Conversation No. 544-8

Date: July 23, 1971
Time: 10:26 am - 1:03 pm
Location: Oval Office

The President met with John B. Connally, John D. Ehrlichman, George P. Shultz, Caspar W.
(“Cap”) Weinberger, Kenneth R. Cole, Jr., Edwin L. Harper, Ronald L. Ziegler, and Paul W
McCracken (?); members of the press were present at the beginning of the meeting.

     Seating arrangements
          -Press photograph

     General conversation

     [Camera noise]

Ziegler left at 10:29 am.

     Schedule
          -Henry A. Kissinger

     The economy
          -Overview
               -Comparison with previous trends
                    -Economic depression of the 1930's
                    -World War I period through 1920
                    -World War II period in the 1940's
                    -1950's, 1970's
                    -1970, 1971
               -Economic growth

Kissinger entered at 10:29 am.

                 -Prices
                 -Time lag in feeling effect of changes
                 -Range of probabilities
                 -Statistical analysis
                       -Gross National product [GNP]
                              -1972
                                         11

                     NIXON PRESIDENTIAL MATERIALS STAFF

                                 Tape Subject Log
                                   (rev. 10/08)



           -Balanced budget
           -Effect of direct tax
                 -Unemployment rate
           -1971-72 rate of growth
           -Projected growth for 1972-73
                 -Lower tax
     -Interface between the budget and economy
           -Effect of budget action
                 -Budgetary and economic targets

Ehrlichman’s conversation with Robert J. Dole
      -People’s Republic of China [PRC] initiative
           -Wilbur D. Mills

Charts

The economy
     -Interface between the budget and economy
           -Actual deficit figures
                 -Revenue, expenditures
                 -Joint Congressional Committee's figures
           -Expenditures in terms of full employment revenues
                 -Rowland Evans and Robert D. Novak
           -1972 expenditures
           -Full employment deficit
                 -Actual
           -Congressional deferral of social security increases
           -Projection
                 -Inflation, population growth
           -Fiscal Year [FY] 1972, FY 1971 changes
                 -Carry-through to FY 1973
     -Department of Defense [DOD]
           -Shultz's conversations with Melvin R. Laird, Kissinger
           -Shultz’s conversation with David Packard
           -Cutbacks
                 -FY 1971, 1972, 1973
                 -Packard, Laird
                 -Military base closings
                       -National Security [NSC] guidance
                             -Working papers
                                   -Defense Policy Review Committee [DPRC]
                                   -Deployment
                                             12

                         NIXON PRESIDENTIAL MATERIALS STAFF

                                     Tape Subject Log
                                       (rev. 10/08)



                                          -Asia
          -Cutbacks
               -Domestic programs
                    -Tax
               -Defense Department
                    -Kissinger's efforts
                    -DPRC
                    -Military personnel                                Conv. No. 544-8 (cont.)
                          -The US Army
                                -West Point
                          -US Air Force
                          -US Navy
                    -Air defense, ground forces, Navy
                    -Anti-ballistic Missile [ABM] and other missile strength
               -Sources
               -ABM, Strategic Arms Limitation Talks [SALT]
               -Laird, Packard

Haldeman entered at 11:23 am.

               -DOD interests
               -Source of DOD cuts
                    -West Point, Officers clubs, Air Force personnel
                          -Kissinger's assignment
                    -Air Force
                          -ABM
                    -DPRC
                    -Laird's attitude
               -Direction from the President on nature of cuts
                    -DPRC, NSC
                          -August 1971 meetings
                    -Definition of mission
               -Timing
                    -Base closings
                          -1972 Presidential election
                          -Camp Pendleton
                          -Presidio
               -Service academies
                    -Cuts
                          -Timing
                          -Forthcoming reliance on all-volunteer army
               -Opposition from Laird, Joint Chiefs of Staff [JCS]
                                           13

                       NIXON PRESIDENTIAL MATERIALS STAFF

                                  Tape Subject Log
                                    (rev. 10/08)



             -DOD reluctance to abolish commands
             -U.S. defense expenditures
                   -Results
                   -Compared to Union of Soviet Socialist Republics [USSR]
                   -Adm. Thomas H. Moorer, Laird, Packard
                   -Kissinger’s role
                   -Compared to intelligence activities expenditures
                                                                     Conv. No. 544-8 (cont.)

**********************************************************************

BEGIN WITHDRAWN ITEM NO. 2
[National Security]
[Duration: 11s ]


    SUDAN


END WITHDRAWN ITEM NO. 2

**********************************************************************


             -Central Intelligence Agency [CIA]
                  -Compared to the New York Times


**********************************************************************

BEGIN WITHDRAWN ITEM NO. 3
[National Security]
[Duration: 6s ]


    BUDGET



END WITHDRAWN ITEM NO. 3

**********************************************************************
                                         14

                       NIXON PRESIDENTIAL MATERIALS STAFF

                                 Tape Subject Log
                                   (rev. 10/08)




                             -CIA
                  -Budget action
                        -Timing
                             -Vernon L. Walters
                  -Staff

                                                           Conv. No. 544-8 (cont.)
******************************************************************************

BEGIN WITHDRAWN ITEM NO. 10
[National Security]
[Duration: 2m 43s ]


    AGENCY


END WITHDRAWN ITEM NO. 10

******************************************************************************


              -Direction on budget action
                   -Timing
                   -Shultz, Caspar W. (“Cap”) Weinberger
                   -Kissinger
                   -Compared to Atomic Energy Commission [AEC]
                         -James R. Schlesinger
                         -Personnel cutbacks
                              -Secret Service
                   -President’s role
                         -NSC meeting, August 1971
                   -Response to directions
                         -Laird
                         -Robert P. Mayo, Schlesinger
                   -Budget compared with strategic approach
                                          15

                       NIXON PRESIDENTIAL MATERIALS STAFF

                                  Tape Subject Log
                                    (rev. 10/08)



******************************************************************************

BEGIN WITHDRAWN ITEM NO. 11
[National Security]
[Duration: 1m ]


    BUDGET                                                         Conv. No. 544-8 (cont.)


END WITHDRAWN ITEM NO. 11

******************************************************************************


             -Compared to the Office of Price Administration [OPA]
                   -Emphasis on number of people supervised
             -DOD
                   -Number of officers
             -Civilian agencies
                   -Letters
             -Controllable portion of budget
             -Uncontrollable portion of budget
                   -Welfare, revenue sharing, social programs
                         -Move to controllable
                         -Environment
                         -School aid
                         -Farm programs
                         -Office of Emergency Preparedness [OEP] model cities

**********************************************************************

BEGIN WITHDRAWN ITEM NO. 4
[National Security]
[Duration: 47s ]


    PERSONNEL


END WITHDRAWN ITEM NO. 4
                                           16

                        NIXON PRESIDENTIAL MATERIALS STAFF

                                   Tape Subject Log
                                     (rev. 10/08)



**********************************************************************


              -AEC
                    -Schlesinger
                    -Cutbacks
                          -Massachusetts Institute of Technology [MIT]
              -Zero growth                                           Conv. No. 544-8 (cont.)
              -Imposition of ceiling
                    -Low-level personnel
                    -High-level personnel
                    -Effect on budget
              -Need to control personnel, staffing
                    -Comparison with Lyndon B. Johnson's administration
                    -White House
                          -Secret Service cutbacks
              -Departments of Agriculture, Housing and Urban Development [HUD], Health,
                    Education and Welfare [HEW], Transportation
              -CIA
         -Personnel in the Federal Government
              -Increase in average grade levels
              -The President's conversation with Connally
                    -Staff
              -Increases
              -Pay increases
              -Family Assistance Program
                    -Shift in personnel
              -Sources of cuts
                    -Amounts in uncontrollable categories
                          -Defense agencies
              -Civilian agencies
                    -Percentage cuts
              -Range of cuts
                    -Civilian agencies
                          -Amount of cuts
                    -Defense agencies
              -Across-the-board personnel cuts
                    -Compared to action in California
                          -Ronald W. Reagan
              -Legislative, Congressional approval
              -White House
                    -Office of Management and Budget [OMB]
                              17

          NIXON PRESIDENTIAL MATERIALS STAFF

                      Tape Subject Log
                        (rev. 10/08)



-Defense Department
      -Announcement of cuts
-Non-critical agencies
      -Transportation, HEW, HUD, Agriculture
-Critical mission agencies
      -Law enforcement agencies
            -Anti-trust
      -Department of Justice                             Conv. No. 544-8 (cont.)
-State Department, Agency for International Development [AID]
-State, Justice, Treasury
      -Effect of ten percent cuts
-Average person's perception of action
      -Federal payroll cuts
      -Effect on GNP
            -HEW
-Controlled expenditures contrasted with uncontrolled expenditures
      -Shifts
-Effect of across-the-board cut
      -Possible recession
-Camp David discussion
-Military cutbacks
-FY 1973 budget proposals
-Timing of action on personnel cuts
      -November 1972 elections
      -CIA, AEC
            -Effective date
-Congressional action
      -Military personnel ceiling
-Timing
-CIA, Defense Intelligence Agency [DIA]
-Cuts in programs
      -Human resources cuts
      -Special revenue sharing, health research, Office of Economic
            Opportunity [OEO], housing
      -Family Assistance Program
            -1973 allocation
      -HR 1
            -Welfare reform, food stamps
      -Shift of uncontrollable to controllable
            -Revenue sharing, family assistance, the environment
-Uncontrollable expenditures
      -Methods of control
                                   18

               NIXON PRESIDENTIAL MATERIALS STAFF

                           Tape Subject Log
                             (rev. 10/08)



                 -Legislative action
     -Imposition of ten percent cut
           -Personnel
     -Pay changes
           -Social Security, military pay
     -Defense Department
     -Human resources program
     -Manned space program                                   Conv. No. 544-8 (cont.)
           -Apollo, Spacelab
     -Regional medical programs, health centers
     -Political implication of certain program cuts
     -Educational development programs
     -Reduction of Headstart, Peace Corps allocations
     -Congress
           -OEO extensions
                 -Constitutionality
     -The Peace Corps
           -ACTION
           -Reception abroad
                 -Effect on foreign policy
     -Military and civilian employees
           -Wages
     -Option of wage and price freeze
           -January 1972
           -Duration of freeze
     -Inflationary costs
           -Arthur F. Burns
           -Necessary price increases
           -Industries
                 -Environmental Protection Agency [EPA]
     -Federal government's effect on local government
     -Effects of standardization and uniformity nationwide
-Exclusions from 1973 projection
     -Ten percent cuts
     -Personnel
     -Program cuts
           -Revenue sharing
                 -Special revenue sharing
           -Model cities
-Amount of defense, civilian projections
-Cutbacks
     -CIA
                                          19

                       NIXON PRESIDENTIAL MATERIALS STAFF

                                  Tape Subject Log
                                    (rev. 10/08)



             -AEC
                  -Schlesinger
                       -Breeder reactor program
             -CIA, DIA

**********************************************************************

BEGIN WITHDRAWN ITEM NO. 7                                  Conv. No. 544-8 (cont.)
[Statute]
[Duration: 22s ]


    INTELLIGENCE


END WITHDRAWN ITEM NO. 7

**********************************************************************


                  -Analysts
             -Defense Department
             -Ten percent Federal personnel cut


**********************************************************************

BEGIN WITHDRAWN ITEM NO. 8
[Statute]
[Duration: 7s ]


END WITHDRAWN ITEM NO. 8

**********************************************************************


             -Social Security check issuance
                   -Staffing
             -Justice Department
                   -Civil division
                         -Busing
                              20

          NIXON PRESIDENTIAL MATERIALS STAFF

                      Tape Subject Log
                        (rev. 10/08)



            -Anti-trust
            -Richard G. Kleindienst
                  -Mitchell
                  -Federal Bureau of Investigation [FBI]
-State Department
      -United Nations [UN]
            -US delegation
                  -George H.W. Bush                      Conv. No. 544-8 (cont.)
                  -Cut
      -AID
            -John A. Hannah
-White House
      -OMB
      -Council of Economic Advisors [CEA]
      -Secret Service
            -Staff size
                  -President, Vice President
                  -Assignments
      -Residence
            -Social events
      -John S. Davies office
            -Staff
            -Tours
      -Inclusion of White House in cuts
-Public Increases
      -Peter G. Peterson
      -Treasury Department requirements
-Executive level job attrition
-White House staff
      -Executive Office Building
            -Staff
-Imposition of across the board cut
      -Mayo’s reservations
      -Probable impact on polls
      -1972 action
      -Effective date
            -CIA, DIA, UN delegation, Secret Service
      -Economic impact
      -Taxes
            -CIA personnel
-Tax cuts
      -Tax reform
                                 21

               NIXON PRESIDENTIAL MATERIALS STAFF

                          Tape Subject Log
                            (rev. 10/08)



-Schedule
     -Focus on programs
           -Republican National Committee [RNC] platform
           -State of the Union Address
           -Revenue sharing
     -Confidentiality of meeting
           -HR 1
           -Revenue sharing                              Conv. No. 544-8 (cont.)
           -Tax reform
-Public perception
     -Focus of spending
           -Programs
-HR 1
     -Food stamp
     -Medicaid
-Schedule
     -Domestic problems
           -Campaign issues
                 -Jobs
                 -Inflation
-Spending priorities
     -Perceptions
           -Revenue sharing, HR 1, welfare reform
           -Unemployment
           -Deficits
           -Private sector perceptions
     -Deficits
           -1971, 1972, 1973 projections
-Domestic initiatives
     -Aging
           -Robert J. Dole
     -Farms, cities
-Budget
     -Congressional action
           -White House options
                 -Uncontrollables
                       -Revenue sharing
                       -Model cities
                 -Legislative strategy
                 -Public perception
                       -Model cities program
           -Legislative strategy
                                              22

                            NIXON PRESIDENTIAL MATERIALS STAFF

                                        Tape Subject Log
                                          (rev. 10/08)



                            -Response
                      -Program funding, appropriations
                      -Cuts
                            -Model cities
                 -Perceptions of the administration
                      -Treasury, Justice
                      -Cuts in HEW, Transportation
                            -Cancer program                      Conv. No. 544-8 (cont.)
                 -Cuts in personnel across the board
                      -Justification
                      -Staffing of new programs
                            -Family assistance
                            -Sky Marshals

     Schedule
          -Afternoon budget meeting
          -The President's forthcoming meeting with Connally

The President et al. left at 1:03 pm.