The Rule Book For Business Is About To Get Smaller

Forget the frenzy over the balanced-budget amendment and a capital-gains tax cut. Corporate America is more interested in a quieter Capitol Hill-White House struggle over ways to ease the regulatory pinch on business.

Although the anti-regulation drive hasn't garnered the headlines of other GOP crusades, the fight is falling into a familiar pattern: Republicans are leading the charge for sweeping change, while defensive Democrats are revving up their own package to stay in the game. The result: a win-win situation for Washington's business lobbyists.

Insisting that regulations are choking industry, the GOP has reprised a favorite device: the regulatory freeze. Republicans are shooting for a late February House vote on a six-month moratorium that would stifle nearly all new rules. Among the targets are proposals business opposes, such as curbs on toxic emissions from hospital waste incinerators, and some that industry favors, including a seafood inspection


TWO PHASES. The furthest-reaching GOP proposal would require stringent scientific studies to weigh risks and gauge the costs and benefits of new rules. And a "regulatory budget" would cap compliance costs for business at 5% of gross domestic product. "Government will have to show a compelling reason to interfere with the market," says Representative David McIntosh (R-Ind.), former head of Vice-President Dan Quayle's Competitiveness Council.

The Administration has come up with a two-phase approach to head off the GOP onslaught. First, Clintonites are lambasting the Republican plan as a radical attempt to gut health and safety rules. If the GOP's scheme had been in effect earlier, "we couldn't have banned lead in gasoline," says Environmental Protection Agency Chief Carol M. Browner. "A generation of children may have been needlessly brain damaged."

The White House also is trying to dampen business enthusiasm for the GOP blitz by arguing it could lead to cumbersome risk-assessment reviews. New pesticides, for example, might be kept off the market pending fresh studies. "Some of these proposals are calculated only to make the process more complicated and more expensive," says John M. Quinn, Vice-President Al Gore's chief of staff.

But the Clintonites know they can't just cry extremism. So Gore is working on the second phase of the attack: a plan to give industries more flexibility. Current rules often dictate the equipment companies must use to comply with the law. The Gore initiative would scrap that approach and replace it with broad performance standards that corporations could meet any way they want. Separately, the Veep has ordered agencies to review their rules and junk unnecessary ones. The Hill and the White House "have interpreted the message from the election, and that's `Get government off our backs,"' says DuPont CEO Edgar S. Woolard Jr.

Trouble is, Gore isn't expected to produce his proposals until spring. And some White House officials concede that may be too late to affect the Hill debate.

The House bill is sure to change as it heads for a vote in late February. Its supporters admit it's flawed. But even the final version may be too radical for the Senate. Senator William V. Roth Jr. (R-Del.) has introduced a measure that would require risk studies on rules that cost more than $100 million, rather than the House's $25 million threshold. And Roth's plan doesn't dictate how risk assessments should be conducted, as the House measure does. To business, it doesn't matter which plan prevails. One way or another, regulatory relief is at hand.

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