry. In addition, the
regulatory commissions must maintain their commitment to competition as the
best regulator of all.
The other part of my reform program covers the regulations that are needed
to protect the health, safety, and welfare of our citizens. For these
regulations, my Administration has created a management program to cut
costs without sacrificing goals. Under my Executive Order 12044, we
required agencies to analyze the costs of their major new rules and
consider alternative approaches, such as performance standards and
voluntary codes, that may make rules less costly and more flexible. We
created the Regulatory Analysis Review Group in the White House to analyze
the most costly proposed new rules and find ways to improve them. The
Regulatory Council was established to provide the first Government-wide
listing of upcoming rules and eliminate overlapping and conflicting
regulations. Agencies have launched "sunset" programs to weed out outmoded
old regulations. We have acted to encourage public participation in
regulatory decision-making.
These steps have already saved billions of dollars in regulatory costs and
slashed thousands of outmoded regulations. We are moving steadily toward a
regulatory system that provides needed protections fairly, predictably, and
at minimum cost.
I urge Congress to continue on this steady path and resist the simplistic
solutions that have been proposed as alternatives. Proposals like
legislative veto and increased judicial review will add another layer to
the regulatory process, making it more cumbersome and inefficient. The
right approach to reform is to improve the individual statutes, where they
need change, and to ensure that the regulatory agencies implement those
statutes sensibly.