The Administration: Need Friends in High Places?

By Michael Duffy/Washington

William Reilly thought he had a deal. The besieged chief of the Environmental Protection Agency was certain Dan Quayle had agreed that any piece of land that was flooded or saturated with water for 15 consecutive days a year would constitute a "wetland" and deserved protection from private development. The next day Reilly received a call from Allan Hubbard, who heads Quayle's Council on Competitiveness, telling him the deal was off. Within days the council hatched a new plan, narrowing the definition of "wetness" by six extra days, satisfying a powerful coalition of farmers and builders and reducing America's wetlands by as much as 30 million acres.

Reilly was privately steamed. If George Bush persuaded Congress last year to pass most of his kinder, gentler legislation untouched, Quayle's Council on Competitiveness is spending much of this year making sure that the new environmental and health laws are as beneficial to business as possible. California Democrat Henry Waxman calls the council a "shadow government." Senator Albert Gore believes that the mysterious body allows Bush to pose as an environmentalist long enough "to justify a television commercial. Then, behind the scenes, the ((council)) guts the law."

Bush created the panel in 1989 but gave it new powers a year later, when he began hearing complaints from friends that his government was reregulating industries that the Reagan Administration had sought to deregulate. Not long afterward, the President appeared before aides one morning waving a newspaper clipping about reregulation and asking, "What's going on here?" Bush, who headed a task force on regulatory relief as Vice President, asked Quayle to review new regulations to make sure that costs would not outweigh benefits. Lacking a high-profile White House role at the time, Quayle jumped in with both feet.

This is no renegade operation: Bush, chief of staff John Sununu and Budget Director Richard Darman are fully apprised of the panel's activities. When such agencies as the EPA and the White House differ over how aggressively to implement a law, the council moves in to referee. Staffed by fewer than a dozen officials, who are, even by Bush White House standards, unusually conservative, the council regularly sides with business against the environment. Even Administration officials marvel at how powerful the body has become. "Because Quayle has Bush's total confidence," said a former Administration official, "nobody can touch those guys."

The council's favorite target is the 1990 Clean Air Act, which the White House backed but now fears will cost more than $26 billion to implement. Last summer the council asked the EPA to make more than 100 changes in proposed regulations for carrying out the act, changes that top EPA officials say undercut the law. The most controversial proposed change would allow polluters to unilaterally increase their emissions if states ignore a waiver request for more than seven days. "You could drive a big truck through some of those holes," said a top EPA official.

The council has also opposed an EPA plan to require liners and leachate collection systems at all new solid-waste landfills. For nearly a year, the council argued that the plan was too costly, though other officials noted that in the past five years no city has permitted the construction of a new landfill without such equipment. The nation is short on landfills, and the rules for creating new sites are already three years behind schedule.

Hubbard, a gregarious Indiana entrepreneur who ran Pierre du Pont's 1988 presidential bid, points out that those who object to the council's rulings are free to mount challenges in the courts. Hubbard says the council's goal is to improve the nation's competitiveness, not to shelter industry from regulation. "The higher the cost of the regulation, the higher the cost of the product to the consumer," he explains. "Our whole effort is to protect the consumer and the American worker."

There's a little more to it than that. The council is potentially a political gold mine for Quayle, who often refers businesspeople with complaints about government meddling to his eager staff of deregulators. The council spearheaded Quayle's attack on lawyers and excess litigation last August, and is preparing to move beyond reviewing new regulations to tackling rules already in place. While Quayle's detractors dismiss the Vice President as silly and feckless, his shrewd handling of the council's affairs is just another sign that he is taking full advantage of his office.

For Bush, who in the midst of a sluggish recovery can neither pass out tax cuts nor launch spending programs to promote economic growth, the council is "the only game in town," an official said. "The one thing that can cause George Bush problems in 1992 is the recession." The council also exemplifies Bush's have-half approach to political problems. In 1992 he can run as an environmentalist while telling industrialists he's on their side too.

With reporting by Dick Thompson/Washington