Social regulation began to gain new momentum after the Democratic Clinton administration took over in 1992. But the Republican Party, which took control of Congress in 1994 for the first time in 40 years, again placed social regulators squarely on the defensive. That produced a new regulatory cautiousness at agencies like OSHA.
The EPA in the 1990s, under considerable legislative pressure, turned toward cajoling business to protect the environment rather than taking a tough regulatory approach. The agency pressed auto-makers and electric utilities to reduce small particles of soot that their operations spewed into the air, and it worked to control water-polluting storm and farm-fertilizer runoffs. Meanwhile, environmentally minded Al Gore, the vice president during President Clinton's two terms, buttressed EPA policies by pushing for reduced air pollution to curb global warming, a super-efficient car that would emit fewer air pollutants, and incentives for workers to use mass transit.
The government, meanwhile, has tried to use price mechanisms to achieve regulatory goals, hoping this would be less disruptive to market forces. It developed a system of air-pollution credits, for example, which allowed companies to sell the credits among themselves. Companies able to meet pollution requirements least expensively could sell credits to other companies. This way, officials hoped, overall pollution-control goals could be achieved in the most efficient way.
Economic deregulation maintained some appeal through the close of the 1990s. Many states moved to end regulatory controls on electric utilities, which proved a very complicated issue because service areas were fragmented. Adding another layer of complexity were the mix of public and private utilities, and massive capital costs incurred during the construction of electric-generating facilities.
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This article is adapted from the book "Outline of the U.S. Economy" by Conte and Carr and has been adapted with permission from the U.S. Department of State.