CABINET COUNCIL MINUTES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP87T00759R000200220013-8
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 6
• Document Creation Date: December 22, 2016
• Document Release Date: June 3, 2010
• Sequence Number: 13
• Publication Date: December 5, 1985
• Content Type: MEMO

Sanitized Copy Approved for Release 2010/06/03: CIA-RDP87T00759R000200220013-8
TO:
EXECUTIVE RETARIAT
ROUTING SLIP
ACTION
INFO
DATE
INITIAL
I
DCI
2
DDCI
.3
EXDIR
4
D/ICS
5
DDI
6
DDA
7
DDO
8
DDS&T
9
Chm/NIC
10
GC
11
IG
12
Compt
13
D/OLL
14
D/PAO
15
D/PERS
I
VC/NIC
r
I0/ECON
x
18
D/OGI
19
ES
:Y.
20
21
22
SUSPENSE
ON FILE NSC RELEASE INSTRUCTIONS APPLY
3637 (10-81)
Sanitized Copy Approved for Release 2010/06/03: CIA-RDP87T00759R000200220013-8
 Sanitized Copy Approved for Release 2010/06/03: CIA-RDP87T00759R000200220013-8
THE WHITE HOUSE
WASHINGTON
CABINET AFFAIRS STAFFING MEMORANDUM
Datee: 12/5/85 Number: 317036CA Due By:
Subject: Cabinet Council Minutes
ALL.ABINET MEMBERS
Wice President
SState
Treasury
Defense
Jiustice
interior
!'Agriculture
(Commerce
tiabor
*HHS
4HUD
TTransportation
tEnergy
(Chief of Staff
!Education
CEA ^
CEQ ^ ^
OSTP ^ ^
McFarlane
Svahn
Chew (For WH Staffing)
Action FYI
^ ^
11 0
^ ^
^ ^
^ ^
(GSA
(EPA
(NASA
(OPM
IVA
?SBA
REMIARKS:
REURN TO:
Executive Secretary for:
DPC
EPC
Attached for your information are the minutes of the
November 20, 1985 joint meeting of the Economic Policy
Council and the Domestic Policy Council.
Alfred H. Kingon ^ Don Clarey
Cabinet Secretary ^ Rick Davis
456-2823 ^ Ed Stucky
(Ground Floor, West Wing)
Associate Director
Sanitized Copy Approved for Release 2010/06/03: CIA-RDP87T00759R000200220013-8
 Sanitized Copy Approved for Release 2010/06/03: CIA-RDP87T00759R000200220013-8
? ?
MINUTES
DOMESTIC POLICY COUNCIL
ECONOMIC POLICY COUNCIL
November 20, 1985
1:00 P.M.
Roosevelt Room
Attendees: Messrs. Baker, Meese, Hodel, Block, Baldrige, Brock,
Miller, Sprinkel, Burnley, Boggs, Bauer, Armacost,
Kingon, Bledsoe, McAllister, Svahn, Brashear,
Brumley, Cribb, Danzansky, Gray, Ginsburg, Holmer,
Gibson, Kimmet, Muris, O'Shaughnessy, Sofaer, Stucky,
and Ms. Dunlop, Ms. Risque, and Ms. Steelman.
1. Report of the Working Group on Antitrust Review
Mr. Ginsburg, Assistant Attorney General, stated that the Working
Group on Antitrust-Review had developed several significant
proposals for amending. the antitrust laws, including a proposal
for detrebling antitrust judgements by amending the Clayton Act
to:
1. Treble only damages caused by antitrust overcharges or
underpayments, in both private and government damage cases,
and provide automatic prejudgement interest on actual
damages in all antitrust cases;
2. Provide an affirmative defense in all antitrust cases that
would reduce the plantiff's claim for damages by the share
of those damages fairly allocable to any person released
from liability; and
3. Provide attorneys' fees to prevailing defendants where thrr,
plantiff's conduct is frivolous, unreasonable, without
foundation, or in bad faith.
He stated that the detrebling proposal would affect not only thr
Clayton Act but also the Robinson-Patman and Sherman Acts. He
explained that even in instances of treble damages, interest
expenses would not be trebled.
The Council discussed the need to preserve incentives to settle'
dispute and not encourage protracted or unwarranted claims.
Mr. Ginsburg also outlined the three options developed by the
Working Group with regard to merger restrictions:
1. Propose legislation to repeal Section 7 of the Clayton Act
and to substitute a monopoly standard for mergers in the
Sherman Act;
Sanitized Copy Approved for Release 2010/06/03: CIA-RDP87T00759R000200220013-8
 Sanitized Copy Approved for Release 2010/06/03: CIA-RDP87T00759R000200220013-8
? ?
Minutes
Domestic Policy Council
Economic Policy Council
November 20, 1985
Page two
2. Propose legislation to codify the policies of the Department
of Justice's Merger Guidelines into Section 7 of the Clayton
Act;
3. Endorse current merger enforcement policy under the
Guidelines without proposing legislative action.
Mr. Ginsburg pointed out that antitrust theory and practice has
become increasingly less restrictive in recent years, as
evidenced by the thinking and decisions of Judges Robert Bork and
Richard Posner. He noted that the Department of Justice Merger
Guidelines embodied a similar approach. He explained that the
Reagan Administration has brought roughly six antitrust cases per
year, with most of these challenges based on actions in local
markets, for example mergers of nursing homes. He also noted
that the Department of-Justice has focused on.barriers to entry;
if there are not significant barriers to entry, mergers are not
restricted.
He stated that the Working Group in developing the options for
the Council's consideration was concerned about future
discretionary merger policy. The Merger Guidelines represent
Administrative policy and are not binding on future
administrations. He noted that the prospects for legislative
changes in the area of antitrust are not clear, but pointed out
that a House Judiciary subcommittee passed antitrust legislation
last year that would have restricted horizontal or vertical
mergers and restricted plant closings.
Secretary Baldrige stated that our antitrust laws must reflect
that competition is occuring on a global basis, exemplified by
the fact that of the fifteen major industrial corporations, only
five are based in the United States. In addition, he stated that
70 percent of U.S. businesses face competition from abroad.
He argued that U.S. corporations are held back in decisions
regarding mergers by a lack of certainty regarding merger policy.
He also pointed out that the Department of Justice reviewed
10,000 mergers last year. The Secretary also reiterated that the
current Merger Guidelines are not binding on the courts or
private parties and are subject to change by future
administrations.
Secretary Baldrige suggested that rather than seeking repeal of
Section 7 of the Clayton Act, the Administration should seek to
codify the Merger Guidelines and incorporate in the Clayton Act a
monopoly test defining illegal behavior as that which would
enable firms to raise prices by a significant amount over a
Sanitized Copy Approved for Release 2010/06/03: CIA-RDP87T00759R000200220013-8
 Sanitized Copy Approved for Release 2010/06/03: CIA-RDP87T00759R000200220013-8
Minutes
Domestic Policy Council
Economic Policy Council
November 20, 1985
Page three
relatively short period of time. Mr. Ginsburg pointed out that
the Department of Justice review of mergers is a statutory
requirement.
Secretary Baker suggested that rather than seek major statutory
changes in the Clayton Act, the Administration might seek to
alter the so-called incipiency test, for example by substituting
the word "would" for the word "may" in assessing whether a merger
affects competition. The Council discussed the possibility of
altering the incipiency test. Several members of the Council
suggested that the phrase "dangerous probability" be incorporated
into the test.
The Council discussed the dangers of proposing statutory changes
in antitrust statutes, including the possibility of creating an
opportunity for social interests, rather than economic interests,
to be included in merger law. Several members of the Council
pointed out that advances in antitrust thinking, emphasizing
economic considerations, will not be easily reversed.
Decision
The Council unanimously agreed to:
1. Seek detrebling legislation, as proposed by the Working
Group;
2. Alter merger law (Clayton Act) by:
a. Codifying the enforcement policy currently in the Merger
Guidelines;
b. Eliminate the current incipiency standard and adopt a
new standard which tests for a "dangerous probability"
(of the exercise of monopoly power); and
c. Incorporate a monopoly power test as the ability to
profitably maintain prices above competitive levels over
a significant period of time.
3. Endorse the Working Group's recommendation that the
Administration propose antitrust exemptions for mergers and
acquisitions in industries injured by imports as alternative
relief under Sections 201-203 of the Trade Act of 1974.
4. Endorse the Working Group's recommendation that the
Administration propose amendments to Section 8 of the
Sanitized Copy Approved for Release 2010/06/03: CIA-RDP87T00759R000200220013-8
 Sanitized Copy Approved for Release 2010/06/03: CIA-RDP87T00759R000200220013-8
Minutes
Domestic Policy Council
Economic Policy Council
November 20, 1985
Page four
Clayton Act to exempt certain "safe harbor" de minimis
interlocks between competitors and increase to $10 million
and index the current $1 million jurisdictional size
threshold requiring each interlocked corporation to exceed
that threshold before an interlock would be prohibited.
Sanitized Copy Approved for Release 2010/06/03: CIA-RDP87T00759R000200220013-8