Nixon, Richardson & Agnew on Vietnam War and Indochina operations

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I'd first like to report on the Operation Southern Lodge.

It's referred to as Lansdowne 71-9.

71 stands for the year, and the 9 stands for the 9th Operation Carry Bus, and the 8th Operation Carry Bus itself is in forces to go to Carriage 1 of the

We saw the enemy's forces have not encountered any major actions.

We saw bombs and collisions across the border.

We saw the enemy's forces that are in a blocking position.

We saw the enemy's forces that are in a blocking position along with the NFC and along across the border have not had any major actions.

The South Union forces have been dropped into loss, are disrupting the trails in the name of the Fortune Trail Complex and have uncovered quite a bit of the military stores.

We've got anti-supply.

The effective force of the operation is to disrupt these supply lines, disrupt these warehousing facilities, disrupt the truck park, disrupt the pipeline that goes through this area, and generally cause difficulty in this supply complex.

by any measurement, even if the operation were to be terminated tomorrow, and it is not to be terminated for several weeks, the operation would be successful and the budget is brought into

The total force of South Vietnamese operating in Laos at present time is 10,300, approximately 10,300.

The U.S. engineering group is starting to take over the work on Route 9 which runs just south of the DMZ and it goes all the way across Laos.

The U.S. engineers are building up the road right into the open quarter.

And they have, you know, they have several landing strips in the area to which we now are operational.

And we are giving our air support to gunship support from these two air strips that have been made operational close to the ocean border.

The west and most penetrating southeast of Bredesen China, where they have over-connection and where they have secured their positions, is 11 miles west of the Laotian border.

And it's about 7 miles from the population center in District 4, which is the largest population center located in this sanctuary area.

The, uh, the results of this operation decide the main objective of destructing the supply and supply and destructing the, uh, warehouse facilities, destructing the storage, storage spaces.

Of course, there have been 622 enemies, North Vietnamese troops that have been killed.

There have been 30 United States losses, during this particular period of time.

And there have been 85 South Vietnamese that have

It killed an accident in the last 7-19 operation thus far.

Now, our Georgia City figure this week will run from this past week, which had a sunny overall south of the nation.

We'll run from 31 to 23 to start to make a definite figure.

Because we get a lot of the reports of people that were faulted from acid levels in the domains, and sometimes it takes 48 hours to get all of those reports in, but it will last over 53, and right ahead of this morning, 151.

Our tendency to hear more of this is running at a little higher rate.

helicopters have shot down, and we've lost 25 so far this week.

All of the plans and objectives, however, of Plan Exxon and 719 are being accomplished.

They're on schedule.

And I would repeat that by any measurement you want to make of this operation, it has been successful, and it will continue to be successful now.

There are going to be some difficult times in this operation.

We're going to have the enemy build a stand and fight in several of these places.

We have information on this.

And the fighting will get tough between the south face of Maine and the north face of Maine.

I don't want to give you the impression that the South and the East are going to win every one of these battles and they can counter the North and the East in this area, but they'll win most of them.

They've got a lot of confidence and they'll come out of this in a good shape.

They have the air support in the United States.

They also have the air force from our air force, which is a decisive advantage as far as the overall operation is concerned.

Now in Northern Laos, the situation is about the same as it's been at this time of year for the last five years.

The authority of the ministries are slightly ahead of where they were as far as the bonds are concerned at this time.

They're about three and a half weeks ahead of the schedule that they maintained last year.

The U.S. Air Force did have the same aircraft about 14 hours ago.

But the damage reported to the press in certain complexes and certain facilities in which there were some American presence was not damaged by the accidental drop or the false drop of two M4s.

The damage that was reported in the press

was damaged and was critical to authority in the meantime for an artillery attack as they moved to a high position near these installations which we don't support.

The Air Force did not make that drop.

Uh, this was reported by this paper man in Saigon that talked to a fellow that had been on a lot of these missions that he had, that he made in, uh, they had made in Paul's Rock, or he was making in Ross.

And, uh, these reports came in as to, uh, the ends of, uh, they made, uh, against this base camp.

In the report, I had both of them together and it became a great story around the country.

The tragedy of that story, frankly, was not the United States Air Force that was responsible for that damage.

We had our anti-aircraft and anti-shaking representatives there on the ground.

And we had that, that was perfect.

It's more important than anything to not talk about these operations, nor their loss to the IAEA.

Uh, and they, of course, around this table, we know that they aren't supported by the CIA, but then they're covering the defensive part of the question.

Uh, but, uh, each time that I testified on all of these operations, we have deleted any reference to the CIA, any reference to this kind of testimony from the, from the record.

And it's, uh, we don't want to get out of the position of having any problems, uh, I think we're supposed to spend most of our time just fighting CIA budgets in the future if, uh, if we, uh, get too public, uh, on that operation.

The other operation is perhaps as significant, but is receiving very little publicity, and that is the operation being carried out by General Freeman and 25th Division of Union Cannonball Unit.

The Cambodian operation has been a very successful operation.

As far as the South Vietnamese are concerned, they're buying 75% of all the air sorties and all the gunship sorties in this operation.

They have killed 1,125 Vietnamese.

They've lost 132 themselves.

Uh, this is the largest operation that's currently going on with about 18,000 seats.

South Vietnamese operating, uh, uh, off to, uh, west of Saigon, well, Cherokee, and Strait of Indian Columbia in the so-called Kaplan Station area, which is a major base camp for the North Vietnamese.

They have maneuvered in an area which is 40 miles northeast of Mount Evans and they have been causing considerable difficulties for the enemy in this area.

The friendly activities are going according to the plan here.

General Treat is a bit upset because all he did just seems to be

from the ocean affair, and he's a rather colorful general.

I was greeted by him, by General Ten, the 25th Division Commander.

They worked out all of his plans themselves, and the ocean operation kicked off at the same time, and he's been complaining the last few days that no one's paying much attention, very much attention to him, and he's operating way over a million movies,

He feels he's doing a remarkable job, Mr. President, and it's all South Vietnamese operated, and so he had a little morale problem with him, but I think we can probably take care of that in the next 24 hours, generally from now on.

I'm sure that'll be taken care of.

But this operation is a successful operation, and we'll have a great deal to do with the AT&T

Uh, stability, uh, uh, giving the Cambodians an opportunity to, uh, train their forces, which have grown so rapidly, 30,000, 400,000, 200,000, 18,000, and 36,000.

Let's bring it, uh, we can take, uh, these are the three major prospect areas.

The war is narrowed to these areas.

The war no longer is fought in the major cities south Vietnam.

The war is being contracted in the area of occupied Cambodia.

It is the northeast corner of Cambodia in that area.

The occupied area is lost.

There is not much fighting currently going on in Southeast Vietnam.

We won't stabilize there, except for terrorist attacks from time to time.

There may be some fighting in South Vietnam.

The war is out between the North and the East.

I mean, it's a tragedy that there may be a portion of this in action in South Vietnam.

It's a very daring tactic, but so far they have been not able to do any of the attacks there.

I think it might be well to make this a new general trend, the statements about the general trends of the war in Southeast Asia, because there are many people I think that do not realize that the war, as far as the United States is concerned, is truly winding down.

The number of casualties when we came into office were running as high as 500 in a week.

We are averaging now below 50 a week.

The efforts that have been made to boost the training of candidates and all that effort is for me an easy way to embrace a head that comes substantially down the, as far as the

We're going to be drawing 90,000 troops out of the country in the same time the operation is going on in the evening.

Troop levels are going down.

U.S. air operations are down almost 50% since 1968, and they're down substantially since last year.

here, the number of sorties have been reduced.

And of course, as well, the budget costs have been reduced and are about half as far as the total overall costs are concerned since 1968.

So by any rate, whether it be the number of Americans, the number of care sorties, or the budget costs, by any number you want to use,

in the United States about this, uh, as the giant whale.

No.

I can mention the fact that the war, the fighting of the war, has shifted from the main population areas to the geographic areas where there is very little population, where the area has been occupied for a good many years by the North Vietnamese, and I think that that is significant.

The other important factor I need to bear in mind is that the South Vietnamese military force

What do you measure it as?

The capability on land, on sea, or air is a much different military force than we had two years ago.

They are capable, as far as land combat is concerned, they are over one million trained in force level.

As far as their air power is concerned, we're at a schedule on phase two of the immunization program.

We're at 1,500 hours ahead of schedule.

where we were to be under the program that we worked out, and paying over $500,000 after centering for inventory.

We also had a schedule to fix the cleaning bureaucrat as of this date, and the only time that we're going to be in fact, there is a training facility.

I think it's working well.

It still is a dual program.

We'll try to program as far as we are not as concerned as the organization does.

That's a compliment to the negotiations from.

Mr. President, I'm trying to avoid statistics.

forecast or predictions.

I don't think this is the year necessarily in the forecast and predictions.

As far as Vietnam is concerned, we may have to do some of that next year.

I think the manner in which we

Handle the public affairs of the ocean operation is pretty good.

We've got the minimum of U.S. involvement.

Most of the current analysis is being handmade by the South Vietnamese.

I think it is truly identified as a South Vietnamese operation, and this was most important.

Not only important from the standpoint of the U.S. public, but important from the standpoint of continuing to build this important confidence, which is needed and necessary as far as the South Vietnamese forces.

This operation is justified in accordance with the

a limitation which was written into the Congressional Appropriation Act known as the Status Meant Amendment.

And this truly qualifies, in all respects under that particular amendment, of making possible further withdrawals of Americans from South Vietnam and to protect the lives of Americans as these withdrawals go forward.

Those are the two nuclear points which were placed in the congressional elimination against the use of ground forces and against the use of American forces

in Laos and Cambodia.

We are not only following the letter of the law, we are following the intent of the law.

And our sponsors of this legislation, as well as almost every other person in the Congress of the United States, in both the Senate and the House, realize that we are following this mandate of the Congress and respect the mandate of the Congress.

There are other side benefits that are important from these operations.

And perhaps the most important of which is that we are giving the Cambodians some time to build this military force, which has grown from 30,000 to 218,000, I'm sure, in six months.

Our military assistance program was not approved until December.

We've only had two months, really, to operate under that military assistance program.

And although we cannot publicly justify the operations that are going on in Cambodia or Laos,

On this basis, we do have this ancillary benefit that I think is important as we move from 1971 to 1972.

But, Mr. President, I think the operations are going well.

I could go on and sound like Mr. President.

Mr. President?

And in a few words, I think that what Mel said was a very well-planned effort.

And it's almost known to say that I think it's one of the best coordinated and planned operations that I've ever seen in Washington, D.C. And I think we can forget how much the president has become actively involved in these things.

He has made use of most of the leaders and has done a very well-planned orchestration.

scenario for diplomatic presentations.

We touched on the issue of all the senators and Congressmen, key people in Congress, and so that I think has been extremely well thought through operation.

Because a lot of you are going to be questioning about it, there are two or three things we should mention.

One, obviously there are going to be similar problems in the future.

But there aren't problems that we didn't anticipate.

For example, we lost 25 helicopters, it sounds like quite a lot.

The fact is that we were losing six a day anyway in that area.

In that general area, what we've done is transferred most of the helicopters to LAOS, and those that are being used to check operations.

So consequently, we did have some losses, but they're not exactly as high and not more than we expected.

I think that when we talk about Northern Lost, you should keep in mind that's the best out-of-going fight that's been going on for five or six years, so there's nothing new about that.

Really, what we're talking about is, is a cannon and a Southern Fight Lost.

And if that succeeds, and as Bill said, it looks as if it's going to, then it's going to, it's going to be a major blow to the enemy, not only now, but in the foreseeable future.

Now we don't want to totter too much because we don't want to make people think this is going to end the war if it's successful.

But it certainly is going to have a crippling effect on the enemy if it's successful and it shows every sign of being successful.

I think in the discussions we have outside we should keep in mind that we want to maintain the maximum flexibility so that if we wanted to get out a little earlier we could or if we wanted to stay a little longer we can.

Now, fortunately, we have emphasized two facts.

One, not enlarging the war has sent us to a new area.

This area in southern Laos has been seen of combat, active combat, since 1965.

We've been bombing this area very severely since 1965.

So it's not a new area of combat.

The only thing I know about it is the South Vietnamese are going in on the ground.

Because the bombings have not been successful.

That's the only new fact.

It's not analyzing at all.

Essentially, what we talked about before being the major population centers, keep in mind that there really is practically nobody there.

It's a deserted town.

If you look in the picture, you can't find any people.

And there would only be 2,000 to begin with in there.

And I think they're walking on.

So we're really not talking about an area where there are any people.

And there are people, as they're not the ocean civilians.

They're either in Panama or going to work for the enemies.

We want to maintain the flexibility of time.

And the way to do that is to say it's limited in time and area.

When people say, what's the time limitation, then you say it depends on the weather.

Sometimes the rainy season starts in the middle of April.

Sometimes it doesn't start until June.

So we want to, we don't want to start talking about we'll get off by May 1st or we, or we're going to stay until May 1st, we might want to get off by April 15th.

So it seems to me we should leave that loose and don't, we don't face the danger.

I'd say it's a limited operation, limited by the weather and by the, uh, the operation itself, even recently too.

That's why we make it up.

Um, I, I don't say it would be possible to manage an operation that's been more successful than this today diplomatically.

to play at home with young people, or militarily.

And it's one of those things that requires a great deal of planning and presence, but it worked out well, and I think that we all offered those parents a good opportunity to make this happen.

Question, what do we say about Lon Noll's illness?

Well, I think we just say to him, you know, obviously, we hope you'll recover.

We don't think it's going to be a serious blow.

Obviously, it's a blow, but he's got good people, good young people, and I think the most important thing to him is not so much voting.

He's a deeply unified.

It's not at all the way it was in South Vietnam, where there was a vision.

Everybody supports the government.

Young people.

Intellectuals.

The whole country supports the government.

And they weren't all out of tax.

A lot of them, although there's a good leader, has a little more military stature.

The student attack.

We think the student attack is going to be good.

And my mind is to say that we hope you'll be young.

President, the other question is, would this in any way, what would happen if the Chinese come in and pray with all of our actions?

Well, I think there's something to do with it.

We don't think they will.

They didn't last time.

See, this is a long ways from the northern months.

We were fighting the northern months.

It's not new at all.

Mr. President, could I just add one point to this?

I feel so right on the, this time, and talking about the time and the, the appearance.

We don't want to get into a position where we set some objectives way off, like, uh, absent on the road walk.

And then, as I had some hall of papers and everything, our, uh, road, uh, walk up there, and it was not accomplished.

We're accomplishing something every day in this operation.

And we don't want to limit it as to the area or to the time.

It's most important that we follow that in all of our discussions.

Sir, could I ask now a question about the training of the helicopter pilots and turning over that kind of operation to the South Indian?

What's holding that up and what restrictions do you hold on that?

There are no restrictions on it.

As a matter of fact, we all appreciate

First, President Chiu and General Mack do not want to reconstitute every division in South Vietnam and the Native American divisions because they want their divisions except for two major divisions to be located in the areas that they're going to depend so that they'll be living here in their homes and can't be involved in the

in protection of their particular area, their particular area of the country, whether it's in military region one, two, three, or four.

So they will not have as many helicopters as the United States.

They already have more helicopters than any free world nation.

...except the United States.

They are operating 550 dog outers in the present time.

There's no demilitation.

Any place in the world that has this method.

We've turned over 325 this year.

Training vehicles, the maintenance mechanics, set up the maintenance tracks.

They're running.

Now, we are going to be turning over some more, but we're not going to kill the South Vietnamese forces in the community of the United States Army, because that kind of mobility within their country is not needed.

They're going to get to air more divisions.

They're going to be completely equipped by the United States Division, as far as air mobility is concerned.

But we're not going to do that with every one of their divisions.

I'm going to be excepting those.

I just wanted you to know that that's well, very well programmed.

Uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh,

What about the kind of operations that they carry on down?

You said most of the 757th Flight Service operations are going on down in Cambodia, flown by the South Vietnamese.

Do they have any ability to support this layout?

It seems to me that that would be a very good...

There's no question that we can do a better job giving them the kind of American air support that we're giving them.

They could have done this on the ground, but they could not have done it as effectively as they can with the kind of air power and air support.

Not only are the gunships that are operating in there the most important kind of support,

We are turning over gunships to the South Vietnamese.

We're training their troops.

We're not used to the South Vietnam, even two years ago.

These have all been developed.

Uh, and they are programmed.

We have not turned those over to the sub-units as yet.

But in the program, they will be turned over to the sub-units.

They are not capable of operating those kind, that kind of equipment now.

But we are making arrangements and we are turning that equipment over to them in phase two of the transition.

We'd like to go on with this.

We can talk about Elliott Richards and his tie-in on the Associates League.

Because I have a terrible idea of why this stuff might say a hundred times.

I don't have any other questions to the person involved in this.

And I can assure you that

But I ask questions, and if people can address it otherwise, that we haven't considered trying to work out if that's going to work perfectly.

But in the final analysis, I think what we have to do, and what we have to do about this, and what are the analysis and the goals that we operate on,

I read all the questions that were raised by three-fourths of the Canada, China, and Cambodia.

And it's a tough decision and much easier not to go answer this.

If we hadn't done Cambodia, South Vietnamese, we wouldn't be drinking and being able to do Laos.

I noticed an artist in Beijing this morning who came to the United States of America to do this four or five years ago.

He said, first of all, you have to do Laos first.

I mean, he said to Cambodia, he said, they're on the south, and that was the situation there.

Because the result of the, of what the south needed to meet is the confidence they gained, Cambodians, and they got on the south, and they now are able to make some cut-off points in the trail, and he's tried to disrupt them during the time.

The second point is that, as both Mel and Bill have indicated, this is a long operating long in terms of several weeks more, more headwinds to attract more of the DSPB.

The point is that we had, there will be on Stoud's final analysis, that we will have to look back on Cambodia, on Laos, on our whole contact with this border.

What happens?

And here we have to keep our eye on the main goal.

Our objective is to withdraw from Vietnam, not to withdraw in a way that the South Vietnamese would have no chance to survive and to make their own decision with regard to their future, but to withdraw in a way that South Vietnam can remain an independent country able

to determine its own future without having to go with the military force of another country.

We are accomplishing that objective.

And we are accomplishing the withdrawal we are accomplishing the reduction of American involvement in a very, actually spectacular way.

Let me put it another way.

The chemical use in the month of January this year

And I compared them with the last month of the previous administration.

They were five times as great then as they were in the month of January that you had some progress.

The number of troops that we will have in Vietnam on May 1st will be approximately one hand of what they were when we came in.

And, of course, that program withdraws and retraces the work we did.

And finally, South Indian thieves are able, and this time more and more, they have an evolving capability, as we withdraw to defend ourselves.

If we accomplish this, it will be a major accomplishment, because we have done so with very, very strong opposition lately, particularly in the Senate.

We have done with hardly any support of the so-called American establishment.

We understand that lack of support because they believe either

that we should have gone to Vietnam in the first place.

Many can argue that.

In the second, once we got there, many believe it was the wrong way.

But given what we found, what we're doing, what we are going to be judged about is how we came on.

The easy thing would have been to get out.

The easy thing would have been not to do it.

I have suffered a

Quite a disaster situation this year as Cambodia was rolled up by the North Vietnamese Sanctuary for extended, and the whole southern part of Vietnam would be caught.

Therefore, subject to attack, and the Americans there would have had to withdraw and proceed.

Not to have done Laos no problem this year, but as we wind down our forces to a minimum next year,

a very serious problem, because as our withdrawal program becomes more and more successful, the nature to our remaining forces becomes greater and greater.

I don't see it happening, unfortunately.

And for that reason, after a lot of soul searching, because it's so much easier to say, say it's really true, things are going good, casualties aren't going to go up, they wouldn't.

Final analysis.

We took the action in Cambodia.

We've taken the action in Laos.

Not to expand the war.

Because Hanoi had already expanded the war.

He had taken the action in Cambodia and in Laos.

but for the purpose of bringing the American involvement in the war to an end.

This is our goal.

It may not work.

If it doesn't, then we have to take responsibility.

But if it does, we can look back, recognizing that it did work, because above these things that happened, these are the things that we have to move on.

And we're not all silent about it.

in this kind of situation where we are not allowed to use all of our power, which is so easy because it would be, I must say, in this kind of situation, we simply can't look at it as we traditionally have and how the suspension has been engaged.

But, considering the limitations on what we are able to do, considering the long anguish the country has gone through, considering the vision of home, this administration has taken a very, very hard problem and has tried to resolve it in a way that we can continue to have a viable foreign policy home for the world.

We think we are going to be able to do it next year.

We'll know.

What we're doing this year is to make sure, as sure as we can, to buy some insurance, not insure, but to buy some insurance that next year we can look back and say that we're able to accomplish a goal that many of us possibly can't.

On the health program, Elliot is going to make his presentation frequently and have his colleagues continue.

I have heard it four times now, so I don't want to have Elliot feel that he has to change his lives because I've heard it before, so I'm going to have a vice president preside over this part of the issue, and also he's heard it four times too.

And we have decided to be sure that they like the policy.

And that, uh, that, uh, you know, to me is, uh, that's my question.

I, I, I can say that all this is all broken by way of introduction.

And as a result of months and months of study, we have considered a number of proposals making it all the way to complete compulsory officer programs that have just been advocated by some of our so-called liberal senators.

And going to the other extreme, most simply,

a holding action, doing very, very little with a very real problem.

I can sum up my own attitude in a nutshell.

I had very strong convictions, and they are reflected in this program, very strong convictions, that in a period of reform, you don't reform for the sake of reforming.

The important thing to remember is that if you look over the history of names, the history of folk reforms, is that

Where reformists have really done good in Asia is where they have been highly sophisticated in zeroing in on what was wrong, but being very careful not to destroy more than they constructed.

And where revolutions or reforms go beyond that, then they set a country back rather than pushing forward.

I think there's a great deal wrong with the American medical care system.

But as I've pointed out several times in considerations here, I've noted quite interestingly that by anyone who's aborted, when he's furiously ill in a foreign country, and then come and is looking for the best medical care in the world,

He does not go to those countries who have socialized medicine, although some of them have very good doctors.

They come to the United States.

And that's true, as Bill will tell you, of the foreign leaders abroad.

They come to Boston, Houston, whatever the case may be, to the great clinics here, to Mayo's.

They don't go to some other country.

Now, that means, in other words, that our free medical system, when all of it's false, does at the highest level produce the finest medical care in the world.

What we have tried to do here

is to develop a program that will correct what is wrong with our health care system without controlling what is wrong.

And that's what I mean, I think, has come up with a very, very good plan.

Thanks.

Ladies and gentlemen, I'm not going to be able to sit if you're not getting yourself today.

I don't know.

I think that I love to eat, but at least I never get cold when I travel this time.

Unless you're going to make me think about an egg open.

No, I wouldn't choose that.

That's impossible.

Uh-huh.

I believe that here, what you're about to see is the actual current deadline.

This now is the last building that we're going to submit a health program and we're going to convince everybody.

And I think, in part for this, in part for the importance of our having positive administration recommendations on the Yale, in time being serious in conjunction with the half dozen other schools that are up there now.

It was very easily possible to spend a few more months improving our implementation.

It didn't improve since it was open, as a matter of fact.

And we did get, actually, a 24-hour freeze

In the reading material that I'm about to go through,

And it has been breathing.

I had to go to New York today to greet the New York capers.

This was not postponed when I joined the Foreign Office.

So, uh, at 9 o'clock, wherever I may be, in the course of this outline, I'll ask Bob Petty-Sutton, who is the unsecretary of the movement's head, to be helpful in planning a program to help members of the agency take over the war.

Let's start at what is the first slide of a series of slides that I've been designing that is not entirely for the benefit of the government or the people, but for the use of all of us who will be talking to people of a yield of interest or otherwise.

I've left out some of these lies.

Some are still, uh, could be tinkered with in one way or another because the numbers are wrong or because he was in his presence or something.

This will give you a general idea.

The, uh, the partnership approach that we are proposing at size limits the change to meet desire and goals

No radical restructuring is where restructuring is not necessary.

As Fred has just said, all we have to try to do is zero in on what is wrong, being careful not to destroy more than we fully construct.

We are emphasizing also choice, not compulsion.

This is a comprehensive approach in the sense that it is emphasizing

not just the quantity of medical care, but its qualities.

It emphasizes the development of the supply of medical care, and it's not simply a response to a plan.

And it focuses on approaches which are parts of a algorithm.

It recognizes that each part of this belongs to a co-regulating system.

I won't go through this line by line.

These are statistics showing that, on the whole, we're a lot better off than we were at the turn of the century.

One of the most dramatic figures, especially since we hear all about the relative position of the United States in maternal mortality.

In 1920, there were 1 in 150 maternal deaths from childbirth.

Today, it's 1 in 4,000.

So that's what's happening over time.

We look pretty good.

But there are apparently disturbing aspects of the relative position of the United States.

You see life expectancy on the left.

And, uh, of the right, John says 70.

My defectors.

Please, John.

You know, Elliot, I don't get all kinds of trouble with those kind of figures because of the reporting.

But it's not an un-reporting system for those countries.

It's not the same kind of system that we have.

You're just giving all kinds of trouble to those figures.

I mean, I'm not sure that's true.

I guarantee you that if you're allowed to say that for years, I mean, you know, the appropriations of the committee and the system is entirely different.

Just assume that if it is there, then you'll be relieved.

Floyd International.

The power of the data.

And our basis is that the system is different.

And we work on it as a private organization.

We disagree against the definitions.

Agreed.

You're talking about life expectancy?

Yeah, and also the change to send out the energy.

The, uh, the percentage of the energy that's on the planet.

So the life expectancy is... Oh, I can see you laughing flat.

Uh, you know, the energy is...

There's something lower than the average, than the average male, you know.

Um...

And to one of several charts on specific problems within the total picture.

Here is a chart showing the relatively high ratio disability days for low income people.

and the comparison of mortality between whites and non-whites.

Of course, one of the values, passing the crown, now raises the comparability of U.S. figures with the rest of the world.

The relative position of the U.S. is

I thought you said the mortality was 2 in 100.

You had a choice in the hole.

I was there on the channel.

Yes.

That's what you said, but the chart was talking about mortality.

Which chart?

No, I mean, the figure I gave you on the channel, that wasn't on the chart.

No, it was on the channel.

So not on the channel, but mortality.

So you can transfer that to 100, which is what the first chart dealt with.

But two in a hundred, if I recall correctly.

Is that right?

Can we see them where they are?

Yeah, that's it.

That's it.

There's one right here.

But two in a hundred, that is, is not consistent here.

200 is not consistent with the 22.2, 4,000, and 445 is now going.

I think it's pretty close to it, but that hand is not good.

It's pretty low, isn't it?

Well, they said it was sort of a refined sort of thing.

Well, you're all out of the same business as we do today.

This is Kennedy.

He's getting rid of those little baby sharks.

Well, me, uh, I can't say anything about it.

I'll leave you there with one more chart.

What's the five major problems that we can seem to address?

Here are a few that we've left behind me, and this is what it's all about.

Let's look at it.

The five things that our proposal seeks to address are the problem of the pursuit of the change in the placement of health care costs, the effort to provide more resources in areas of scarcity, particularly rural areas and inner cities, to deal with the problem of

wide disparities in quality and availability of care, to overcome financial barriers to care on the part of the poor, and to deal with the sound of catastrophic costs for everybody, and to come forward with what we consider to be

use programs that have efforts into and reduce pressure on the system at all.

every accident or injury or illness for which we find some means of prevention, we reduce the need for doctors or facilities to reduce pressures on the total cost.

So, I tell you about how we propose to solve these five problems.

And I hope that you will support my company while I have this done.

Well, I'd like to continue on speaking to these five problems.

We have, by the Senate vote, a briefing and a message to the Senate that should come so that there is first a problem section that leads into a final proposal section that is addressed specifically to these kinds of problems.

As the president decided, it would seem to be a targeted kind of program rather than a radical structure without regard to where the emotions are.

We have some charts that we can skip for now on each of these five products, looking at what they are, but I'd like to go to these two.

the two basic principles.

These two are, if I'm wrong, some kind of emerging message.

And to summarize, by the secondary and present at the outset, we've said before about complete replacement funding.

That's kind of obviously what we have in mind here.

We're trying to raise questions about certain nationalized compulsory health insurance plans that are proposed to completely eradicate

restructure all private health insurance and the medical care systems.

Second, we can provide my enforcement with a point that the U.N.R.D.M.P.

figures and others that you've seen, probably does not supply more money to properties than are in the deliveries today.

How is that?

that we must have comprehensive policy.

Again, here we think the proposed National Health Partnership is far more comprehensive and extensive in terms of the problems it addresses than any other pension measure on the Hill.

Fourth, that it must be a diverse health care system.

That reflects at least two things.

Opportunities for informed consumer choice.

Again, a basic thing that people have to be able to choose the kind of healthcare delivery system, the kind of provider they want to deal with.

Rather, again, as in some ending measures, being subjected to compulsions and requirements to deal with a certain kind of providers in a certain way.

And we're talking about a system that tries to build incentives into marketplace operations rather than relying on central planning, central rate regulation, and price fixes to create an efficiency that's really impossible.

And then lastly, it's a health system.

It isn't a health care system.

If we're not a health care system, won't we do this again?

It's something I think the president's program will be distinctive in compared to other bills.

We have to keep constantly in mind that what people want is to stay healthy, not merely to have better health care, which he didn't say.

The most basic principles in my office have, as I said, five in part, Mr. President, both.

First, help make the organization on that side, but all of these as pilots are somewhat distant, so very much in the air, up in the air.

Last March, the administration proposed, as amended to the Medicare program,

Giving the right of Medicare to cities.

Giving to Medicare cities the right to elect membership in so-called health maintenance organizations.

This is an organization that provides first, comprehensive health care.

That means hospital services, outpatient services, medical services, for Medicare.

Everything it takes to stay healthy when you get well, unless you're sick.

Its most important feature is that it involves a different kind of payment for financing payments.

It's a prepaid system with a fixed-price contract and payments in advance for the year ahead, rather than as we now have with the usual seems-for-service system and the usual insurance system, the cost-plus kind of reimbursement on an e-spring basis.

You go to the doctor, the insurance company pays, and then the doctor charges.

At that point, there's no negotiating contract in advance.

So it's a challenge in your health care.

And then finally, it's a very flexible mechanism.

is an important point if you're dealing with interest groups.

In this time, for example, it's all the elimination of fee-for-service practice.

Doctors can associate with medical societies and medical foundations.

The society and the foundation as a whole can enter into a fixed-price contract of care

With enrollees, the foundation can choose the pay and coverage for practicing positions in a lot of paper service spaces in high school shoes.

One example of the kind of flexibility is options and persistence.

But through these kinds of mechanisms, HMOs as opposed to the credit system, internalize the incentives for efficiency that aren't there now.

Because providers will be dealing for the first time with a fixed contract amount made in advance, they have certain margins in which it works.

They know that their inefficiencies and their over-utilizations are not going to be reversed on an open-end basis by the insurance company.

It's like a company putting a lawyer under a team or getting a service contract for the year ahead on the television set as opposed to going out and paying a mechanic piece by piece.

I can't say the value of this business.

It's a very honest and trustworthy business.

The maintenance has also been spread that stresses preventive care.

And now he moves the provider that tries to help him in order that his profit margin, that we've mentioned under the fixed price contract, he's going to see the maintenance.

And therefore, he's got a financial interest providing all the preventive care and early diagnosis that we are trying to go and help these people.

And then also for the patients, it's a more convenient type of access to the health system.

Now, of course, people are facing a way through a network of first general practitioners and then referral to specialists.

It's very difficult to work your way through a kind of self-created comprehensive health plan.

This kind of system has within it all the necessary kinds of service, specialty, and rest.

We propose five specific legislative actions that occur to encourage the creation of a health maintenance organization for these pre-patient group practices.

Organizations first will require that public insurance, in this case would be Medicare, and proposed family health insurance plan, and private insurance.

If there are at all these options,

I'm using the value of their insurance coverage for enrollment on a three-day basis in an HMO.

This is just an option, but right now the development of health maintenance organizations is inhibited by the fact that product policyholders can't have no portability as to their actuarial value.

They can't take it from a real-cost plan and convert it into a prepaid contract amount to deal with HMOs.

Second, we would provide planning grants to potential health maintenance organization sponsors.

Organizational and entrepreneurial skills needed to put together a comprehensive plan system are significant.

It is necessary to try and support this kind of activity, which would not otherwise be a reimbursement to the contract price for care itself.

Third,

devices to further assist GMOs during the start-up period before they had sufficient enrollees, which typically amounts to $20,000 to $30,000, which in English sounds pretty even on the delivery of care.

And here we propose a direct loan and a loan guarantee program.

4. Financing of initial capital construction and start-up costs.

The start-up costs are the operating deficits that occur, meaning really not more than three years under our legislation before the involvement of the National Investment System.

4.

Because teaching hospitals is the teaching of hospitals associated with medical schools, and typically higher service costs, if they're going to get into the health maintenance organization business, we have to find a way to reimburse the pedagogical or educational component that's associated with their service delivery.

We can't do that with the usual insurance reimbursement or service reimbursement.

We would not want to pay a regional hospital to make the contract more than we would pay a community hospital.

So we created a separate program.

to allow us to reimburse the extra costs associated with the education component of the teaching hospital.

I might add that trying to get these organizations going in medical schools is continually important in terms of communicating their desirability to medical students.

And because teaching hospitals are typically located now in central city areas, they can't be particularly effective in dealing with the poor.

And then finally,

opposed to use the supremacy clause of the Constitution to override two types of state-league barriers that can give the development of self-maintenance organizations.

At present times, some 22 states have laws that either prevent or seriously limit the development of improved practice medicine.

These laws trace back several decades, typically ending our out-voted

We propose, rather than preempting them generally, to say that when we enter into a contract with a provider, any general provider, for the delivery of services to federal beneficiaries, maybe Medicare beneficiaries more than the insurance plan recipient.

That contract of service under the Supremacy Clause of the Constitution will prevail over any inconsistency laws of the organization for practice.

In fact, there is one other legal barrier with regard to positions being aimed at delegating duties to allied health personnel under their direct supervision.

State laws now have given that practice within a health maintenance organization.

If the organization is to have efficiencies in the structure and delivery of services, it has to be able to use allied health professions properly supervised in a flexible way.

So again, we would propose to permit

doctors in an HMO to make such use under the correct supervision of allied personnel as efficiency and quality of care would dictate with regard to what might be the barriers operating for physicians in solo corrections.

The summary cost data on this you see is already down a little bit to a further grant course today.

I don't want the record to show that that went unnoticed.

Our second proposal.

is designed to address itself specifically to one of the problems that was raised before, namely the problem of scarcity of service in certain geographic areas, namely rural areas and inner city populations.

The scarcity problem traces most directly to an unwillingness in the part of physicians and the entire medical personnel that is located in those areas.

It's a manpower scarcity problem which then creates a facility problem, but a part of it is a manpower problem.

The positive nature of that, in terms of dominant problems, is not financial.

It's not that doctors can't make a good dollar in the inner city poverty area.

They can, but they haven't done the Medicaid program.

Rather, it has to do with the types of institutional supports that are available in these underserved areas.

A lack of sophisticated medical backup, a teaching hospital, a lack of so-called peer simulation, doctors working together.

a lack of cultural advantages to the family.

So with this kind of analysis of what is causing the problem in mind, we have a set of proposals that emphasize the creation of those institutional supports that we think will be attractive to new doctors in the area.

First, we propose a modification, a second generation modification of the neighborhood health center concept, something called family health centers.

Most of the establishment of 125 of these over the next two years, we have about 100 now, looked in very serious countries, supported through OEO and HW.

These are ambulatory care facilities.

They typically do not provide hospital care.

And they are located by definition in these medically underserved areas.

A quick expansion of this program can give us a quick fix of

distribution problem, while other more long-term answers like more toxic training, long-forgiveness programs, and health maintenance organizations themselves can be attainable.

This, we see, is important, especially in transition periods and long-term solutions.

Second, we would propose a further type of program, a special grant support program for health maintenance organizations that provide services in these poverty or scarcity areas.

The idea here is to give a grant rather than a guaranteed loan to an organization that will serve a poverty population as a further inducement to that service.

Third, the congress passed last year in present time, in December, the Emergency Health Personnel Act, creating a National Health Service Corps.

We propose to implement that legislation with an initial appropriation of $10 million.

This permits public health service personnel of a variety of types of positions to be assigned by the Secretary to designated security areas.

While we have drafts, this carries with it a draft exemption.

And finally, taking up a proposal made by the attorney commission for higher education and going directly to the institution's supports, they propose

We encourage teaching medical schools and university health science centers to develop satellites, medical education satellites, in scarcity areas.

We call them area health education centers.

Typically this would be working through a medical school

to develop an education component in a community hospital in some scarcity area.

This is happening to some extent now around the country so that expat school would have a training center for example classroom in primary care medicine out in a far-flung community.

Not only is it a useful teaching device, helpful in terms of our priority finding a more primary care physician,

But it is the county of center for peer simulation and sophisticated health care that we hope will bring other physicians into that area.

The third proposal has to do with a rather complete reform of our medical education financial support system.

is increasing itself

This kind of financial progress assistance is beginning to overwhelm project grant supports for the achievement of particular programmatic changes, reforms, and bridges.

We've got to find a more active way of providing a secure financial base for medical schools so that we can go in the direction of the form.

And then secondly, we're interested in the expansion of physicians and medical school production with targeted efforts on primary care physicians and physicians' aides.

Just expanding the number of medical school graduates is not going to do the job.

80% of medical school graduates do not go into the primary care specialties of pediatric internal care, general practice.

In fact, the number of primary care specialists has gone down in absolute terms in even higher positions over the recent years.

This is a six-point program of legislative reform in the second and first.

has had virtually every subject studied in the medical education department.

So we come out in favor of a capitation formula that's the basic device of medical school support.

It's an amount paid per graduate, $6,000, let's see, let's see, about $50,000.

What we arrived at, and I might add, is roughly half of the learning that the American Association of Medical Colleges has proposed, but it is a substantial increase over our present formula funding for medical schools.

We are trying hereby to switch over to a role where the federal government has a first-dollar responsibility.

The medical school knows in advance how much it's going to get from us.

It has to find, from other sources, save and drive its last dollar support.

No longer will we be in the position, we hope, of being the people we look to for that last dollar of financial distress assistance.

So we are scaling down the financial distress authority as the capitation funding takes hold.

What is your caution about graduates?

Cost per graduate is estimated at between $10,000 and $25,000.

Is that it?

I don't believe that.

You mean the full time that the graduate, the student is in school, normally costs between $10,000 and $20,000 per month?

Yeah, that kind of capital costs.

Is that three years?

Three years.

That's for a year.

Oh, yeah.

But in other words, it was three-year medical school, it would be a four-year medical school, it would be...

$10,074 on the $20,074 on the $80,000.

And what does she propose?

Is it $6,000 per year or $6,500?

$6,000 for the entire time.

This is my value.

$6,000 related to $50,000.

This is not the only money that's going into London schools, so it would be fair to say, is that percent of the figures arrived?

This is a bulk of money.

Bob, there is an ambiguity there, though.

The $6,000 per grad with life's interest in the grads in the school will be $6,000 times the number of people in the graduating class.

That's correct.

That's what it is.

Well, then it is $6,000 per student in the... That's correct.

I'm sorry.

Now, the idea was to have two graduates so that we had it built into a kind of performance or output, right?

and rather than go to one of those standards and pump these fragments through, I think the conclusion wasn't there enough.

The teaching process didn't look like that very much.

But at the same time, the artist is trying to

from other sources, for example, from university health science centers, going through those institutions to come to the medical schools in the third and fourth years.

Right now you have an excess capacity in the third and fourth years of education.

We would like to try and fill those centers with this kind of advice we hope is consigned to that kind of production.

What kind of qualifications for a medical school under this law?

What does the public prevent?

It's the standard that I can't give you in detail for this thing.

The legislative definition exists in current law.

It's very specific and it's narrow, so it deals only with the 105 medical schools.

This goes also, I might add, to the schools of dentistry and osteopathy.

I understand you said it was access to the medical school in the sense that there is, there are, there is training in the 10th, 1st, and 2nd years that is leading now to some of the spaces that are important as opposed to, you know, programming and all sorts of things.

Historically, that's something that there are a number of two-year medical schools, like the University of South Dakota, that have provided a senior year to disease advantage.

schools may come to these dropouts for whatever reason.

The community comes.

No.

Comparable.

Comparable idea.

But there's two different medical schools.

There are post-baccalaureate degree schools and post-baccalaureate degree public school, baccalaureate degree institutions.

And that's where medical schools make sense.

There haven't been enough two-year institutions to come along to make up this deficit in two-year institutions.

Yes.

Well, basically, it doesn't have to be two years, it doesn't have to be three years.

Three years through, we'll get $1,500 per year.

The capitation formula has certain incentives again built into it for increased production.

You get the same amount, for example, whether you're going three years through to four years through.

This again, to the recommendations of several groups and incentive for a period of shortening.

The AMA, by the way, supports this idea of Christian Jordan.

And it is, by nature, an incentive for more graduates to accept you, aren't you?

Well, it's not too bad, because it gets you saved for a graduate.

But it also makes the problem of two or three semesters, not only do you turn on faster, so you're going to get the money sooner, right?

No.

If you go on a tri-semester basis, it's close to it, but that's it.

Yes, that's right.

There is a second category as an existing law of special project grants for specific targeted purposes.

For example, the development of the Reception Program in the offices of GEDs and other primary care doctors for the underclassmen of the medical school to try and get them interested in primary care.

So planning money for converting curriculum to four to three years, that kind of targeted special support.

Third, a special effort to try and bring more low-income minority students together in the schools and medical practice.

Yet this has a function of attempting to deal with the problem of the position of more of us locating scarcity areas and drawing more people who hope to see scarcity areas into the practice of medicine and hoping that there's something that goes back to a greater percentage of scarcity.

and we are proposing to expand our scholarship loan amounts in total that are available here, starting solely on the loan income plan, and to, as we have in other areas of higher education, use the guaranteed loan bank as well.

Generally, I think, people without a job can't pay any of them.

So before Eric and Gold, it has to be you in person.

But that's it.

That's it.

You have found them.

And there's search inhibitions in our current programs.

And that's the one that's effective use for medical education.

And it has a mobile amount that's fairly low.

It has a number of gears that you can throw on.

And there's no secondary market because the banks aren't coming up with money.

In our higher education legislation, we have a license for that.

It's very, very expensive.

And then lastly, a special advice, long forgiveness of these guaranteed loans, where a large young minority student fails to complete medical education, and there are studies that show that

that this kind of person is unwilling to undertake that obligation, it's called an obligation, to enter higher education, medical education.

What we're trying to do here is to reduce the risk and to get that scare factor of coming in on a long program, goodbye.

And he could be obligated to pay back a substantial amount, but he doesn't know he's a graduate of medical school or doesn't have a higher education associated with that.

So, the same gives me hope and fear.

We won't forgive the law.

Whatever the guy goes, we're going to have him here.

And he was given the law, and then he finishes that other half on his own.

I thought there was going to have to be some way to improve that.

I don't know.

I'm a fan, but we've got to have legislation on that, regulations on that.

Further on medical education, we are expanding funding in the allied health personnel training area.

But while there is a lot of expansion overall, it represents more of a shifting of funds within this category on the type of allied health personnel that can expand aid positions.

ability to serve patients, physician's assistants, the dentist's assistants, the nurse pediatric practitioner, the nurse midwife, this category of person, as opposed perhaps to a radiologist, something like that.

And there will be special emphasis on the team training physicians, by physicians, with doctors.

There is also loan forgiveness for physicians who practice in scarcity areas and who enter into a primary care specialty as described.

I'm not sure that there are more problems and assets in the forgiveness business.

I've been watching it for years since I was at the university.

We're not, we're not too optimistic about it.

There is a little bit of a surge in current law.

Yes, they're going to be low for teachers.

There's others, too, for nurses.

And it hasn't done much.

It is relatively low, but it's happening.

It's going to be a surge in average payback.

You may just worry that people will go in on their own part-time and just be part of the regular practice.

Well then finally, we are consolidating five construction grant programs in the area of medical education and facility support.

Cutting back on the ground support as we head elsewhere.

And trying to switch over to a low-gear gear to the south end of the device for construction support.

I'd like to leave this up to you, because I know we're running over time.

The fourth general proposal area is in the area of preventative health.

This is to say, it is a sanctified piece of the President's proposal.

It's not a problem.

We have the summit and other plans.

And it relates back to the partnership faith that's trying to develop one of the elements of that partnership with the individual himself.

He has got to be responsible for the maintenance of his own health.

Our proposal here is to divide between others, too.

to expand citizen health education programs, and to operate on the preventive medicine side, to be concerned with high payoff areas that we have by for the addition of special departments.

Both the biomedical research additions, as the President has already announced, cancer and sickle cell media,

and in the operation and treatment areas.

Accident prevention, venereal disease, which is in the epidemic reportings around the United States, is the second only to the common cold that exists.

Infection disease, alcoholism, and methadone.

These are typically areas, too, of community health responsibility.

And the federal government has a special responsibility to deal with.

Skipping out, I'll get to the health insurance part of it.

It's a set of four proposals through which we propose to give or buy a national health insurance system.

We are suggesting that the name National Health Insurance plan is appropriate to what the President is proposing.

It is not a nationalized health insurance plan, a federalized health insurance plan.

In fact, we don't like the county bill, but we don't think it will be on the wrong side of the semantic balance to start with.

This is a nationalized proposal.

The first element in the

is the establishment of national health insurance standards governing private employment analogous to the care labor standards and perhaps the minimum wage.

We propose that

that the minimum level of health insurance coverage be considered as important.

And that every employer be obligated to provide this standard plan and these standards to his employees and their families.

At the time of the plan, we include hospital and surgical letters, kinds of inpatient care, physician services, outpatient care, including in your CDOs, those areas we're working on preventions that private insurance doesn't know, typically covered, well-being care.

Now they're planning immunizations and other things that are important for the health services of the great health diseases.

The plan will include a so-called major medical or catastrophic surgery.

It turns out to be relatively expensive to go up, fairly high, but we are proposing that the plan will cover medical bills of $150,000 per person.

This is a kind of catastrophic health insurance through the private sector that doesn't get us into the problems that we're dealing with.

Vice President and others, we were proposing a government-advanced catastrophic plan, whereas we were in a position of having to

You can all lie on certain experimental or highly expensive services like heart transplants and kidney machines, but we wouldn't want necessarily to cover the government's next program, but we can blame it in itself.

We could just have it get away with the proposition of excising those kinds of services.

I don't know what your plan is over saying.

To these lawyers, it is you who have to have this general coverage.

We don't tell you what services have to be entered.

We're shifting to the private sector.

That hard job is defying me.

These cars are not easy.

Are the cost features the catastrophic coverage difference in the Air Force?

In other words, is there a separate corridor that you've got to pull in that anybody's carrying or something like that?

No, I think that's best explained by dealing with the whole...

There is a...

The premium cost featured whereby in the first two and a half years of the program, employees made up to 35% of premium cost.

Employers paid 65.

Employer share increasing from January 1976 to 75%.

And then the typical employee share in private health care plans, food plans, is about 25% now.

On deductibles, we're proposing fairly significant deductibles of $100 per person up to three people, plus two days hospital room and board.

That is consistent with the President's desire to create a public and private insurance system which stresses consumer cost-consciousness.

You're not saying that the employers and unions can't bargain for some pickup at that time.

You are saying, in our costing of the plan, and you say these are the standard package that we envisage this time for the government, does that mean the maximum deductible under the plan is $100 per trip?

That's correct.

It doesn't mean that you must, in order to have this plan qualified for tax purposes, have it acceptable.

That's correct.

That's the problem.

That's the cross problem.

You don't have a necessary deductible.

You don't have the individual involved to help you manage your resources.

That's what we've made in all of that.

Well, we discussed that in the building, the very digital, and in certain deductible people, it's always about time.

Insurance is paid for that deductible.

We're now doing one in Medicare, and we saw that for most employers,

to pay, if they were concentrating, picking up the deductible, and at the same time providing these services, that would cost them money.

It would be a financial headache.

If they don't know how to put your thing on, I don't care.

If I don't want it, you can get away with that.

You can get away with it.

It saves it all.

The big problem here is the tax status of this plan.

And also, on your premium cost point, what's the tax status of the employee contribution?

as compared to the employer contribution.

Why does it make sense to say that when there's an employee contribution, he has to be taxed on that contribution?

When there's an employer contribution, there's no taxes.

It just means that the idea of employee contributions is being undermined by the federal taxes.

And this would be a good opportunity to get rid of that.

You see, if you turn those two things off, it breaks out with your boy ahead.

You mean by the deduction of the employee contributions plus three?

The way it is now, there's a great incentive for the employer to take all the costs.

And the reason is that if the employer or the employee contributes his tax as a regular income matter, the employer is deductible from his, the employer's credit and the employee pays no tax on it.

The present law does permit deductibility of premiums paid for health insurance by an individual.

That's right.

I can't remember what the qualifying factors are.

The deduction is not a business expense, and as a deduction it has to conform along with every other deduction with the limitations and contributions and taxes and the other chemicals you have to deal with.

If you want to speak to this point, Assistant Secretary Butler has been charged with the health insurance laws.

Let me, I think that, I don't know if this is the right answer or not, but there are many tax questions that come up in this.

I think as we got into this question and the related tax questions, then we made a decision which may be right or wrong, that all tax questions ought to be a part of an overall look at the tax system in the country.

as opposed to dealing with them on ad hoc paper.

They relate to health or X subject or Y subject or that kind of thing.

So where you see problems here, they are problems, they're problems.

We recognize the problems that people who've been working on this chose to come to grips with in a little bit different fashion, or at least that was kind of what we were asked to do, and that's where we are here.

That's why we've got this difference right now.

Does this complete the discussion of this particular program, and does it like to talk to the cost of development of it?

Does it accept the full insurance fees?

Well, I'd like to ask a question, too, about the cost feature there.

I think that it's a big observation that we have provision of a certain amount of employee needs as a disincentive to usage of those deductibles and certain things that have to be recognized.

cases already, those things are paid for by the employers and you aren't going to plan to change that and aren't going to take that away.

And where they aren't paid for by the employers and bargaining that exists, they, there will be one of the first demands.

So this kind of, this incentive is going to be long lasting for circumstances where, where the bargaining exists.

I think that's perfectly right, unless you say that you must provide her with what I have, and that's why this is such a critical point, because if you let this point go, you'll never get it back again.

Um, Mr. President, I'd like to express some concern about what this does to business.

I have some statistics which I have done with some hesitancy because there don't seem to be any very accurate facts on it.

But one statement in EGW's original memorandum said 76% of all employees are covered by some type of medical care, hospital care program.

That means 24% are not covered at all.

And of the 76%, some are covered by plans which would qualify within these criteria and perhaps many are covered by plans which would not qualify.

Carrying that arithmetic one step further, the estimate is that somewhere between 60 and 65 million people would be eligible for this kind of package.

The difference between that and the 80 million workforce or government employees

people who are covered by paid insurance because they're unemployed or employed at low income, and a number of other exempt categories.

If you take 60 million people and give them a package which is priced at $400, which is my understanding of this package, you're talking about $24 billion a year of insurance.

And the present expenditures by business, as far as we know, on health insurance are about $12 billion.

So you're doubling the present cost, adding $12 billion a year to health insurance costs.

of the employees in business, which one-third, per time, as you say, by the employee, and two-thirds by the employer, but ultimately three-fourths of that business, or $8 million a year.

Uh, plus, Mario, if this thing could not be, uh, well, I guess 25% is, uh, is, uh, is that prescribed?

You know, they have to, oh, you have to make that, you know, that'll be blown away, you know, make that, uh, uh, feature right away, so they can make the whole trip, you know.

I can describe that, but if you don't change the tenant system...

So doesn't that mean you're just working against yourself in that?

Well, I guess the same result of approximately $12 billion added cost by taking the 24% of ethanol coverage and pricing that out and making some assumptions as to those that have partial coverage.

And that was verified by one of the major insurance companies in this field.

Now, the significance of the $12 billion cost is that the large companies that have union negotiations pretty well have packages that conform to this.

What we're adding is approximately $12 billion for potentially small and medium-sized businesses that have main barrier packages of health care or have no packages of health care.

I'd like to express very greatly the concern which is shared by the Administrator of the Small Business Administration that this is something that will be overwhelming for small business.

Now we've talked about a number of alternatives in the discussions in the last week.

One would be a package with less benefits.

More deductibles, for example, of less benefits.

greater participation by the employee, and so forth.

There are plans which one of the major companies comes up with that would be a presentable plan

Obviously, the less in benefits than this would come in terms of approximately $220 instead of $400.

As a matter of fact, the low option for federal employees isn't anywhere near $400.

It's less than $300.

$338.

So we're going beyond that, which we make available as a low option to federal employees when we talk about a $400 package.

Now, so if it would be possible, I believe that we'd let the insurance companies come up with it to develop a plan in the range of $210 or $220 so the employee would pay $70 and the employer $140.

We've talked also about other special considerations for small businesses that would not appear in this plan.

One would be to defer application to small business

employers of less than 50, for example, or some other definition of small business.

Or it's subsidized in part by the government, the costs of small business.

Or even they have a substantial exclusion which provides essentially major medical care, but less of the basic medical care to the employee.

I haven't been able to sell any of these options, and I want to express again the fact that this is one hell of a price to impose upon essentially the small business of the United States, even though it's deferred until 1973.

and that we ought to think very seriously about what it does there and what it may do in the field of inflation as well.

The real dilemma you have here is the climate system, the current system that we've developed, has developed to a point where it now covers about 70 to 80 million Americans.

And it does not include, by and large, detectables and gossips.

And on the other hand, what we want to introduce

is a system that does do that.

So what we've got is something that will be very unattractive if we enforce deductions to those 75 or 80 business that are now covered.

And if we don't do that, we are going down the road that we don't want to go, which is to provide a system that doesn't have adequately turned usage.

And it's a damn dilemma.

I don't know any answers to that.

Well, I think there are a number of dilemmas.

I know of some that have been worked out.

For example, I have been able to sell this to PGW.

For example, you write a policy with a $500 exclusion per family.

which would mean that in case of all major illnesses, catastrophe and so forth, they'd be insured from $500 up to $50,000 on an 81-day... Would you be in court that morning?

Well, you could be bargaining.

Couldn't you be bargaining the way you're doing this right now?

Well, you're bargaining the way you're doing it.

And it costs $20 million to have families in America, $500 more, is there now a cost to the government?

Let's look at it another way.

We're talking only about applying this discovery.

to employees who earn $5,000 or more.

And the question is whether a large number of those people could not afford $500 worth of medical expenses a year.

Secondly, for those who couldn't, the insurance companies could offer a pool that would sell him some of that coverage between $0 and $500, so that he could buy it personally.

Now, that's only one way of doing this because the companies have a great many ways of doing it.

Their actual goal is that they can come up with a package which would be defensible in the range of $210 or $220.

The $500 exclusion would get the cost down in the range of $120 or $170.

Now, I do that only as an illustration to show that there are a great many ways of doing this that would reduce the cost of business very materially.

And I point out again, you're talking essentially about small business in this country.

You're going to hit them all the time.

I'd like to clarify on one point, Bill.

The national standards plan would apply to all employees without an income test, but you want to get a means test applied within the workforce.

So it would cover a full-time worker below $5,000, mainly the working poor.

That's a change then since last week.

You were talking about a $3,900 cut-off and then $5,000 cut-off.

That's the independent health insurance plan for unemployed persons.

That's the cut-off that we always felt that the so-called standards plan would cover all workers, even those very poor.

And it would not cover the under-employed of those...

I'm earning less than $5,000 under the government.

It doesn't matter.

We've not covered any full-time employees.

I would, I mean, go ahead and remark this.

I just wouldn't compliment our customers.

One of the problems here, of course, is that we try to solve the work distance, and if not, the present Medicaid program is created where all you've got, on the average, a Medicaid recipient receiving something like $850 worth of government health insurance, as soon as he becomes a full-time employed person on the working board, he loses that.

And he has nothing.

The idea here was to mandate something in the order of a $400 package so that this inciting notch would be dealt with.

To the extent that you cut back on the package, you increase that inhibition of getting off welfare at the same point.

How would you help self-inflict people with this?

In two ways.

Self-inflict people would be covered then.

Perhaps this Vice President would be well to go through the rest of the package to see how...

I think we better do that because we haven't got a great amount of time left.

It's 10 of 10.

How long will it take you to complete that package?

Five or six years.

This Vice President's problem is, it seems to me, that substantial problems have been raised both by Jim and Parry and Joy.

And they talk about this thing going out there to the Congress day after tomorrow.

If that's my understanding correctly.

I think these are problems that are the most substantial ones that, as Kenny has said, we don't think we're going to run into a bust, no, when it gets public.

Well, I don't know what the president's decision will be.

I think the president's made a basic decision on this.

Am I right on that?

Yes, sir.

I'm sure that any concerns that...

We'd like to hear how much time is there for modification.

We've been modifying, Mr. Vice President, right along, and we are still making some adjustments, I think, on the problem that Secretary Stansbury has with regard to the premium value of this thing.

There is some discrepancy still with regard to how much the plan is really worth.

We've got four different actuaries working on it and two are lined up on one side of the line and two are lined up on the other side of the line.

The ones we've been working with from the Department of Commerce or the Department of Commerce Cooperation has a lower cost than $400.

Secretary Richardson's actuaries have

And hopefully today those people are going to sit down and perhaps by some miracle they'll arrive at a common figure.

So that's just one problem we think we're coming to grips with.

And I think that we're going to turn out to be a little bit closer to Secretary Stan's cost here.

I think we have to point out that what we did was to take the federal government's low on our plan, which is $338.

add deductibles and co-insurance to that, which would have the effect of reducing the cost of that plan.

Then on the other side, it would be deemed of the catastrophic or major risk insurance, which is a very low cost item once you get past $10,000.

So in some way, the differences appear to be

This plan by Secretary Stanton's actuaries, as I got it, I think one of his staff people yesterday, is around $220 to $230 versus the $400 cost that we have from HVLB's actuaries and the people that they work with us.

one of the problems.

When we met with Administrator Kleppi last week, he was talking about a handset hour cost, which he was calling unacceptable.

As we work this thing out, we've come to the conclusion that if we're in the neighborhood of $220, $230, we're in the ballpark, and I think that

There are going to be problems, but the trade-offs here are very tricky.

If we reduce the package too much more, we're going to get kicked in the head for not doing enough for people.

If, on the other hand, we leave it off too much, we'll get kicked in the head by small businesses.

That's very correct.

We'll have other Secretary-in-Law separations starting the people, the 20 million people who never had to contribute anything.

Is that being considered?

Well, it is considered in this plan, it says that there will be no deduction of anything that anybody has already.

But if you want to accomplish what George has been talking about, that is that you do manage some disincentives.

Then you wash out the attractiveness of this plan to those people in their path.

You can have it both ways.

At the present time, in other words, practically all employees that are covered by room insurance plans have what they call first-dollar metrics.

That is, there is no deductible of any significance.

There's no real disincentive to usage.

And this provides a disincentive for usage for those that aren't now so covered.

But it will mean that the people that it provides a disincentive for will be able to, through bargaining with their employer, to remove that disincentive.

Less than 20 million, but now we just had to remove the two markets.

I think we felt that it would be difficult to change the situation that already exists.

And given that and given the effects of what we're trying to do here, which is maybe build up the supply side, that's the first job that we've got to come to grips with that.

And we think that the program as outlined here is a sound one to do that.

The other thing is that we will, because we're covering people, be putting new people into the system.

So, you know, there's an injustice, I agree, but the fact is that as we're building a supply side and feeding new people into the system, some of these thoughts are black.

And instead of supporting proper use until some of the supply side issues begin to take effect, which is not going to be exactly in 1973 by any chance.

Well, I think that's another key point on this whole thing.

Some of the insurance companies say that the plan will really be a fraud on many people because you can't provide $400 worth of benefits.

And with the system the way you have it, you won't be able to do it by 1973, so people will go to hospitals and doctors and not be able to get the care they're in charge for.

The other thing, too, in just doing something for an offensive reason, there's certainly no way to justify anything, but we've got to look at this thing in terms of the alternatives that we're confronted with.

And certainly it seems to me from our reading here that what is gaining a great deal of momentum is a complete takeover by the federal government of the nation's health system.

We've got to come up with something then, we think, to get the job done, taking advantage of what already is there and reforming what doesn't work in the current system.

so that we don't eventually wind up with what is reported to be a $77 billion health bill with the federal government stepping in in front of the weather nation's health system.

We can't do anything else well.

I can't possibly imagine what makes us think we can run that health system well.

As far as economic districts are concerned, the tax bill for $77 billion has got to be astronomical.

It's computed on the basis of about $1,000 per family.

We're talking about a 3.5% increase in the Social Security tax.

Not to mention what we'll have to do as far as raising people's income taxes to pay for the thing.

So we're kind of confronted with all these things, and it's a darn difficult problem to deal with.

Well, it's not a hard question for us.

Let's go ahead with it.

Let's go ahead and finish the presentation because I think we're having a slight of critical things here.

Thank you.

And go on to the second and third elements of the plan.

We should be...

federal responsibility now.

We're proposing first a family health insurance plan to replace the family portion of the current Medicaid program that is 40% of our Medicaid expenditures that go to

Welfare and families, welfare and other female-headed families were leaving the program for the ages line and disabled under 19.

But putting the other important spaces whereby first there would be national eligibility rules, the plan would cover all families with children where the family has no full-time employed person in it.

or where the family head sells the toy.

And there is, akin to the welfare reform plan, a slight scale of premiums so that you work out some income ceiling.

What we're tentatively discussing now is about 83% of the poverty line.

So he works out to $5,200.

We're talking about a uniform national benefit package, unlike the current Medicaid program where you've got benefits varying from state to state and two states that don't program law.

The package is modeled on the standard medical plan that affects private insurance, except that for cost reasons there are certain patients put into it, namely 30 days of hospitalization, eight physician visits per person, that kind of thing, so the same covered services.

and premiums would cut in at $3,000 of family income, with increasing premiums by family income up to the cutoff point of about $2,000.

There would also be deductibles for insurance on the same order of magnitude as in the other plan, so that as someone moves off welfare into work, he will be granted some relief from the

a federal plan into a private plan of destruction in the same way that the Duster was tortured.

This will have a fiscal relief effect on the states if they choose not to supplement the coverage with their own state program.

There are some services that are covered in some states now, like Medicaid, which is federal matching, that we would not be covering here, and so you can anticipate that many states like New York and California will use the fiscal relief they would otherwise gain to enrich this basic benefit package.

You can see a converse of Canada there, question mark.

This is what the total federal cost is because the construction program is still somewhat overdraft.

The cost is the area of a billion dollars.

It would have been a lot higher.

Is that a question mark about the cost or is that the average cost of this after it gets fully in effect?

So that's the first year cost.

You see, what was originally designed was much more expensive.

But by virtue of going to the requirements of employers, we have eliminated very many people who would have qualified under this program.

So we've reduced the cost down.

The question mark here just represents that we're still waiting for decisions on what the income cutoff level would be.

The advantage of going this way is that we now have a restricted, limited residual federal program instead of one that was open-ended and could be expanded for all people up to 5,000 or 8,000 and so on.

We have put a lid, if you will, on the federal program.

What is the annual cost after it's fully effective?

This represents a fully effective cost.

Well, it's calculated on the basis of all of everybody's, if everybody participated in the first year, the maximum amount.

The Medicare program would remain as the other piece of federal responsibility, virtually intact, except following a recommendation of the Legislative Social Security Advisory Council, soon to emerge, proposing a consolidation of the Part A hospital and surgical portion of Medicare with Part B outpatient.

part into a single program with the federal government picking up the current, of course, July 1, as of July 1, $5.60 monthly premium that Medicare enrollees now pay for their Part B out-of-pocket services.

That would be picked up either for general revenues or trust funds.

That question is still standing open.

Not the last I heard of it.

Thank you.

And, uh, passing that, uh, that, that pickup of, uh,

So the $5.60, which aggregates to $1.4 million, out of the pockets of the old folks now, is designed to counterbalance the $4.5 million.

I mean, it's a schematic.

No insurance is in there.

place on Medicare recipients in the fiscal 72 budget.

So we propose tying these two things together so that there is a net benefit rather than now existing budget and that loss of coverage for the Asian citizens.

The last slide, can I just make one comment on the Medicare area and also in the health insurance plan as I understand it.

We will have, in effect, a compulsory deductible.

Right?

In Medicare, with the exception of people who are forced to fly private jets now.

But within the system, there is a compulsory deductible and also a family health insurance.

Very small, but the idea is that everybody should feel the whole cost.

Now, it seems to me that it's just extraordinarily important.

Your other employer, Amanda, the employer of John, has a very ingenious idea and couldn't quite go about it.

to have that same principle represented.

And if we don't do it now, we'll just never do it.

The way you have it set up, there will be no defense.

We'll get firing away without any doubt at all.

And so if we set up a system where medical care is every good, really you just can't deliver on it.

So there is a problem with the cost consciousness rationality, that there is in fact no data that shows that civilization changes significantly because of the kind of conduct that's involved.

The world is full of examples of changes of behavior by people with respect to any kind.

That's between when it's free and when it costs you something.

Even a cocktail party.

Right.

Make the drinks free, avoid everybody's drunk.

Turn to $5 a drink and be very careful.

The same principle applies across the board.

I think on this point, we would have thought, we were just advised that the tax change were not in the picture at this time.

If someone wishes to change the tax structure to accomplish what you described, I think we would be very happy to have it.

Well, that's a different question.

The tax structure question is a different one.

The deductible one is the question whether or not the deductible U.S. election understood what it was to be there.

is optional or compulsory, from the standpoint of whether or not the plan qualifies, from the employer's standpoint, as a, as a legitimate cost.

Now, you know, you have to put a requirement into all the plans where there aren't requirements.

That's what you have to do.

That's what's a big problem.

And I agree with Jim.

We're sort of at a big divide on this subject as to whether or not we're going to have a system where medical resources are a free good to everybody.

We can see in the last four years of experience under Medicaid and Medicare what happens to medical costs.

I think we can have a free good for a large segment

and medical care would be pretty good.

Really, you just can't deliver on it.

So there is a problem with the cost-consciousness rationality, that there is in fact no data that shows that utilization changes significantly, because the kind of conductors that we're talking about, that world is full of examples of changes of behavior by people with respect to anything.

That's between when it's free and when it costs you something.

Even a cocktail party.

Right.

Make the drinks free, avoid the everybody's drunk.

Turn your private hours of drinking very careful.

The same principle applies across the board.

I think on this point we would, if we were just advised that the tax change were not in the picture at this time, if someone wishes to change the tax structure to accomplish what you describe, I think we would be very happy to have it.

Well, that's a different question.

The tax structure question is a different one.

The deductible one is the question whether or not the deductible U.S., which I understand it was to be there, is optional or compulsory from the standpoint of whether or not the plan qualifies, from the Aspire standpoint, as a legitimate cost.

Now, you have to put a requirement into all the plans with the right requirements.

That's what you have to do.

If you have to do it, that's what's a big problem.

And I agree with Jim.

We're sort of at a big divide on this subject as to whether or not we're going to have a system where medical resources are pretty good to everybody.

We can see in the last

40 years of experience under Medicaid and Medicare.

What happens to medical costs?

I think the community has a pretty good quarrel.

Our segment of the population, the whole thing has just gone out of control.

Everybody agrees on that.

These questions are so basic as to the philosophy behind this plan.

They talk about this for another few days.

It seems to me it's completely unrealistic.

We criticize the previous plan.

My God, the way that we look at this thing.

The minute it comes to us two days before this thing is on the track, I think we're just getting in all kinds of trouble if we don't resolve these basic questions before this thing goes out.

We give it away to Mr. Jones once and tomorrow again.

We've got no chance of getting it back.

He made the proposal without the basic incentive he built into that plan.

My problem is going to be solved by just changing one word, and that is the will.

They may solve the air scare, but that doesn't solve the administration.

Because if you do that, you can't really get the damn thing through.

Because 80 million Americans are going to say, this is not as good as I've already got.

I don't admit it, sir.

And they're going to say, they're the congressmen.

Well, let's put it on the bus.

Let's put it on the bus.

and whatever we send up to go to the park.

But I'm still impressed when I can talk about the cost that you're willing to do all business here.

Well, I think the purpose of the meeting, as I understood it, having presently been already shut down on the planning plan going on myself, so I had a little sympathy for you.

Well, this is an employment.

I think you're all suited for employment.

But those of us who stay in the state, I don't need a general approval this morning.

So I'm not sure the general approval is required for the president

I'm afraid to say.

You say that this is an area of gravity.

I think we should not ask for it.

We should go with it.

Or ask for any additional gravity sanctions.

Which, you know what the effect is.

If they allow you, you don't want them doing that to you or any of this kind of service.

It's in the legislation to be caused in the case of a ghost or a scourge.

Like I said, we've got to start from the second time.

The first time, we've got to start from the second time.

Because we've got to clarify, if there was a cable TV that comes through, we have to have two cable TV's.

They are exempt from that.

So, we're talking about whether we say, here's a free crack, or what you've got to do is come to the public health service, and then we'll talk about it.

The real question is, it says the president's philosophy regarding the draft will be less.

in order to expand the core and therefore to expand its extensions.

We don't have this legislation to remove the draft extension, which ought to be done by Selective Service.

Or, are we expanding the court in a way that we should in legislation that expands the court so that it should not take power since the last time that the court did not be changed?

Karen, are you in trouble with that?

I have two kinds of court in our court.

There is a different kind of court of business.

The legislation says our court has to decide.

It's just a question of, is it going to be the same?

Of what you do is a question of what the core becomes.

You said the core has a tendency to grow.

All of a sudden, the core becomes an entirely different thing.

Let's just review the key words here.

Nixon, Richardson & Agnew on Vietnam War and Indochina operations

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Nixon Library Finding Aid

Also recorded on February 16, 1971

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