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...comments that John has had on this topic.

Generally, the way that's going to appear, and then we'll move on to the next project, so that we can have that.

This is better, I believe, on the other side.

Very good hands of Congress.

Mr. President, as you suggested, the fourth quarter came out quite well for us.

And since this is a third anniversary, I've prepared a table which some of you might want to have, comparing the fourth quarter of 68 with the fourth quarter of 61, and a number of respects, and a number of respects.

The fourth quarter of 71, the fourth quarter of 58, yes.

We see, for example, in the fourth quarter that just finished, the fourth quarter of 71, the annual rate of increase for the GNP was 6.1%.

That is the biggest number in a long time, except for the new quarter.

Does that figure come out yet?

This figure will be out at 10 o'clock tomorrow morning.

That's the figure.

So that this is a reflection of the effect of the freeze in phase 2 of the fourth quarter.

And our own expectation is that we will not continue to get many quarters, especially if you play the rise that only 1.5% of the election was very helpful to us in the past quarter.

We have today to figure, we have a super frightening day for December, which will also be released tomorrow morning at 10 o'clock.

And that shows an increase of 0.4, that's 4.1% for the month of December.

A very big increase, about 7.1% on food, 0.3% on everything else.

which is some signs of post-free fall that we had expected.

In fact, many of the transitions from the free space to the flight free, I think, is a fairly satisfactory outcome, by the same as the increased culture of privacy and the...

It's a considerable degree on the strength of fiscal policy which is being put before it.

It will be propelling the economy up towards the end of the year.

And I think it will be substantial where we sit and we are counting very heavily on the fiscal policy to be a main proponent of the economy and I think that is true.

What did you say, the four point, the four tenths of point?

That's even adjusted.

Forty-five, forty-seven.

Forty-seven, yeah.

And the fourth quarter, we had two very good ones.

Again, the fourth quarter increase in consumer prices is up in the annual rate of 0.3%, which is one of our targets.

That is the fourth quarter of 1972.

I think we were all very happy with that.

Well, that's almost 5% of the annual rate.

But again, you should note that the food is a big item.

Much of the food increase was in areas that were not covered either by the freeze phase 2.

So, this increases the support and forward space.

In fact, these numbers are beginning to raise questions people find about when are we going to put controls on food.

But there isn't anything to talk about.

Are they talking about something?

Yeah.

Well, that is, for, compare what happened to CGI, we were earning all last year, now that this is beginning, we can't do that kind of comparison.

6.6% in Navi's earnings last year, and only 3.4% in the cost of living.

For the first time since 1965, the Americans have really had some real gains in weight.

Versus the total of the CDI for the year 1970 is now 40.4%.

This is part of the figure that they just put out.

Well, it's part of the figure that I read is the newest.

New people's justice and that's what I put out, but there are figures that I don't think, you know, it's just part of the figure.

Does that convince you to make any promise to let the next lawyer decide on what to do next?

The number of people drawing on appointments and charitons

divided by the number

The reason that you can't do nothing is the new people under the workforce.

In the last quarter of last year, we got 780,000 new jobs in this economy.

Do you think that would have brought down unemployment?

If all these new people came in, principally women and young people, into the workforce.

And so it just leveled the whole thing up.

Do we have the analysis of the unemployment figures?

What has happened to the...

The workforce, I know they're breaking down, but they've analyzed the gears in terms of workforce.

As far as householder is concerned, what's happened to them?

Very much so.

3.3% has been rocking around between 3.4 and 3.4%.

What's happened to you?

It's not 3.3 right now, it's really 1.33, about 4 as the previous month, 3.3, so it's down about half the normal, but it's still higher than it was in the early 70s, I think it's down as low as 1.6.

How about the comparison on the number of new jobs created from here to here?

Well, traditionally there's about 1.5 million new people entering the workforce each year.

You can see when 800,000 entered the workforce in one quarter alone, and it all got funded up.

It's understandable that we had a good quarter from an economic standpoint.

But in the earlier part of the year, there were not as many as normal women, so the average for the year will be an overall.

There are many women in the workforce, married women, who doesn't do it.

A great many of them are married.

Yes, there's some.

It doesn't mean that we should say that there is not, there is, that's preventing fighting.

And also, the point is also to put it in perspective of what it is and what you're fighting against, any possible goals.

So, I think we better, you see,

analyzing what the underlying point is, more emphasis needs to be given to that.

That is, first, you've got to hit the household, and that means married men, married men, single women.

They've got a person.

Women looking for extra jobs.

I mean, a person in a household looking for a job.

You've got young people entering the labor force.

Maybe they're junior.

Maybe they're a little bit bigger than that.

Who knows?

The other thing I don't know is if I ever, if the Bureau of Labor Statistics ever gotten out any one of those, I'm trying to think, an analysis of how many jobs are available.

I was looking at the health water heads in the U.S. Times.

I looked at the health water heads in the U.S. Times in California and got that out there more than 10 years.

I mean, stores, pages.

Do we have anything on that?

Oh, we finally got some financial support for a vacancy series in Georgia.

We got started only with manufacturing, as I recall.

It's just been under way for about... That wouldn't help, right?

No, it won't.

What we're talking about, we all know.

Look, there are jobs available.

Household work allows you to do it.

There are jobs where you can get into minutes.

Maybe people don't want to do that either.

But there are a lot of people, there are a lot of people that couldn't get help out through the country.

I mean, there have been various columns written on this.

The thing that concerns me is that while we cannot, we must not ever get in a state where state law doesn't exist, doesn't show your heart, because yes, where it does, I got rid of the plan, but we mustn't say that

That 16-year-old coming into the labor force, they're ready to sit behind the desk of a corporation.

They're not ready.

Because that's what the job is.

I agree with you on this discussion.

Workup and analytical teams on this subject with comparisons and some breakdowns.

I have had a chance as part of this task to see my employees with other announcements.

So I have not had a chance to talk to Jim about your discussion.

And I may want to just, on this tip, in some way we can get a comparison of how many women who are married to employed men, how many more women are currently in the labor force, because they're the ones that may be knocking a single woman out of the job.

And then there are a number of working women whose husbands are gainfully employed.

If that figure is greatly increased over what it used to be, it's certainly something to look forward to.

That's not a lack of prosperity, that's because of prosperity.

If 205 million people in this country, 3 million of them work, that means there's a lot more than one per family working.

Those figures might be one that impact.

So to combine the impact of it,

For a factor of four, say, that would show both the impact of the increase in young families, and why they're going to work, and it also shows the impact of the division, which increases for the families in the divided ethnic communities.

I have considered it a high authority to ask John to follow up with everybody concerned.

It's not only your job, but it's the Congress Department's job.

It's also the Council of Economic Advisers.

We have two dozen things that are important, but I think what I had is that there's bound to be, I mean, you've got all sorts of other groups, you've got the national group, and the outside groups, the Central Conference, and others, but I think that all the other ones, if we are...

Yes.

I'd like to know, for example, I'd like to know, just for my own information, maybe the situation has changed, and maybe we're never going to live from it.

But I'd like to know whether the numbers that are used now, the kinds of surveys, is not really comparable to what we used ten years ago.

For example, we're 18-year-olds, and 17-year-olds, and 15-year-olds, considered on...

The increasing numbers of women in the labor market and the increase in wages really increases the temperature a little bit as well if we develop some sort of figure that reflects family income.

...for a factor of four, say, that would show both the impact of the increase in young families' defense and why they're going to work, and it also shows the impact of the division's weight increase for the families in the divide at that point.

I consider this a high authority and ask John to follow up with everybody concerned.

It's not only your job, but it's the Congress Department's job.

It's also the Council of Economic Advisers.

I like to know, for example, I like to know, just for my own information, maybe the situation has changed, and maybe we're never going to let it drop.

But I like to know whether the numbers that are used now

For example, we're 18-year-olds and 17-year-olds and 15-year-olds considered unemployed in 1961, 2, 3, 4, and 5.

I don't know that they were.

If we go out and search...

To be fair, you ask the woman, and that would be kind enough, but your mother comes to the job, and she's got to have a job, which is like, well, I don't know anything, but I'd love to be in the head of the corporation.

For Christ's sake, now that's a nice thing to do, and so she's unemployed.

And that's a lot of...

Because I still say, look at those help-wanted ads.

I know that's old-fashioned and so forth, but they are there.

There are help-wanted ads, and they aren't just those screwy jobs where they come in and we'll train you to sell baby models.

Basically, there are help-wanted ads for hard work that a hell of a lot of people don't want to do.

Does that sound like much to you?

Yes.

And I think it's a lot on the farm, right?

Absolutely.

Farm, you have a very great problem in rural America, I think that's why.

They don't pay as well.

When you put it in terms of manufacturing, which is your top priority, they won't do it.

As hell, we need to know what that is too.

In fact, all the farms, that's kind of what they want to do.

And they would rather compensate you for that, not do the change.

Well, Mr. President, I think you hit the nail on the head when you said this is a very high priority thing for us to be able to talk about.

We really haven't been as skillful in explaining our side of the thing.

Another thing you might bear in mind, the cabinet members who go into...

...different places to talk.

This unemployment is very scattered.

The high rates of unemployment are only in two areas, and you'll find very frequently you're in an area where unemployment is absolutely no problem.

It's a good thing to say that while you're there, because the illusion is created by the national media that this unemployment is everywhere.

I was in Alabama and Birmingham where there's almost no unemployment.

Unemployment is certainly a factor, particularly in certain areas where the defense problem, the reduction of defense effort has hard hit.

Take your city right here, you don't have any unemployment.

Why did he do that?

They assume that everybody has 6% unemployment.

It seems to me two things have changed.

I don't know what the figures will tell you.

Two things have changed.

One, I've never considered a woman whose husband just wanted to get some extra money for the family.

That wasn't really an unemployment problem.

That was just a woman hoping to get some extra money for the family.

The other one...

You never, you know, when you were younger, even 15, 20 years ago, you went on the bus, you said, I want a job, I want a particular job.

That's all I'll do with it.

All right.

Now that wasn't unemployment.

Unemployment was when you wanted a job, you couldn't get it to you.

That wasn't unemployment.

That was quite a sea of work.

Like when you had cash, for example, 15 years ago, you expected to work there for 20 weeks, and they offered it to you.

Now you're trying to find compensation, and you're not going to work.

This was the norm.

It's the norm now, except our system has to build it.

It has to get to the ground.

I asked this, you see we've got various people, now there's another face of it, I didn't realize, I heard about this too.

I asked, John and I were talking about this, he was raising therapy, I said, well let's pull this together, and so he'll be talking to all of you to see if we can't get a coordinated program, or getting the facts, we really want to know what the facts are, what the problem is, and then

And then, of course, we have to fight the problem, because if the problem, for example, is primarily a problem of women seeking extra jobs, if that is 18% of the men, but they are actually women seeking extra jobs, what would be the result of that?

If the problem is also, it's primarily a degree of young people coming into the labor force, because then maybe we've got to find something to do with young people.

Could I suggest that we take, we take on this?

You could say, uh, time.

Uh, let's set a month.

I think it takes a month to study anatomy.

Or is that too long?

I like it.

And that's what we all do about it.

Because it's a failure.

The problem is, let's get the Secretary of Labor, the Secretary of Commerce off, charging around the time.

This is the one point of office.

Who knows?

They know very well.

A very good point was made by the

It is really true, it's a standard business.

I mean, you go to some sections of the Midwest, there's no problem.

Other sections, it's very serious.

California and Southern California, it's a major problem.

We all know Texas is not so tough.

Florida is not so tough.

I mean, the whole South seems to be better off than the other parts of the country at the moment.

Maybe that tells us something.

I don't know what, but it may tell us something.

Mr. President, I think one phrase we ought to try to define you.

It's a very voluntary one.

It's a very large part of our understanding.

It's voluntary.

People out of the job, taking six months off before they go back to work.

For people who could get a job, it won't take the kind of job that's offered because they want something else.

I don't think we should do a demagogue on it.

If it's true, though, it ought to be sin.

It ought to be disgusted.

Stop looking for love.

You can't get any of it.

Yeah, that's true.

They aren't to that job.

They don't pay as well as this.

They aren't what the person's paying for.

I came back to Vietnam with some other military groups there, 100,000, to see how quickly they could come and pull it.

It was like 11,000 average, but it wasn't quite 8,000.

Now that's a pretty good point of picture.

And, uh, we're ready to go.

Now, off to, uh, this table.

This is very good news.

This is why you can't raise your brother, and, uh, despite all the ups and downs, warnings that it will fall apart and still be good, uh, there's still a big deal of question, I think, in people's minds about what's up with the regulations.

Part of the price side, originally, we, yesterday, announced two very no-sure requirements, is the word I've been using.

The impact exempted from the controls, 10 million out of 24 million rental units in the United States.

That's 45% of all rental units were lifted from the controls.

They will not be controlled correctly.

We also exempted from the control 1.5 million retail staff.

They're under $100,000 a second, which is a significant cost to the agency.

We did it for several reasons.

One is we felt that this didn't need refining after going into effect on November 13th.

We wanted to see that we were focusing our resources on things that did have an important inflationary impact, and not dissipating resources by dealing with a whole lot of bottom-up or grocery-type family operations.

We wanted to ease the burden on the internal revenue service they were based on.

They were spending about 65% of their whole load within the rental area.

And it had less than 5% of the consideration.

So we were putting a great deal of our energy, our energy,

on a problem that really had very little inflation.

Finally, it's our best judgment to use, to go in terms of jailbreaking, in terms of, it's the council's judgment that in fact, these areas that we've exempted will be effectively controlled even though not directing insults.

It's not like exempting a whole sector of the economy.

We've exempted a portion of the sector,

And the control portion will continue to have an impact on the marketplace through competition.

It won't be a great crisis, really.

It's just that the NCP, with the remainder, is still controlling.

On the pay side, in the middle of debating what Congress meant as far as the substandard and working curve for exemption,

Of course, let me counsel.

Originally, we decided to exempt everyone under $1.60, and then the Congress said it should be more.

In fact, in today's words, the council reconsidered $400 per hour, and the State Board has rejected that.

I think the council will be meeting on it tomorrow.

But that would mean about 22% of the non-supervisory production workers would be exempt from controls.

That's $1.91.

The aerospace contract you know about, the first big one with the payboard address, managed to work down from about 12.9% to approximately 23%.

The United Aircraft contract, we can walk around eight pieces there, and then suddenly we have to put in the payboard at 7.5%.

It's pretty close to that percent.

They're arresting him with the United Transportation Union contract at the present time.

It seems to me that two things have happened in the last three weeks on the payboard that are more important than any of these decisions.

However, that is, about three weeks ago, Judge Bold kind of crossed over the grid and decided that he'd been awful nice to an awful lot of members of that payboard.

He'd taken off a lot of gun, and he was tired, but he told himself, and went out and hired himself a pretty good staff.

In the afternoon, in the last 60 minutes, they were delegated to Judge Bolt, a tremendously large grant policy.

He came out to see handling exemptions and what have you, with his staff doing the work, instead of having to do these things before a 15-man tripartite board that was designed because they disagreed, and then just...

more efficient, more responsive job than they have been in the past, and begin to more closely approximate this kind of efficiency that the present mission has been able to achieve, because it is not dry farming.

So I think that's a very important insight.

The remark from earlier, Secretary Connolly just spoke to in about 2000,

The audience erupted in applause, which is amazing when you think of who was in the room.

I'm not sure if it was how he said it, or if it was really all that much for the faith board and the praise commission, but the fact of the matter is that I think it's a very encouraging thing that they applauded and responded faithfully to what the secretary indicated in his support of what they're doing generally, and that it is its own job.

So I'd say that where we were still gestating eight weeks ago, we're now kind of an 80s youngster, and we're coming along.

Tough business.

I think it's longer than eight and a half weeks.

John, do you want to add anything?

Yes, the guidance is true.

But we should know how long this is going to last.

That is crazy.

That was the very thing they asked me to address my question.

This was a question that was running through my mind.

Everybody at the Congress, how long is it going to last?

They take it from me.

Try to make it work.

And I said, we've already determined that this is a typical bullet of impotence.

And I said, he can do nothing but to chuck himself now.

So we keep it on for a year or four years.

It's going to have to be all over again.

You're the answer to it.

We're not.

But that's the fact.

That's the fact.

That's not why it's a study.

It's a study that's dedicated to it.

They've got a head and toes as long as they're supposed to do the job.

They know what the toes are.

They're on two fronts.

They have to bring negotiations later on in the relationship.

Because of those negotiations, the factory needs to wait.

It's really safe to tighten because you have the holes.

And when that occurs, and when the inflation factor reaches two degrees range,

We felt that it had to go through this period of refinances and try to relieve the burden of red tape on these little one-and-two-and-three-man shops, which is a tremendous burden, given the approach that the Price Commission took to controlling them.

As we go through that process, it's important that people have a mindset, as the Secretary said, that these people put on, they're there to do a job, they're going to do a job, and they're going to get off as soon as that job's been finished.

They shouldn't stay on at all.

That's necessary to do that job, and I think that if people have that fixed in their mind, that they're many years better.

Thank you.

Well, I'm going back to the free market.

I'm also going back to the free market, but I'm going back to the competitive market.

I don't think we've had any competitive markets.

If we could get a competitive market, I think we're going to be in front of some form of control.

Well, that's what happens, and that's why I think, and that's why I would hope that sometime during this period of control, we would take a look at what we're going to take to get a competitive market once we've let up on the control.

One point I would suggest is that if you're going to speak tomorrow night, and I mean one thing, you will have a terrible friend in the audience, and you just need to forget them.

They're not good friends.

I would refer to Wilson's reference.

He was among the little group of...

We're going to have a set of legislation tomorrow.

We think it will be ready to go.

We have to move it.

You run out over 90 days, you gotta do the movement.

The other thing to do is to get back at him, you get it, but it's not good.

And then he says he's passed.

It's one for a lot of organized labor to go support it soon.

We've got to support it.

But what we see is action by the Congress on our legislation that will evolve transportation titles.

Absolutely.

So that is the thinking.

And that's fine legislation, Eric, that we think.

Right, George?

That's what I do as Secretary of Labor.

That's what I understand.

What I understand is basically it gets away from the concept that it has some arbitration.

Nevertheless, in this field, in the field of transportation, the nation cannot afford to do tie-ups.

You just can't do it.

That includes railroads.

It includes filling stops.

It's not that hard.

Yes, Mr. President, your statement today has come back to say that the only end of the speech was a reference to the West Coast Doctrine.

That means the White House is serious about the situation, while against the legislature, that we might present the legislation this year.

Well, that is what I wanted to present to you two months ago.

But you didn't say that on TV at all.

Today it appears, though, well, maybe now it's about to get serious.

Who did that?

No, who did it?

We ought to hire him.

Thank you very much.

I think the amount of the debts has certainly shocked a lot of people, and perhaps will bring people to think a little bit more about their efforts to spend more money.

There is a matter that I'd like to get to at the end of the discussion of the 73 budget, which in some ways is more startling to this group, perhaps, than the debts, but I'll say that until the end.

Certainly the first impression I make by this budget is the impression of the deaths in fiscal 72.

There has been lots of talk about that.

I think that, however, we will be able to point to this budget as a strong one, as a budget that sees the problems that the nation has, and is responsible for over a period of time.

It's responsive to the question of helping to create prosperity and expand the economy at first time, but what it's suggesting is at the same time attentive to the long-run problem of inflation and the impact of the budget on it.

And in its composition, it meets squarely, head-on,

...de central problems for the government in this day.

It's controversial in that sense, and as a charity it's new in that sense, but it takes a position.

I'd like to say a few things about the overall picture of the budget, and then talk about some of these aspects of the composition.

There may be more charts here that you'll want to look at quickly to give you a sort of a mirror of the different things that are going on, and then get to present that architecture at the end.

The judges and the person you know, the 38.8 million, estimated for fiscal 1972.

For fiscal 73, we're estimating 25.5 million.

However, there are many things to be said about that.

The first is that, speaking of the 72 budget, this is an effort to do what is necessary to expand the economy.

And we are keeping that point head on.

Looking, however, at the spending, I think there are some important things to be said.

In the last three years of adjustment, outlays rose by a total of 51%, or an average of 17% per year.

In the first three years of the Nixon administration, outlays rose by a total of 28%, or an average of about 9% per year.

So that's roughly half the rate of increase, cutting down on spending.

The movement between fiscal 72 and fiscal 73 is 4.1%.

So, this is a big button.

However, to those who feel it was important to get a hand on spending and get outlays under some kind of control, there is a record here of getting a hold and of cutting down this rate of interest.

This is the

New version of the Sharks that we have had in a prior year.

You can see the large actual deficit there in 72.

Many of the long-run inflation problem, however, and the question of whether or not we are under control at all, this is a picture on a full-time patient that is comparing revenues at full employment with outlays at full employment.

And we just dropped down here.

Percentage-wise, it's much smaller than that in terms of percent of the total budget, but we did drop down here, and we have managed to fight back to the point where we are in balance with full employment for fiscal 73.

That is our overall picture, and it's in that sense, I think, that we can say that we have been willing to be extensive and lustrous

but at the same time we have managed to stay in the posture so that when we get back in the range of full employment, our outlays will not be all out of control, and thereby just regenerate the inflation that we've worked so hard to get away from.

Just in terms of, and this is repeating her and John's story, but we're having in our budget book this picture in terms of the economics, and I think when you put it up here in terms of bar charts, it shows that there has been some real progress on this question of inflation.

And these are the CPI figures that rose to this level on a December-to-December basis in 1969, down a little bit in 70s.

December-to-August, they were down, but not far enough.

August-to-November, 1.7%, I believe, with the CPI that will be released tomorrow.

If we add this August-to-December, it would be 2.5%.

So even with this little bump at the end, which we were expecting,

Nevertheless, in our draft, that will be coming down.

So on the inflation front, we do have a last picture.

We've talked about onslaught, and we've all talked about the fact that isn't mentioned in the State of Human Address, the decline in military personnel.

And I think it is well to keep reminding ourselves of this fact.

We have another chart in our chartbook that takes us out of the military, but...

civilian defense and defense industries, and charts that all have.

And you have a big drop going on here in the number of jobs in defense industries, in fact.

I might just point out in passing this wave picture that is causing so much difficulty in the defense budget, but which nevertheless, I think by this chart you can see,

is more than justified, particularly if we're to have any luck at all in getting a volunteer armed force.

Here were years of inflation.

One military penny was really not going up by control.

So by the time you get to 1969,

It's no wonder that many military people were on welfare.

They think we're not getting paid anywhere near adequately.

So this has moved up fast at a basic level in the defense budget, but is a necessary ingredient to a healthy armed force.

Now, just to take the first of these cutting edges that it seems to me has illustrated very sharply in the budget,

We talk about returning power to people, the philosophy of saying that much power has flowed to government, and we need to return to the people a measure of power.

The president talks about this in the State of the Union.

We talk about this in terms of revenue sharing.

But, there has been another form of recurring power that people have, that is, in the words of the President's budget message, as remarkable as it is unremarked.

You don't care a thing about it.

I believe it will become a big thing, and it will probably become controversial.

But if you compare the revenues from individual income taxes

that would have been generated had the tax rates that were in effect when the president took office remained in effect.

With the amount that will be collected in 1973 from the current tax rates, the difference is $22.4 billion.

Now, that's a lot of return on power to the people.

A very powerful...

statement of priorities and philosophies that's illustrated in this budget.

I suppose what will be said, because the perspective section of the budget shows that not only is the 73 budget tight, but when you look ahead to 74, 75, 76, 77, there is no fiscal dividend.

There is nothing to move into.

Be sure, when we get to 77, all of a sudden $20 billion appears.

That appears purely and simply because there is a central increase in Social Security taxes in 1976 that suddenly generates a large surplus in the trust funds.

And we know from our experience, when Congress gets up to that point, they generally postpone that tax.

So that you cannot count on that.

Not that Elliot has a long-run plan to do away with it anyway.

So, as a congressman, Elliot, we probably don't have the means of it.

I think the point here is that when you think about this perspective, you think about these candidates, there will be people who will say, this is irresponsible.

We should have lent that money here for government to spend.

And I think that will join that philosophic debate that now brings the pressure to tax more and spend more.

And what has happened here is very dramatic in that regard.

I think the next chart shows, in a way, something rather similar, a particular list, and then we have coded these to suggest a myth that

The biggest increase by far

A pain to scrape Mary's tongue in the butt is for demand.

The defense budget authority goes up by over $6 billion.

It's a very large step up.

And I think when we consider the budget, looking ahead now, and then thinking of the last few years, we have been living on the fat of a reduction, a mass reduction in domestic banking.

And it is still out in the form of that fiscal dividend to people of 22 billion.

It is still out in the form of all this less living that all you people in the domestic departments have been having.

That guy is gone.

There is no more defense to come.

And we are having to go back and regather our resources and to look to this defense establishment and see what needs to be done with it.

So there is a very strong increase in budget authority for defense, and I stand as an outstanding element in this budget.

A long range basis to purchase the things that strengthen both the strategic and the

The military reduction basically will be over, we think, by June 30th.

And the budget projects more or less a stable force structure in terms of military personnel.

So this big tear down that we've had from the military and from defense industry employment and so on, that is...

That's the problem of staying alive.

29% increase in cost.

I would say, myself, in terms of the problem of managing today, the problem of productivity, of having to bring power, so to speak,

It has become a central one in defense management just because the value is so high.

And I think it's just a counterpart of what we see in our high-ranging economy.

It's the high wages, in a sense, that go along with the technology that we have, and we have to find that technology in order to use people effectively.

In terms of some of the components, the history is quite striking in the teaching program.

In terms of the R.E.P.

and E.C.A.R.E.

and how about that?

in research, development, testing, evaluation, and defense.

And in terms of the police, on the other side, particularly authorities, building up the energy associated with the shark deal out there.

So that's a defense story.

It's a very strong one.

It's a foot forward, positive way to divide, and I'm sure that it will be controversial, but it's a good one.

We have to admit that it's very controversial on both sides.

It's hard for most of you who are actually here on the domestic side, and some of our greatest students, which I believe, but by and large, people are going to take this and not take it.

And we will catch up with you.

Basically, we are responsible for the other side of the mobility.

We should cut an advance by $40 million and put more together.

So we'll catch up both sides.

We've got to know what we should do on the other side.

You just talk to some of these people, Ted.

I understand your problem.

They're going to look at the outlets rather than the authority.

The outlets, of course.

It's certainly quite obvious.

Let's just help send it.

It's shifting to another area, although decided, is the special R&D effort.

There are three lines there you can see.

You can see that in the last three years, the defense spending on R&D has been rising, and the civilian spending on R&D has been rising.

The national budget has to decline, and that is fundamentally because the Apollo has been doing that big procurement exercise, and the whole national budget has counted it.

and research and development.

And because that is a large number, it has led to the illusion that our research effort has basically been designed, which is to say, it has been increased.

But, in the bucket, and more especially in the special message that will be going out in a month or so, a strong...

research initiative will be put forward.

But I think the draft there suggests the nature of it.

In terms of the numbers, I think these numbers will go from 16.4 billion in

in 72, 17.8 billion in 73, so there was a real advantage commitment there to that.

It may be noted that the increase in civilian spending on R&D has not been based on that.

This 1969 has been 65%, so we have, look, people say priorities have changed, priorities, well, the president went ahead of the game on that, but priorities have changed,

and there hasn't been pushing there.

Plus, when it comes to the defense research, there has been a very considerable effort to look at that and say, this is necessary for defense, and we want it for defense, but us being cognizant of the peacetime spillover, I think it's a transportation deal, John, in the aircraft and so on, we're working very much on that angle, so there is an overlap here.

This is just a quick chart to go through some of these things on resources for urban transportation, which shows both the increase and the balance that we're trying to attain here.

Spending money not only for highways, which has been sort of a traditional...

...but also for fast transit and airways.

... ... ... ... ... ...

Okay, we'll get to the first question, if you want to talk about it.

Now, there is a, what's there, a cut from $900 million to $600 million in transportation?

No, sir, the Congress said you can't spend more than $900 million in 1972, and they took $600 million, so we were within the...

Within the authorized range, you can see, it was a team of a set of two.

We are now at the base of the subject research of four record transfer masteries.

That's the contract authority figured for 73.

Into this case where it's being administered well, and we think it is now in a pretty good shape, and it's ready to go forward strongly.

If we had tried to put it forward at this billion dollar level, or 900 billion dollar level a year ago, we probably would have fallen all over ourselves, because we didn't have the administration set up properly.

But anyway, it is really rolling very strong now.

If I could turn to the area of given need...

Having said what we said about the defense budget and the energy there, we're in the position, in a sense, of having it both ways.

When, in 1968, the year before President Trump came here,

The budget proportions were 45% to test, 32% to the test.

Instead of the treatment budget, those proportions are exactly reversed.

That is 32% to test.

The number one spender.

The number one spender is ATW.

They will spend more money in ATW than in any other department.

That, of course, is very prevalent because of the great rise in social security benefits, which are part of the ATW.

The number of these cards, this is just a picture of what is happening in spending here.

for the elderly as compared to the numbers, which I don't know, not very much, suspending us from going up quite sharply the last three years.

We have a series of charts here that essentially show strong, bright athletes, at least in my mind,

They don't stimulate you to say hurrah, unless you stimulate you to say, here is an illustration of a problem, and why is it a problem.

And you can see what is happening to welfare costs, what is projected to happen to them, and it is in effect because of what is shown on this chart, that the welfare report that has been proposed is so essential.

Thank you.

By the same token, you can see what has been happening in the outlays for medical purposes, as in the difference between what you see in current dollars and in medical, $57-$59.

We are belated.

Italy and France for being negligent of the needs of the hungry and being unwilling to put forward a strong program of food aid to the needy.

Well, I think that character tells quite a story.

There has been a very sharp run-up in the outside for food stamps in that period.

We are also thankful to Greg Latham for being the negative of the needs of starving children.

Now, if you don't pay any attention to ladies for lunch and school and so on, then you can see the total error of the Green Line, which was going up, but not all that rapidly, before the French administration, and that's the 26th of June, and then you can see what happens.

Now that record is the subject of all of this attack.

There is an aspect of it that I think is the troublesome thing, which to me is the thing that needs to be debated.

But if you look and you visualize the difference between this line and this line, between this line and this line, this is the knee and this is the toe.

That distance has grown.

It's about double.

To put it another way, this is supposed to be a program that helps needy.

And it's turning into a program that helps the middle-income and rich kids.

Food for rich kids.

Now, we have come to the point where that seems to be put forward in a straightforward fashion now, by one reason or another.

Doesn't the federal government design fair good bylaws for every child, or not?

And that is what, that is the debate that's emerging there, that is the problem there with the Charter Service Illustration that has been involved.

The patterns budget is a very strong budget this year.

I doubt it will be complex, but we'll have to look a while further.

It's a little all around still, and I don't know what else we can say about it.

Another area where we're really affecting Congress all the time.

Always very, very connerious policy.

As you can see, starting in 1969, it's gone right straight up.

In each category.

We have just about double the ratio of staff and patients.

I guess that was taken in Vietnam.

In Vietnam, along with the increase in education and training, but the increase in medical care, and to a considerable extent, the increase in just a straight row of veterans.

The mission is to improve the quality of care.

It's something that we have been doing very hard, which we think is extremely important as a company,

service-connected disabilities are the ones we should worry about the most.

And we should try to serve them very, very well.

So that is the nature of one of the issues that we've heard about in the last year.

It's up to 1.5 to 1 now.

This is 1.1 to 1 in 1969.

It's a measure of that.

hundre hundre

The money is controlling the problem, in a way.

And here we have at least some kind of a measure of output.

And we've been working

But this, the coal business has taken off, and quite a job is being done in the Gargantua area.

We're over the top, we're not, I don't know, too late or something, but we're too late.

What were they doing back in 64, 62, and 66?

It just wasn't going any further.

This is another example of the pollution control, the municipal sewer treatment.

You said the budget is dull.

We get right down into the dirty budget.

Municipal sewer treatment is a big deal, and it's very important over on the country.

This is what's happening on the border.

I'm sure everybody would be unhappy, but they don't have any reason.

You can find something to dedicate it to.

I put this card up because Senator Kennedy made a talk a couple of days ago with a witch.

It's a good deal.

We've got less civil rights and it's reconstruction.

Well, there's a civil rights record, and there will be a special cross-cutting of much of the stuff.

We have not been building on plain rhetoric, but the performance has been quite extraordinary.

Unfortunately, all that really matters is the rhetoric.

So just talk about it.

All that matters is the rhetoric.

I strike out every time.

I know the program, I know why we had to do it, and all the rest, and so forth, but I don't think that proves necessarily that what we are doing is the right thing, that we're on the right track.

So, it would be better if the number of people receiving this sponsor went up ten times as fast.

Thank you.

that counts as much as anything as what you do as a home base, as the same as what you treat other people to do.

And these are some figures about minority plants by a grade level, comparing November 69 to May 71.

Now, don't be misled by the chart.

It doesn't mean that the minorities have been doing all the jobs.

This just shows, if you say how many minorities were there at East Supergrade in 1969, that's a number that was a very small number, then how many are there in 1971?

Well, it's 55% more.

So it's an extensive measure of how poor the performance was

With all the rhetoric, when we have come into office, and a measure of how much actually, substantively, has been accomplished.

Not doing this, where all the minorities are, down here.

But in here, where it's more difficult, and where you must find people with real ability, if they're going to work as much.

The record is...

It's really quite something.

Well, those are charts.

We have a chart book on the one we had last year.

A few more charts than we had last year.

And then, it will be available to you tomorrow.

If you want to do that, or anything like that.

It's very cool.

It will be available after I speak to you.

Now I like to come to other instructors and tell them, though I haven't had time to speak for a long time, to hear what they thought about me.

But those are kind of a problem.

These aren't going to take a lot of people for the desk.

At the same time, it seems to us, since we're going to take this heat,

We might as well spend the money and actually use this to help the expansion of the economy and to get people on drugs and so forth.

There's no point in saying we're going to have the suns and then hoarding the money and not doing anything about it.

Now, I think we all know, as people who have had officers or heads of companies or universities or whatever banks, everybody behaves the same way.

The worker behaves the same way on the machine.

The worker's mind on the machine is, they're going to let the boss know what you're going to do.

Last year, when we came to the budget closing, now this is not going to happen, I don't expect anything to stay here on it.

But last year, we came to the budget closing, and we were working to get our ways out, if you remember.

We went to the departments and the agencies, and we said, how much are you spending?

We don't think you're going to make what you say you're going to make.

Everybody said, oh, you're going to make it.

And when we got into May and late June,

That's the way they did it.

The civilian agencies just spiked right out of the bunkers.

Not only were the agencies and departments way off, our own assistant directors and OIPs doubted the agencies and departments, and they had no rest to do.

But here is the situation this year.

We have figures for six months outlay by defense and five months outlay for the rest of them.

And we can interpolate this five month outlay picture into a six month or half year picture.

Then we know of various special things that will affect the second six months differently than they were in the first six months.

For example, in the test we know that you will have roughly a rate of 800 million dollars higher payroll cost because of the payouts.

So we add that to the six month figure.

We take the six months, we juggle, and we add up some coins in case they need special features.

And that gives us another kind of an estimate of if you do the same as the second six months, if you did the first six months, here's where you'd be.

And then we compare that with what you say you want to spend, and say you can spend, and you have the authority to spend for the total year.

We have indicated outlays of 210 billion.

The outlays has budgeted and has been carried in our budget.

Our $222 billion.

$12 billion difference.

Now, that is a measure of the step-up in the second six months of the fiscal year enticed by this budget.

And furthermore, that doesn't suddenly drop off at the end of the fiscal year.

The fiscal 73 budget carries that throughout.

Now, from the standpoint of expanding the economy, of using the fiscal policy tools that we have in our hands, they're in your hands.

This is not obviously the kind of operation we want to publicize, but it is.

This is the exact thing.

When I saw this number, 12 billion dollars.

That's a hell of a lot.

Now, where is it located?

I don't want to go through department by department, but 5.6 of it is in defense.

Detection of defense budget.

Double the six-month rate, make the special change, that can come out to $70.2 billion.

That's what's been going on in the first half of the year.

Our budget application total is 75.8.

I think the people who say we don't have big enough applications for defense, they ought to think about that a little bit.

And we've been working with Bob and Al for the last two months on this problem to see, are we going to make this number, or is it too many of us?

And I might say, not just to take this money and throw it out, but do it well, and write good contracts.

And we're assured by defense that they can do it.

Frankly, we don't think they can.

We think they're going to come in low.

They say they can.

And so, there they are.

We put that number in the budget.

I interrupted my famous president on this subject just a minute, because there's another problem that gets done here.

The people that the president was talking about, who think we're not spending enough for defense, have had the word passed to them, quietly, that the president is the one saying to spend this money, and they're seeking instructions out of the Department of Defense.

The president doesn't want the money spent.

Det er en avslutning i det stedet.

The 5.6 has been 6.7, as the church wall implied, in the civilian agency.

6.7 billion dollars.

And all I can see is her standing over there like this, talking about what this can do to the economy.

Spending, spending, spending on something that's constructive.

And you've all said that you've got your programs, that you desperately need them, that you really want to have twice as much,

And so here we are.

And so I think that there is a strong message here about that we can't spend more than we're authorized to spend, of course, but we can sure spend that much.

And we're a long way from doing it right now.

Thank you very much.

All repairs we've been going through in the 1973 budget, and in a leap year, they will not have any effect whatever, because we'll be very lucky to have any of that enacted by September.

Maybe August, but probably not September, and none of it will get out.

So this amount that's authorized in 72, that's part of this big deficit that we're all going to be explaining, and takes an awful lot of heat, and will require an awful lot, at the very least, of some good.

And there is that kind of a margin that George was mentioning, and if it doesn't get out by June,

I don't know.

You're talking about the shortfall between the expenditures that would be achieved at the present rate percentage of the balance in the year versus what was anticipated to be total outlays for the year.

You're not comparing rates to expenditures without a gauge.

It was published that potential expenditures...

What you are authorized to spend, what you have the money to spend, the Congress doesn't have to do anything about this.

It's all you.

So that is what we're comparing with at least.

Figures are not the figures that we set on the system.

They have the figures that emerge from the budget struggle we've just been through with these departments.

Which, as you all know, is not only what are we going to do about fiscal 73, but giant with fiscal 73.

You say you have money to spend, but it's an appropriation, it's an authorization to spend.

But if it's appropriated in terms of building, for example, we wouldn't have shown outlays of that appropriation in the year.

We all have that.

It's that that got us, that really set us up to start looking at this problem from the very end, and very hard, summarized it very briefly this way.

I think that we, I think that we've been a part of the political conversations about it through the era, looking at it from the standpoint of the economy.

It is now that the economy needs to

We're not sure if they will be able to send us in July, August, September, or last year.

From a political standpoint, it doesn't make any difference what you do in July, August, September, or last year.

Until much later.

But right now, given the months of January, February, and March...

Thank you for watching.

If you don't really have the thing on track, that means that we haven't given the economy the necessary impetus that it needs at a time that is already moving forward, and that would then perhaps allow it to generate its own.

Because it is that that has created this deficit.

Not an increase in spending.

The increase in spending can come up.

But, if we look at our full employment revenues, we realize that if the economy were moving at full employment in 72, of course, we'd still miss by some.

Minimum, I think, insofar as full employment, I think a great part of that would be really decent direction over our own.

But beyond that,

And so, when we say to you, spend all the money that you have appropriately, we dare not say that you're going to spend this and make you a big spender, you're going to be responsible for a bigger deficit.

Just the other opposite is the case.

If you don't spend it, your failure to do so is going to mean that you haven't done your part in using this critical tool

to give the economy impetus that it needs, along with our monetary policy and the other things we're doing, to reach full capacity again.

Once we reach the full capacity, then we solve the problem of our budget deficits, not only in terms of full employment, but in terms of conventional budget stocks.

If we don't reach it, we're just going to continue to have deficits.

In the conventional sense.

Because the economy will always be operating on a golden basket.

And we can easily see that our revenues, I mean our expenditures are just going to grow.

So I would say that we want a monthly report agility from your office, from every department.

There he got off their tails, I mean, at the department, I just didn't forget one, all up and down the level.

I mean, it doesn't make it, maybe like $50 million a little program here or there, it doesn't amount to anything.

But we saw, for example, that when we had this question,

We're going to take a wrap for a big deficit.

It's fair enough.

If we were running out, we would wrap that for a big deficit.

Ours is here.

It explains why.

On a deficit, half of it is added on to a full capacity economy.

That's inflation.

The deficit takes up the gap between full capacity and lack of full capacity.

It's not inflation.

That's the restart argument.

With the private eye, we're going to take the right.

Having taken that right, stating that goes down in dollars, tens of millions, hundreds of millions, in the next four or five days, between now and the end of the year, doesn't mean one damn thing.

As far as the economy is concerned, so therefore it is good for the country to spend it as fast as we can, and I don't mean to go into a lot, but wait a minute.

You get back, you talk to my elements, and this is no matter as well as anybody, and you understand how to do it, and the main thing is, in January and February, March and April, you get it back.

It would help the economy at this time of the economy.

And, of course, it might help the economy of the land that could help us to live.

The latter doesn't hurt you the most.

It doesn't hurt you.

A professional job of telling this story is only to start on small segments, maybe 15 minutes in length, maybe an integrated segment for a half an hour program, and to be used...

The average Republican worker

He goes around his neighborhood and answers these questions or these accusations.

Let me just say that we have a problem here.

It's extremely difficult.

It's extremely difficult for basically American citizens.

which most Republicans do go out and brag about spending money.

That's our problem.

I mean, I, a moment ago, when I referred to the food standard, my problem there is not spending money.

My problem is that I see it as a

But there are a lot of people who think we ought to be doing something else.

We've got to brag about it.

Civil rights.

How much we've done in these areas, I mean, they talk about the civil rights budget, but the civil rights budget, of course, has been enormously increased from the civil rights budget.

Yes, sir.

But my point is, you're going to take the heat for the devastation.

Also, there's a lot of folks out there that want these programs, and we are stuck with them.

Some of them we offer, and all of them we have had assigned because it will end up with the Congress, and now the thing to do is to make a virtue of necessity.

Just go out there and have a ride about it from the treetops.

Even the conservatives would like the answers to, we got back into London.

There are a lot of people here because these are the questions they're always asked.

Why aren't you spending more?

Why aren't you doing something new?

The idea that we aren't helping the poor folks.

What about the kids' nutritional threat?

My God, there's triple the amount for nutrition.

Don't worry about it.

Don't say it.

It's done now.

Our democratic friends, I'm speaking now about, I would say, I'd rather we got to the liberal group.

Our liberal friends sometimes spend less and enjoy it more.

That's our point.

That's what we've got to do.

We're going to spend more now.

Let's enjoy it.

And let people think we really love it.

You know, that's the thing we've got to do.

We've got to be very selective when we go out there.

Thank you for watching!

And we'll see you all tonight.

I was expecting to stay here, but my wife is out here anyway.

So all I say is that we appreciate all of your hard work.

We're stuck with the problem.

We're doing a lot of very good things.

And the thing to do is to be proud of it.

And to hurt each other.

and saying those things so often, so often, our music to the ears of that small, tiny audience that you may be speaking to, that doesn't make any sense of what we're doing.

So,

Thank you for watching!