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What his time at the FTC suggests about how he’d run the White House.
Long before Ted Cruz was a big-name senator and conservative rock star, wowing the crowd at Liberty University in the early days of his presidential bid, he was just another lawyer toiling away in virtual anonymity under George W. Bush.
While Cruz’s time in the Senate is best known for fiery speeches and high-profile gestures like his 21-hour filibuster, in his earlier time in Washington he demonstrated a wonkish eye for detail and an eagerness to take on powerful industry groups that he saw as stifling competition. Though his efforts ultimately succeeded on a much smaller scale than he’d initially envisioned, they demonstrated a relentless focus on repealing or preventing the passage of laws that he felt needlessly regulated the marketplace. If this early period of Cruz’s career is any guide, a Cruz presidency would feature a sustained push to roll back federal regulations, one where outcomes are measured carefully but where success may be less black-and-white than Cruz’s public comments since his election to the Senate might suggest.
Cruz spent a good portion of his early career working for President George W. Bush — first as a legal policy adviser to the Bush-Cheney campaign in 2000, then as part of the recount team in Florida. He was the Department of Justice coordinator for the Bush-Cheney transition team and then spent six months as Associate Deputy Attorney General at the DOJ. But his longest stretch of work for Bush was at the Federal Trade Commission, before he departed to become the Solicitor General of Texas.
From July 2001 to January 2003, Cruz was the director of the Office of Policy Planning at the FTC. There, he earned a reputation as a passionate boss intent on tracking the success of the office’s efforts in granular detail.
A memo written by Cruz and his deputy, Jerry Ellig, shortly before his departure to Texas included a chart of the office’s projects, his calculation of how successful each project had been, an estimate of the probability that decision-makers listened to the FTC, and an estimate of the probability of the same outcome without any advocacy or action from the FTC. (Cruz and Ellig concluded the FTC had influenced the outcome in eleven of the 14 projects that were not pending.)
Initially, Cruz proposed an ambitious agenda that featured efforts to roll back regulations on teacher certification, hospital accreditation, and local governments’ agreements with cable television.
“Recruiting good teachers could be made easier if the educational system adopted a more market-oriented approach, reducing the number of formal education-school requirements in order to increase the supply of teachers in critical specialties,” Cruz wrote in a July 2001 memo outlining a dozen policy areas for the FTC. He contended that eliminating those requirements would attract more teachers who had recently retired from another profession or the military, or who were interested in making a mid-life career change.
In the same July 2001 memo, Cruz also compared the primary professional organization that accredited U.S. hospitals, the Joint Commission on Accreditation of Healthcare Organizations, to a cartel:
The Joint Commission has a structure that would seem to be very worrisome in antitrust terms. The group includes virtually all horizontal competitors in the industry, and it has, in certification standards that are closely interwoven with state licensure requirements, a powerful enforcement mechanism to prevent cheating on cartel conduct.
The future senator went on to contend that the Joint Commission’s accreditation standards limited “patient choice without any apparent benefits for health or safety,” citing accreditation standards that limited some of the times and terms of family members’ visits to hospital patients.
Cruz also urged his colleagues to “look into possible anti-competitive exclusion of cable television companies.” He cited a report from the FTC’s San Francisco office of possible collusion between municipalities and cable companies. The municipalities would allegedly pass a tax or franchise fee on a cable company that was above the level permitted by federal law, which the incumbent cable company would then happily pay in exchange for local officials’ promise to reject all new entrants into the market, even if they offered better services or lower prices.
The bolder ideas in Cruz’s early memo, however, never came to fruition, as pressing cases and efforts in other policy areas ultimately took precedence. But Cruz’s work in these other policy areas did have an impact, and might prove to be useful experience in deterring what he sees as bad regulations in the future.
Cruz and the other FTC staff successfully defeated changes aimed at allowing competing physicians in Alaska and Washington to engage in collective bargaining with health plans over fees and other contract terms, arguing that the proposals would increase health-care costs and reduce access to care, without ensuring better outcomes for patients.
Cruz also weighed in on proposed New York and Virginia laws that aimed to restrict below-cost gasoline sales. Some state lawmakers contended that retailers selling gas for less than they’d paid for it represented a predatory effort by large corporations to force smaller businesses out of the market, by slashing prices so low that the smaller ones couldn’t compete.
But Cruz and the other FTC staff argued that the laws duplicated existing law and would discourage or even prevent competitive pricing. “New laws to limit price-cutting and prevent refiners from opening new gas stations are especially inappropriate at a time when many Americans are concerned about gasoline prices,” Cruz declared in August 2002. New York governor George Pataki pocket-vetoed the proposed law in February 2003.
A similar bill died in committee in Virginia.
Rolling back regulations has been a perennial promise of GOP presidential candidates for a generation. Every Republican presidential hopeful says he’ll cut red tape; very few make it a top priority once they’re in office. Cruz faces a steep climb to the nomination and the presidency. But if he can defy the odds and claim the White House, he’ll bring a level of hands-on experience with the regulatory state — and a proven zeal for cutting it down to size — that few, if any, of his predecessors could match.
— Jim Geraghty writes the Campaign Spot on NationalReview.com.
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