Reagan Aides Consider Move to Preempt State on Toxic Rules

Officials of the outgoing Reagan Administration are considering a proposed regulation that would cancel the consumer warnings for toxic chemicals in food, drugs and cosmetics that could be mandated by California’s Proposition 65.

The draft regulation, which was sent for review this week to the President’s Office of Management and Budget, says that it is up to the federal Food and Drug Administration--not the states--to decide whether such warnings should be presented to consumers.

Environmental and consumer activists have feared an 11th-hour move by the Administration to strike down the California law at the behest of the food industry.

Proposal Not Yet Approved

However, government sources cautioned that the controversial preemption proposal has not been approved by top officials at the FDA, the Department of Health and Human Services or the budget office, which oversees federal rule-making.

“All I can tell you is that I have not signed off on any regulation, said FDA Commissioner Frank Young, who refused to speculate on the proposal’s chances for approval. “There has been a lot of speculation on this, but I can’t comment on rumors.”

Under legal doctrines set by the Supreme Court, a federal agency can preempt conflicting state laws in an area it oversees if it believes that Congress has intended the federal government to “occupy the field.”

Since 1986, when California voters approved Proposition 65, known as the Safe Drinking Water and Toxic Enforcement Act, food industry lobbyists have been pushing federal officials to preempt the new state law.

The draft regulation, a copy of which was obtained by The Times, states that federal law gives the FDA “comprehensive” regulatory authority “with respect to warnings as to the safety of food, drugs, (medical) devices and cosmetics. Accordingly, any exercise of state authority in this field that creates inconsistencies with the exercise of federal authority is preempted.”

The draft was drawn up by the FDA staff, apparently at the request of White House officials.

A budget office official, who also asked not to be identified, confirmed that the measure “is being discussed. We’ve been getting a lot of pressure on this,” she said, declining to comment further.

The food industry has contended that the state warnings are unwarranted, saying that toxic chemicals are present in such minute quantities in the products that they are harmless.

More stringent than current FDA rules, the California law requires companies to give consumers a “clear and reasonable warning” if a food product contains such chemicals as lead, arsenic or benzene.

“We believe California broke with the established policy that the FDA is charged with providing meaningful health and safety information to consumers about food and drug products,” said Jeffrey Nedelman, vice president of the Grocery Manufacturers of America, which has spearheaded the drive against Proposition 65.

The preemption proposal has divided the Reagan Cabinet, according to officials who have followed the internal debate dating back seven months. Some, such as Interior Secretary Donald P. Hodel and former Atty. Gen. Edwin Meese III, argued in favor of preemption on the grounds that the California law constituted excessive government regulation of an industry. Others, including Health and Human Services Secretary Otis R. Bowen, who oversees the FDA, opposed the move, in part reflecting Reagan’s view that the federal government should not interfere with state decisions.

A White House task force concluded in November that Proposition 65 has had only a “negligible” economic impact on the food industry, but FDA officials were instructed to prepare a draft regulation for scrutiny by budget office officials.

“Some people wanted to move fast on this and get it out now, so that the Bush people would not have to start all over again,” said one FDA official, who asked to remain anonymous. “But we also thought it might look embarrassing to do this at the last minute.”

When a federal agency sets forth an official rule, it normally publishes it in the Federal Register and gives the public 30 to 60 days to comment on it. After the responses are considered, the agency decides whether to enact a final rule.

But the preemption draft sent to the budget office is characterized as merely “a statement of policy,” not “substantive rule-making.” Therefore, the draft concludes “that Proposition 65 is preempted now, and, as such, it (the preemption order) is effective immediately, without any requirement for notice and comment.”

This approach, if approved by the Reagan White House in its last week in office, would permit the preemption order to go into effect before George Bush takes over on Friday.

“Someone who does not have George Bush’s best interests at heart has been trying to set him up,” said David Roe, an attorney with the Environmental Defense Fund and a principal author of Proposition 65. “The strategy is to get the Reagan Administration to act at the last minute and leave an enormous controversy for the Bush administration as it comes in the door.”

Savage reported from Washington and Paddock from Sacramento.