Nixon phone call with Colson on Pay Board and Phase 2 economic policy

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Hello.

Good evening, Mr. President.

Hi, how are you?

Fine, thank you, sir.

Anything to report on the Bay Bart?

Well, yes, they reached a decision, and I can't quite tell yet how it's going to work out.

They voted 10 to 5.

The public members and the business members sided against the labor members.

Uh, it's a little bit iffy.

I don't think Mimi's going to walk out because she said he wouldn't.

And as Woodcock said, he wouldn't.

We had a marvelous compromise on the show tonight.

It was pretty well engineered, we thought, this afternoon.

They went into the paperwork meeting at 4.30 and didn't ever get to the compromise that we had.

They voted on it.

They had a plan that Arnie Weber proposed.

which probably from the moral standpoint is a good plan, but it doesn't ensure that labor will stay in because it doesn't fully recognize the retroactivity of the contract.

It's a very complicated point in the review of the installation, but what it does is to recognize certain contracts retroactively and not recognize others.

In fact, it recognizes probably 80 to 90% of the contract, but it includes some.

Is there some reason that we couldn't get to Weber?

Well, Schultz tried.

Schultz worked with him.

And apparently, I think Weber was trying to help him.

Well, he had four other members of the public panel who were kind of tough, and that's why any negotiation, you get in there and you think to yourself,

At one point, they had eight votes lined up for what, essentially, what Stuart Shultz and I were trying to promote, and that evaporated, and they went to a vote on the public member's proposal.

It might be a good proposal.

I don't want to be too premature in judging, but it might work.

All that many have said tonight is that he will have no proof of content, but he will be at the Thursday meeting.

and that he will take the whole issue to his convention, which he denominated as a good.

I'm a little troubled by that.

That may mean trouble.

There is another meeting Thursday in which they will work out the specifics, the mechanics of what was agreed to.

Does any of this get out in public?

Yes, sir.

It did.

The early wire reports indicated that the public members and the business members had voted, ten votes, and then the labor body.

But the press reports, the early press reports, indicated that they did not recognize any retroactive contract wages increases.

and that's an error they did they there's a formula in which they determine which ones they will recognize and which ones they won't uh yeah schultz and i and ramazel need to talk in the morning and work out kind of figure out what it all means because it is not the way we expected it to turn out in fact it isn't the way anybody expected it to turn out the labor people when they

quite happy at 4 30 and the business people weren't happy and everybody thought they had the things behind the main sessions during the day a little bit of a different twist to it that we had thought was coming is there any way they can modify them yes that's important they really ought to try to modify the content

Well, he hasn't, I think.

I hate to jump to conclusions because I haven't studied it.

I've read it, but I'm not sure I know what it means.

The damn fool thing is that they give full effect to about 80%, we think, 80% to 90% of the contracts that we're in for, but not to the other kind of 20%.

And the problem with that is that you have...

refusing to recognize the principal, but giving up most of the money.

You know, that's just foolish.

I mean, if you're gonna give up most of the money, don't hang it on the question of the principal.

Let's force it away, let it go back away.

Fitz was pretty unhappy tonight.

I mean, primarily because he thought he had it worked out with the original compromise that

I don't think he'll walk out at all.

Woodcock is pretty good.

But what we are faced with is not...

so much what happened today as what will develop in the way of public attitudes.

I'm very worried about the Congress for moving in quickly.

You may have noticed that we spoke out in favor of recognizing the 19th century.

Almost all of the Democrats have spoken to many of the Republicans.

And it's a tough one.

If this decision stands, we can't

We'll do some work on it between now and Thursday and meet again.

We'll end up with the same outcome, but by virtue of the time we get around.

Well, we're going to try to.

That's exactly what we'll meet on in the morning.

And as I say, it may not be this day.

I really have to kind of study what appears that way.

It does appear that way.

It appears that it would be trouble for us if we weren't bargaining for it because Schultz and I had Saturday and yesterday and today had a package that we thought everybody was going to take.

Why don't you go back to the package?

Well, it may be.

Yes, sir.

They're meeting Thursday to draw up the, uh, specific regulations that will flow out of today's decision.

And wisely, uh, we've got, uh, well, they meet on the go and make the decision.

We've got to look back and sit and say that they want the same thing until we see the regulations.

Uh, it depends on how the lawyers decide they want to draw it up.

They can draw it up pretty quickly.

They can draw it up...

Fairly liberally.

If it is liberally, then it may not be much of a problem.

But we have a lot of room to go to work.

The business, we will enjoy it.

Yeah.

Well, it'll look like a handy labor.

I think the present tomorrow will look like a handy labor.

And for a couple of days, that'll have all the business people very happy.

The labor doesn't go on.

Yeah, that's right.

Until they rectify it.

But the contract thing is very difficult to fight them with.

Oh, it's a tough one.

It really is a tough one.

Well, the difficult part about it is that you think Weber would understand that totally.

Well, we had a big Saturday night when they broke up.

This was so close to being settled.

that yeah it was it was basically uh it was both the management and the labor people that pretty much completely right but the public people weren't

went out on board, and yesterday they apparently did some trucking again today.

They came back morning to kind of flex their muscles.

And the final solution that they voted may not be that bad.

I hope I'm not misleading you by giving you my reaction to it.

It could be that they're not balanced when they look at it.

Well, we ought to be smart enough.

get that stuff right in the principal, get 80%.

That's the way to do it.

Well, that's right.

Exactly.

That's what we thought we had.

I won't be available tomorrow because I've got a lot to do.

I've got to prepare my book.

I've got to go to Chicago.

Rumsfeld was not too discouraged.

I think he, you know, I think Schultz and I are a little more concerned with what we do.

I just can keep holding hands the way we're going.

So we're doing that as long as that takes place.

Just wait and see, you know, we're going to enforce this.

Well, that's right.

And the encouraging thing was the meeting statement tonight, which was that he's going to take revenge.

Well, he said he would have, he said he would have nothing to say until he went through with it.

But that's next week.

You know, that's the end of next week.

But the beauty of that is that we have a lot of time to work with him.

And at this point, children may move in and work with him.

His mood was different than he is.

Apparently the attitude was different.

Yeah.

Okay.

So we'll, you know, maybe when we figure out the implications of this, it won't be something that we can't tell him.

We do have some flexibility.

Growing up the regulations for Thursday, we do a lot of twisting and sanding.

And I think by Wednesday, we won't blow these tomorrow, but by Wednesday, we'll let you know.

Yeah, obviously.

Specific things we may want to do.

But we'll, by then, probably have the flexibility to say to you that... Yeah, all right.

Well, that's right.

That's the difficulty.

We felt we were ahead of pretty well in the controllers.

I know we were, you know, we can't tell them.

We can't get caught knowing, which would be more important.

No, exactly.

So we were really on the box.

Well, we, Weber, though, I thought was a key man.

I would put him on the stand.

Well, I think, you know, I think he got very sensitive to the criticism that he was under RMA.

And as a result, he had the feeling over the weekend that he was maybe going to prove that he really wasn't anybody.

Yeah.

That could be a little bit of criticism.

Yeah, that's right.

Labor was being armed.

I think that should be a good deal to their side.

Well, I think that's right.

And maybe it'll work out then.

Everybody come back and study what the hell it means.

They wrote it.

The final thing they voted on is four pages of the damned bureaucratic language that you've ever seen.

None of us are quite sure of it.

all of what it means but we have to we do know one thing that it did not recognize but we will go back and study it conceivably it will conceivably it'll be something that everybody will come around to especially the new legislation it took us a little bit by surprise

That was it.

I was worried about feeling.

I talked to George about that tonight, and I think now he's free.

We decided against that today, because we thought it might be beneficial, but I think at this point, it's kind of safe.

I think George and Nina can talk and share.

The news flowed, I think, very well over the weekend.

I don't know what he's saying, but the news happened today.

I didn't check the street very carefully.

I checked it.

That went very well.

The employment played well.

The grain has played fairly well.

It should have played better.

Yeah.

It deserved it.

It deserved better.

But it should have.

Well, until we get our own man at BLS, that's what we'll do.

Well, Moore did it.

Moore was on the hill Friday, I think it was Saturday morning.

He said, well, it was marginally significant.

And if you say that, you can still look into it.

Oh, he's done it.

See?

Now he's done a margin.

That was just raised before breakfast.

So I told Fred Mallard today that he won't wait no longer.

We're going to take that lead very much and get it behind him.

Take whatever criticism we take and let's get the game started.

I'd rather give him more or better, John.

Yes, sir.

He hasn't had that form that often, too.

No, I think that I...

This weekend, I just will, like... We'll get that to his face.

I should put out a pilot, but... Yeah, it's been great.

The press will take whatever...

They'll take the negative.

They'll take the most negative they can take out.

The printed press played it well.

We got a very good play over the weekend.

We got an excellent play over the weekend, especially on the corner there.

That was very, very good.

And I think the fact that the Senate Finance Committee reported a text about it was good.

The market was just sort of dawdling along, and I pitched up and picked it up and brought it back.

Yeah, and about evening?

Yes, sir.

It was down.

It was a very, very low trading.

But it was down.

At midday, it was down five or six points.

And then the financial media reported out the bill.

And it came and brought it back up.

And they're planning to take it up on the floor on Wednesday, if they could.

get that bill out of the minute in a week, in the conference room.

I think we'll make sure that nothing goes wrong.

I think we'll have to get up before 9 o'clock, which will be a great show.

Right.

I had some new retail bill figures this morning, which show that.

I told him it's just beautiful.

Yeah.

They've been running 8-9% ahead of last year, all through the month of October.

And even when you exclude the car sales, you're still running 6-7% ahead of last year.

And the major department stores all have their October reports, which show big sales.

I think on the economy, this week, one way or another, we clear up the uncertainty of Phase 2.

Well, I still think you have the ultimate weapon, President, and I think the reason that Meany, you know, Meany said before this all began that if we did not protect the sanctity of country, he would walk out tonight.

He did not say he would walk out.

He said that he wanted time to study the regulations.

We have maneuvers.

Put a phrase in there with regard to

That's what, well, we also, at the Coastal Living Council, which is something I wanted to work with Rumsfeld on, because if they were to make a decision that they, if nothing, that the board would do to violate the 90-day contract, that would end it.

Right.

Then all of this would be a lot of maneuvering and regulation and trying to bureaucratic junk.

Right.

But that would be the one thing that might be...

to put that damn issue to rest.

Of course, it's a phony issue.

It's not a phony issue.

It's a phony in terms of the dollar.

Gotcha.

Well, sure.

The employer's going to say it anyway.

We can threaten him with all kinds of things.

He's going to say it because he made a contract.

That's right.

He's got to look forward, not back.

Well, and they did set a standard for next year, which is very good.

They set 5.5.

Well, they didn't, but that was on 10.5.

Yes, sir, but the unions had agreed with us.

They said, that's 5.5.

That was their whole point.

You know what that means.

The tough thing was that Simmons called me for a meeting.

He said, I've got to agree to 5.5.

I said, hallelujah, you're a genius.

And he said the only thing he wanted was just one clause to protect the capacity of the country with all the benefits.

Well, the thing to do is to get the union on it.

If they get 5.5, that buys what he wants.

Oh, it does.

That is worth giving in on the other one.

Just as cold as that.

Exactly.

Well, that's what we thought we'd do.

When they agreed to the 5.5, I thought we really didn't support it.

that everybody would interpret that next year as inflation less than 3 billion.

Okay.

Good luck.

We'll keep it on the track, sir.

Thanks.

Nixon phone call with Colson on Pay Board and Phase 2 economic policy

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Nixon Library Finding Aid

Also recorded on November 9, 1971

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