The Rostrum

Wanted: the rapprochement of business and government

By MICHAEL J. HOWLETT and WILLIAM H. PERKINS

WHEN Thomas Jefferson wrote the Declaration of Independence, he listed several reasons why King George III was unfit to be the ruler of a free people. In the middle of the list was this one: "He has erected a multitude of New Offices, and sent hither swarms of Officers to harass our people, and eat out their substance." Jefferson's complaint seems ready-made for businesses that face an ocean of federal and state regulations today.

Regulation of business has been with us for awhile. The Army Corps of Engineers was set up in 1824, the Patent and Trademark Office in 1836, and in 1887, when the railroads seemed to be taking over the country, the Interstate Commerce Commission was set up to regulate them. The Federal Reserve System was organized to bring the banks under some kind of control and stop currency abuses. To break up the trusts, the Federal Trade Commission was created.

In New Deal times, business actually welcomed many of the new agencies that sprang up. Since that time, the alphabet has done double duty keeping track of regulatory institutions like the FCC, FDIC, SEC, FDA, EPA, OSHA, and in 1964, the EEOC, the Equal Employment Opportunity Commission which ushered in the concept of the regulation of social policy. Of the 55 major agencies listed by the Center for the Study of American Business (Washington University), 20 were born in the 1970s.

Even though we are used to hearing astronomical dollar figures quoted nowadays, the amount of those dollars required to feed the regulatory system is staggering. Murray L. Weidenbaum, the chairman of President Reagan's Council of Economic Advisors, estimated the cost of government regulation in a Reader's Digest article of June 1979. He projected the cost at $96 billion. That is $450 for every man, woman and child in the United States. It costs $4.5 billion to support 55 federal regulatory agencies and their 80,000 employees. The other $91.5 billion is what it cost private business to comply with their rules. Who pays the cost? The same people who pay the taxes.

The dollar cost is not the only expense or massive dimension of government regulation. One of the heaviest loads laid upon business by regulators is the paperwork. Richard D. Wood, chairman of Eli Lilly & Co., said his drug firms use more manpower filling out government reports than on research on cancer and heart disease combined.

The sheer production of pages produced by the Federal Register is impressive. In 1980, that agency printed 87,012 pages of new regulations, an all-time high notwithstanding the stance of the Carter national administration for deregulation. In February, during the first full month of the Reagan administration, the Federal Register produced 242 pages a day, down from 507 a day in January. New or proposed rules went down from 5,946 to 1,320.

A typical family Bible has about 1,500 pages. It would take a stack of 58 Bibles to equal the content of the 1980 Federal Register.

There is some evidence that the pressure for new regulatory agencies, so effective in the 1970s, is easing off as the 1980s begin and business is learning how to deal with government.

It is about time because regulation is here to stay, and business is well advised to learn all it can about how to work with it.

The first step in learning is to find out who is making the rules and who is enforcing them. Finding the right person in the bureaucracy can be difficult. Bureaucrats do not run for office, are not responsible to the voters and are often unknown. They are protected by Civil Service and the executive; legislative and judicial branches have little control over them. The best way to find the right person to complain to is through the legislative branch of government since a regulatory agency at any level owes its existence to a legislative body. Be it Congress, the General Assembly, the City Council or some local board, the legislative body votes the funds which keep the regulatory agency alive.

A survey of ours showed, however, that average citizens are none too certain of their legislators. Of those surveyed, 36 percent knew who their U.S. senators were and 43 percent knew their congressman.

Because they must live with government regulation, businessmen usually understand politics better and know more officeholders than the average citizen.

Most businessmen can't spare the time for dealing with regulators or legislators and for them the advice and experience of a lobbyist or a professional governmental relations consultant can be useful. Such professionals can be useful in federal, state or local governmental relations; professionals know who the congressional and legislative leaders are who will make decisions concerning the businesses they represent.

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Illinois is fortunate in its congressional delegation. Several members, both Democratic and Republican, are ranking members of important committees in the Congress.

Congressman Dan Rostenkowski (D., Chicago) is the newly elected chairman of the all-important House Ways and Means Committee, which writes tax and Social Security legislation. He is an alumnus of both the Senate and House of the Illinois General Assembly. We have two additional members of the Illinois congressional delegation on the Ways and Means Committee, representing both political parties.

Robert Michel (R., Peoria) is the recently elected minority leader of the House of Representatives. Congressman Melvin Price (D., East St. Louis) is chairman of the important Armed Services Committee. Rep. Frank Annunzio (D., Chicago) is a ranking member of the Banking and Currency Committee. Rep. Robert McClory (R., Waukegan) is the ranking Republican on the Judiciary Committee with Rep. Tom Railsback (R., Rock Island) and Rep. Henry J. Hyde (R., Oak Park) also members. Congressman John Erlenborn (R., Wheaton) is the No. 2 Republican on the Education and Labor Committee. Sen. Charles H. Percy (R., Chicago) is now chairman of the prestigious Senate Foreign Relations Committee.

Of the 24 members of the Illinois delegation to the U.S. House of Representatives, 11 served in the Illinois legislature. Sen. Alan J. Dixon also served in both the Illinois House and Senate before being elected to the United States Senate last November.

Neither businessmen nor their representatives can afford a purely partisan approach to government relations. Lobbyists and governmental relations consultants belong to political parties and have political convictions, but they do not wear party buttons on their coat lapels. They advise elected officials regardless of their party.

The lobbyist performs an essential service to business and the legislature. Both of those groups are busy, and the information they share by way of the lobbyist saves time and money. The workload of the Illinois legislature and the U.S. Congress indicates the need for a go-between between business people and the legislative bodies. During the 96th Congress, a total of 12,556 bills were introduced. Of these, 642 were passed and 613 became law. During the same time, the 81st Illinois General Assembly introduced 5,686 bills of which 1,666 were passed.

Businessmen must be alerted to the dangers present in much of the legislation proposed, and must work through their lobbyists and associations to change such laws and regulations as are unacceptable.

Big government and proliferating regulations are the price we pay for a high living standard and a high degree of civilization. We can't do away with regulation. We don't even want to. We want to keep it in bounds and make it work to the best advantage of the most people.

During the last 192 years, government has expanded to meet us everywhere we turn. There are "a multitude of New Offices" and "swarms" of regulations to "harass our people, and eat out their substance." Government touches every facet of our corporate lives, and therefore a close working relationship between the two is crucial. □

Michael J. Howlett and William H. Perkins are partners in the governmental relations firm of Howlett & Perkins, Chicago. Former Secy. of State Howlett is the only Illinois Democrat ever to be elected to four consecutive four-year terms of statewide office: auditor of public accounts, 1961-1973; secretary of state, 1973-1977. In 1976 he was the Democratic candidate for governor. Perkins was a legislative representative of the CNA Financial Corporation for 30 years. He has served under both Republican and Democratic presidents both as advisor on insurance matters to the chairman of the inaugural committee and as member of a Smithsonian Institute committee.

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