Nixon White House Tapes › Tape 82 › Conversation 082-004

Nixon, Cost of Living Council & Connally on Phase II and Pay Board

Monday, November 15, 1971 · 12:00 AM–3:36 PM ET · Cabinet Room · 13 min

ParticipantsNixon, Richard M. (President); Cost of Living Council; Connally, John B.; McCracken, Paul W.; Burns, Arthur F.; Campbell, J. Philip; Stans, Maurice H.; Hodgson, James D.; Romney, George W.; Shultz, George P.; Knauer, Virginia H.; Lincoln, George A. (Gen.); Stein, Herbert; Flanigan, Peter M.; Mullaney, Joseph; Rhode, Earl D.; Cheney, Richard B.; Abrahams, Albert E.; Kosters, Marvin H.; Alfultis, Richard J.; Greener, William I. ("Bill"), Jr.; Lynn, James T.; Silberman, Laurence H.; Paarlberg, Donald A.; Partee, J. Charles; Rumsfeld, Donald H.; Grayson, C. Jackson ("Dan"), Jr. (Dr.); Boldt, George H.Conversation082-004 on Tape 82StartMonday, November 15, 1971 at 12:00 AMEndMonday, November 15, 1971 at 3:36 PMRecording deviceCabinet RoomSourceNixon Library record for 082-004 ↗ · National Archives Catalog, NAID 417174275 ↗

AI Summary

President Nixon met with the Cost of Living Council and members of the press to discuss the successful launch of Phase II of his economic program, emphasizing the efforts of the Pay Board and Price Commission in controlling inflation and aiming for a two to three percent inflation rate in 1972. The President highlighted the balance between necessary economic controls and preserving economic freedom, while also noting the Senate's delay on crucial legislation and the potential impact of a continuing resolution lapse.

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part B, 50:49

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NARA Description

On November 15, 1971, President Richard M. Nixon and members of the Cost of Living Council, including John B. Connally, Paul W. McCracken, Arthur F. Burns, J. Philip Campbell, Maurice H. Stans, James D. Hodgson, George W. Romney, George P. Shultz, Virginia H. Knauer, Gen. George A. Lincoln, Herbert Stein, Peter M. Flanigan, Joseph Mullaney, Earl D. Rhode, Richard B. Cheney, Albert E. Abrahams, Marvin H. Kosters, Joseph E. Malaga, Richard J. Alfultis, William I. ("Bill") Greener, Jr., James T. Lynn, Laurence H. Silberman, Donald A. Paarlberg, J. Charles Partee, Donald H. Rumsfeld, Dr. C. Jackson ("Dan") Grayson, Jr., George H. Boldt, and members of the press, met in the Cabinet Room of the White House at an unknown time between 12:00 am and 3:36 pm. The Cabinet Room taping system captured this recording, which is known as Conversation 082-004 of the White House Tapes.

Nixon Library Finding Aid

Conversation No. 082-004

Date: November 15, 1971
Time: Unknown between 12:00 am and 3:36 pm
Location: Cabinet Room

John B. Connally met with Paul W. McCracken, Arthur F. Burns, J. Philip Campbell, Maurice H.
Stans, James D. Hodgson, George W. Romney, George P. Shultz, Virginia H. Knauer, General
George A. Lincoln, Herbert Stein, Peter M. Flanigan, Joseph Mullaney, Earl D. Rhode, Richard
B. Cheney, Albert E. Abrahams, Marvin H. Kosters, Joseph E. Malaga, Richard J. Alfultis,
William I. Greener, Jr., James T. Lynn, Laurence H. Silberman, Donald A. Paarlberg, and J.
Charles Partee

     National economy

            -Price adjustments
            -Vote

The President, Donald H. Rumsfeld, Dr. C. Jackson (“Dan”) Grayson, Jr., and George H. Boldt
entered at 2:02 pm; members of the press were present at the beginning of the meeting

     National economy
          -Cost of Living Council
                -President’s schedule
                -Connally
          -Pay Board and Price Commission
                -Accomplishments
                -Success of the President’s program
                -Prospects for 1972
                      -Phases I and II
                -Television appearance
          -Connally’s view
          -The President’s program
                -Roles of McCracken and Burns
                -Success of Phase I
                -Congressmen’s comments
                -Movement into Phase II
                      -Rumsfeld
                -Inflation

     Pending continuing resolution
          -Senate action
          -Effect of non-passage

The President left at 2:13 pm

     Vote on option 2

     Question on option 2

Recording was cut off at an unknown time before 3:36 pm

Transcript (AI-generated)

This transcript was made by an AI model listening to the recording (gemini-3.8-flash) and has not been reviewed for accuracy. Speaker names are the model's inference from the voices and the participant list. Words and names can still be wrong — verify against the audio and the finding aid before citing.

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Connallystating that all price adjustments announced before August 15th will be subject to the same 72-hour procedure as those described in option two.
ConnallyYou've heard the amendment. Is there a second?
ConnallyCall for the vote. Those in favor of the amendment, signify by saying, "Aye."
UnknownAye.
ConnallyThose no?
ConnallyThe "Ayes" have it. The amendment's adopted. The question comes on the adoption of the other
UnknownThey just stepped in.
UnknownI don't think they're going to allow it.
UnknownLet me get around in the picture. Yeah.
NixonWell, this is the first opportunity that I have had to meet with the Cost of Living Council for several weeks. And, of course, the first opportunity since we entered Phase II, officially Phase II, and since the Chairman announced with their colleague the decisions that have been reached.
NixonAnd during that period, there have been stories, speculation about, you know, the developments that have occurred outside of the Council, like on the Pay Board and the Price Commission.
NixonI simply wanted to say that I think I speak for a great majority of Americans, expressing appreciation to the members of the Pay Board and the Price Commission for taking a potentially explosive, a very difficult, issue
Nixonand bringing into activity in a way that is fair, that is equitable, and that we believe will work. I, the reason I believe that, I base that on the acceptance that the various groups involved, including business and labor, as well as in our economy.
NixonAs we look to the future, I think that we can say now that what with the decision on the Pay Board, and the prospect for bringing inflation into the range of two to three percent, and the Price Commission, looking into the goal of two to three percent on the price side,
Nixonthat the massive public support that we had during Phase I, which succeeded in stopping inflation, that that public support continuing into Phase II will mean that the year 1972 will be the year in which we've cut the rate of inflation in half in this country.
NixonAnd by cutting it in half, it means that the prospects for the future of a sound, based, and a healthy economy, an overseas economy, are very strong. We owe a great deal to them, and I'd like to say the members of the Pay Board and members of the Price Commission. They were all patient, and each had to say that I've been patient on the Cost of Living Council.
ConnallyWell, that patience worked--
NixonMy patience worked a whole lot better.
ConnallyWell, Mr. President, I'm, I am very happy to report to you that Phase II, so far as the Pay Board and the Commission are concerned, is fully launched. We are on our way toward the objectives that you set for us for controlling inflation in the United States. And I have not the least doubt in my mind that it's going to be accomplished.
BoldtI'd like to say, when we talk of a thankless job, it was tough, very demanding and challenging. It is not thankless. We've found a lot of support from people, and thanks of a lot of people in public life who know this program can work. Some people said it couldn't be done, but as Secretary Connally said, "It has to be done, and it will be done." It's, I think the program that did emerge is a program that's sound and the overall goal will be achieved.
NixonWell, I think we'd like to say, before I turn the meeting over to Secretary Connally that success was not deciding and creating unattainable goals. It's easy, and tempting, to make a dramatic headline by setting goals, in the jungle of economic, very mild, system of our own.
NixonWe believe, however, that we have found a pattern here in Phase II that works and that will succeed and step forward, and it will work precisely because it has been carefully worked out. Not that we're saying that goals aren't good and all, but they're utterly unachieved,
Nixonbut in setting realizable goals, goals that can be achieved, and then making up our minds that we are going to follow through, and see that those goals are achieved. That's what you've done and that's why we're pleased. Secretary, you have some continued business?
ConnallyFirst, I think I'd express all of our thanks to Dr. Grayson and Judge Boldt, all the members of the Pay Board and the members of the Price Commission. We feel considerably relieved of many responsibilities. I think it's appropriate at this time, too,
Connallyto thank all the staff, the Office of Emergency Preparedness and all the folks in package who worked so tirelessly and
Unknown[unintelligible]
Connallypart of this committee. And so this meeting includes all of the other, including Dr. Burns, who who has been invited to attend this to this board as a as an adviser to it. And now is chairman of the of the Committee on Interest and Dividends.
ConnallyMr. President, I must say that I do it on behalf of the entire Council, that that we think the Phase I wage-price freeze, which has just expired, was a resounding success.
ConnallyVery uh, few significant moves occurred in what the inflation had in that whole period. We tried to maintain a freeze in the very real sense, in a very true sense. Uh, but it was made possible largely by the unstinting support, the wholehearted cooperation of the American people.
ConnallyI think that being as it was, and the fact that we've had this cooperation, and the fact that the vast majority of the American people, in spite of what a few leaders have done, but the vast majority of the American people applaud your action, and I think it behooves us to try to execute the program which you've laid out.
ConnallyI am, frankly, and somewhat amazed at the at the remarks that constantly are made, all about all, by damn, everybody out that they've never seen such confusion. They say they've never seen such on and on and on. But the goal, what's been achieved
Connallyuh, the goal was made clear, and you and you've already stated, and you've said them on television. Other than that, certainly, I don't know what they're talking about, because the results have spoken all through this. And Mr. President, you made this clear to us, and made clear to each of these new, newly-respective boards. And so I would hope that out of the meetings of the few days, the argument
Connallyhas somewhat subsided, after they get all of their affairs in order. And Don Rumsfeld has has predicted there's no reason why we can't proceed from one phase into the next with uh with dispatch, with understanding, with support, which I think the program has.
ConnallyThat's what you promise.
NixonI think uh, Secretary Connally has very well put this in perspective. This is a very delicate and difficult operation. To begin with, we can have a simplistic program with no freedom, and that's the choice we had to make.
NixonA total, absolute control, wage and price control, across the board, a huge bureaucracy to implement it. And while a few people, economists and outside, have advised that, we rejected that, because we believe that we need to maintain freedom in the economic, in the market economy in this country. We believe you can have freedom,
Nixonand still have that freedom uh, without the irresponsibility uh, of inflation. And what we have here is, therefore, enough controls to control the inflation, but not so much as to destroy freedom. Now, in doing that, we do have the freedom of speech.
NixonThat is inevitable. Nobody, society does not deny all men their freedom of speech, because there are persons who speak. But I'm quite sure with uh, with the Pay Board, and the Price Commission, and under the Cost of Living Council,
Nixonunder this very delicate uh, having enough control over this without destroying freedom, I think we have uh, ended up on exactly the right course, at least as close to that course as we can.
Nixon[unintelligible]
Unknown[whispering]
UnknownYou get a few more?
UnknownYeah.
NixonWhile the press is cramming, [laughter] let me greet the uh, Cost of Living Council for one other thing, you might be interested in. As I understand it, for the last three days, the Senate has stopped work on the foreign aid bill, and the President's economic bill, and tax bill, because of a continuing resolution.
NixonThe Senate has stopped the pass of continuing resolution. As of midnight tonight, all employees in the [unintelligible], all employees in OEO, all employees in [unintelligible], all employees in the postal service and the State Department will go on furloughs without pay, that will help reduce your income. [laughter]
NixonThank you very much, gentlemen.
ConnallyI call for uh, the vote on Option Two. The question having been needed, all in favor of Option Two, say aye. [chorus of ayes] Opposed, no. The ayes have it. Option Two is amended, uh, its contents.
ConnallyNow that they voted on it, let me ask you a question. Um, the first part of Option Two eliminates items three from 300.051.
ConnallyThis uh, this eliminated theatrical performers, and now as well for wholesalers and retailers. Did you deliberately exclude now uh, intended by this [unintelligible]

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  • 618-010 8:40 AM · 6 sec — President Richard M. Nixon and Stephen B. Bull met in the Oval Office of the White House at an unknown time between 8:40 am and 8:54 am.
  • 618-011 8:54 AM · 1 hr 25 min — President Richard M. Nixon, Peter M. Flanigan, H. R. ("Bob") Haldeman, Stephen B. Bull, Henry A. Kissinger, White House operator, and John B. Connally met in the Oval Office of the White House from 8:54 am to 10:20 am.
  • 014-101 9:45 AM · 7 sec — President Richard M. Nixon and the White House operator talked on the telephone at an unknown time between 9:45 am and 10:03 am.
  • 014-102 10:03 AM · 2 min — President Richard M. Nixon, White House operator, and John B. Connally talked on the telephone from 10:03 am to 10:05 am.
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All 62 conversations from November 15, 1971 →

Cite this conversation

Conversation 082-004, November 15, 1971. White House Tapes, Richard Nixon Presidential Library and Museum, National Archives (NAID 417174275). Audio and AI transcript via Easy Nixon, https://www.easynixon.org/tapes/082-004 (accessed November 2, 2026).