Presidential Influence on Independent Commissions: A Case of FTC Staffing Levels
Lu, Haoran, Presidential Studies Quarterly
Independent regulatory commissions are intended to be autonomous and removed from direct outside control. They are not truly independent, however. The literature suggests that their regulatory policies and performances are affected by the legislative and executive branches of government.(1) Only to a lesser degree are they influenced by own internal factors.(2)
Congress influences independent commissions through incentive structures, oversight hearings, appropriations, and statutes. The latter two are considered the most effective ways of controlling the commissions.(3) The president, on the other hand, can influence them through appointment of commissioners and designation of a commission chair. More important, the president also can exert his influence over these independent commissions through funding and staffing. Since regulatory agency budgets generally contain no "uncontrollable," they are more vulnerable to political and policy considerations and hence external control.(4) Through budgetary control of funding and staffing, the president can translate his policies into a commission's decisions and performances. Few rigorous empirical evidences have been accumulated to support this contention, however.
In this article, I examine the use of staffing levels by presidential administrations to control independent commissions. Specifically, staffing level in the Federal Trade Commission (FTC) is my focus of study. I analyze the impact of presidential administrations on the number of FTC annual requested, recommended, and actual full-time positions. This analysis is different from previous studies in that it addresses whether presidents use the budget as a mechanism to influence the FTC rather than if presidential influences exist.
In the section that follows, I discuss briefly the FTC's history from 1969 to 1990, the period under scrutiny. The discussion provides the necessary contextual information to understand possible impacts of presidential administration on the commission. It also helps us interpret the analytic results to be presented later. The next section reviews the past empirical research on presidential and congressional control of the FTC. Some of its shortcomings are identified. Afterward, I present sections on research design and statistical analyses. The article concludes by suggesting research directions for future studies.
History and Background of the FTC
The Federal Trade Commission Act (63d Cong., 2d sess., H.R. 14631), which enabled the FTC, became law on September 26, 1914. In its early days, the commission was mainly empowered to prevent "unfair methods of competition in commerce."(5) In 1938, the Wheeler-Lea Act (74th Cong., 2d sess., S. 3744) formally authorized the commission to act against business on behalf of consumers. Before 1969, nonetheless, the FTC essentially neglected its consumer protection jurisdiction.(6) Such negligence was the major cause of the first congressional and presidential attempt to "reactivate" the commission.
The action occurred during 1969 and 1970, amid the emergence of the consumerism and critiques initiated by a study under the guidance of Ralph Nader. In April 1969, just after taking the Oval Office, President Nixon asked the American Bar Association (ABA) to evaluate if the FTC was effective in protecting consumers and enforcing antitrust laws. The ABA report, published a few months later, further criticized the commission and had the most significant impact on FTC revitalization.(7)
On October 30, 1969, Nixon delivered his consumer message to Congress, calling it a "Buyer's Bill of Rights." In the message, he advocated several measures to protect consumers against deceptive sales practices. "The reactivation and revitalization of the FTC" were considered very important components. As recommended by the ABA report, Nixon sought a top-quality, programmatic administrator to head the commission. …