Debunking the Myth: Carter, Congress, and the Politics of Airline Deregulation - Scholarship

David B. Cohen

ABSTRACT

The Carter administration fashioned a multi-faceted strategy to help push the Airline Deregulation Act of 1978 through the Congress: Administrative (relaxation of aviation regulation through the Civil Aeronautics Board); public (public speeches and a media blitz to effect public opinion); persuasion (a Beltway tactic aimed at pressuring key members of Congress); and, divide and conquer (organization of interests sympathetic to deregulation, and cooptation of key members of the opposition to weaken those opposed). Although Jimmy Carter has often been criticized for dealing unproductively with the legislative branch and failing to delegate policy to his staff, the case of airline deregulation demonstrates that this was not always true.

INTRODUCTION

"For the first time in decades, we have deregulated a major industry. When I announced my own support of airline deregulation soon after taking office, this bill had few friends. I'm happy to say that today it appears to have few enemies." (1) With those words, President Jimmy Carter signed into law the Airline Deregulation Act of 1978, thus freeing the nation's airline industry from much of the federal oversight and protection to which it had become accustomed over four long decades. Among other things, the Act opened up the airline industry to competition from new and existing carriers, allowed automatic market entry for airlines wishing to add new routes to their system, and, as of January 1, 1985, terminated the Civil Aeronautics Board (CAB), the regulatory body that oversaw the industry. (2)

The President signed the bill after a twenty-two month struggle with Congress to enact the legislation. However, the deregulation fight did not start when Jimmy Carter entered office. Rather, the battle began in earnest after Gerald Ford ascended to the presidency and his administration assembled a domestic agenda. Carter benefitted from a process that was well underway when he was sworn in on January 20, 1977. Regulatory reform of the airline industry was ripe for an early legislative victory for the fledgling administration. (3) However, successful passage of a deregulation bill would not come for another twenty-two months.

Although it has led to some isolated difficulties, air transportation and industry experts have seen airline deregulation as having added substantial benefits to the traveling public. (4) However, analysis of the economic benefits and costs of airline deregulation will not be made here. Rather, the intent is to examine White House strategy concerning passage of the airline deregulation bill.

THE AIRLINE INDUSTRY UNDER REGULATION

FDR Through LBJ, 1934-1969

The first major piece of legislation regulating the airline industry came in 1934 with the passage of the federal Airmail Act. The act shifted responsibility for overseeing airmail from the U.S. Army to the Post Office Department after several pilots were killed in accidents due to inexperience and faulty equipment. (5) The Post Office was also given primary responsibility over entry into the industry as well as scheduling and route assignments for the airlines. (6)

In 1936, the major airlines formed the Air Transportation Association (ATA). The ATA's original purpose was to lobby the federal government for increased aid to the industry as well as for protection from excess competition, which it contended, would eventually destroy the industry. (7) ATA lobbying helped secure passage of the Civil Aeronautics Act of 1938 that created a five-member Civil Aeronautics Board (CAB). Each member was appointed to a six-year term by the president, with one chairman, and was subject to confirmation by the Senate.

Among other things, the Civil Aeronautics Act was authorized to:

* encourage and develop an industry adapted to the present and future needs of the foreign and domestic commerce of the national defense and postal service of the Us

* regulate the industry in order to foster safety, economic soundness, and coordination among the airlines

* promote adequate, economical, and efficient services at reasonable prices without the use of discriminatory or destructive practices

* promote competition to the extent necessary so as to assure sound development of the industry (8)

The framework constructed by this law was one in which power resided completely with the federal government. The CAB dominated the industry; however, most of the players within the system were content and viewed the CAB as a "benevolent dictator." (9)

Another important piece of legislation was the Federal Aviation Act of 1958, which distinguished between two main functions of airline regulation: safety and economics.

The law created the Federal Aviation Administration (FAA), which was given the primary responsibility of regulating industry safety. The CAB was left with the responsibility of overseeing the economic health of the industry. (10)

Until the 1970s, life for the airlines under regulation was stable and marginally profitable. Some analysts have gone so far as to call this regulatory scheme a "brilliant success." (11) Others have not been quite so bold, but argue nevertheless that the regulated airline industry was stable and grew rapidly during this period. (12) Despite the fact that profits were small, the airlines were content under regulation as they were protected from potential new airlines that were denied access into the system. (13) The executive and legislative branches were also happy with a system that was relatively safe and problem-free. (14)

The Nixon Era

The election of Richard Nixon in 1968 marked the beginning of the end for airline regulation. During this time the CAB began to narrowly interpret its mandate and strictly enforce its regulations. An explosion in ridership occurred in the 1960s. Due to a number of discount programs offered by the airlines and a pro-competitive stance by the CAB, more people could afford to fly. However, ridership decreased at the end of the decade and Secor Browne, the CAB chairman, tightened regulatory controls as the CAB assumed an anti-competition stance. (15) When Robert Timm was appointed by Nixon to assume control of the CAB in 1973, he took an even more anti-competitive stance than his predecessor. (16)

Compounding the problem was the CAB's policy concerning domestic fares. Due to some questionable practices within the industry, the Domestic Passenger Fare Investigation began in 1969 and completely overhauled the pricing system that had guided the industry. As a result, many of the discount fares that had become so popular were abolished and the average price for a ticket increased by twenty percent. (17)

Discount fares were not the only casualties in the CAB assault. For the period 1969-1974, the CAB was guided by an unwritten policy that all applications by potential new carriers were refused consideration. (18)

These controversial moves by the CAB resulted in a swing of momentum toward those who favored reform. The Arab Oil Embargo of 1973 exacerbated the already worsening situation by increasing costs for both the airlines and consumers. Profits dropped sharply for the industry during this period. (19)

The Ford Era

The Ford era marked a turning point in the deregulation debate as a number of factors congealed which gave the regulatory reform movement cause to be optimistic. The Ford administration, as part of its anti-inflation strategy, adopted regulatory reform as a major component. (20) Chairman Timm was fired in December and replaced with the pro-reform John Robson. Though Robson did not favor complete deregulation of the industry, he was inclined toward loosening the regulatory grip. In fact, from the moment Timm was removed, the CAB began reversing its controversial anti-competitive policies. (21)

Another major factor encouraging the anti-regulatory mood was the Kennedy Hearings on CAB policy that commenced in 1975. (22) Senator Edward Kennedy (D-MA) favored radical reform of the industry and as chair of the Subcommittee on Administrative Practice and Procedures of the Senate Judiciary Committee, the hearings were constructed in such a way as to show the need for regulatory reform. (23) The Kennedy Hearings crystallized support for reform-the debate shifted from questioning whether reform was necessary to what type of reform would be optimal.

The Ford administration was very much in sync with the mood reflected at the Kennedy Hearings. In October of 1975, the administration introduced the Aviation Reform Act into the Senate. (24) Shortly following the introduction of the Ford legislation, Kennedy submitted a similar reform bill in the Senate. (25)

Both the Ford and Kennedy bills were reported to the Aviation Subcommittee of the Senate Commerce, Science, and Transportation Committee chaired by Howard Cannon (D-NV). Cannon was an instrumental character in this drama-his subcommittee would have a great stake in determining the fate of regulatory reform. At first, Cannon was reluctant to endorse reform. Throughout his career he had favored regulation and had many friends in the industry that wanted to maintain the status quo. However, circumstances forced him to switch sides in the debate. Cannon's position as Aviation Subcommittee chairman gave him an incentive to control the reform debate and defend the committee's jurisdiction and prestige after the much-publicized Kennedy Hearings. This issue also provided an opportunity for Cannon to build up his own unremarkable legislative record. The fact that Cannon's committee staff was free-market orientated also pushed him towards reform. (26) Finally, in testimony before Cannon's subcommittee, Chairman Robson asserted that regulation was the central cause of the industry's economic woes; this pronouncement had a profound effect on Cannon and, following Robson's testimony, he endorsed reform. (27)

Gerald Ford was defeated in his quest for his own full term as president and was deprived of an opportunity to shepherd regulatory reform of the airline industry through the Congress. Jimmy Carter, an advocate of regulatory reform himself, was able to benefit from Ford's misfortune. As a staff member of Carter's CAB noted:

Carter inherited a stage of development of deregulation in transportation where airlines were in the consciousness of government....And we walked into a CAB where the mood had already been structured for deregulation by the previous chairman, in his leadership with the board members, and in dealing with Congress. (28)

Thus, by the time Carter was sworn in as the 39th president, the momentum had swung in favor of regulatory reform. (29)

REVIEW OF THE LITERATURE: PERCEPTIONS OF CARTER'S POLITICAL LEADERSHIP OF CONGRESS

Most studies of Jimmy Carter's leadership of Congress concentrate on the failures and weaknesses associated with the President and his legislative staff. Dilemmas faced by the Carter White House are often attributed to the President's background in Georgia and his lack of Washington political experience. As one scholar put it, Carter "left a bad taste in the mouths of too many people who were personally offended by his hostility to Washington politics and his lack of sophistication about the role such politics played in fueling the policy process." (30)

Much of the literature reflects three themes concerning Carter's leadership of Congress. The first theme suggests that the President was inexperienced with the rough and tumble of Washington politics. Eric Davis claims that because Carter felt he did not "owe" anything to Washington politicians, he avoided bargaining with legislators and building coalitions. (31) Stephen Skowronek argues that Carter "exposed himself as one of the most paralyzing cases of estrangement." (32) In his discussion of Carter's decision to cut nineteen federal water projects from the budget, Skowronek contends that the "initiative was received on Capitol Hill as an ignorant, irresponsible and politically pretentious assault on the bread and butter of congressional careers." (33)

Even those who assume a more sympathetic view of Carter have argued that the President was overly apolitical. Charles Jones argues that Carter was a rationalist who believed in "doing what's right, not what's political." (34) He describes Carter as uncomfortable with political accommodation, believing those who wanted him to compromise were associated with the Washington political establishment. The public wanted him to pursue the best policies, and as their trustee, he would distinguish policy from politics. (35) Nelson Polsby contends that Carter's failure to articulate broad legislative themes led to his inability to develop working relationships with congressional leaders. (36) James Fallows, Carter's top speechwriter, even saw the President as foolishly unaware of legislative norms: he "did not know how Congressmen talked, walked, and thought, how to pressure them without being a bully or flatter them without seeming a fool." (37)

The lack of Washington political experience was not limited to the President. The second theme extends the charge to Carter's domestic policy staff, in particular the White House legislative operation. For Davis, chief legislative point man Frank Moore came to be regarded as out of touch with Washington politics because he appointed mostly inexperienced Georgians to his staff in the congressional liaison office. Also, Moore emphasized policy specialization in his organization of the office, which had been rejected by former Democratic liaison officials. (38)

The image of Carter and his staff lacking political skill was formed early in the administration. Kellerman describes the White House staff during 1977 in the following manner: "The White House congressional relations staff was ineffective for much of the year, and by October the liaison team headed by Frank Moore was under heavy fire." (39) Harold M. Barger suggests that by 1979, Carter's perception "as a bumbling chief legislator had become well established in Capitol Hill and in the nation's press." (40) Fallows argues that in his first legislative year, Carter relied much too heavily on a half dozen of his upper level advisors, who were almost all from Georgia. (41) He suggests that by ignoring those most experienced with Washington politics, Carter was unable to build an effective legislative team. (42)

The charge that Carter may have been too inexperienced in Washington politics is typically associated with his operating style, which has been perceived by some as a contributing factor in his limited accomplishments. The third theme holds that Carter's operating style was that of a self-reliant policy micro-manager. Erwin C. Hargrove sees Carter as someone who personally examined the entirety of a policy problem. Carter "sought to achieve public goods in the form of comprehensive programs through political appeals to diffuse goals rather than to specific interests and coalitions, and he developed such programs in a decision-making process that placed the highest priority on study and collegiality." (43)

Along the same line, Stephen Hess argues that Carter's goal in organizing the White House staff was establishing a rational policy process that would be open enough to produce the best policy results. "Carter trusted process to create policy and was averse to ideology, which in his view would contaminate rational selection of policy." (44) Hess also contends that Carter's preoccupation with process led him to lose control over the initiatives he introduced in Congress, which contributed to a policy environment embroiled in suffocating gridlock. (45) Jack Knott and Aaron Wildavsky claim that although Carter believed in creating a good and pure policy process that was open, honest, and comprehensive, the result was a series of unfocused legislative initiatives. (46) Similarly, Paul Quirk suggests that Carter preferred self-sufficiency and sought to construct a "self-reliant presidency as a matter of conviction." (47) His attention to the details of policy contributed to a lack of focus on legislative matters.

Taken as a whole, the prevailing literature has broad implications for the study of Jimmy Carter's political leadership of Congress. Also, some accounts have either ignored or downplayed instances in which Carter was highly successful and politically astute in his approach to legislation. These three themes may lead students of the presidency to misperceive the relationship between the Carter White House and the Congress. Unlike much of the prevailing literature, which seems to suggest that Carter had a poor reputation and strained relations with the Congress, we believe airline deregulation is case that challenges previous accounts of Carter's legislative skills.

THE CARTER ADMINISTRATION AND AIRLINE DEREGULATION: THE PLAYERS

The deregulation drama had a varied cast of characters who helped shape the battle. These included individuals in the White House, the Congress, the airline industry, and groups on both sides of the issue.

Inside the White House, the main organizational unit in charge of airline deregulation was the Domestic Policy Staff (DPS) headed by Stuart Eizenstat. Within the DPS, the responsibility for this complex and important issue was delegated to Mary Schuman under the direction of Si Lazarus, Associate Director for Government Reform. Young, (late-20s) and only a junior staff member, Schuman became the point person for aviation reform. (48) David Rubenstein, a senior member of the DPS described Schuman's role in this way:

We had a young staff person who...had worked on the Hill. Her name was Mary Schuman and she just took this under her wing and did nothing for about a year except airline deregulation. Most people on our staff would have five or six things floating from time to time and it was a matter of juggling. She was very single minded. She said, 'I'm going to do airline deregulation, I'm going to get it through.' She did the Hill lobbying, getting Brock Adams [Secretary of Transportation] to file papers, orchestrating a memo to the President, orchestrating the interest groups, orchestrating the press. It was a real maestro performance. The result was that Carter got airline deregulation... This was a classic example of how something which was a campaign position would have died had not somebody on our staff really pushed it to the end. (49)

Stu Eizenstat also acknowledged Schuman's important role: "If it hadn't been for Mary Schuman, there wouldn't be airline deregulation because the transportation department was very lukewarm on it and it was only her pushing and the President's that led to it." (50)

Brock Adams, as head of the Department of Transportation (DOT), would normally have taken the lead on an issue such as this. However, Adams' views were not compatible with Carter's on airline deregulation, at least in the beginning. He favored a more conservative, incremental pace of reform, if any. Carter and his staff wanted a bill with more gusto than Adams cared for. Additionally, the Carter White House viewed the issue as economic and not one concerning transportation. (51) The conflict that resulted between Carter and Adams was much publicized, having occurred less than two months into the new administration. (52) The primary documents are full of instances that detail the rift between the White House and DOT. For example, Si Lazarus wrote to Stu Eizenstat concerning a telephone call from Brock Adams to Eizenstat three days earlier:

As background, Stu, you should know that, by going over Mary's [Schuman] head to get you to modify her directions, Adams is in effect trying to undermine her capacity to coordinate the Administration's approach to the airline issue. Even if after consulting with her, you disagree with her, you have got to lean over backwards to support her in what you decide to do, and most importantly, in how your decision is presented to Adams. Consult with her before agreeing to anything nd usually let her communicate the response, if you feel her position needs to be modified. Otherwise, we lose our ability to see that the President's policies are not undermined by DOT's day-to-day behavior. (53)

Nonetheless, Adams did partake in the later stages of the deregulation struggle.

By virtue of his position as head of the White House congressional liaison office, Frank Moore was an important player. Much of the communication between the administration and Congress went through Moore's office. Moore supported regulatory reform and was a willing participant in the process.

Another key figure for the administration was Alfred Kahn who was appointed by Carter to succeed Robson as head of the CAB. Kahn was a noted economist and had written extensively on the subject of regulation. (54) He was also an avid reformer and free-marketeer. Kahn's appointment was crucial because after he assumed control of the CAB, the Board initiated a series of moves, which began to deregulate the industry long before any bill was passed. Kahn's CAB moved at a pace much faster, and his reforms went much further, than Robson's had. Kahn described their differences:

The main difference between the preceding chairman and me was not on the general efficacy of deregulation, he had in fact come out in favor of it,- but in his attitude toward moving before a bill. Now in that he was extraordinarily conservative...." (55)

In order to ensure that the CAB moved in a pro-competition direction, Kahn also brought in a number of his own people who were similarly free-market advocates. (56)

Finally, the President himself must be considered an important player. Carter put economic deregulation of the transportation industries near the top of his agenda when he moved into the Oval Office. Though he shied away from much of the day-to-day lobbying of Congress and important interest groups, he did resort to public and private persuasion when the time called for it. (57)

Other players outside of the administration were instrumental in the deregulation battle. The White House went to great pains to organize various pro-reform interest groups to put pressure on Congress. The Ad Hoc Committee for Airline Regulatory Reform was a baffling patchwork of organizations that would normally not have worked together. (58) Included in this committee were Ralph Nader's Aviation Consumer Action Project, the American Conservative Union, the National Association of Manufacturers, the National Association of State Aviation Officials, the American Farm Bureau Federation, the National Federation of Independent Business, and Common Cause. (59) Some groups within the industry also pushed for reform. They included most of the commuter, charter (e.g., Trans International Airlines, World Airways, and Evergreen International) and all-cargo airlines (e.g., Federal Express and Flying Tiger Line) and some of the intrastate carriers (e.g., Pacific Southwest). Eventually, some of the major carriers (e.g., Continental and United) and smaller airlines (e.g., Hughes Airwest) joined the coalition. (60)

There were key people within Congress who were advocates for reform and played important roles. Both Howard Cannon and Edward Kennedy were very influential by virtue of their respective positions as chairs of important Senate subcommittees. It is the Cannon-Kennedy bill (S. 689) that became the foundation for the deregulation bill (S. 2493) eventually enacted. Kennedy later emerged as a bitter rival and critic of Carter, challenging him for the Democratic nomination in 1980; however, on the issue of airline deregulation, they worked well together. By virtue of his position as chair of the Senate Commerce Committee, Warren G. Magnuson (D-WA) was also important to the White House. Although he generally deferred to Cannon on aviation matters, the administration made sure to maintain his support. (61)

James B. Pearson (R-KS) was also an important player in the Senate on aviation reform. As the ranking minority member on the Commerce Committee, it was crucial for the administration to gain his favor if they wanted support from the other Republicans on the committee. In fact, Pearson and Howard Baker (R-TN) submitted their own, more conservative" version of an aviation bill (S. 292) which was eventually merged into the Cannon-Kennedy legislation that was signed by Carter. (62)

Over on the House side, two California Democrats, Harold T. (Bizz) Johnson and Glenn M. Anderson, were key figures. Anderson chaired the House Subcommittee on Aviation of the Committee on Public Works and Transportation. It was here that the airline bill stalled in the later stages of the process and Anderson became a key actor in the drama. Johnson, as chair of the Public Works Committee, was instrumental in quickly reporting the bill out of his Committee to the Conference Committee. His actions allowed a vote to occur before the 95th Congress recessed.

Finally, academics, especially economists, played a role in the debate. Had it not been for a number of articles and books that attacked airline regulation, it is doubtful that regulatory reform would have been placed so high on the agenda by the Ford and Carter administrations. (63) Also, most research favored total economic deregulation of the industry, not gradual change, which encouraged the Carter administration eventually to favor a complete overhaul of the industry. (64)

The deregulators were opposed by a number of powerful groups. First and foremost were the airlines and their executives. Most of the major airlines (e.g., American, Delta, and Trans World) and local carriers (e.g., Allegheny, Ozark, Piedmont, and Southern) initially opposed any type of regulatory reform. (65) Though not entirely happy with life as they knew it under the strict control of the CAB, it was better than the potential disaster that could befall the airlines in an unregulated environment. Delta Air Lines, based in Atlanta, was especially vehement in its opposition. W.T. Beebe, Chairman of the Board and Chief Executive Officer of Delta wrote to President Carter:

Because you and I have had a long relationship in Georgia, I particularly want you to know what we are doing in the way of opposing this bill so that there will not be any secrets involved....It is my intention for Delta to expend whatever energy and resources we have available to us to fight deregulation in its present form. I am extremely sorry that we apparently are on opposite sides of this issue, but we expect to make our fight on the basis of issue and to avoid any personality involvements. I notice with interest that you have Mary Schuman canvassing the country trying to sell deregulation in its present form, and we shall try to counteract effectively her mission and any and all such future efforts which we conceive as being very misguided. (66)

The Air Transportation Association and the Association of Local Transport Airlines opposed deregulation from the beginning. The ATA, however, was an unwieldy and disorganized organization and proved to be a weak guardian of the industry. (67)

Most every union within the industry lined up against deregulation. (68) These included the Air Line Pilots Association (ALPA), the International Brotherhood of Teamsters, the Transport Workers Union of America, the Association of Machinists and Aerospace Workers, the Brotherhood of Railway and Airline Clerks, and the Flight Engineers International Association. Fearing that wages would fall and jobs would dry up in a deregulated airline industry, the unions fought hard against reform. (69) Typical of the union stance on deregulation, John J. O'Donnell, ALPA head, noted the following:

[W]e firmly believe that prudent government regulation of the privately owned and operated air transportation system is in the public interest, and that efforts to get the Federal Government out of the airline business in the name of free enterprise and more competition is contrary to the best interests of consumers, airlines, and employees. Historically, public transportation systems have been regulated by government to insure regular, reliable, and reasonably priced service to the traveling and shipping public that depend on them. We believe that such regulation is as vital today as it was in the early days of aviation to maintain and develop a stable and integrated network of air transport services. (70)

Other entities such as commercial banks and insurance groups with a large stake in the industry were likewise concerned about reform. (71) A deregulated environment brought uncertainty, something banks and insurance companies do not look kindly upon. Some state and local organizations representing airports and small communities, especially those in rural areas, similarly opposed legislation. It was thought that deregulation would encourage major carriers to pull up their stakes and abandon unprofitable routes in the "hinterland," leaving small cities and the airports that serviced them with inferior and inconvenient service. (72)

Finally, some notable figures in Congress were vehemently opposed to deregulation. Among others, Senate Aviation Subcommittee members Barry Goldwater (R-AZ), Daniel K. Inouye (D-HI), and John Melcher (D-MT) were vocal in their opposition. Like the rural states they represented, Senators such as Melcher had a real fear that service from the big carriers might dry up. (73)

WHITE HOUSE STRATEGY

With all of the various interests lined up for and against airline reform, the Carter administration fashioned a multi-faceted strategy to help push the legislation through the Congress: 1) administrative (relaxation of aviation regulation through the Civil Aeronautics Board); 2) public (public speeches and a media blitz to effect public opinion); 3) persuasion (a Beltway tactic aimed at pressuring key members of Congress); 4) and divide and conquer (organization of interests sympathetic to deregulation; and 5) cooptation of key members of the opposition to weaken those opposed).

The Administrative Strategy

The first area of focus targeted the executive branch. Alfred Kahn's nomination as CAB chair was the initial step in the process. Under his leadership, the CAB embraced price and service competition as the main policy objective of the agency. (74) In so doing, Kahn and the CAB were able to accomplish by administrative fiat much of what the Airline Deregulation Act legitimized. In a January 1978 interview, Kahn remarked that:

[W]e have done a lot already and will do more in the next few months to liberalize what we do and to remove a great deal of the dead hand of CAB.... Within the last month or two, for the first time in history I think, two carriers applied for a route-Washington to Cincinnati-and we told them they might both go in if they choose. In one swoop, we undermined the traditional character of certification, which is its exclusivity and its correspondingly mandatory character.... We will be making more strides within a couple of months to undermine the essential character of cartel-like restrictions on entry.... All this, of course, is counter to a competitive system. Our moving against exclusivity and requiring that the carrier has to serve the route strikes at the heart of the process. (75)

The economic results that poured in after significant regulatory liberalization by the CAB in 1977 were positive, enabling the deregulationists to capture the momentum away from the anti-reform opposition. (76) The administrative strategy, although very successful, would not suffice. Stu Eizenstat and Mary Schuman explained the necessity of reform legislation to the President:

Although Chairman Kahn has made extraordinary progress in making the industry more competitive, he is perhaps the most forceful advocate of strong legislation. First, a future Board could easily reverse his reforms. Second, the CAB is taking substantial risks by interpreting current law as liberally as it is. Kahn states privately that there is a substantial risk that many decisions will be overturned. The CAB is taking these risks because they are counting on strong legislation to back them up. Third, the CAB can improve regulation, but it cannot make fundamental changes that will gradually reduce it. (77)

Going Public

The administrative strategy was just part of the overall Oval Office scheme. Carter and his team frequently "went public" to usher support. (78) In a number of speeches, Carter discussed the benefits of airline deregulation for both consumers and the industry alike. He began addressing the topic in March 1977, after he had sent a letter to Congress urging passage of a reform bill. At a "town meeting" in Clinton, Massachusetts, Carter stressed the need for deregulation of the major transportation industries:

My staff has begun to assess the need for deregulation of the transportation industry as much as possible. The first step in that process has now been completed [Air-Cargo Deregulation]. And I've already sent to the Congress a message which supports Senator Kennedy's bill and Senator Cannon's bill to deregulate to a major degree the airline industry. The next one on the list will be the surface transportation industry, which would certainly have the trucking industry as a major factor. (79)

Until deregulation was finally passed in October 1978, Carter kept a steady pace of public pronouncements on the subject. In June 1977, Carter held a public briefing for industry representatives, interest groups, influential Congresspersons, and the press, outlining the argument for deregulation and White House support of it. Among other things, Carter argued that the benefits included flexibility for changing markets, lower fares which would give more Americans the opportunity to fly, and greater entry into new, untapped markets. He also pledged that the bill would include guarantees in the form of subsidies to small communities to make sure that these areas did not lose their service. (80)

Due to a lengthy and complicated legislative process, the administration failed to pass an airline bill in 1977 and 1978 became a crucial year for airline deregulation. In his State of the Union Address, Carter noted:

This year, I will continue to work for passage of the airline regulatory reform bill for passengers. That bill will allow air carriers to compete through lower fares, new services, and new markets, without excessive government interference or disruption of service to small communities. (81)

Following that address, Carter began to put overt pressure on Congress to pass a deregulation bill. In a speech to newspaper editors concerning the administration's war on inflation, Carter asserted that airline deregulation was a major tenet of his anti-inflation policy and held that legislation "...must be enacted this year." (82) The link with inflation was made a week later in a statement by Carter congratulating the Senate for voting in favor of a deregulation bill on April 19. (83)

In a series of speeches in the summer and fall of 1978, Carter continued to address the deregulation issue. In front of Missouri farmers, Carter argued again that deregulation of the airlines was an important step if inflation was to be brought under control. He also noted that deregulation was necessary to bring fares down via competition. (84) In front of steelworkers in September, Carter highlighted similar themes. (85) Later that day, he reiterated that message at a Democratic fund-raiser. (86) In fact, the last month prior to the passage of the deregulation bill, Carter made six speeches or statements in which he endorsed deregulation. (87)

Carter was not the only one taking the deregulation issue to the public. Mary Schuman spent an inordinate amount of time canvassing the country for the administration. For instance, in August 1977 alone, Schuman visited 14 cities, meeting with press, consumer, and transportation groups including the Atlanta Constitution, Chicago Sun-Times, Flint Journal, WQUA radio in Moline, Illinois, and Penjer Del Corporation in Philadelphia. DOT Secretary Brock Adams also made a number of speeches on behalf of deregulation. (88)

Public opinion appears to provide a favorable political environment for airline deregulation to gain support. Throughout most of 1977, the public's general approval of the way Carter was handling his job as president averaged 65 percent and peaked at 75 percent in March 1977. Public support for Carter dropped steadily through the first half of 1978, averaging 48 percent between January and July 1978. However, riding the crest of his successful conclusion of the Camp David talks between Israel and Egypt, in September and October, Carter's public approval jumped to an average of 53 percent. (89)

Persuasion

Another tactic used by the administration was one of persuasion. (90) Though much of the conventional wisdom regarding the Carter presidency holds that Carter and his staff were ineffective in their dealings with Congress, the case of airline deregulation demonstrates that this was not always true. Carter and his staff, at least in regards to this issue, effectively utilized persuasion. The President was not reluctant to flatter, and at times, prod and harangue Congress into enacting a bill. The targets of this Beltway strategy were usually the membership of those committees and subcommittees that were crucial to passage of aviation reform.

The most basic way that the Washington strategy was accomplished was to "thank" respective members for all their hard work on airline reform. Even during the transition, plans were made to initiate this persuasion strategy. Stu Eizenstat recommended to the President-elect that he "call to compliment [the chairmen and ranking minority members of the relevant Senate committees on] their efforts and to encourage them to have their staff work with our staff in developing a sound, effective bill for early enactment." (91)

Once in office, this "complimentary" tack was continued as evidenced, for example, by the suggestion to Carter from Eizenstat and Schuman that he "may wish to commend Senators Cannon, Kennedy and Representative Anderson for their leadership on this issue." Eizenstat and Schuman later reminded the President that Cannon had requested a picture be taken of the two of them at an upcoming meeting on aviation reform. (92) Similarly, after a suggestion from Senator Kennedy, Eizenstat urged Carter to call Cannon:

I recommend that you call Senator Cannon to congratulate him for his leadership and for his three weeks of hearings. I would re-emphasize your commitment to legislation, pledge our assistance in working out a small communities provision, and let him know that he will have the active support of the Administration as he "hangs tough" in the months ahead. (93)

Though these seem like petty details, such minor displays of etiquette and courtesy are very important inside the Washington Beltway. (94)

Another way persuasion was accomplished was through formal correspondence by the President. In fact, Carter's first communication to Congress on the subject was in the form of a letter: "As a first step toward our shared goal of a more efficient less Burdensome Federal government, I urge the Congress to reduce Federal regulation of the domestic commercial airline industry." Carter then asked the Congress to act "without delay" and pass a reform bill. (95) In a July 1978 letter to Howard Cannon, Carter used both flattery and cajolery. He wrote that:

Reducing regulation of the airline industry is the first major opportunity to meet our shared goal of eliminating outdated and excessive government regulation. Sound regulatory reform is a top priority of my Administration. I commend you for the progress you and your colleagues have made in working toward that goal. I urge you to speed the pace of your deliberations so that a bill can be acted upon by the Senate this year. You have already made significant decisions on many parts of the bill. But the most important decisions still lie ahead. (96)

Carter then described four provisions that the White House wanted as part of the legislation: automatic route entry, presumption in favor of entry, unused route authority, and pricing flexibility.

Besides these innocuous forms of persuasion, the White House utilized more involved tactics such as direct lobbying of Congress. From the administration's point of view, canvassing the Hill was necessary to counteract lobbying by the airline industry. In April of 1977, Mary Schuman observed: "Industry pressure on Capitol Hill is intense, and unless we get up there to rebut the misinformation that the industry is claiming (massive unemployment, breakdown of the system, etc.) we are going to lose the bill." (97) Thus proceeded a visible administration presence within the halls and corridors of the Capitol. Mary Schuman and Les Francis documented administration efforts that summer:

Meeting with Senators. Bob Thomson, Linda Kamm (General Counsel - DOT), Mark Aron (DOT), Bob Francis (Cong. Relations - DOT) and Mary Schuman have divided ourselves [sic] into two groups and met with every Senator who would see us, and with the staff many times.

Meetings with the Industry and Public Interest Groups. DOT and Mary Schuman met continuously (and to the point of exasperation) with outside groups to listen to the changes they want in the bill, and to try to build their support.

Media. The White House Media Liaison Office has prepared a summary of our position. It is being sent to all editorial boards, and all transportation, consumer and financial writers. Mary has participated in the semi-weekly White House briefing for 30 out-of-town editors.

Other Administration Lobbying. We have recommended that OMB, Justice and Esther Peterson write to the Committee this week to point out the reorganization/reform and consumer aspects of the legislation, and to urge speedy Committee action. Secretary Adams wrote a letter to all governors urging support of reform; Mary has suggested that we send a copy to each member of the Committee. Alfred Kahn, CAB Chairman, has begun to lobby individual Senators, and we expect him to write a letter to all members urging speedy action. (98)

Even Vice President Walter Mondale was not immune from such actions as evidenced by this memo sent to him from Congressional Liaison Frank Moore:

The Senate is expected to begin consideration on Wednesday of S. 2493, the Cannon/Kennedy airline deregulation bill. The bill was reported by the Senate Commerce Committee 13-3. We expect the vote to be favorable, but many Senators are still in the undecided column, including, as far as we know, Senators Humphrey and Anderson. We suggest that you give them a phone call to urge them to support the bill. (99)

At other times, the administration utilized a number of different allies outside the White House to put pressure on those lawmakers that were wavering. In a strategy memo sent to her superiors at DPS, Mary Schuman broke down the prospective votes by Senator on the Cannon-Kennedy bill in the Aviation Subcommittee. Those categorized as undecided were: Russell Long (D-LA), Daniel Inouye (D-HA); those noted as voting against were: John Melcher (D-MT) and Barry Goldwater (R-AZ). For each of these Senators, a carefully crafted strategy was enacted in an attempt to pressure them to vote in favor of the administration-supported bill:

Long: Bud Thar of the National Governor's Conference, is getting the Louisiana Governor to work on Long. Bob Thomson, Secretary Adams, and Charles Schultze have spoken with him. Any ideas? VP?

Inouye: Congressman Mineta and Dan Tate are working on him. I will follow up on Mike Masaoka. Any Ideas? VP?

Melcher: Montana is served by Frontier and Hughes Air West, both of whom now support reform. Al Feldman and Russ Stephenson, their presidents, are working on him. DOT has provided the most extensive analysis known to woman on how the legislation would directly benefit Montana.

Goldwater: Bud Thar of the Governors Conference, the American Association of Retired Persons, the American Conservative Union, and the American Enterprise Institute are working on him. (100)

Finally, quid pro quos and veiled threats were utilized in an attempt to persuade. Glenn Anderson, Aviation Subcommittee chair in the House, was treated in such a manner. For a good part of 1978, Anderson had stalled consideration of the deregulation bill as he wanted to pass an aircraft noise bill that was supported by the airline industry. The noise bill would have funneled federal dollars to the airlines so that they could comply with noise regulations. In the summer of 1977, Mary Schuman recognized that Anderson was going to be a problem for the administration:

In the House, we must convince Rep. Anderson that he needs our support to get a noise bill passed and that we will help him only if (1) he makes necessary revisions in the noise bill and (2) introduces and begins acting on a reform bill....Since Anderson has shown no inclination to introduce or act upon a reform bill until the noise bill is reported, a bill may not be introduced until next year. Before his noise testimony, Secretary Adams told Rep. Anderson that the president would veto any noise bill that was not accompanied by a reform bill. (101)

In a memo sent to the President to prepare him for a meeting with Anderson, Frank Moore advised Carter to make clear to Anderson that the deregulation bill was of much higher priority than a noise bill. He described the situation this way:

The problem is that Rep. Anderson and the industry are beginning to feel that they can get a noise bill without an airline deregulation bill. We must impress upon Rep. Anderson before he goes to the markup that the Administration's number one priority is the airline regulatory reform bill....Emphasize to Rep. Anderson that the airline regulatory reform bill is the centerpiece of your campaign commitment to have less government regulation in private business. Encourage Rep. Anderson to markup an airline regulatory reform bill that will not be weaker than the consensus reform bill that has been introduced. Impress upon Rep. Anderson that the regulatory reform bill is of higher priority at the White House than the aircraft noise bill, and imply that the chances of an aircraft noise bill being signed into law are improved with the passage of a strong airline regulatory reform bill. [Emphasis added]. (102)

Divide & Conquer

A final strategy used by the administration was one targeted at organizing the efforts of supporters and dividing the opposition. The Ad Hoc Committee for Airline Regulatory Reform was an effort to organize the plethora of diverse interests sympathetic to reform. The Committee was instrumental in facilitating communication among its members as well as organizing speakers for the many Congressional hearings held on the topic.

Concerning the opposition, the administration utilized two different tactics. First, and most importantly, the White House sought to drive a wedge between the various airlines. The airlines were poorly organized and neither the administration, nor the Congress, feared them. (103) Derthick and Quirk labeled this strategy one of "divide and conquer" and the Carter White House was successful in using it. The airline resistance was weak to begin with, especially after United and some of the smaller carriers endorsed deregulation. Smelling blood, the White House went in for the kill. In one incident, Derthick and Quirk assert that the administration made an overt attempt to buy support from Frontier Airlines by amending White House proposals for a small community service program in a way that only affected Frontier. There were also allegations that the administration used future route assignments as an incentive for support. The change was worth a few million dollars to the airline and Frontier jumped at the chanc e. The "Frontier Amendment" was important as Frontier was the first small airline to support reform. (104)

In an attempt to appease labor and small community interests, the White House sought to include labor protection and small community subsidy provisions in the bill.

Guarantees of service for small and rural communities were included in White House proposals from the start, as evidenced by Carter's early public pronouncements, with labor protection provisions adopted later. For the administration, a labor protection clause was a no-lose proposition. One of the assumptions of deregulation was that it would improve the economic situation of the industry- there was little worry about jobs being lost because it was thought that market competition would benefit the industry and maintain, if not create jobs. A memo sent to the President late in the deregulation fight illustrated this thinking:

We also recommend that you state your strong preference for the Senate labor protection provision, which permits the payment of benefits only if there are serious dislocations in the industry directly resulting from airline deregulation. Recent events show that airline employees benefit from airline competition, so the prospects for having to invoke this provision are not great. (105)

By including these provisions, groups representing labor and small communities reluctantly supported a bill that seemed destined to pass anyway. (106)

The Carter administration's multi-faceted strategy was a success. After a 22 month struggle, the measure was signed by Carter on October 24, 1978. Among other things, the Airline Deregulation Act of 1978:

* instructed the CAB to focus on competition in its regulation of the industry, to prevent anti-competitive practices, and to preserve service to small and rural communities

* provided for an automatic market entry program

* permitted carriers to lower rates 50% below or 5% above the standard industry fare (based on fares as of 7/1/77) without prior approval

* exempted commuter aircraft, weighing less than 18,000 pounds and carrying fewer than 56 passengers from most CAB regulation

* required the CAB to impose rules and requirements on charter airlines that were no more rigid than those it imposed on other types of carriers

* provided that the CAB would be abolished January 1, 1985 unless Congress voted otherwise

* provided compensation for industry employees who could prove they lost their job or had their wages decreased as a result of the deregulation bill

The CAB was abolished in 1985 and its responsibilities were shifted to DOT.

CONCLUSION

In the end, the Carter administration's multi-faceted strategy was triumphant. By using such a strategy, the White House was attacking all fronts on all sides. The administrative strategy was propitious as Kahn and the CAB received favorable reviews from CAB liberalization of regulations. This administrative strategy significantly increased the momentum of regulatory reform.

The White House strategy to organize interests sympathetic to deregulation, and to divide and conquer those who opposed, was also a success. The airline opposition was weak to begin with. The conversion of major trunk carriers such as Continental and United and smaller airlines such as Hughes Airwest and Frontier, drove a wedge through the airlines and neutralized the ATA as an opposition force. The cooptation of labor and small community interests also hastened the opposition's demise. The administration's ability to organize such a mixed-bag of interest groups in support of regulatory reform is admirable. This included Ralph Nader working effectively with the National Association of Manufacturers and the American Conservative Union with Common Cause.

Finally, at least regarding airline deregulation, the Carter administration worked effectively with the Congress. Although Carter and his staff have often been criticized for failing to deal productively with the legislative branch, airline deregulation demonstrates that this was not always the case. In fact, the Carter administration's Washington strategy helped shepherd an airline bill through a Congress not altogether amenable to such legislation. Much of the credit for this achievement must go to Mary Schuman and the rest of the Domestic Policy Staff whose concerted and persistent efforts on behalf of aviation reform made the Airline Deregulation Act of 1978 a reality. It is highly questionable whether airline deregulation would have been achieved absent the intense and effective White House lobbying effort.

We argue that the case of airline deregulation be viewed as a case that questions a prevailing myth of Jimmy Carter's ineffectiveness in regards to his relationship with Congress as well as his penchant for micro-managing the White House. This study finds that, at least in regards to airline deregulation, Carter was neither a micro-manager nor ineffective in his dealings with Congress. Rather, Carter delegated a great deal of responsibility to his White House staff and effectively participated in a multi-faceted strategy geared towards passage of the legislation. The case of airline deregulation aids in debunking the myth that suggests the Carter White House was politically ineffective in its relationship with Congress. However, it is stressed here that the single case of airline deregulation cannot be seen as one that refutes an entire body of literature that appears to suggest that the Carter White House was ineffective in attaining its legislative goals. Rather, it is a case that provides evidence that per haps the conventional wisdom surrounding Carter's management of the White House and legislative branch has exaggerated his failings.

The case of airline deregulation is also important because it demonstrates that presidents have different tools at their disposal that can be utilized in their quest for legislative success. Though the strategy used by the Carter team to pass the deregulation bill cannot be considered a one-size-fits-all solution for presidents and other chief executives seeking legislative success, it can be utilized by social scientists and policy makers alike as a learning tool.

David B. Cohen, Ph.D., University of South Carolina, is currently an assistant professor in the Department of Political Science at the University of Akron. His research on executive politics has been published in American Politics Quarterly, Congress & the Presidency, Presidential Studies Quarterly, and Southeastern Political Review. His primary areas of interest are executive politics, Congress, and U.S. foreign policy making.

Chris J. Dolan is a doctoral candidate in political science at the University of South Carolina. He received has M.A. at Northeastern University and his B.A. at Siena College. His teaching and research interests include presidential politics and history, Congress, and U.S. foreign policymaking. He is currently writing his Ph.D. dessertation on U.S. foreign policymaking at the National Economic Council during the Clinton administration.

NOTES

The authors would like to thank Ed Beardsley, Betty Glad, Otis Graham, George Krause, David Welborn, and Laura Woliver for their helpful comments. Also, many thanks to the staff at the Carter Library for their assistance in gathering data for this project. Any errors or omissions, however, are the sole responsibility of the authors.

(1.) "Airline Deregulation Act of 1978: Remarks of Signing S. 2493 Into Law. October 24, 1978," Public Papers of the Presidents of the United States: Jimmy Carter, 1978, Book II. (Washington, DC: USGPO), 1837.

(2.) For an excellent summary of the Airline Deregulation Act of 1978 as well as a brief legislative history see "Congress Clears Airline Deregulation Bill," Congressional Quarterly Almanac, (1978), 496 - 504.

(3.) "Transportation and Commerce: Regulatory Reform," Congressional Quarterly Almanac, (1977), 527.

(4.) For a general assessment of the benefits attained by consumers of air transportation services from 1978 to 1998, see Carol B. Hallett (Air Transport Association), "Airfares Are a Bargain," USA Today, February 27, 1998. She argues that competition within the industry has led to a doubling of consumers who traveled on the major airlines- from 275 million in 1978 to 600 million in 1997. Hallett also points to evidence showing an increase in the number of competing airlines- from 39 to 95 over those 20 years. Furthermore, she states that airline deregulation has led to substantially lower airfares, which are 37% cheaper today than they were in 1978. Also, see Steven A. Morrison and Clifford Winston, The Economics Effects of Airline Deregulation (Washington, DC: The Brookings Institute, 1986); Ivan R. Pitt, and J.R Norsrothy, Economics of the U.S. Commercial Airline Industry: Productivity, Technology, and Deregulation (Kluwer Academic Publishers, 1999); and, John Robert Meyer, Clinton V. Oster, Benjamin Berma n, Airline Deregulation: The Early Experience (Greenwood: Greenwood Publishing Inc., 1981).

(5.) Larry N. Gerston, Cynthia Fraleigh, and Robert Schwab, The Deregulated Society (Pacific Grove, CA: Brooks/Cole Publishing, 1988), 86.

(6.) Ibid., 87.

(7.) Ibid.

(8.) Melvin A, Brenner, James O. Left, and Elihu Schott, Airline Deregulation (Westport, CT: ENO Foundation for Transportation, 1985), 3.

(9.) Gerston, Fraleigh, and Schwab, 87.

(10.) For a summary of the Federal Aviation Act of 1958 see "Legislative History of the Airline Deregulation Act of 1978," Committee on Public Works and Transportation, US House of Representatives. 96th Congress., 1st Session.

(11.) Brenner, Left, and Schott, 15.

(12.) Gerston, Fraleigh, and Schwab, 87; Elizabeth E. Bailey, David R. Graham, and Daniel P. Kaplan, Deregulating the Airlines (Cambridge, MA: The MIT Press, 1985), 23.

(13.) Gerston, Fraleigh, and Schwab, 88. In fact, the CAB had not allowed any new trunk (large commercial) airline to enter the industry during the 40 years of regulation- 230 applications were filed and the CAB did not allow hearings on 95% of them after 1950.

(14.) Ibid., 87.

(15.) Anthony E. Brown, The Politics of Airline Deregulation (Knoxville, TN: University of Tennessee Press, 1987), 99.

(16.) Martha Derthick and Paul J. Quirk, The Politics of Deregulation (Washington, DC: The Brookings Institution, 1985), 58.

(17.) Bailey, Graham, and Kaplan, 20; Brown, 100.

(18.) "Amending the Federal Aviation Act of 1958: Report to Accompany S. 2493," Committee on Commerce, Science, and Transportation, US Senate. 95th Congress, 2nd Session. (Washington, DC: USGPO), February 6, 1978, 2.

(19.) Brenner, Left, Schott, 19.

(20.) Brown, 106.

(21.) Ibid., 112.

(22.) See "Oversight of Civil Aeronautics Board Practices and Procedures: Hearings," Subcommittee on Administrative Practice and Procedures of the Senate Judiciary Committee. 94th Congress, 1st Session. (Washington, DC: USGPO, 1975).

(23.) Brown, 107.

(24.) The title is important as it demonstrates that the political environment had not shifted to one of total deregulation. Rather, regulatory reform was the goal sought after.

(25.) Ibid., 112.

(26.) Derthick and Quirk, 108 - 109.

(27.) Brown, 113 - 114.

(28.) "Alfred Kahn Session, December 10 - 11, 1981," Jimmy Carter Oral History Project. (University of Virginia, White Burkett Miller Center), 93.

(29.) Though the focus of this paper is primarily on White House strategy, one of the more interesting stories of airline deregulation is how a number of factors congealed thus making the political environment receptive to such legislation. Carter, no doubt, inherited a situation that was ripe for change. One could argue that because of this, airline deregulation is not a good case to make the argument that Carter was more skilled at legislative politics than previously thought. The authors disagree, however. History if full of examples when presidents squandered opportunities to change the status quo even though the political environment had changed in a favorable direction. President Clinton and health care is an obvious example. President Carter's airline deregulation legislation did benefit from a change in the prevailing political conditions; however, passage of the legislation was not ensured by any means. The Carter administration's skill in attaining passage made the difference. For an excellent descr iption of the underlying environment that existed at this time as well as a more general theoretical argument describing the fusion of policy streams which makes "radical" legislation like the Airline Deregulation Act of 1978 possible, see John Kingdon, Agendas, Alternatives, and Public Policies, 2nd ed. (New York: Harper Collins, 1995.)

(30.) Barbara Kellerman, The Political Presidency: Practice of Leadership from Kennedy through Reagan (New York: Oxford University Press, 1984), 210.

(31.) Eric L. Davis, "Congressional Liaison: The People and the Institutions," In Anthony King, Ed. Both Ends of the Avenue (Washington DC: American Enterprise Institute, 1983).

(32.) Stephen Skowronek, "Presidential Leadership in Political Time." In Michael Nelson, Ed. The Presidency and the Political System (Washington DC: Congressional Quarterly, 1998), 163. See also, Stephen Skowronek, The Politics Presidents Make: Leadership from John Adams to George Bush (Cambridge, MA: Belknap Press, 1993). Skowronek's study is an anecdotal account that relies mostly on biographies, periods of historical study, and administration chronicles. A limited number of primary materials, derived mainly from the Public Papers Of The Presidents of the United States, are used to supplement secondary sources.

(33.) Ibid.

(34.) Charles O. Jones, The Trusteeship Presidency: Jimmy Caner and the United States Congress (Louisiana State University Press, l988), 6. Jones,s Work is based on a series of interviews conducted with President Carter and certain members of his senior staff at the Miller Center at the University of Virginia. Although Jones provides firm evidence to the contrary, the authors of this study rely on documentary materials at the Carter Library to argue that Carter was able to establish close working relations with key members of the so-called Washington political establishment. Airline deregulation provides a compelling case study that Carter was not always averse to working with members of Congress and interest groups to attain his legislative objectives.

(35.) Ibid.

(36.) Nelson Polsby, The Consequences of Party Reform (New York: Oxford University Press, 1983), 108 - 109.

(37.) James Fallows, "The Passionless Presidency," Atlantic Monthly. (May 1979), 33 - 48.

(38.) Eric L. Davis, "Legislative Liaison in the Carter Administration," Political Science Quarterly 95 (Summer 1979), 287 - 302.

(39.) Kellerman, 216. Kellerman's work is a theoretical examination of the political leadership skills of six US presidents. Her case study of President Carter focuses mainly on his energy proposals.

(40.) Harold M. Barger, The Impossible Presidency (Glenview, IL: Scott Foresman, 1984), 107.

(41.) James Fallows, 33 - 48.

(42.) Ibid.

(43.) Erwin C. Hargrove, Jimmy Carter as President: Leadership and the Politics of the Public Good (Baton Rouge: Louisiana State University Press, 1988), 162. Hargrove's account of the Carter presidency is based on interviews with the former president and several aides and is focused on the internal mechanics of policymaking. The authors contend that documentary material at the Carter Library in Atlanta provide firm and compelling evidence that suggests Carter was not always bogged down in studying, evaluating, or even micro-managing the policymaking process.

(44.) Stephen Hess, Organizing the Presidency (Washington DC: Brookings, 1988), 167. Although he makes relative use of the Public Papers Of The Presidents of the United States and lists annotated memos of the Carter Transition of 1976/1977, Hess's study relies mainly on secondary accounts of the Carter Administration's legislative objectives. Although secondary sources are perfectly reasonable considering the fact that the book was published less than ten years after Carter left office, we believe that the documentary evidence provided in this case is very compelling.

(45.) Ibid.

(46.) Jack Knott and Aaron Wildavsky, "Jimmy Carter's Theory of Governing," Wilson Quarterly. (Winter 1977), 49-65.

(47.) Paul J. Quirk, "Presidential Competence." In Michael Nelson, Ed. The Presidency and the Political System (Washington DC: Congressional Quarterly, 1998), 173.

(48.) Ironically, the president who was often accused of overzealous micro-management may not have been sure of Schuman's identity. In response to an inquiry from Carter, Eizenstat explained in a memo sent to the President who Schuman was and some of the roles she was playing in the deregulation battle: "Mary Schuman is the member of the Domestic Policy Staff principally concerned with the Airline Deregulation Bill. At the request of the White House press office, DOT Public Affairs Office, and Frank Moore's office [Congressional Liaison], she has taken speaking engagements before Chambers of Commerce and similar groups to discuss airline deregulation. A need for activity along these lines by our staff was seen because of the lack of similar efforts by the Department of Transportation." Memo, Stu Eizenstat to President Carter, 6/9/78 (filed), oCA,o Box CA-1, WHCF-Subject File, Jimmy Carter Library.

(49.) "Carp and Rubenstein Session, March 6, 1982," Jimmy Carter Oral History Project, 41.

(50.) "Stuart Eizenstat Session, January 29-30, 1982," Jimmy Carter Oral History Project, 55.

(51.) Richard E. Cohen, "Airline Deregulation is Not Cleared for Take-Off," National Journal (July 30, 1977), 1195.

(52.) For a summary of the Carter - Adams conflict over airline deregulation see Richard E. Cohen, "Carter Shows Who's the Boss When It Comes to Airline Deregulation," National Journal (March 5, 1977), 352 - 53; see also Carole Shifrin, "Adams Voices Doubts on Airline Industry Deregulation," Washington Post (March 3, 1977), D13, D17.

(53.) Memo, Si Lazarus to Stu Eizenstat, 3/21/77, "Aviation - Airline Regulatory Reform (2) [O/A 6232] [3]," Box 148, Domestic Policy Staff, Eizenstat, Jimmy Carter Library.

(54.) For examples of his writings see Alfred Kahn, The Economics of Regulation: Principles and Institutions Vols. 1 and 2. (New York: Wiley, 1970 & 1971), and Alfred Kahn, "Applications of Economics to an Imperfect World," American Economic Review, Vol. 69 (May 1979), 1-13.

(55.) "Alfred Kahn Session," Jimmy Carter Oral History Project, 93.

(56.) Derthick and Quirk, 78.

(57.) Brown, 103.

(58.) "Airline Deregulation," Congressional Quarterly Almanac, (1977), 555.

(59.) Brown, 103; Gerston, Fraleigh, and Schwab, 90; Memo, Mary Schuman to Stu Eizenstat, 3/31/77, "Aviation - Airline Regulatory Reform (1) [O/A 6232]," Box 148, Domestic Policy Staff, Eizenstat, Jimmy Carter Library. For a complete list of the members of the Ad Hoc Committee, see "Hearings on Aviation Regulatory Reform," Committee on Public Works and Transportation, US House of Representatives. 95th Congress, 2nd Session. (Washington, DC: USGPO, March 6 and 7, 1978), 202 - 203.

(60.) "Airline Deregulation," 555; Brown, 104; Memo, Mary Schuman to Stu Eizenstat, 3/31/77, "Aviation - Airline Regulatory Reform (1) [O/A 6232]," Box 148, Domestic Policy Staff, Eizenstat, Jimmy Carter Library.

(61.) Memo, Mary Schuman to Stu Eizenstat, 3/1/77, "Aviation - Airline Regulatory Reform [O/A 6232] [3]," Box 148, Domestic Policy Staff, Eizenstat, Jimmy Carter Library.

(62.) For an excellent summary of the views of key members on the Commerce Committee, see Latter, Senator Edward M. Kennedy to Stuart E. Eizenstat, 4/18/77, "Aviation - Airline Regulatory Reform (2) [O/A 6232] [3]," Box 148, Domestic Policy Staff, Eizenstat, Jimmy Carter Library.

(63.) For a review of some of the more important economics literature on the subject see Bailey, Graham, and Kaplan (introduction).

(64.) Initially, however, the administration and Carter favored reform, not complete deregulation of the industry. In a memo to Stu Eizenstat, Mary Schuman cautioned Eizenstat to "avoid talking about "deregulation," a code word that some take to mean totally free entry and the abolition of the CAB. Talk about "reform". Secretary Adams has always taken the position that total deregulation is not in the customer's interests. President Carter agrees with this position and does not support the elimination of the Civil Aeronautics Board, but instead supports a measured, phased transition to a system which relies more on competition and less on regulation." Memo, Mary Schuman to Stu Eizenstat, 3/1/77, "Aviation - Airline Regulatory Reform [O/A 6232] [3]," Box 148, Domestic Policy Staff, Eizenstat, Jimmy Carter Library. See also George Williams, The Airline Industry and the Impact of Deregulation. (Cambridge, UK: Ashgate, 1993), 10 - 11.

(65.) Bailey, Graham, and Kaplan, 32.

(66.) Letter, WT Beebe to President Carter, 8/8/77, "Aviation - Airline Regulatory Reform (2) [O/A 6232][2]," Box 148, Domestic Policy Staff, Eizenstat, Jimmy Carter Library.

(67.) Derthick and Quirk, 152 - 153, 155 - 156; Brown, 104.

(68.) Gerston, Fraleigh, and Schwab, 91.

(69.) Brown, 104.

(70.) "Hearings on Aviation Regulatory Reform," Committee on Public Works and Transportation, US House of Representatives. 95th Congress, 2nd Session. (Washington, DC: USGPO, March 6 and 7, 1978), 186.

(71.) Bailey, Graham, and Kaplan, Deregulating the Airlines, 32 - 33; Brenner, Left, and Schott, Airline Deregulation, 10.

(72.) Brown, 105.

(73.) For example, in a dissenting opinion expressed in the report accompanying the Cannon-Kennedy bill, Melcher stated that "There are many reasons for my concerns; the Automatic Entry provision contains too many serious, unanswered risks to justify an experiment of the magnitude proposed that could well lead to excessive competition, reduce service to more marginal markets and small communities, increase industry competition, serious [sic] adverse impact on the smaller carriers and the weaker of the larger trunk lines, pressures for fare increases, and reduced opportunity for new entrants. Neither the hearings nor the Committee mark-up sessions adequately disposed of these risks, and there is substantial evidence that these are real risks." (Amending the Federal Aviation Act of 1958: Report to Accompany S. 2493, 223.)

(74.) For a summary of Kahn's reign at CAB, see Paul Stephen Dempsey and Andrew R. Goetz, Airline Deregulation and Laissez-Faire Mythology (Westport, CT: Quorum Books, 1992), chapter 16.

(75.) Richard E. Cohen, "The CAB's Kahn on Aggravations of Airline Deregulation," National Journal (January 14, 1978), 50.

(76.) Brown, 98 - 99.

(77.) Memo, Stu Eizenstat and Mary Schuman to President Carter, 5/12/78, "Aviation - Airline Regulatory Reform (2) [O/A 6232] [1]," Box 148, Domestic Policy Staff, Eizenstat, Jimmy Carter Library.

(78.) For a general description and analysis of the power of the president to exercise public leadership, see Samuel Kernell, Going Public: New Strategies for Presidential Leadership, 2nd ed. (Washington, DC: Congressional Quarterly Press, 1993). He defines "going public" as a "strategy whereby a president promotes himself and his policies in Washington by appealing to the American public for support." (p. 2). By so doing, it is hoped that public support of the president will force compliance by the Congress.

(79.) "Clinton, Massachusetts: Remarks and a Question-and-Answer Session at the Clinton Town Meeting. March 16, 1977," Public Papers Of The Presidents of the United States: Jimmy Carter, 1977, Book I, p.389. The primary documents provide supporting evidence that the administration viewed airline deregulation as one of the first steps to deregulating other industries. For example, Charles Schultze, head of the Council of Economic Advisers, noted, "The air reform bill will have far-reaching precedental value. Our efforts to reform other inefficient regulatory programs via legislation will be more readily accepted by the Congress and the public if we can point to the success of the air transport industry under comprehensive reform legislation." Memo, Charlie Schultze to President Carter, 5/1/78, "Aviation-Airline Regulatory Reform (2) [O/A 6232] [1]," Box 148, Domestic Policy Staff, Eizenstat, Jimmy Carter Library. Similarly, Stu Eizenstat asserted, "If airline deregulation fails, there is little realistic hope of realizing your aim of eliminating anti-competitive regulation in other sectors." Memo, Stu Eizenstat to President Carter, 3/3/77, "Aviation-Airline Regulatory Reform (2) [O/A 6232] [3]," Box 148, Domestic Policy Staff; Eizenstat, Jimmy Carter Library.

(80.) "Airline Industry Reform Legislation: Remarks at a Briefing for Representative of the Airline Industry and Public Interest Groups. June 20, 1877," Public Papers of the Presidents of the United States: Jimmy Carter, 1977, Book I, 1834.

(81.) "The State of the Union: Annual Message to the Congress. January 19, 1978," Public Papers Of The Presidents of the United States: Jimmy Carter, 1978, Book I, p.109.

(82.) "Anti-Inflation Policy: Remarks to Members of the American Society of Newspaper Editors Announcing the Administration's Policy. April 11, 1978," Public Papers Of The Presidents of the United States: Jimmy Carter, 1978, Book I, p.724. This link with inflation is observed early on in the White House documents as deregulation of the nation's transportation industries was viewed as part of the administration's "war on inflation"; e.g., see Memo, Si Lazarus to Stu Eizenstat & Mary Schuman, "Aviation-Airline Regulatory Reform (2) [O/A 6232] [3]," Box 148, Domestic Policy Staff, Eizenstat, Jimmy Carter Library, and Memo, Stu Eizenstat to The President, 3/3/77, "Aviation-Airline Regulatory Reform (2) [O/A 6232] [3]," Box 148, Domestic Policy Staff; Eizenstat, Jimmy Carter Library.

(83.) "Airline Deregulation Legislation: Statement by the President. April 19, 1978," Public Papers Of The Presidents of the United States: Jimmy Carter, 1978, Book I, p.762. The Carter administration was very concerned with inflation and with good reason. At the time, the country was experiencing double-digit inflation and skyrocketing interest rates. Gallup Poll data showed the American public to be extremely nervous about the high cost of living as inflation consistently was ranked as the most important problem facing the nation. For example, in a Gallup Poll dated April 10, 1977, 58% of respondents held that inflation was the most important problem facing the country. A little over a year later (May 14, 1978), that figure remained steady at 54%. In July, that figure rose to 60%. Finally, in August 1978 as his approval rating tumbled to 39% from 67% a year earlier, only 22% of the country approved of the way President Carter was addressing the inflation problem. Clearly, inflation was becoming an albatross around the President's neck and deregulation was viewed as a way to reverse the trend as well as demonstrate that the administration had an active plan for combating the situation. Gallup Data was drawn from The Gallup Poll: Public Opinion 1972-1977; 1978 (Wilmington, DE: Scholarly Resources Inc.).

(84.) "Columbia, Missouri: Remarks to Members of the Midcontinent Farmers Association. August 14, 1978," Public Papers Of The Presidents of the United States: Jimmy Carter, 1978, Book II, p.1424.

(85.) "Atlantic City, New Jersey: Remarks at the United Steelworkers of America Convention. September 20, 1978," Public Papers Of The Presidents of the United States: Jimmy Carter, 1978, Book II, p. l549.

(86.) "Atlantic City, New Jersey: Remarks at a Democratic Party Campaign Luncheon. September 20, 1978," Public Papers Of The Presidents of the United States: Jimmy Carter, 1978, Book II, p.1553.

(87.) These include the two Atlantic City speeches already mentioned as well as a statement the next day congratulating the House for passing their version of the bill, a speech to the Democratic National Committee in which he noted that subsequent passage of an airline deregulation bill proves that Democrats believe in free market principles, and remarks at two different Democratic fund-raisers three days prior to his signing the bill. For the complete texts of these speeches see "Atlantic City, New Jersey: Remarks at the United Steelworkers of America Convention. September 20, 1978," "Atlantic City, New Jersey: Remarks at a Democratic Party Campaign Luncheon. September 20, 1978," "Airline Deregulation Legislation: Statement on House of Representatives Action Approving the Legislation. September 21, 1978," "Democratic National Committee: Remarks at a Fundraising Dinner. September 27, 1978," "Wichita, Kansas: Remarks at a Rally for Bill Roy and John Carlin. October 21, 1978," "Minneapolis, Minnesota: Remarks at a Democratic-Farmer-Labor Party Victory Rally. October 21, 1978," all in Public Papers Of The Presidents of the United States: Jimmy Carter, 1978, Book 11.

(88.) Memo, Mary Schuman & Les Francis to Frank Moore & Stu Eizenstat, 7/18/77, "Aviation-Airline Regulatory Reform (2) [O/A 6232] [2]," Box 148, Domestic Policy Staff, Eizenstat; Jimmy Carter Library.

(89.) See The Gallup Poll: Public Opinion 1972-1977; 1978 (Wilmington, DE: Scholarly Resources Inc.). We believe rising presidential approval added to the momentum of Carter's ability to push deregulation over the top in Congress.

(90.) For an assessment of the president's power to persuade elites inside the Beltway, see Richard B. Neustadt, Presidential Power. (New York: John Wiley & Sons, 1964 [1960]). In his classic statement of executive power, Neustadt informs readers that "presidential power is the power to persuade" and that "the power to persuade is the power to bargain." (pp. 23 and 45). From Neustadt's vantage point, presidents must bargain-schmooze, coax, cajole, convince, etc.--if they are to be successful in accomplishing their goals. Since power is shared in the American political system, the executive branch cannot afford to ignore the legislature; to do so is to risk failure. Therefore, presidents must pursue a strategy of "going Washington" if they are to achieve their legislative goals. Richard Rose utilized the term "going Washington" as a way to compare Neustadt's bargaining strategy with Kernell's public strategy; see Rose, The Postmodern President: George Bush Meets the World, 2nd ed. (Chatham, NJ: Chatham House P ublishers, 1991).

(91.) Memo, Stu Eizenstat to The President-elect, 1/10/77, "Aviation-Airline Regulatory Reform (1) [O/A 6232] [2]," Box 148, Domestic Policy Staff, Eizenstat, Jimmy Carter Library.

(92.) Memo, Stu Eizenstat & Mary Schuman to President Carter, 6/18/77, "CA," Box CA-l, WHCF-Subject File, Jimmy Carter Library.

(93.) Memo, Stu Eizenstat to The President, 4/12/77, "Aviation-Airline Regulatory Reform (2) [O/A 6232] [2]," Box 148, Domestic Policy Staff, Eizenstat, Jimmy Carter Library.

(94.) For a discussion of the "folkways" of Congress (unwritten rules, traditions, and norms), see for example Donald Matthews, US. Senators and Their World (Chapel Hill, NC: University of North Carolina Press, 1960), chap.5 and Hedrick Smith, The Power Game: How Washington Really Works (New York: Ballantine Books, 1988), chap.6.

(95.) "Airline Industry Regulation: Message to the Congress. March 4, 1977," Public Papers Of The Presidents of the United States: Jimmy Carter, 1977, Book I, 277-278.

(96.) Letter, President Carter to Howard Cannon, 7/28/77, "CA," Box CA-1, WHCF-Subject File, Jimmy Carter Library.

(97.) Memo, Mary Schuman to Stu Eizenstat, 4/11/77, "Aviation-Airline Regulatory Reform (2) [O/A 6232] [2]," Box 148, Domestic Policy Staff, Eizenstat, Jimmy Carter Library.

(98.) Memo, Mary Schuman & Les Francis to Frank Moore & Stu Eizenstat, 6/18/77, "Aviation-Airline Regulatory Reform (2) [O/A 6232] [2]," Box 148, Domestic Policy Staff, Eizenstat, Jimmy Carter Library.

(99.) Memo, Frank Moore to Vice President Mondale, 4/19/78 (filed), "CA," Box CA-1, WHCF-Subject File, Jimmy Carter Library.

(100.) Memo, Mary Schuman to Bert Carp & Les Francis, 10/7/77, "CA," Box CA-I, WHCF-Subject File, Jimmy Carter Library; In the end, these particular tactics were unsuccessful as Inouye, Melcher, and Goldwater voted against reporting the bill out of the Commerce Committee and Long was absent for the vote.

(101.) Memo, Mary Schuman & Les Francis to Frank Moore & Stu Eizenstat, 6/18/77, "Aviation-Airline Regulatory Reform (2) [O/A 6232] [2]," Box 148, Domestic Policy Staff, Eizenstat Jimmy Carter Library.

(102.) Memo, Frank Moore to President Carter, 3/7/78, "CA," Box CA-1, WHCF-Subject File, Jimmy Carter Library.

(103.) Derthick and Quirk, 152.

(104.) Ibid., 60; There is documentary evidence, however, that the Frontier Amendment was neither an administration ploy nor was it supported by the White House. Mary Schuman addressed the issue: "The 'Frontier amendment' is a backroom deal never discussed at markup that gives windfall profits to local service carriers while the current subsidy system is being phased out. Carriers who don't benefit from this provision are claiming that the bill has become 'special interest' legislation. We support eliminating it. The problem is that Senator Cannon supports it to help defuse opposition to the bill by local carriers." Memo, Mary Schuman to Stu Eizenstat, 2/21/78, "Aviation-Airline Regulatory Reform (2) [O/A 6232] [1]," Box 148, Domestic Policy Staff, Eizenstat, Jimmy Carter Library.

(105.) Memo, Frank Moore & Stu Eizenstat to The President, 9/27/78, "Aviation-Airline Regulatory Reform (2) [O/A 6232] [1]," Box 148, Domestic Policy Staff, Eizenstat, Jimmy Carter Library.

(106.) Brenner, Left, and Schott, Airline Deregulation, 28 - 30; Fraleigh, and Schwab, The Deregulated Society, 95 - 96.

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