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June 16, 1978 - Image 4

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Michigan Daily, 1978-06-16

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Page 4-Friday, June 16, 1978-The Michigan Daily
Nmichigan DAILY
Eighty-eight Years of EditorialhFreedom
420 Mynrd St., Ann Arbor, M. 48109
Vol. LXXXVIII, No. 32-S News Phone: 764-0552
Friday, June 16, 1978
Edited and managed by student,
at the University of Michigan
Lobby reform bill,
not quite enough
T HE MICHIGAN SENATE took a major step
this week to put state lobbyists in their
place by passing a bill to severely regulate their
power and influence in the legislature.
Under the bill, which was approved by an over-
whelming 33-3 vote, lobbyists would be required to
reveal any expenditures on state legislators ex-
ceeding $50 monthly or $250 annually. They would
also be prohibited from donating gifts of over $25
to any legislators.
Too frequently lobbyists have been able to "buy
legislators" with free racetrack tickets, free lun-
ches and large campaign contributions.
The direction of legislation affecting Michigan
residents has been too heavily determined by in-
terests of powerful state lobby groups.
This bill would make lobbyists' activities
public. Citizens would know if their represen-
tatives are being lavishly courted by lobbyists and
would be able to determine how much that con-
nection influenced the representatives' voting
record.
Also, the bill stipulates that representatives
cannot openly solicit campaign contributions
from lobbyists. This provision is a crucial step to
curb lobbyists' influence on legislators. In the
past, legislators have sought lobbyists and ex-
changed campaign contributions for guarantees
on certain legislation benefiting the lobbyists.
Under the bill, legislators can be prosecuted if
suspected of seeking contributions from lob-
byists.
While the bill does represent a step to control
lobbying, it does not go far enough. It does not
guarantee that lobbyists cannot still contribute to
a legislator's campaign and thereby pressure the
legislator to accommodate his demands. Also, the
bill -does not provide any guarantee that
legislators can not become lobbyists immediately
after leaving office.
The bill now goes to the House Policy Commit-
tee and eventually to the full House. The House
should adopt strong amendments to the
legislation, insuring that lobbyists will not be able
to make any contributions to political campaigns.
This would finally separate the dangerous
associations between lobbyists and legislators.
Perhaps then legislators will become more
responsive to the demands of their constituents -
not their lobby connections.
_SPRING EDITORIAL STAFF
BARBARA ZAHS
Editor-in-Chie
RICHARD BERKE KEN PARSIGIAN
Editorial Directors
JEFFREY SELBST
Magazine Editor
OWENGLEIBERMAN
Arts Editor
ANDY FREEBERG

Airlines: Trying to
bite their own tails

By Richard Berke
Both Democrats and
Republicans support it. The
American Conservative Union
and business interests want to see
it, as does Ralph Nader.
President Carter is pushing for it
with more intensity than did
President Ford.
Then why is an airline
regulatory reform bill, already
approved by the Senate, confron-
ted with a tough battle in the
House of Representatives?
Because the nation's major
airlines are afraid of reform in
their industry-reform that they
don't realize would yield them
higher profits and offer the public
better service.
PASSED IN APRIL, the Senate
bill would open the airline in-
dustry to price competition for
the first time, and provide for vir-
tually unrestricted entry of
airlines into new markets. If
enacted, the bill would represent
the first major reform in gover-
nment control of the airlines sin-
ce they were regulated in 1938.
United and Pan American are
the only giants in the industry
favoring the legislation. Almost
every other major airline has
initiated heavy lobbying efforts,
warning passengers that reform
legislationrwould, in the words of
Trans World Airlines, create a
"bloodbath" in the industry.
"(The major airlines) are
spending thousands and perhaps
hundreds of thousands of dollars
to defeat this bill," said Senator
Howard Cannon (D-Nevada),
principal sponsor of the
legislation. "They want to con-
tinue to operate like a closed
fraternity; protected by an out-
dated statute and a paternal
regulatory agency."
THE AIRLINE industry is inef-
ficient because of strict
regulation. The Civil Aeronautics
Board (CAB) regulates air fares
and decides which routes airlines
can serve-actions which result
in such low profit margins for the
airlines that they rely on millions
of dollars in annual government
subsidies to keep them operating.
The public is also hurt by strict
regulation because airlines can
cater only to the minority who
can afford to fly-primarily
business people. Without set
fares, airlines are able to com-
pete only by adding costly and
unnecessary frills such as sirloin

steaks-frills for which the con-
sumer doesn't want to pay. -
Most major airlines fear
regulatory reform because they
say competition resulting from
the legislation would lead to
airline bankruptcies when
newer firms enter the established
markets and cut in on the profits.
Major airlines argue that the bill
would eliminate scheduled ser-
vice to small, unprofitable com-
munities, and result in job losses
for airline labor.
These claims are not
realistic-they come from
airline executives who aren't
foresighted enough to see the ad-
vantages of regulatory reform.
Still, as support for reform has
grown, the airlines have in-
troduced cut rate fares in recent
months in an attempt to convince
the CAB-which has staged a
turnabout in favor of loosening its
grip on airlines-and the public

cheaper to fly than to drive their
cars. Fares are 40 percent lower
than those charged by large
airlines, whose fares are set by
the CAB.
Small community service
would most likely increase, not
diminish with reform legislation.
The Senate bill includes
provisions for a community ser-
vice program designed to protect
small communities by guaran-
teeing federal subsidies for ten
years. But that program may in
fact be unnecessary since new
airlines will compete for small
community markets.
THE ESTABLISHED airlines
shouldn't fear bankruptcy either.
Lower fares resulting from the
legislation will stimulate demand
and thus fill the planes closer to
capacity. The increased demand
would create a need for more
airline passenger service em-
ployees-not unemployment.
Thus, the large airlines' ap-

'With set fares, airlines are able
to compete only by adding costly
and unnecessary frills such as
sirloin steaks-frills for which the
consumer does not want to pay.'

that reform can come without the
help of legislation.
SINCE THE FARES have been
slashed, airlines have
unquestionably benefited: More
people are flying, planes are run-
ning with full loads, and as a
result, profits are up. If their own
minimal reform efforts aren't
enough to induce airlines to sup-
port regulatory reform, they
should take a look at the success
of intrastate airlines who aren't
subject to CAB regulation.
In the seven years Southwest
Airlines has operated in Texas,
for example, markets have ex-
panded dramatically because, of
the introduction of low fares. The
same is true in the case of Pacific
Southwest Airlines in California,
which has been so successful in
its low-cost no-frills operation on
some routes people find it

prehension is basically unfoun-
ded. Yet still they fight the
reform legislation that is expec-
ted to be considered by the House
before theend of the year. But it
looks as if some form of airline
deregulation will be enacted
despite the industry's cries to
retain strict government control.
Passage of the legislation
would do wonders for transpor-
tation-taking to the air will-no
longer be the expensive sport of
the wealthy few or those with
generous expense accounts.
Airline reform legislation has
been grounded for much too long.
Richard Berke, co-director
of the Daily's editorial page,
covered airline reform
legislation while interning last
summer for the Capitol Hill
News Service.

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