vits for all this, and there were suits that were threatened in five or six other District Courts that ultimately were not brought. But what happened in that situation is that the first case that went to decision in San Francisco, the Pacific Meat Jobbers Council v. Dunlop case, went to the court of appeals within a week after the decision was rendered. And within a matter of a week or so after the oral argument, a comprehensive decision was issued by the TECA which put the entire matter to rest. And from our viewpoint, that represents a very efficient use of Government resources, but at the same time assures the litigants of a fair and a very readily available avenue to seek redress. Mr. PECORE. Now, I believe I am correct in recalling your earlier remark that you had something on the order of 1,200 problem areas, or 1,200 requests for decisions? What again was that? Mr. WALKER. My remark was in the context of the communications center which we maintain in the Cost of Living Council, which is our primary point of interface between the Council and the district offices of the IRS. And the way in which that center operates is, when the IRS revenue agent who is working on stabilization matters in Cleveland or Chicago or whatever has a question about what is the applicability of the regulations in this sort of situation, or what is the answer to this question, and he is not confident of the answer, he calls the communications center. We have 13 or 14 people assigned there, and if they can answer it immediately on the phone, they give him the answer. Otherwise, the question is written up and we have a review group on which Mr. Munroe, my deputy, sits, as well as three or four other people from the affected offices in the Agency, and we try to get the answer back to the field within 48 hours. If we cannot get the answer within 48 hours, we tell him we cannot get it within 48 hours, and we staff it out and we get it out when we can. Mr. PECORE. You would not characterize these 1,200 items of business, as being 1,200 potential cases or controversies? Mr. WALKER. Oh, by no means. By no means. I would characterize those as inquiries. Mr. PECORE. Inquiries. Yes. Are you aware of the number of the cases that have actually been brought by citizens in the district courts under your regulations? Mr. WALKER. I do not have that information at hand, Mr. Pecore. I would be glad to furnish that for the record. Mr. PECORE. I believe it is something on the order of 50 cases as of the end of August. That is the readout that I have. As of the end of August 1973, there are some approximately 50 cases where the Government proceeded against individuals. Mr. WALKER. I think it is considerably more than that. My recollection is 286 cases in which we have brought affirmative litigation. Mr. PECORE. I was referring to the end of August as reflected in one of the Commerce Clearing House printouts. But the same source tells me there is something on the order of again approximately 50 cases in which people have sought redress, we will say, in the district court system. But my real question and the real thrust of my thought is whether or not you feel, in your opinion, that the mechanism that the statute provides, that is, by permitting a direct route through the Federal court system in the controversial cases which arise in the efforts to control the economy, whether that special provision is adequate as a sounding board which provides effective means of assuring due process? Mr. WALKER. Yes, I think it has. As I have indicated, and as I indicated a moment ago, I think that kind of system is essential. both from our standpoint as administrators of the program and from the standpoint of the public. Where an issue cannot be reconciled and where parties feel aggrieved, then there ought to be a means of promptly resolving the issue in the courts. And the procedure established by the statute provides just that: Expeditious judicial review of administrative discretion, and I think that is very desirable. Mr. PECORE. I have no further questions. Thank you, sir. Senator MATHIAS. Mr. Rodgers. Mr. RODGERS. Thank you. Mr. Walker, you have provided the committee with a copy of. I believe it is officially entitled the "Phase IV Handbook, Revised," which we have been calling the IRS manual.1 Mr. WALKER. Yes. Mr. RODGERS. As I understand it, this is provided to the personnel of the agency for purposes of giving guidance in reaching decisions under the program. Mr. WALKER. It is provided for a whole variety of reasons. As you understand from having looked at it, it covers both the manner of administering the program and the manner of posting things in the computer, and a whole wide range of subjects. Mr. RODGERS. I would also point out that you were kind enough to provide us with the health care exceptions manual, which—I think it is a parallel document in that specific area. Mr. WALKER. Yes. Because the health area is no longer being serviced by the Internal Revenue Service; it is being administered internally. It was formerly being administered by the IRS, but has been brough back internally. So the manual we have furnished to the committee is simply an adaptation and an updating of what was formerly an IRS health manual. Mr. RODGERS. Are there other sources of guidelines, either with respect to other areas, such as insurance or wages, or with respect to a greater depth of analytical standards in these areas, that would be applied to any of these cases? Mr. WALKER. Well, we have also furnished to the committee. I believe, a copy of guidance on handling exceptional requests in the petroleum industry. But there are no similar sorts of documents in other areas. On the wage side, the IRS does not have an administrative role. I mentioned in my statement that these comments I am making really are directed pretty exclusively toward the price side, since I understand that is the principal area of your interest. 1 See vol. 2 of these hearings. Mr. RODGERS. Well, in fact, we were interested in both sides. But what I am interested in ascertaining is whether or not there are any other written sources of standards that would be applied? Mr. WALKER. None of which I am aware. Mr. RODGERS. I had a number of questions about the manual which I think, in the interest of time, we will forgo and submit to you later in writing. But I did want to ask you, or point out one thing to you, and see if I could ask it in the context of the prior questions. On page 51 of the manual, section 2-and I will read that section Interpretation is a written statement issued by the district director or his delegate in response to a written request concerning the application of the regulations to a specific act or transaction. Districts may issue interpretations where there are clear and sufficient guidelines, precedents, rulings, or regulations, on which to base a determination. My question really is, is this IRS manual, are these IRS manuals— do they constitute the full range of guidelines or precedents? And if not, what else might there be, and which of that material is made available to the public? Mr. WALKER. Well, the next section, just to follow on, section 3.02 says: Where there are insufficient guidelines, precedents, or where policy issues are involved, the request for interpretation should be telephoned or faxed to the Cost of Living Council. We specifically have divided the responsibility for issuing interpretations between IRS and ourselves in this way. Where the road is clear, IRS has full authority to go ahead and issue an interpretation, but where the questions are novel or new or involve important matters of policy, then we wish to be consulted, and in that case, the interpretation would be issued by us. Now, strangely-and I am interested in this, and I had not realized it until I began preparing my testimony to come up here we have received a very small number of written requests for interpretations. Of course, we have received goodness knows how many telephone calls each week which we try to answer and respond to in as helpful a way as we can. But I am advised that we have fewer than 50 requests for interpretations that have been received from members of the public on our regulations. But to complete this, we have not published or we have not issued many interpretations as yet. Most of them have been coming in the last 10 days or 2 weeks, as people are interacting more directly with the regulations as time goes on. But it is my intention, as we are going to do with exception decisions, to see if we cannot get the Commerce Clearing House to publish those verbatim, so that that body of information will also be available to members of the public. I might also add, if I might just interrupt further, to say that, as we issue decisions for requests on exemptions, I expect to make those available to the public as well, for the reasons that I indicated in response to the chairman's inquiry. Senator MATHIAS. I have, as I indicated earlier, some written questions that are propounded by Senator Hathaway. Since they are in writing, perhaps we could save time if I could give them to you, and you could respond to them in writing. Mr. WALKER. I would be glad to respond to them. Senator MATHIAS. If we could ask you to do that within a week. we will hold the record open for that period of time. They will be included in the record. Mr. WALKER. Fine. I would be pleased to respond. [The questions and answers referred to follow:] QUESTIONS SUBMITTED BY SENATOR WILLIAM D. HATHAWAY TO WILLIAM N WALKER, ACTING DEPUTY DIRECTOR. COST OF LIVING COUNCIL, IN HEARINGS BEFORE THE SUBCOMMITTEE ON SEPARATION OF POWERS, OCTOBER 10, 1973. FOLLOWED BY RESPONSE OF THE CLC IN THE FORM OF A LETTER WITH ENCLOSURES DIRECTED TO SUBCOMMITTEE COUNSEL UNITED STATES SENATE, COMMITTEE ON BANKING, HOUSING AND URBAN AFFAIRS, I have some questions regarding the implementation of the Public Access section of the Economic Stabilization Program regulations. What procedures are being followed to ascertain whether all companies which are subject to the public disclosure requirement under the provisions of the Economic Stabilization Act are in fact complying with the requirement and submitting forms for public disclosure? What steps are being taken to bring those which are not in compliance into compliance with the law? There appear to be problems in this area. Staff members from the Joint Economic Committee informed me that they had requested disclosure forms for all the steel companies but had only received documents from two companies. When they asked the Cost of Living Council to determine whether others were subject to public disclosure, they were informed that this was not possible because the forms had all been sent to the appropriate district IRS offices. Obviously the forms should be kept on hand by the central CLC office, for secu rity and for disclosure should this be warranted. In view of the public interest involved and in view of the fact that the number of companies affected is rather small, I believe CLC should be able to establish procedures to insure compliance with the public disclosure law. What procedures have been instituted to insure that companies which are subject to public disclosure reveal all of the information they are required to reveal under the CLC regulations. As you are aware, I consider the regulations to be far too narrow as they stand, and I feel they violate the intent of the law. Thus I am further disturbed to see that companies are not even complying with CLC's very minimal requirements and that apparently nothing is being done to make them comply. For example, in the attached forms from two steel companies, one company has left out the percentage cost justification figures and the other has furnished little more than the name and address of the company. Since these forms were provided by CLC in response to a Congressional request, it appears that no attempt is being made to enforce the regulations on public disclosure. Please provide information on requests CLC has received for public disclosure reports and how they have been filled. Part II.-Calculation of Base Period Profit Margin (Enter dollar amounts with 000 omitted and percentages to 2 decimal places.) Part III.-Calculation of Profit Variation (Enter dollar amounts with 000 omitted and percentages to 2 decimal places.) 19 You must maintain for possible inspection and audit, a record of all price changes subsequent to November 13, 1971. Give location of such records. D Part V. Certification #3 Gateway Center, Pittsburgh, Pennsylvania 15230 I certify that the information submitted on and with this Form is factually correct, complete, and in accordance with Economic Stabilization Regulations (Title 6, Code of Federal Regulations) and instructions to Form CLC-2. Type name and title of the Chief Executive Officer of parent or other authorized Executive Officer and date of signing. |