EPA -- what really needs reforming

The allegations of scandal steadily rising from the Environmental Protection Agency (EPA) are drawing attention to the larger issue of how much direct political control should be exerted over regulatory decisions.

For Congress, this is a reflexive response. At a time of possible scandal, almost everyone on the political spectrum becomes committed to ensuring the integrity of the regulatory agencies from outside influence.

This concern has led to examinations of the agency's dealings with polluters, investigations of White House contacts with the EPA, and, most recently, a proposal by Democratic Sens. Daniel Patrick Moynihan and George Mitchell to replace the EPA with a new five-member ''independent'' federal commission. So-called ''independent'' commissions such as the Federal Trade Commission (FTC) , whose members serve fixed terms and cannot be fired by the president, are generally considered to be more insulated from political heat than ''executive branch'' agencies such as the EPA, whose administrators serve at the president's pleasure.

But over the past decade, Congress and a succession of administrations have steadily eroded the independence of both kinds of regulatory agencies, making them more susceptible to the kinds of political pressures now under investigation at the EPA. President Reagan has instituted the most centralized regulatory review process ever established in the White House, and Congress is imposing itself more directly in regulatory decisions through the legislative veto.

As a swarm of congressional committees pore over the charges of political favoritism and cozy relations with polluters at the EPA, it might also be an opportune time to reexamine this trend of lashing the agencies ever more tightly to the mast of centralized control.

Congress first created the regulatory agencies in the late 19th century, when the issues facing the federal government proliferated and became more complex, and the legislature found itself unable to directly manage the burden. But neither did it want to vest that power in the president.

Throughout the 19th century, the prevailing legal view was that the president had limited authority to control the agencies. Though the statutes creating the Departments of Foreign Affairs (now State), War, and Navy explicitly lay out presidential direction of those departments' officials, such directions are missing from the laws establishing such domestic agencies as Treasury, Interior, and the Post Office.

That standard has eroded somewhat before the increasing powers of the modern presidency, but, as the Congressional Research Service noted in a legal analysis , ''contemporary case law has not altered the original conception of the constraints on the exercise of presidential power over administration (of federal agencies).'' In a significant 1935 case, for example, the Supreme Court ruled that the president could not remove a member of the FTC without cause, concluding that ''the Federal Trade Commission . . . cannot in any proper sense be characterized as an arm or an eye of the executive.'' Independence in practice was what the court believed Congress intended for the ''independent'' agencies.

In the early 1970s, Congress created a host of new regulatory agencies to deal with health and safety problems like environmental pollution and occupational disease that both government and business had long ignored. And as these agencies began to implement the new health and safety laws passed by Congress - the Clean Air and Water Acts, the Toxic Substances Control Act, and others - the industries forced to undertake expensive remedial measures increased their lobbying pressure on the White House and Congress to get the agencies off their backs.

With the political stakes of regulation increasing, legislators and administration officials have moved to bring both the independent and executive branch regulators more tightly under their thumb.

Every president since Nixon has established a mechanism for White House oversight of executive regulatory agencies. President Reagan has gone a large step further by granting the Office of Management and Budget (OMB) a virtual veto over regulatory decisions of executive agencies through a February 1981 executive order. Critics such as the Congressional Research Service say the order exceeded the President's authority and lacked ''safeguards against secret, undisclosed, and unreviewable contacts'' because it allowed outside groups to make their case against the agencies in private White House meetings.

Congress, though, has effectively endorsed many of these executive branch initiatives and at the same time increased its own involvement in regulatory decisions. In 1976 Congress mandated that independent agencies, for the first time, had to submit their budget requests through OMB, like all other federal agencies. In March 1982 the Senate unanimously passed legislation that not only gave the White House review the force of law but extended it to the independent agencies. Moreover, the bill gave Congress the authority to veto any agency regulation. Since the House leadership held up the bill, it died in the 98th Congress. But it will be back.

The problem with legislative vetoes and White House control is that they create more points at which special interests can interfere with the regulatory process.

Consider Congress's use of the legislative veto it granted itself over FTC regulations. In 1982, it used the power to decisively reject an FTC rule requiring used car dealers to provide a sticker on the car declaring whether it had any major defects and what kind of warranty was offered. The decision came after a barrage of lobbying and more than $1 million in campaign contributions by the National Automobile Dealers' Association.

Though the veto sparked editorials around the country questioning the auto dealers' influence over Congress, it did not spark the same kind of congressional investigations now examining the chemical industry's influence over the EPA.

Similarly, the President's counsel is now investigating contacts between White House officials and the EPA. Whatever it finds, the investigation is missing a forest of infestation for a few vulnerable trees.

The OMB currently reviews allm new EPA regulations (as well as those of all the other executive branch agencies) on a daily basis. The OMB has been closely involved in the development of ''every single hazardous waste regulation,'' says outspoken EPA hazardous waste expert Hugh Kaufman. ''There is no policy that they don't get involved in.''

Meanwhile, the President's Task Force on Regulatory Relief, headed by Vice-President George Bush, has directed the EPA to postpone or review existing rules on hazardous wastes, pesticides, clean water, clean air, and toxic chemicals. In all, throughout the government by last summer the task force had designated 111 regulatory ''programs for review, addressing regulations that were frequently mentioned by the public in complaints and suggestions to the task force.'' Overwhelmingly, the ''complaints and suggestions'' came from companies and trade associations unhappy with decisions made at the agencies.

This centralized control affects the performance of all regulatory agencies. Executive branch agencies become acutely sensitive to the political interests of the White House, and independent agencies are cautious not to cross their critics in Congress, lest they be slapped with a legislative veto like the FTC.

Making the EPA an independent agency, as Senators Moy-nihan and Mitchell would do, might make it more independent from outside pressure - but only if Congress moves to restore the freedom of all regulatory agencies from veto not only by the White House, but by itself. That is a point Congress would do well to consider as it examines what went wrong at the EPA.