On March 23, 1971, President Richard M. Nixon, Vice President Spiro T. Agnew, and Republican Congressional leaders, including John A. Volpe, John B. Connally, Hugh Scott, Robert P. Griffin, Margaret Chase Smith, Norris Cotton, Gordon L. Allott, Peter H. Dominick, Gerald R. Ford, Leslie C. Arends, John B. Anderson, Robert T. Stafford, Richard H. Poff, John J. Rhodes, Barber B. Conable, Jr., Robert C. ("Bob") Wilson, H. Allen Smith, Robert J. Dole, George P. Shultz, Arnold R. Weber, John D. Ehrlichman, Clark MacGregor, William E. Timmons, Kenneth E. BeLieu, Herbert G. Klein, Patrick J. Buchanan, Harry S. Dent, Ronald L. Ziegler, Andy Rouse, and Bryce N. Harlow, met in the Cabinet Room of the White House from 8:03 am to 9:55 am. The Cabinet Room taping system captured this recording, which is known as Conversation 050-009 of the White House Tapes.
Transcript (AI-Generated)This transcript was generated automatically by AI and has not been reviewed for accuracy. Do not cite this transcript as authoritative. Consult the Finding Aid above for verified information.
It's an entirely different thing, and that's the place that we've got to invest our attention out there and get that back in here because these fellows are in the headquarters of the minority movements and headquarters of the union movements.
They've just invested too much attention here in Washington for too many years to make their anything except the old federal system as being the best way to do it.
We've got change going, giving an end right around it.
So much for that.
And the construction thing, I think that we're going to be coming to you in the next day or so with an idea of a subsequent step.
We certainly got their attention the way you get Neil's attention with a 4x4.
They picketed me in Illinois, they picketed me in Delcourt, and there's no question, but we've got them excited now that we can find some way to take advantage of that.
Harvey, I've still got what we want, but moderate weight increases would be a step in the path that everyone takes.
Yeah, it will have to be a voluntary action on their part.
It never would have taken them unless we'd done something like this.
What we have to have in mind is this, that I'm proud of, and I listen to what I love to hear.
Economics.
Six dollars an hour.
We're concerned about the economics.
The economics, particularly in what you might call the marginal areas where the non-union has a chance to compete in these big cities.
Big cities all the time.
One of the real problems that we have is that
an addition of $2 per hour for three years, or $6 per hour on top of the $7 an hour.
I think it was Omaha and Nebraska that just came out with that, asking for a $6 an hour increase over a three-year period.
Yeah, it's a jolly hell of a lot, $13 an hour.
Mr. President, I don't know what they, if I might be concerned, I can roll it out.
That's not a fact that the wages are going from six dollars an hour back to three dollars and a half an hour.
They may talk about that being a constraint, but that's not a fact at all.
I think it's a threat.
It's very likely.
It's just what they have stirred up, what they have stirred up, you know, they put a rumor around, but it doesn't mean a thing as far as the fact is concerned.
Although I think...
The safeguard base that you're planning to build out in is a common laborer.
A common laborer out there will make $35,000 a year.
Now this will be a 16-hour-a-week job because of the construction schedule, but with the overtime and with the hazard pay, $35,000 a year for a common laborer.
Well, the interesting thing to me about the meeting that Jim had with the Instruction Commission is that the employer is just as concerned about the union, as the union, about this action on state to state, and really concerned about competition.
In the case of labor, it's opened them up for some of this non-union competition, and the same thing with employers.
There's a lot of non-union contractors who are going to be bidding on these contracts.
And one of the disturbing things is, as far as I know, Jim, the wage settlements are just as high upon the level higher than they were last year.
Of the 15 wage settlements that have occurred so far this year, they've already been a percent more than last year.
That is 19% in the first year, 16% in the second year.
Last year it was 18%.
And the impact is spreading.
I talked, it was at a meeting where the president of the food fair was present, and he indicated that their clerks had been getting $120 a week.
They offered them a $55 increase over 18 months, which was turned down.
And on the premise that the teachers got more and the building credit got more.
And he said, I don't know that you can come.
It's plain that they're refusing because the other groups are getting one.
They don't know exactly where things are going.
So what we're talking about here in terms of getting some action is important.
And I do think this Davis-Bacon situation has created, interestingly, a greater possibility of action through your group than even the wage price freeze might have done.
A greater climate.
Yeah, a greater climate to get action.
Difficult with the wage price freeze.
There was nothing to follow up with.
You could follow up the wage price freeze with the legislative program and leave it on until the legislative program will pass.
And then deal with the structural problems in the industry.
And they say this is a hell of a courageous thing to take on the David Bacon.
There's no doubt the president would have been more than to take it on.
It was an emotional kind of thing.
We made a careful analysis of everything that's been said in the public press about this, and there hasn't been a thing in the public press negative about this.
It's always there.
What happened to the weight increases, and as you pointed out, it's still going up.
Well, we have a... That's the point, though, that there's...
Mr. President, you're talking about the NCA agreement.
That's all sham.
Those white rules have been in existence since 1958.
I would refer to those in charge as they relate to this next step that she's talking about.
What we've been trying to get them all along is to agree to get management later to come up with their own volunteer.
If you can follow that, this is pretty much the same thing.
I guess if you're licensed now, I've got some hopes.
Well, thank you very much.
We'll see most of you again, I guess.
I trust that each of you will...
Consider what I say in the light of the fact that the SSC would mean, or doesn't mean, per se, a single-handedly person.
But I ask that each of you consider, particularly on this side, whether your support, whether your colleagues, or your non-support of the SSC,
Simply on the basis of the merits of this particular program, I hope not on your issue.
I trust that you believe that the Department of Transportation and the Secretary will spend a few hours in this last couple of years trying to work out your request.
I don't believe you ought to support the SST program because it's not a good job to try to be helpful.
I certainly want to express my appreciation to all the people from the men and staff that you made during this last year when we passed practically every one of the president's transportation programs which we believe were vital to the success of this administration of nations.
I couldn't be just touching on, I think, the three major issues that we have to confront as far as this SST is concerned, which has become such an important issue.
First of all, let's take the environment.
And I notice that the opposition primarily is shifting from environmental issues.
Nevertheless, may I just say that you have one of the signs for it.
This issue should be removed now.
There are no flights going to fly over the land.
They can fly subsonicly just as well as subsonicly.
And as a matter of fact, the axle plane, the first plane coming down that runway in late 77 or 78,
They'll have every job they can do to try to furnish enough planes for five or six years just for trans-oceanic groups without having to fly over land.
But the president has made the statement, I have made the statement, and that's the rule, as a matter of fact, we need to have it in Congress that it will not be allowed to fly over land as long as we have any sign-point problems.
Second, you have engine noise.
When I first came aboard over two years ago, they were talking about 116 decibels.
I won't try to explain the decibels, you know, it's the noise factor in connection with planes or anything else that you have to listen to day in and day out.
So I'm with this detector, and we have a...
It's a little film that shows the noise from various sorts of things.
The bands that you and I hear, the detectives, they seem to be a lot higher than an SST plane or anything else.
It's one of those things where nevertheless we felt that it had to be brought down.
We decided that it ought to be brought down from 116 to 112.
When I got it down to 112, I said, well, I'm one of those perfectionists.
By that time we had decided we would establish 108 decibels for the new level 4 subsonic plane.
And I said it was good enough for the sub-sonic planes, then we just got to get it down to 180 for the supersonic planes.
Totally couldn't be done.
Just absolutely couldn't be done.
Well, they just worked like everything else.
If you try hard enough, then you have enough technology applied to it.
They did get it down to 180.
It was only six weeks ago that we were able to get down to the point where we now can say you can build a supersonic plane that will meet the same requirements that we've established for the
sub-side planes.
And that's not just our thing, and that's the Verning Committee, that's composed of scientists from NASA, from all kinds of organizations who have worked together to develop the fact that we can and will produce an engine that will get down to 180 decibels.
You've heard a great deal about the possible effects on the climate of this SST plane.
Gentlemen, I was surprised, tremendously surprised, when I spoke with two different groups of freshman congressmen, one about the 21 and one about the 23.
You know, they thought, when you ask them, you know, well, how many planes do you think this involves?
One fellow said 100, another fellow said 200, another fellow said 300.
As would you believe if I said there's only two planes involved, and two planes can affect the climate.
Two planes can affect skin cancer.
There's so much that's been said about this,
And as Bill Maguta said on the Big Cat show last night, there isn't a single scientist in this nation who has said it will produce skin cancer.
He thinks it might produce skin cancer.
Well now the fact is that I'm sure that you would know that neither President Nixon, myself or anybody else would for one moment
allow a plane to go that would kill one person from skin cancer to save nothing but about 10,000 per year as some people have claimed.
The fact is that we have a climatic impact assessment program that is going on in parallel with the production of these prototypes
and that is composed of people from the Hong Kong Environmental Fund, NOAA, NASA, National Science Foundation, you name it, so that we can be absolutely certain as we develop these prototypes
that it just is not going to do any of these things.
And I can assure you, the president has assured me, and I'm sure will assure you, that if there is the slightest doubt about skin cancer or a climatic change or anything else, we have to certify that claim within our department, through our Federal Aviation Administration,
And if for a moment we believe that it doesn't meet all those criteria, all we have to do is say, the plane will not be certified, period.
And that will be it.
Now, that is also, that position, by the way, if some of you haven't seen the statement of the American Institute of Air and Arts and Astronautics, is well documented and just as clear as it fell as far as I'm concerned.
Now, secondly, may I just talk a moment about
Talk about the word leadership, preeminence in aviation field.
Per se, you know, what does leadership mean?
To me it means a great deal, but on the other hand, what it really means is that we either do or do not want to
continue to be the leader in advanced technology, both in aviation and aeronics and in aerospace and electronics and the related fields.
You know, we've been trying to do this job here.
It's taken us many, many years in order to develop this tremendous capacity that we have now that sells 83 to 84%.
of the jet planes in the world.
Now, that didn't come just because we wanted it.
It happened because we developed a tremendous amount of technology and a good deal of it spent with defense funds, by the way.
And when anybody tells you, why any subsidizers?
Every one of the planes we're now using was subsidized in one way or another from the military spin-off.
Here we don't have the military spin-off.
We learned a few things from some of the superpowers.
military planes, but nothing compared to what is needed in order to do the job.
Now, I have said, I haven't mentioned the airline.
I didn't mention this wrong.
The president of LL Airlines
The Irish airline was in my office just a little over a month ago.
I didn't ask him for this statement.
He volunteered it.
And we were talking about some other matters, and all of a sudden he jumped on the SST.
And he told me of a statement that he made at a press conference in Paris.
Here's where he was at.
He was asked whether or not he would buy the French Concorde.
And he said, no, I will not buy, because it's right in Paris now, I will not buy the French Concorde.
And he paused, and he said, unless the United States does not build an SST, well, why wouldn't you buy a Concorde?
Because I want to buy my planes, all of my planes.
from the same nation and preferably from the same firm.
I don't have to explain the reason for that, the maintenance, the parts and everything else.
It would be much more costly for an organization, an airline, to have to have parts and all the other things that are necessary from two or three different organizations.
And the fact is that if we could start at this particular point,
We would be in one heckish international mess if the fire was telling both the English and the French and the Russians as well that you can't land in the United States with your SST without our having proceeded to build and test these two experimental test planes.
Yet we have built them, and we have tested them.
Then we're in a position to say, look, we've used our best brains, and we haven't been able to build a plane that is safe environmentally, and we feel can land or should land in this country.
The fact is that if we do this, I only do this chance, maybe just one chance at a hundred.
After all, the airframe manufacturers have now put, together with GE and others,
$250 million for this program.
By the time it's through, they will have put in $403 million.
Our competition is an entirely nationalized proposition.
England, France and Russia is entirely government money.
In our case, industry is putting in 400 million out of the 1.7 billion that it will cost to put this program across.
And the fact is that we would have a tremendous international bureau if we were to say, without all the facts that we could use if we had built and tested planes, that you just can't land in America.
I needn't talk about balance of payment.
You've heard about it.
It's $22 billion over the course of the program, and you know how hard we fought to try to bring that balance of payment up.
The president has been very, very successful in bringing that around, plus figures instead of minus figures.
Now may I just, for a moment, say that there are those who say, well, let's put this off for a while.
Why don't we just, you know, wait, see what the French do, see what they do.
The Russians now have a plane they're going to have for sale at the Paris Airshow.
They're not just dreaming about it.
Some of you may have seen a film which shows the SST.
They're going to have it at the Paris Airshow.
They've advertised an aviation weekly full two-page ad over on their whole family of planes as well as the SST alone.
We're now three to five years behind.
All we do is get further behind and make it impossible, possibly, for us to sell as many planes as are needed in order for us to get back the royalties which we now expect to get back.
This plane, if we produce and sell the 500 planes which are now anticipated,
will return a billion dollars in royalties.
It starts with the first plane we sell, and of course the royalties continue to go up as we build it.
Now, some people say that, you know, what happens if you just do get behind all of that?
The fact is you can't dismantle the group of over 15,000 people that have been assembled, who are highly scientifically oriented technicians of all types, and fields that will be able to reassemble that gang.
I know the construction of a building.
If I have to stop the construction of that building after I've taken together a superintendent, I've gathered foremen of all types and so forth,
Which is very, very simple as compared to building a supersonic transport.
And yet, if I have a strike or something that stops that job for a couple of months, I've lost the momentum.
I just take an awful long time when I start to try to gear up again to get that job going.
And you dismantle a team of this type, it's a very, very different program from not dismantling, but slowing down a highway program, or slowing down some other program,
which doesn't dismantle a great deal, but here you're dismantling a group of people that have been very, very carefully assembled, and it will almost be impossible to put it back together again.
Now let me just say that we're almost ten years down to 12-year-olds.
It's been approved by four presidents.
If we stop now, we've got to pay termination costs.
When we get through, what do we have?
We have practically nothing.
If we continue, and all that costs 134 million dollars, only 134 million to me, a million dollars is a lot of money, but here in Washington, 134 million by comparison with overall budgets, isn't a tremendous sum that I would think it would be back in Massachusetts.
But 134 million this year, 235 next year, 96 the following year, and 16 million dollars the following year, and you're all through.
Now, those who tell you that you're going to have to spend another two or three million dollars, it's going to be a tremendous overrun, you just look at the figures on this program, and I am extremely proud of the fact...
that this is probably one of the only programs that, going back for four or five years, you've had a very small increment of increase over the course of these years as contrasted to some of the other programs you and I have seen that have doubled or tripled in some cases the cost of eating pork brussels.
So I would hope that you recognize that this plane is not only essential because we feel that we've got to meet the competition for it,
But the fact is that the technological spin-off from this point is just impossible to try to develop.
And I probably would feel that maybe as important as anything here is the employment pictures.
There are 15,000 to 15,000 jobs, as Derek Brooks so well said in the final House debate,
that you just give the ticket to.
Now, that is a guessing, gentlemen, ladies and gentlemen.
That is an absolute fact.
The Boeing company in general record,
Can't keep these people for other things.
Aerospace and the airframe industry is going downhill.
And this would be a blow for which I think it would have to recover.
Now, that's only 15,000 jobs.
The fact is that you have a situation here where in five to seven years, if you don't have the whole family of planes,
You could be basing as many as a quarter of a million or a half million jobs if we go down the drain.
Not 15,000 jobs because we wouldn't be able to sell the full family of plants.
Now, I have had my gang just add up very quickly, and it was challenging to find somebody else with it.
But you try and figure out what you have to pay by way of the unemployment insurance, the loss of personal income taxes, the loss of corporate income taxes, both in direct employment, the loss of corporate and personal income taxes in the indirect jobs that are involved here.
And you can't get well above the $470 million that will be needed to build and test these two planes.
And after all, it's these taxes that support some of these priority programs like health and education that all of us are concerned about.
Let me finish by just chucking straight pockets for a moment.
The president has worked and worked extremely hard to try to turn this situation around.
We're starting to make some progress, but we've got a long way to go.
Gentlemen, I've been a Republican.
I'd like to see the president re-elected next year.
I hope he runs.
I would like to see more Republicans elected in the Congress next year, but I very frankly say to you that if we start to see the undermining of confidence in the ability to get jobs, and we start to see a slide here, which means fewer and fewer jobs in an industry where we now have the expertise and the leadership,
This could trigger a real downhill slide, and I have one hope that we just don't do that, because 1972 for us has got to be a good year and not a bad year.
I could say a great deal more, gentlemen, but all I can say is that I have given everything I have to this program, to the rest of the program, to this department.
I only hope that you realize what is involved here.
It isn't getting a jet set to
London that much faster.
It's a productivity proposition.
The British and the French and the Russians are going to have a plane that will be much more productive than we will have.
And that's the name of the game.
If you have a productive plane, you are now paying 5% less for costs in some plane rides than we spent 25 years ago because you produce more and more productive planes.
If we had stayed with a DC-3,
Instead of 3,000 planes in the sky for the United States today, you would have 43,000 planes.
And the fact is that, you know, that these planes do produce some exhaust emissions.
We've done a great job at bringing those down.
We're going to continue to do so.
And I just urge and hope that each of you will feel that this is a program that we've got to save.
And I hope that in the Senate tomorrow that we will see a favorable vote, and that when it goes back into the House through conference, that it will be present.
That's my message.
Could I ask a question?
What is the present decibel?
I would have heard differently.
The claims that you see running around now as the vice president in many cases are running 109, 110, 112.
You're talking about 108.
We're talking about 108, which is what we have now set already for a new standard for all of the new subsonic claims.
And by way of obligations, by the way, and by the way of priorities, there are those who say we've got our priorities wrong.
Let me say to you that in 71 and fiscal 72, we will put more money into urban mass transportation than was put in in the previous seven years.
A billion dollars in each two years has contrasted with 741 billion dollars in the previous seven years.
So we don't have our priorities wrong.
I think we've got our priorities right.
We're going to continue with the demand strategy because the president feels very strongly about unsniling some of the congestion and making possible transportation for those who can't afford a lot of business.
Thank you very much.
John, thank you very much.
I want to say first that I appreciate you.
It's a very controversial issue.
It's a hard battle in my house.
I appreciate you for that.
I know the purpose of this is not to go to heaven.
I believe now, if it is lost in the Senate, I will continue to say it strongly.
First, there are four arguments.
One is the environment.
The environment argument is one that is very deeply held.
It is one, for example, that influences a man like Buckley, who would normally be voting for this national vote, but who is influenced because environment is a big issue in the state of New York, it's a big issue across the country.
The environment argument will increasingly be used, sometimes in very legitimate places, but sometimes
It's not for the sake of the environment, but because of simply an urge to knock down the system in every industrial advance in this country.
So in examining the environment argument, it's very important, not only in this case, but in every other case, to see if the real part of it isn't the environment, it's the system, of course, the system.
As far as the environment argument, however, is concerned, having raised that point, which is indeed a concern of mine, because I cannot see the United States making a mistake, we must not see it making a mistake, giving up on industrial progress because of our concern about the environment.
If we do, we'll go back to the good old days when we all lived in the trees.
As far as this particular matter is concerned, it's a good question.
There is no environmental issue.
We are building prototypes.
And in building prototypes, the decision with regard to whether we go on and then build 5, 10, 15, 20, 25, will then be made.
If the prototypes indicate environmental problems, then we will not go forward with the program.
So we begin with that.
Oh, I know the answers are, you know, to start with prototypes, how can we put all this together, and so forth.
But I can say that is policy.
So if you were concerned about the environment...
The answer to all that is very simple.
It will be a motor project now.
You can argue with both sides.
I don't make the arguments on the environment.
I looked them all over a year ago and found nothing really to back them up.
Nothing really very serious.
And then again, this ridiculous skin cancer thing, that of course shows how stupid they were.
You can raise such a question, but be that as it may, on the environment thing,
It is a good question.
The second point is the economics of the program.
Now this is a legitimate argument.
It was a legitimate argument when the DC-3 was a problem.
It was a legitimate argument when we went from there to the planes that I used to fly to California.
That was the DC-6s.
I remember when the jets came along that
who were really very fanatical at that time, and Hannes, sort of looked at the British flying of jets across down to India, and didn't think I was going to make much, but I blew up in the air, and we were going to go forward with the jets, but we did, we caught up, and many of the same arguments were made about the jets, were made about this, all that sort of thing.
Go ahead.
So we went to Jets, and now we have 87% of the business in the world, as we know.
On the economics, we've looked at that right here.
It is a closer question.
In my opinion, the environment issue has moved, for the reason I mentioned.
The economics question can be argued.
Is it economically feasible?
On that, all that I can say is that, generally speaking,
Every foreign line is subsidized, every flag by the government.
Every foreign country that is in this business, the British, the French, and the Germans, and the Russians, will be subsidizing by huge government companies, and in the case of the Russians, a total government subsidy, to build for this plane.
And so when you compare that with the economics of our situation, it's pretty tough.
What we are saying here is that the starting cost is one that government at least ought to do, and from then on, this bird will fly, it's going to be able to fly, and it's going to make some money.
We've looked into it.
and that the Council of Economic Advisers studied, and that even the Science Advisory Committee studied, despite reports of the contrary.
The opinion now within this government is, across the board, is that economically, this is a good bet.
Otherwise, we would not have approved it.
We would have taken all political flak we think put this out.
The third point is that here is a real tough political problem.
Why put it in the SSD?
You've got all this money.
You've got the poor people.
You've got the hungry people.
You've got the situation about, which is in mass transit.
And what are you going to do for my city?
And how about the main project west to the south, wherever the peace might be?
That is a political point.
I accept that as one.
And if anybody wants to vote on that basis, I understand.
And I know that most votes are cast for those reasons.
I do not think, however, that if you think that true, that you will come up on that side for this reason.
We all want to help the poor.
We have enormous, enormous amounts.
I take food stamps, for example.
You know, if you talk about this administration, what we have done and what we haven't done in the field of hunger, there were three days of getting food stamps a week, and now there are 90 days.
And we go on and on and on as to what we're doing.
But...
I tell you again a little story about the Prime Minister of Bergen, 1953, Prime Minister Juno.
He was a wonderful man, still is.
He's now in a monastery, having been thrown out, but still a wonderful man.
I remember he took me into his office.
Here was Bergen, just got his independence.
He was indeed a believing socialist.
They showed me all the plans for the future of Burma.
They were going to raise, they were going to give a minimum income for all the people of the country.
They were going to provide health standards, they were going to provide schools, they were going to rebuild all the highways, they were going to do all these things, everything for people and so forth.
Here they were all in the space of five years.
And I said, Mr. Prime Minister, how?
Oh, he said, we're going to just budget appropriately.
Where are we going to get it?
All of us want to do good things for the poor, for mass transit, for the cities, for the countries, for the houses, for the rest.
We have to remember that it is.
We've got to face the cold fact.
Where are we going to get the dough?
It has to come out of something where the United States...
as a great, economic, powerful instrumentality, produces the wealth to win the tax money where we can do the job.
Now, let's look at this trillion dollar economy of ours.
Where does that come from?
Well, we have to remember that five or six of it comes from what people do in private enterprise and not in government.
Now, what we're really talking about here is that in order for us to have a $200 billion budget for defense, or all the other good things that we want to do more and more and more, we have to realize that we simply can't stand still in terms of industrial progress and in going forward on some gambles that may produce more wealth that will enable us to have more taxes,
John mentioned balance of payments.
What I am more concerned about is this.
When this plane flies, because I believe it will, and I hope we fly, and we're not flying around in Russian planes or French planes, and this is a takeaway for a moment, when it flies, it will mean a minimum of 10 to 12 billion dollars in tax revenue every year for all these good things.
The question is, where else are you going to go?
So, on the environment, it's a moving question.
But regarding the economics, better brains and minds are the economic brains that convince me that economically it will go.
Although it's arguable, and I can understand people getting on the other side of it.
And,
There, from the standpoint of, well, we ought to appropriate this money for the poor rather than for this toy that we're going to fly around in the air a few years from now.
You can make that argument about every little thing.
You can make it about space.
You can make it about everything but everything else.
My point is, where are you going to get the money to help the poor unless you go forward in something that is going to produce wealth?
How do you come to the other point?
It's going to be a courageous vote for anybody in the Senate to vote for this, and it was very courageous for anybody in the House to vote for it.
I watched the polls in the SST.
Most people are against it.
They're also against going to Jets.
If they had been polled, they would have been against the Wright brothers, and they would have been against the VC3, and so forth.
Why would we need to go into all that argument?
Let me say this, that in terms of polls and arrests, we have, it seems to me, a much greater responsibility.
I live in the United States of America at the present time.
And I can be, perhaps, somewhat mistaken.
Thank you.
is the number one country in the world in air transport.
It's one of the areas that we are still number one in, and we must remember that in a number of other areas we are slipping behind.
In electronics, the Japanese have now passed us.
Another area where we are headed is in computers.
How do we get there?
Curiously enough, a spin-off from space
Here's all this money being spent on the one in the moment.
A spinoff that nobody expected at the time of the computer thing has given us an enormous true industry, which has made us, of course, competitive for our businesses.
But let's come to this.
At present time, due to the fact that we've already made streets in the moment, and all the magic and mystery is on it,
For the present time, there is an enormous problem with homes, budget problems, city problems, problems with floors, things that really tear our hearts apart.
There is a natural turning away from any ventures like SSP or space.
At the present time, it's interesting to note that a majority of the people would oppose the appropriations that I trust you're going to vote to continue the space program.
The majority of people in this country will oppose what you vote for for SST if you were to vote.
Let's look a little further down the line.
You look over the history of nations.
Whenever a great nation drops out of a race to explore the unknown, it ceases to be a great nation.
Not now, this year, not five years from now, not ten years from now, but inevitably it does.
Times past, it was crossing oceans.
Later on, it was going into wonderings.
As far as the United States is concerned, the reason that we are a great nation is that we have, somewhere within us, coming out of all this great marvelous movement of people that make up America, we have a drive to explore the unknown.
To be number one, maybe so.
Well, so what's wrong with that?
The point that I make is this.
By dropping out of this race, it's going to do something to the American spirit.
Well, you won't pay for it in elections.
As a matter of fact, you may get a little side benefit for doing it, because you'll be helping the poor, rather than going off in this highfalutin scheme.
On the other hand, I am utterly convinced, and this is the strongest reason I feel this way, that the United States in this area
Where a plane is going to be built, a plane that's going to bring the world closer together, I can go to arguments all the time too.
So why anybody should build a plane that's going to be built?
A plane that is a dramatic new breakthrough for human transportation.
The exploration of the United States of America, the first nation in the world, the first industrial nation, the first nation in air transport, simply shouldn't drop out of the race.
We're afraid because of the environment.
Or economically, we don't think it'll pay.
Or because of our problems at home, we can't afford it.
Or maybe, in some way, we're turning in and have lost our feel for greatness.
Thank you.
President, may I just, on the way out, tell you one story.
In 1488, the king of Spain, Queen Isabella, appointed six Spanish sages to look over Columbus's plans.
You say, why the hell did they choose Columbus?
Let me tell you, those six stages came back two years later and said... Those six stages came back two years later, giving them six impossible reasons why it couldn't be done.
Professor, could I give a later illustration from the New York Times, if you will?
One of the first accidents
When an automobile occurred in New York City, the New York Times advocated the abolition of the automobile.
It holds here since it's been spread.
That's a good idea.
Thank you, John.
Good to work.
Fine.
Secretary Connolly, you all have known us.
That's the job we've done before, for various periods.
Where I got to know him, as I generally remind you, was in the field of the organization for two years.
He worked in the Ash Council.
But we really had to come down to the tough decisions, whether we would go forward with this program, which recommends, shall we say, a streamlined cabinet.
and a reorganization of many other fields.
We would probably have said that if he were right in your chair, I remember at the edge council meeting, he looked across the table, and he made about a five-minute speech about why we ought to go forward.
It was the most eloquent thing I ever heard.
He convinced me, and now he's going to convince you.
Mr. President, would you like to say something about that?
Oh, yes.
I need all the help I can get.
I'm going to take a little butter over my feet.
I get your message about the time that I have, five minutes.
Hold on.
The president has already told you that in the spring of 1969 he created the Asian Council for the Progressive Legislative.
Many of the problems we've come through.
May I just remind you that on that council, chaired by Roy Ashton, president of Lipton Industries, was Fred Keppel, as many of you know, of AT&T, Dr. George Baker, the dean of the graduate school of Mississippi Harbor, Mr. Richard Patey, McCormick, Christensen, Patey, one of the really top management consultants in the United States, Mr. Walter Thayer, distinguished lawyer,
More recently, the publisher of the New York Herald Tribune and myself, the only six of us, we built a small staff.
We undertook the charge that the president had given us to really look at this government, to see what changes and suggestions we could make to him.
We were to operate without restrictions.
honest in any way, without political restrictions, without any mental limitation, without any guidelines or standards which he arbitrarily set.
We were free to explore whatever we wished.
In the inception, and I think it's important that you realize that we don't now claim that the ideas that are part of the Ag Council were all original with us.
They were not.
We went back and studied every reorganization report that has been made in this country that we could find during this entire century.
We studied them all, including the commission reports, the price report, the Hollywood report, the Rockefeller report, and so on.
There was a central theme that ran through each of these reports.
Keep in mind, of course, these studies were made in various periods of time.
The problems of the country were different.
The way of life in this country was different.
In the 20s and 30s, what it was in the 40s and 50s, was very different from what it is now in the 70s.
Nevertheless, all of these reports had a basic central theme, and they were first.
Contrary to the view of the Congress, every report fell to that.
The power of the president should be more easily administered.
I know the Congress feels like the president frequently has too much power.
But nevertheless, every one of these reports indicated that the president did not have the means to carry out his policy in accordance with the wishes of the Congress.
We looked at that.
We first suggested that in any reorganization, we ought to start
for the office of the president himself.
That was done.
Suggestions were made to the president.
He adopted many of those suggestions.
He changed some.
He instituted the changes in the creation of the Office of Management, Budget, and all that that concept implies.
He created the Domestic Council, and all that that means.
Those changes are now working through reorganization, as you know.
Beyond that, we looked at the broader aspects of government with several things in mind.
It is important that you understand that these motivations and the very basic assumptions that we made in looking at reorganization in the first place, and they were simply embodied in what the President said last night on the Howard K. Smith show.
Number one,
The government costs too much.
Number two, it is basically ineffective and inefficient.
And number three, people don't feel they can do anything about it, and probably more important, as part of that, they don't like it and they distrust it.
Howard K. Smith, as I recall, in one of his questions last night said, Mr. President, the poll showed seven out of ten people distrust government.
I think that's probably a low figure.
There's no question about it.
We're not talking about the federal government.
We're talking about all governments.
We're talking about local, state, as well as national governments.
Now, there's another basic assumption that you have to make, and that is that there's been no essential reorganization of this government in the last decade, or the last generation, for the past 20 years.
Yet, changes during this period of time have been enormous.
Just absolutely enormous.
We've gone from 9 to 12 departments of government, for one thing.
We've gone from 27 to 41 agencies during this same period of time.
We've gone from a budget of less than $40 million to over $200 million.
We've gone from 100, depending on how you split them out, but we've gone from 140 programs and subprograms to over 1,400 programs.
during this period of time without any central reorganization of the structure of government.
Now, many of you were here during this generation when many of these programs were passed, and you can answer for yourselves how much time you devoted to the basic structure of government through which these programs were going to be administered.
Given these basic assumptions and the feeling, a very strong feeling, that's me.
We were not going to concern ourselves with the concept of the programs themselves, but the administration and the execution of those programs, which in our judgment is what's killing it.
The program, this is what forms the basis of discontent, the dissatisfaction on the part of the American people with government, simply that they don't understand it, they don't know how to come to grips with it, and they don't know where to go to find out.
And I submit to you, there's not a man around this table who can explain it to them.
Not a single one of you can.
You can't tell them what programs there are or who has them or where they should go to find out.
And now that's basically what we were confronted with when we started talking about reorganization.
So in summary, I obviously can't go into this whole thing this morning.
Let me simply say to you that there was no...
There was no basic thought of politics involved in the concepts that we came up with and we recommended to the president.
We were reaching for a basic structure of government through which programs could be administered so that people might understand them, might benefit from them.
Now, we decided in the final analysis that in order to achieve the objectives, we basically had to reorient the administration of these programs on a functional basis.
You know better than I.
You've lived with it.
You don't have any different departments concerning the elements of education, of health, of manpower training.
You don't have any programs that are as safe as federal government administers.
I don't need to draw you horrible pictures of how bad this thing is.
We did do one study out here, a little town on the border of two of our states nearby.
And here's the mayor of a town of less than 5,000 people who was trying to understand what was happening to him and to his community and how he could best serve his people.
So he made a survey and when he finished he found that he had, among other things, 12 different planning agencies that he had to work through.
12 of them.
He had no staff to do it.
No way he could utilize them.
All the planning was available to him, much less the programs.
He couldn't even keep up with the planning that was going on.
Now this is happening all over the United States.
It happens to mayors, it happens to governors.
I know, I built a staff of twice as large as any governor in my state had ever had before, and I couldn't begin to keep up with what was going on.
I didn't know then, and I don't know now.
What programs are available.
I was as much in the dark as members of Congress are.
Or even today.
And I say this very kindly, and I don't say it critically.
I just don't think it's one of the years that knows.
I think we have to face up to the fact that when you go home, you don't know who to tell to even go see.
You can't tell them to go see your governor, your county judge, or any federal office.
You can't, because no office can tell us who handles one problem and who handles another.
And in one case, your regional headquarters for one agency will be in Dallas, Texas, and another agency in the same region will be in Denver, Colorado Center.
And not many people take it forward to travel all over this country to try to find an answer to a problem that they have.
So we decided that the only thing in place
The thing that made the most sense was to try to break it down on a functional basis.
So the matter is that some of the major departments of government, the key four departments of government, we think it makes sense.
I won't attempt to go into all of the details of it this morning.
Let me say at the outset that I will be the last person to tell you this.
that when we tried to make these divisions, what would go into the Department of Community Development, Department of Natural Resources and so forth, that we weren't endowed with infinite wisdom, that we can't say that every single element, every single sub-agency, every single program that we put in these four major categories was heavenly ordained to be at that particular location at this particular time.
But we did at least make the best approach that we possibly could.
We submitted it to the president.
He made some fundamental changes in it.
We spent hours going over it with him to attempt to answer his questions, which were many.
He has, with this modified program, sent it to Congress to look at.
We know full well that it crosses a lot of party lines in terms of, not political party lines, it crosses a lot of party lines in terms of special interests.
We know that it's going to cause some concern among many of you who serve on the various committees.
You're going to be concerned about whether or not this does disrupt your committee work.
It does cause some concern among the various interests that are served by programs, for instance,
I know one classic that I can give you, the Extension Service, is very, very disturbed by all their county agents now, riding around the country as they're disturbed by what's going to happen to the Extension Service, both in revolutionary reorganization.
And they manifest, I think, a concern that a great many people are going to feel.
And anytime you reorganize anything, you know better than I that you're going to get some squeals from people.
Because after so long time, no matter how bad the program is, there are a certain number of people in this country that want to protect the status quo.
And this really gets us to the heart of the argument behind this reorganization.
You can't be in a position to protect the status quo.
Now, I have to believe that there's a very fundamental thing involved in this country.
Just as the President is talking about
The fundamental duty and obligation that you have with respect to the SST and White Leans, not for today and tomorrow, but for decades ahead.
You have a very fundamental responsibility here in trying to reorganize this government to where it becomes an acceptable, intimate outcome.
Now, we're in a time of transition, we're in a time of change, there's no question about that.
You see it on every hand you have here, and I don't want to inject myself into the SST, but it's absolutely inconceivable to me, unbelievable, that this democracy would not support two prototypes in the SST.
Unbelievable.
At a time when we're sitting over here right across the lawn in the Treasury Department worrying about the balance of payments, when you sit here and see over the period of the life of the production of this plane, you have a net gain of $22 billion, and when we sit over there facing a $10 billion deficit, last year the official settlements from the bankers that sent from Europe are worried about what kind of a government we're going to have.
These are the very fundamental...
...facing a $10 billion deficit.
Last year, the official settlements from the bankers in Central Europe are worried about what kind of a government we're going to have.
These are the very fundamental... ...don't even go to sleep...
You can't tell them to go see your governor, your county judge, or any federal office.
Because no office can tell them who handles one problem and who handles another.
And in one case, your regional headquarters for one agency will be in Dallas, Texas, and another agency in the same region will be in Denver, Colorado, Senator.
And not many people think they can afford to travel all over this country to try to find an answer to a problem that they have.
So we decided that the only thing that made the most sense was to try to break it down on a functional basis.
So the matter is that some major departments of government, the key four departments of government, we think it makes sense.
I won't attempt to go into all of the details of it this morning now.
Let me say at the outset that I will be the last person to tell you that when we tried to make these divisions, what would go into the Department of Community Development, Department of Natural Resources and so forth, that we weren't endowed with infinite wisdom.
We can't say that every single sub-agency, every single program that we put in these four major categories,
It was heavenly ordained to be at that particular location at this particular time.
But we did at least make the best approach that we possibly could.
We submitted it to the president.
He made some fundamental changes in it.
We spent hours going over it with him to attempt to answer his questions, which were many.
He has, with this modified program, sent it to Congress to look at.
We know full well that it crosses a lot of party lines in terms of, not political party lines, it crosses a lot of party lines in terms of special interests.
We know that it's going to cause some concern among many of you who serve on the various committees.
You're going to be concerned about whether or not this does disrupt your committee work.
It does cause some concern among the various interests that are served by programs, for instance,
I know one class that I can give you, the extension service, is very, very disturbed.
All their county agents now are riding around the country.
They're disturbed about what's going to happen to the extension service, both the revenue sharing and reorganization.
They...
Manifest, I think you're concerned that a great many people are going to feel.
And anytime you reorganize anything, you know better than I that you're going to get some squeals from people.
Because after so long time, no matter how bad the program is, there are a certain number of people in this country that want to protect the status quo.
And this really gets us to the heart of the argument behind this reorganization.
You can't be in a position to protect the status quo.
Now, I have the ability
It's a very fundamental thing involved in this country.
Just as the president is talking about the fundamental duty and obligation that you have with respect to the SST and what it means not for today and tomorrow, but for decades ahead.
You have a very fundamental responsibility here in trying to reorganize this government to where it becomes an acceptable, intimate outcome.
Now, we're in a time of transition, we're in a time of change, there's no question about that.
You see it on every hand you have here, and I don't want to inject myself into the SST, but it's absolutely inconceivable to me, unbelievable, that this democracy would not support two prototypes in the SST.
Unbelievable.
At a time when we're sitting over here right across the lawn in the Treasury Department worrying about the balance of payments, when you sit here and see over the period of the life of the production of this plane, you have a net gain of $22 billion, and when we sit over there facing a $10 billion deficit, last year the official settlements from the bankers that sent from Europe are worried about what kind of a government we're going to have.
These are the very fundamental things.
That you have to concern yourself with.
This reorganization is a very fundamental thing.
And you can have a thousand reasons why you ought not to be part of it.
You can say, this little program and this little program, we think it ought to be here, we think it ought to be there.
If you approach it from that standpoint, reorganization is dead before it starts.
But if you will look at it from the standpoint of what is your responsibility?
What is the responsibility of government?
It's not just to conceive and pass programs.
It's to try to see that the effectiveness of those programs is of the highest order.
That the benefits reach the people for whom the programs were initiated in the first place.
And it's done in the most economical fashion.
That you do it in such a way that you build a basic trust for people in this country to tend their government.
If this trend continues, if we continue to have 7 out of 10 people or 8 out of 10 people who live in the United States who seriously question the integrity and the honesty and the capacity and the ability of their officials, local, state and national, I assure you, you're going to have some changes, all right.
You're going to have changes in the very structure of government, but it's not going to be brought about in an illogical, reasoned fashion that the president's trying to bring it about.
It's going to be brought about in a revolutionary way, but it's not going to be his type of revolution.
Because you can only exist when you have a government that is so distrustful, and in which there's so much dissatisfaction rampant throughout the country.
So what this reorganization plan does...
It simply puts you on the side of the angels, very frankly.
It says to your constituents and to the world that you're not happy with the way things are going.
You're not here tinkering with the concept of any program.
You're simply saying we're going to take this program, we're going to change it up, we're going to reorganize it, we can make it more efficient, we can make it more effective.
And we can put it on a functional basis to where we know who is responsible for manpower training.
We know who is responsible for education.
We know who is responsible for water resources development and so on.
Now you say, well, these departments will be too big.
This is not a problem.
Size is not a problem.
If you can structure it in such a way that you have the substructure over which you have some control,
Now, the final analysis is one of the whole that I want to touch on.
And that is simply looking at this government and looking at the executive branch of government.
I think there are certain very fundamental things that I'm concerned with.
Number one, you have to be concerned with this office, the office of the president.
It has to be able to function.
It has to be able to function in such a way that the policies of the president can be carried out.
It has to be organized in such a way that he can delegate authority with some knowledge that his policies are going to be faithfully executed.
Now, by the time any man becomes president, he's come up...
I don't remember the expression he used last night, but I thought it was quite graphic.
By the time he reached the top of the green pole, you've gone up and you've gone back.
You've taken a few steps forward and been pushed, or knocked a few steps back.
So any president has to be careful about what he does.
He knows he lives in a political jungle.
He knows that if he doesn't have people around him, he can trust that the structure of government, the mechanism of government is not such that he can delegate authority.
He's not going to do it.
He's not going to do it.
The effectiveness of the presidency itself is at stake here in trying to provide a structure through which he can work and carry out the will of the Congress in administering these programs.
And it's that fundamental.
a problem that you are approaching when you talk about reorganization.
You have to provide a medium, a means, a mechanism through which your policies, your mandates executed by the president can reach the people of this country in an orderly fashion and in a fashion that all of you can be sure is constant with your concepts
and with the president's policies in Washington.
That's about the background of this whole problem of reorganization.
I don't know anything that you could concern yourself with more fundamentally than reorganization and that revenue sharing this year.
But when it comes up, I say to you, as I did a moment ago, that it's obviously something that you can put aside.
It's obviously something that you can find a thousand things wrong with.
But...
There are also some very, very good, sound, fundamental resources.