[Congressional Record Volume 142, Number 141 (Thursday, October 3, 1996)]
[Extensions of Remarks]
[Pages E1909-E1910]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                      HOW BUREAUCRATS REWRITE LAWS

                                 ______
                                 

                           HON. NEWT GINGRICH

                               of georgia

                    in the house of representatives

                       Thursday, October 3, 1996

  Mr. GINGRICH. Mr. Speaker, I would like to bring a recent article by 
John DiIulio, Jr., to the attention of my colleagues.

                [The Wall Street Journal, Oct. 2, 1996]

                      How Bureaucrats Rewrite Laws

                        (By John J. DiIulio Jr.)

       As the historic 104th Congress draws to a close, scholars 
     have already begun to debate its legislative record. Some 
     stress that the first Republican Congress in four decades 
     enacted fewer major laws than any Congress since the end of 
     World War II. Others respond that it was only natural that a 
     new conservative Congress committed to restraining the post-
     New Deal rise of national government activism would pass 
     fewer big-government bills. Likewise, while some interpret 
     President Clinton's bright re-election prospects as a 
     negative referendum on the GOP-led House and Senate, others 
     focus on how Republicans ended up setting the agenda on 
     everything from balancing the budget to welfare reform.
       For at least two reasons, however, both sides in this early 
     war over the 104th's history are firing intellectual blanks. 
     One reason is that it is not yet clear how much of the 
     legislation will stick politically. For example, Mr. Clinton 
     has made plain that, if reelcted, he plans to ``fix'' the new 
     welfare law. And should the House fall to the Democrats, 
     ultraliberal committee chairmen will move quickly to undo 
     much of what the Republicans did legislatively on welfare, 
     crime, immigration and more.
       The other and more fundamental reason is that, no matter 
     what happens in November, it is by no means certain that the 
     laws passed by the Republican Congress over the last two 
     years will survive administratively.


                           Bureaucratic Wars

       Victories won on the legislative battlefield are routinely 
     lost in the fog of bureaucratic wars over what the laws mean 
     and how best to implement them. One of many recent examples 
     is how the Federal Communications Commission has already 
     virtually rewritten the Telecommunications Act of 1996.
       On Feb. 8, President Clinton signed the first major rewrite 
     of telecommunications law in 62 years. To many observers, the 
     act represented the culmination of a series of political and 
     judicial decisions that began in 1974 when the U.S. Justice 
     Department filed an antitrust suit against AT&T, leading to a 
     breakup of the old telephone monopoly and the creation in 
     1984 of the seven regional ``Baby Bells.'' The bill-signing 
     ceremony, the first ever held at the Library of Congress, was 
     draped in symbolism. The president signed the bill with a 
     digital pen that put his signature on the Internet. On a TV 
     screen, comedian Lily Tomlin played her classic telephone 
     company operator Krnestine, opening her skit with ``one 
     gigabyte'' instead of ``one ringie-dingie.''
       During the debate over the bill and for weeks after its 
     enactment, the press played up the law's social-policy side-
     shows, like the requirement that most new television sets 
     contain a ``V-chip'' enabling parents to lock out programs 
     deemed inappropriate for children. But its true significance 
     lay in removing barriers to competition in the 
     telecommunications industry, and devolving responsibility for 
     remaining regulation to the states. While its language is 
     often technical, you need not be a telecom junkie to 
     understand the letter of the law or the record of floor 
     debates in Congress.
       For example, Sections 251 and 252 of the law promote 
     competition in local telephone markets, expressly giving 
     state commissions authority to decide, via a strictly 
     localized, case-specific process, what constitutes ``just and 
     reasonable'' rates. It affords the FCC no role whatsoever in 
     setting local exchange prices: ``Nothing in this chapter 
     shall be construed to apply or to give the Commission 
     jurisdiction with respect to . . . charges, classifications, 
     practices, facilities, or regulations for or in connection 
     with intrastate communication service.''
       The law's devolutionary language and deregulatory intent 
     was so clear that groups such as the National Council of 
     Governors' Advisors quickly produced reports advising key 
     state and local decision makers to prepare for ``telewars in 
     the states.'' Soon, one NCGA report on the law explained, 
     ``governors' offices, state legislatures and state public 
     utility commissioners will be drawn into state debates on how 
     to ensure a ``level playing field for competition' among 
     those firms seeking to provide local and intrastate telephone 
     service.'' The major battles, the NCGA predicted, would be 
     over the terms of price and interconnection agreements. 
     Telephone company rivals could be expected to lobby 
     governors, utility commissions and state legislatures in 
     search of allies.
       But within six months of the law's enactment, the FCC 
     declared a victor in the ``telewars in the states''--namely, 
     itself. The commissions produced a 600-page document 
     promulgating presumptive national pricing standards in local 
     telephone markets. The FCC insists that the order is 
     necessary to pry open local markets to long-distance carriers 
     like AT&T, small firms like Teleport, and cable and wireless 
     companies. Otherwise, the commission asserts, incumbent local 
     carriers like the Regional Bell Operating Companies will 
     remain invulnerable to real competition as potential entrants 
     to intrastate markets are forced to contend with 50 
     different, localized state regulatory regimes.
       But the FCC's rushed, revanchist rewrite of the 
     telecommunications law is based on a hypothetical pricing 
     scheme that only an armchair economist could love. In its 
     hundreds of pages of national regulatory dictates, the FCC 
     almost completely ignores the actual costs that local 
     companies incurred to create the system, and the regional and 
     other variations in how they operate.
       On Aug. 23, GTE Corp. and Southern New England Telephone 
     Co. jointly challenged the FCC in court, arguing that the 
     FCC's order constitutes an uncompensated taking under the 
     Fifth Amendment by requiring them to sell their services at 
     below actual costs. The order, they claim, would almost 
     certainly enervate competition by permitting long-distance 
     giants like AT&T to buy up local phone networks at huge 
     discounts--an ironic potential outcome indeed given how all 
     this began in 1974. Moreover, not only giants like AT&T but 
     fly-by-night arbitrage artists could enrich themselves at the 
     expense of consumers on the spread between actual operating 
     costs and the prices set by the FCC. In response to the suit, 
     a federal appeal court ordered a temporary stay of the FCC 
     regulations and will hear oral arguments in the case 
     tomorrow.
       At a recent press conference, GTE's senior vice president 
     and general counsel, former U.S. Attorney General William P. 
     Barr, demanded to know why the FCC believes that it is better 
     at making decisions ``for 50 states

[[Page E1910]]

     than the state commissions are, who have done this 
     historically, who have all the data that are relevant to the 
     state before them.''

                               A Mockery

       But whether or not the FCC is wiser than the states, and 
     regardless of who is right about the economics of the case, 
     the FCC bureaucrats' orders mocks key provisions of a 
     democratically enacted law. The FCC's action is at odds not 
     only with the textbook understanding of ``how a bill becomes 
     law,'' but with the first principles of limited government 
     and American constitutionalism.
       The FCC's action should serve to remind us that the 
     devolution and deregulation of federal authority are always 
     in the administrative details. On telecommunications, 
     welfare, and almost every other major issue, big government 
     is the administrative state in which judges and unelected 
     officials, and not the elected representatives who debate and 
     enact the laws, govern us all.

                          ____________________