Conversation 107-001

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The fact is that we now have evidence of a very strong recovery underway along with a substantial reduction in rate of inflation.

of the rate of inflation, which had risen to about six or a little more, six or a little more per cent per annum.

In early 1969, when we came in, that had been cut by about a third by the time before the New England Oncology was adopted.

by a half to below 3% for the first time in about five years.

We have a year where the rate of inflation as measured by the consumer price index is less than 3%.

What consequence of this slowdown in the rate of inflation, along with other things going on in the economy, the increase in productivity, the increase in hours of work, reduction of taxes, the increase in workers' real wages spent, a chart that shows this.

Very dramatically, it's one of my favorite charts in the summer report that we're going to put out at the end of this week, showing what's been happening in the real, tangible weekly earnings.

Employment, of course, has been a major concern.

Employment has been a major concern for several years.

We now have had an increase of total civilian employment of 2.5 million in the past year, 4.5 million since the beginning of the Nixon administration.

Yeah, one of the most pleasing aspects of the recent statistics was the decline of the unemployment rate, which had hovered for a long time in the neighborhood of 6%.

It finally declined to 5.5% in June, which was then

greeted by a number of our observers in the press as being the statistical fluke.

Then we had another five and a half percent in July, which kind of put the end of that particular debate.

I read in the paper last night that we were no longer reading that in the press.

We've got to be careful about that.

But anyway, it's very gratifying.

And I read, I did read on Sunday now that the rate is hovering at 5.5%.

It's going to happen in two months.

It's going to have a short hover.

In the second quarter of last year, we indicated that total output, which is the best measure of total output, total real GNP was growing at the rate of almost 9%, the highest since 1965, so there have only been ten quarters in the whole four-period in which the real GNP rose as fast as that.

I want to point out that in the first half of 1972, the annual real net income per farm was higher than in the previous year.

Now, there are certain things that have to be said in qualification that we do not expect that we're going to have a good numbers as we've had in the past.

in the past month.

We do not expect that we will have another quarter in which total output rises by nearly 90%.

There are only two occasions in the post-war period when we've gotten two such quarters in a row.

And we don't expect that we will have

Another month with the river price index rising by only 1% to 1% as of June.

And we don't expect to see downfall rates declining at this rate over the past couple of months.

But we do expect to see continued very high rates of economic growth, higher than our normal rates of growth.

We do expect to see continued reductions in the rate of unemployment, and continued moderate behavior of the Consumer Pricing Index for the remainder of the year.

The two main clouds on the horizon, I suppose the first one and the long-run one, the short-run one, is the price of food.

increasing higher prices of meat to appear in the

consumer price index for July when that comes out later this month.

And further price increases in some items, the chickens and eggs, for some months ahead.

However, we do now see that the meat prices have come down in wholesale, and we have about two weeks of experience now with declining meat prices at retail, as reported to us by some of the leaders.

And we have every reason to think that there will be some further decline in meat prices as the cattle, as everybody tells us, are out there and finally sold to the market.

So that's our problem is the food price problem.

In the longer run, looking ahead to 1973 and beyond, the big issue is whether we can avoid the revival of the inflationary spiral, the inflationary pressure resulting from excess demand and a runaway budget.

whether we can avoid a revival of what happened between 1965 and 1968.

I think that's what the big economic struggle is about today, and that's what the president's effort to hold the budget people in the ceiling is all about.

Because if we have to go through this exercise again, I think that we will find it even more painful than last time, because the credibility of the government in dealing with the problem will be even weaker than it was three and a half years ago.

Now, I would have to say a few words about the McGovern White Paper on the economy.

I think probably the simplest thing to say about it is that it will not win the Nobel Prize for Economics or for Literature.

And the Gospels are a piece you'll know possibly before.

It's...

And we can get into a shouting match about these statistics.

The facts are, of course, that things are much better than they were, but less good, at least in some respects than they have sometimes been.

So we can aim for better credit for things being better than they were a year ago.

And Democrats blame us for those things.

They're not as good as they once were.

And then we blame them for leaving the economy in a mess in which the present situation was the best it could be achieved in this kind of argument.

interminable and unresolvable at that level, unless there's some understanding of what is par for the course and what is the reasonable expectation for an economy starting with the conditions of 1969.

and what proper policy would have been of circumstances.

And what I've decided from nitpicking the statistics in my governing statement, what I think is most disappointing, especially for a man who claims to...

to discuss the issues, is that it's utterly devoid of any historical or policy sense.

There's no appraisal of the economic situation with which the administration began, no recognition of the raging inflationary boom that was underway.

There's no awareness of the painful implications of the inflationary process once it has been started.

And it seems to me that at a time when one of the chief economic questions before the country is preventing the beginning of a new inflationary spiral, it is shocking that a presidential candidate should be so ignorant of the lessons of the last one.

Also, the White Paper is almost totally silent on the question of policy.

While attributing all the difficulties of the past few years to Nixon policies, the paper specifically criticized only one of those policies.

That was a decision not to try in 1969 to revive the arm-twisting approach to price control, which had been tried unsuccessfully by President Johnson and expanded in 1966.

Aside from that, there's no indication of how Senator Gabbard would have done anything different or would do anything different now with respect to the future.

And it seems to me that failure to learn from the past and unwillingness to plan for the future are the outstanding qualities of this regime.

However, I will comment on some of the smaller errors.

Senator McGovern's own statement that came out was a white paper covered by a press release, the press release being identified, and Senator McGovern's words and the rest being unidentified.

Senator McGovern's own statement issued that the White Paper says that, quote, Nixon has thrown almost 5 million Americans out of work, end quote.

This is just about the opposite of the truth.

As you might say, he's thrown about 5 million Americans into work.

Civilian employment has increased by almost 5 million during the Nixon administration.

The rise of unemployment, as his own White Paper shows, has been much less.

And, in fact, the present rate of unemployment is a little less than the average of the Kennedy-Johnson period of the years up to the buildup.

And the unemployment rate today is almost exactly the same as...

The unemployment rate after three and a half years of this administration is almost exactly the same as after three and a half years of the Kennedy-Johnson administration.

And they did not face the problem of unwinding a war and inflation.

It is a great deal of papers devoted to discussion of the inflation problem or assertions about the inflation problem, but it's very interesting that the Consumer Price Index is never mentioned or quoted or cited or any numbers given about it.

The facts are, of course, that the Consumer Price Index had been rising very little at 1.2% from 1958 to 1964.

then doubled by 1966, doubled again by 1968, and in early 1969 was rising at over 6.5%.

This acceleration was then stopped and reversed, and since August the rate has been 2.7%.

And a presentation of the facts or chart of these facts would have shown that it was the Nixon administration that checked the Democratic conclusions.

The white paper places a great deal of emphasis on food prices, which is fair enough, even though Amanda has not lived by food for long.

The paper points out that food prices have risen by 15% since this administration took office, then proceeds to lift what it calls eight examples.

hamburgers, bread, coffee, etc.

By coincidence, each of the examples rose more than 15%.

Since the average went up 15%, a candidate devoted to truth-telling could surely have found a number of things that went up less than 15%.

Also, oddly, in Senator McGovern's own statement, the only food that is specifically mentioned is coffee.

A cynic has suggested that he kept to coffee because it's the only important food that does not represent any kind of the American farmer.

That can't be the reason, because there are a few American coffee growers in Hawaii, which has three electoral votes.

The Senator said that we have got to cheat this, or we have tolerated this

increase in prices.

But the farmer's income has gone down.

The farmer has not benefited as well as I said in my opening remarks.

The real income per farm is now at the highest level in history.

And, of course, there has been a considerable rise in farm prices since the advent of this administration.

It's a good deal of paper devoted to the old...

pro-business administration versus the pro-labor administration, and the charge that the new economic policy is discriminatory against wages in favor of profits.

But that, of course, is belied by what's happening to real wages, by the fact that wages have been rising faster than prices, and for the first time in a long time, as this chart shows, we're

workers getting a real increase in his income at a rapid rate.

And on the profit side, although there has been some improvement in profits, the ratio of profits to sales is now lower than a

except for the last couple of years, lower than at any time in post-war history, certainly lower than during the Kennedy-Johnson administration.

And while we're having a gain in profits, which is normal and desirable in a business recovery, that gain is not as large as relative to the rise of the GNP as in any of the previous post-war recoveries.

The White Paper goes again over the whole business about the 100 people who did not pay taxes on their high incomes, a subject which has been thoroughly analyzed and explained in various speeches by Secretary Eddie Cullen and others.

to make the assertion that the average American's taxes have been increased under this administration, where it's quite clear, these figures were in the budget, that the federal income tax on

Well, the total federal income tax is $22 billion less than it would have been under the rates in effect when the administration came in.

And for a family of four with an income of $5,000, for example, the federal income tax has been reduced 66% by progressively smaller amounts as you go up the income scale.

There's some rather...

unclear remarks about our policy with respect to the dollar.

It's unclear whether they think it's a good thing or a bad thing that we suspended gold payments and allowed the dollar to decline.

I think it's fairly described as...

the first decisive constructive measure in the field of international financial policy in this country in 15 or 20 years, and could have been recognized as such.

Well, anyway, I think that you get a general flavor of the paper below from what I've said.

We are putting out the Council of Economic Advisers is putting out a report to come out on Sunday

which contains a testimony we gave before the Council of Economic Advisers, somewhat updated, and then a quite substantial supplementary paper in the statistical appendix, and this is all preceded by an introduction by the President.

I think you might find it useful as an explanation of where we stand in our view of the current state of the economy and policy problems before us, and I think it's a

indication of the Syrians, with which we take the account probably.

That's a very good point, which is handled in one paper.

There are questions.

Mr. President, may I ask a question?

Sure.

I hate to be too parochial, but I don't know if any other states have this experience, but can you help Gary and me explain what happened in Michigan last month?

Unemployment went up over 10%.

It's really difficult to do it alone, particularly in jails and winters.

Car sales, problems.

I think we've got a different team of people taking the survey.

I'm a part of the growth.

Five more hours.

It went up over 10% growth.

with car sales and truck sales, you just can't believe the figures.

It's particularly hard to explain the view of the fact that when we were selling the people of the auto X and X and X, we were using figures of how much sales, how many jobs were being created by so many new sales, so many additional sales for cars.

This has just not happened, I think.

The automobile companies are just working people overtime.

instead of hiring people, which is putting a lot of, you know, increasing pressure to increase the penalty for overtime work if they continue to do that.

Well, of course, they are getting an enormous gain in productivity.

That's just something we wanted for them.

Take a look at Michigan or maybe have somebody help you with that.

I think one answer is they have minimized model changeovers.

So you don't have to tool and dive people so heavily engaged like we formerly did.

I mean, they just don't make many changes in parents or this or that.

The tool and dive industry, I think you'll find, is our area where we're doing less well than one person's.

Well, I agree with Bob, but it gives you a bunch of other statistics.

In my part of the state, unemployment is 7.8, and you have three General Motors plants that are working overtime, and it just doesn't make sense.

They wouldn't be selling any cars at all, and their profits wouldn't be, you know,

Herb, I'd like to take a question.

I'm not reading the listings, and rather than talking about 5.5% unemployment, what is our figure now?

We had 82.6 million for the highest in the history of the United States.

Is that a big holding or growing?

A lot of persons employed.

Well told.

Total civilian employment in July was $81,682,000, $81,682,000, which is an all-time record.

Who would you have to figure how the caps got ahead of the users before they could be available to an economist with one of those qualities?

How many young people would have been there?

Not only armed forces, but many, many.

Well, the reduction of people from the armed forces.

I would respectfully suggest that this is something that irritates the comments of this person.

Thank you.

So I think we should point out Herb's circumstance and make it like we don't overlook it.

Well, first, I don't know about the paper, but the way it was like, I've got to read the speech.

The average person would believe that unemployment went up by a million under this administration.

He put it by a million people that have been thrown out of work under this administration.

That is just a lie.

Let's understand what actually did happen.

What we find is that at the present time, at the present time in the United States,

We have five and a half people.

We have five and ten.

The rate of unemployment is five and ten percent.

That is the lowest figure that we have had.

That is a figure which is lower than the average unemployment during all the peacetime years of the previous administration.

The average of the peacetime years of the Johnson-Kennedy administrations was five and eight-tenths percent.

It was sixty-seven-tenths in 1961, and sixty-eight-sixty-one in the sixth.

It came down to five-sevenths in 1962, and then it went up to five-fifths, and then it went up again to five-sevenths, and my point is about five-eighths.

So what we're really talking about here is this.

that we have a situation where we have unemployment.

We would like to have it lower.

But the important thing is that that unemployment, the unemployment figure is, or the employment figure of 82 million jobs is

does not have a factor of two million Americans in the armed forces, including 500, including a half million in Vietnam, that the Johnson and Kennedy administrations had demonstrated that the war was going on.

My point is, if I could suggest a political point, which all of you know, which we've often talked about around the world,

The economic issue generally is an issue for the libs.

The peace issue is generally an issue for us, conservatives.

I say libs because we're going to talk to Democrats, but it will be too partisan.

My point is that the reason for that is that

The liberal Democrat usually wins an economic issue because whatever we do, no matter how good things are, he says, we'll give you more.

And we as responsibles can't do that, and we don't do that.

Whereas on the peace issue, we find that over and over and over again.

A war comes, we wind it down, or we get it out.

Or, more importantly, we build the structure that avoids it.

And that, of course, is what China is about, what Russia is about, what's flying down Vietnam is about.

The critical point is this, that there are over two million Americans who were in the armed forces, including a half a million who were in Vietnam, being shot at with casualties running as high as 300 a week.

One week was over 500 during campaign.

That was the situation when we came in.

Now, we have two million less in the armed forces and in defense-related industries.

which of course also gives the line to another point in the game on the other side that's been suspended for two months, and higher than Virginia's.

We've reduced that by two, and still have 100 points.

Now, at a lower level, not much lower, but slightly lower than the average of the peacetime years, the only peacetime years that Johnson-Kennedy administrations have,

You also have to remember that in terms of peacetime years, the only time, and this is a real knock-out event, that's to be said, the only time that the previous administrations, our Ohio post-administrations, have been able to get unemployment down in the 4% range is either during war or preparing for it or running it down.

Do you have the time, Judy, to comment on that?

It's a war to make a...

Without going back and finding a new deal, everybody thinks that the new deal had some of its points and was necessary.

Everybody thought that it ended with the so-called repressions.

It was really the repressions.

As people forget, that is.

In 1939, there were 20 million unemployed in the United States.

In 1937.

That's right.

What I'm getting at is make the peace issue at the time you fight the economic issue.

The peace issue is ours.

The economic issue they want.

Now we don't mean to be defensive about the economic issue.

We've done a good job.

But we always have to remember that on the economic issue,

people are never satisfied i mean nobody's ever going to be satisfied with the creative inflation it's not going to be more than the other one or so forth and so on and we all understand that and when you have the irresponsible on the outside they'll say we'll have a program that will provide a job for everybody

And some of these things, of course, we can do.

Be sure to hang in on this unemployment.

They can't get away with the idea that we increased unemployment right by a figure.

As a matter of fact, on the unemployment front, we have to realize when it comes to unemployment or full employment, jobs without war, we have a bribe where the hair is short.

And I say it to him every time he is the president.

Government is not under their administration.

Government is not the employee of the Constitution.

War is the employee of the Constitution.

That's a little rough.

I said it before.

One quick question I'd rather request, Chairman O'Malley.

About every six months in the last three years, I've had the exclamation of these hundred men who don't pay taxes.

Not being a hundred rich men, not being one of them, that's certainly interesting to me.

So six months later, I forget what the explanation is.

Is that going to be included?

Can we get it from the staff or the finance committee?

It's been written up for half a dozen times, and they can supply it with a copy of Eddie Cohen's speech, which outlines it consistently.

This tells why they don't pay the tax.

That's right, yes.

One is Stuart Mott, the government's biggest campaign contributor.

How many representative and reduction personnel are associated with it?

Of course, it's a process.

Well, Mr. President, I've got a figure that's higher than that.

It's higher than that.

Somewhere near five, I think, with the defense-related industries and the support industries that we have to keep people going.

I think I've heard a number of support.

I think Mel probably said that you get...

My inclination is to give a solid figure that you know you could deliver.

Two million and one is enough.

Because if you had two million and one, I'd put it another way, if the two million and one

If there were any armed forces at it, producing arms for the war in Vietnam at the time we came in and started to wind down the war in Vietnam, if they were still there, unemployment would be less than 3% of the present time.

Do you want that cost?

Do you want 300 a week being killed?

Sure.

Do you want to go to that?

We're going to have it.

We're either going to have low employment without war, prosperity without war.

It's a very different matter.

Mr. President, we do have to take a constructive position on tax reform.

Yes, sir.

And not put ourselves in the position of trying to defend wealthy people not paying taxes, which is an easy thing to do, because statistics show that we do have a very progressive tax system now, and that, generally speaking, wealthy people are paying tax taxes.

But I wonder, in the course of the campaign, there will be some talk about that.

I really think it's an easily flip-sawed issue by the demagogues.

But we've got to be awfully careful not to identify ourselves with the wealthy.

The status quo.

Yes, and the status quo.

But I'm working on it now.

It's a great thing.

I think that would be helpful if we can delegate the law to get a responsible tax.

I can't remember whether the picture is 13,000 or 19,000 people with incomes over 200,000.

15,300 pay taxes.

15,200 pay taxes.

100 don't.

Do not.

And the average is 177,000 per taxpayer.

So it amounts to 59% of your taxable income.

The other thing that I want to comment on is that if you decide that you're going to fix it so that all of these 100 will pay taxes and you're going to change the tax law according to them, you're going to take away many privileges from every other taxpayer, every taxpayer, most taxpayers use one or more of these devices.

to protect themselves, and so I will .

Well, that's the kind of thing that has to be made, but you have to handle it very carefully, because otherwise it appears that we're lining up with the wealthy in favor of not getting these hundreds.

Well, I deal with symbols too much.

I'd respectfully suggest that that's something that we will, of course, be prepared to have some sort of an action speech.

But a more effective method is to go to the next subject on the agenda here, which is whiteners, which I hope you will get rather than get edged down in the questions.

Did I ask one of y'all a good question?

That is this, and that is what we are facing with the

enormous, across the board, increase in taxes for every American.

Now, there was an attack then for the fact that there was a tax increase for everyone.

Because you're the tax, you're the tax, you're the tax.

This is the tax of those $100,000.

And so if they can do that, fine.

Just take everything like that.

You're still going to have, because of the new spending programs that they have already entered in, an across-the-board tax increase, which just to take a number out of that, for anybody earning $10,000 or more, $1,200 per person.

Pretty, pretty big round.

But anyway, go ahead, your question.

I'm sorry.

I was looking out there and got some pictures about how much more, how many more people have worked since the next administration and so forth and so forth, where one of the most effective

ways of expression I've ever heard.

I heard John Culley make a speech somewhere when he said, you realize that there are X number more people at work in the United States than ever before at any point in our history.

Now, do we have that figure?

Well, I think that the numbers that you, the number of increase since we came in.

Well, it's 4.4 million.

All right, 4.5 million.

From January of 69 to July of 69.

That is higher than any number of people that are working in that department.

It's high in World War II.

Oh, it's high.

It's infinite.

Of course, their population is smaller.

Let me put it another way.

Another way that you might make it is this.

Since we have come here, that...

We have added 4.5 million peacetime jobs in America and reduced 2.1 million wartime jobs in America.

Now, that's not a bad record.

We have added 4.5 million peacetime jobs in America and reduced 2.1 million wartime jobs.

More jobs.

A couple more jobs.

They are.

You had to increase by 7 million or 6 million.

A civilian appointment went up 4.5 million.

A civilian defense appointment went down 1.5.

So a civilian non-defense appointment went up 6 million.

civilians who spent some money went down one and a half, and military, that's in the armed forces, went down about a million.

So that's two and a half.

And so if you say four and a half, four and a half, my number was two.

But my point is, here is what we have done.

We have increased peace jobs by four and a half million.

We reduced war jobs by two and a half million.

That's not bad.

Because we have to be ready to take on the war.

Herb, let me say one final thing about her role.

I know many of you realize how effective he is and so forth.

and also his honest facts.

But anyway, but Kerr cannot and should not engage in direct political people and must not do that.

He can, of course, go on programs and ask them questions.

He can, of course, do his life in economic love.

Also, his office can furnish

Just straight facts for you.

As far as the rhetoric is concerned, you've got to sort of embellish it.

That's really been done because he has to retain his own credibility as the president's economic advisor, and we don't want him to do this.

As an earlier, I heard, I saw something, I don't know, some speech was made, something like that, but I noticed that some of the other people were using the nextonomics thing once they, opposite numbers of that, what should we call it?

Well, they're having two suggestions.

I don't know what it was, obviously it wasn't the government.

Someone around here missed the term Reconomics.

It's a little strong for me.

All right, we'll go on now.

The cap will follow up now on the other side of the coin, what the budget would be.

what we're looking at in terms of the tax on the other side, and what that insurance tax increases will be.

Mr. President and gentlemen, I got tired of our budget, so we started looking at the McGovern budget.

And by the most conservative terms we can use, and we're always pretty conservative in our office, why we come up with a particular, definitely everything, including the defense cuts that he's talking about trying to make.

The McGovern budget for his first year would be $144 billion over the present programs.

That's a nice sign, but I'm not sure everybody understands.

What I asked Kevin to do, I said, now take all of the defense cuts that they're advocating.

Take all of the new spending programs that they're advocating.

Only those, not the fuzzy ones, but the ones that you really know are there.

factor it out and come up with how much of an increase in the budget would another program result in, and it's $141.

Now that's very conservative, Mr. President.

We've eliminated duplication, and that's the platform alone.

If you go back to his May and June speeches when he was talking about $1,000 per person, you'd have to add another, and again, it's a net figure.

It's not the $210 billion because there's some subtractions from the other one.

that would add another $185 billion to it.

So if you use the platform and the other, the net is $329 billion over it.

The program that he originally advocated here, and so I don't say that he changed it.

I'm letting him say that.

But the program he written, he's for $1,000 per person, which would mean an increase in taxes for everybody over 12 or over 10.

What we're saying is that without that money,

Just taking what they funded, what the press said was very moderate, a very substantial moderation of this more extreme ideal beforehand, which was included in the platform, is an increase in the budget of $144 billion a year.

If you go back and include the $1,000 a person, it's an increase of over $300 billion a year.

Is that correct?

$329, yes, sir.

That increase over the 73 budgets.

So that's an increase over the existing in-place programs, ours and where we are.

Where we are right now.

That's more than ours.

Because he doesn't suggest stopping anything.

So if you add our present figures, you've got a horrendous total amount.

But what would you add to the trail running of... Because I'm to the spending ceiling, I would add $250,000.

That's fair.

And that would be $3,000.

Now, come to what that would mean in terms of the tax money.

The enactment, the enactment,

of the McGovernite program.

would mean an increase in taxes of how much per family of water?

First, how much overall, what it would mean for family of water?

We have to make some assumptions here, and because I only became an economist recently, it's easier for me to make some of these assumptions.

But one of them is that in order to get that $144 billion, you'd use the same general proportions that we have now, so that personal income taxes...

would have to go up by $125 billion.

Corporate taxes would go up by about $20 billion.

And that would mean that a family of four with a $12,500 income would pay $1,272 additional taxes, or a total of $2,300 a year in federal income taxes.

a family of 9,000, a family of four with a 12,500 income.

At the present time, they're paying about $1,038.

They have to pay $1,272 more, and we'll send all this around.

As a matter of fact, if you want to bait so that you don't just say, well, a lot of people, 12,000 is an awful lot of money.

Couldn't you say...

the average family of four in America.

The average family, depending on the median income, would pay $1,000 a year or more in taxes.

Now you've got a number of people who can do it.

The average family or more would have to pay.

It depends on how they factor it out.

But in some areas, you've got to get $1,000 for every family, for the average family.

All of that.

It's New Texas, too.

Family of four was $9,000 in taxes.

four people with a $9,000 income would have to pay $587 a year more than they're now paying.

You see, median income now is not nine.

It's over ten.

It's ten-five.

So if you get a median income, you have to pay $10,000.

You get a $10,000 split.

That's not bad.

That's not a thousand percent.

Yeah, but you see, if you get a thousand percent, or a thousand percent,

People talk about $1,000, you get $1,000 in person, and you're going to have a tax increase.

Except for those on, you can put it this way, the average working family of four, which leaves out those on welfare, the average working family of four would have to be $1,000, and that just seems to be it.

That's contrasting with our own record, where the $10,000 income for a family of four, we've cut income taxes $320 over the 1969 amount that we're getting there.

So you've got a very direct contrast, and even though Social Security taxes have gone up some, there still is a net savings of a substantial amount, because the family of four

before with $10,000 was paying $93 more in Social Security tax, but we cut the income tax to $320.

So that's a real nuts.

But in order to get now, it would be because if you say to the average family, well, you're going to pay $1,000, in fact, you're going to get $1,000.

Well, that's a lot.

But that figures, see what the numbers really mean, because they're horrendous.

That figures the $144 billion.

That's the moderate budget.

If you take his $1,000 program, you're talking about double that.

So you'd say the average family would get $1,000 and pay out $2,000.

Right?

Yes, sir.

Well, even a little steeper than that.

We don't need to make any steeper than that.

Because then you can say, and then they argue about it, you can make a little statement and say that's a little too high.

You can say the average family of a foreign American, the average working family of a foreign American, under the programs that he has advocated and included in his budget, conservatively would have to pay, have a tax increase of $2,000.

Here, of course, the person gets $1,000.

There's nonsense very steeply, too, here.

It's $3,000 more a year, which is quite a haul.

Well, now, some of the things that are in the program, of course, in the platform, rather, are completely unpricable.

We put prices on it.

A guaranteed job for all.

The government is the employer of first resort.

And this would increase public service employment.

We are estimating a little over $12 billion on this.

And the interesting thing about this is when you get all through doing that,

your statistical picture wouldn't have changed at all because as you know public service employment doesn't count as an employed person until he's been there a year so you put out 12 and you still have uh presumably a five percent figure except it would probably be a little more because something would happen to the rest of the economy uh the uh next client would be to ensure

and replace a welfare system to ensure an income of substantially more than the poverty level.

That would bring everybody up to poverty, at least we are assuming, and that's why I say these are conservative estimates, and it would take over full financing, federal financing of the entire program, which we're pricing at $25 billion.

Substantial increases in the federal share of education.

We don't know quite what that means, but just the cost, a few cost savings in position,

We've been trying to equalize payments between states.

Hear what they're going to do.

They're going to take over the responsibility.

The state legislators now have to say to them that San Marino schools are no better than those in Watts.

Colorado Springs is no better than those out in the western part of Colorado.

They're going to lower the retirement eligibility age to 60 for all government pension programs.

That's a little over 5 billion.

Full federal support for qualified nursing homes.

In other words, we would pay the full cost of all nursing homes that are qualified, 3 billion.

a universal national health insurance system covering all Americans regardless of the amount.

We're estimating 60 billion on that basis.

This is year 144.

Yes, sir.

This is all in one program.

Full funding of all programs.

That's to say that once the authorization is passed, the full appropriation after that amount would have to be passed, 27.6 billion.

Assist local transit systems to meet their capital and operating needs.

We don't know what it means by assistance, but we're saying $400 million on that, just to start out.

Full federal funding for breakfast and lunch programs for all schools regardless of need, $4.7 million.

And guarantee access for all students regardless of need to loan funds.

Those are the biggest of the priceable programs.

Then he's got, we have a couple of pages here of things you just can't price because the language is so fuzzy.

And it says, support economic development programs to ensure the growth of communities and industry in lagging parts of the nation.

Assurance that the needs of society are considered when the decision to close or move any industrial plant is made.

And it can make up the income loss to all workers and the revenue loss to communities.

Develop automatic instruments for protecting the livelihood of Americans who depend on fixed income.

Pay Social Security needed increases out of general revenue.

Maternity benefits made available to all working women.

Full funding of the Ethnic Studies Bill to provide funds for development of curriculum to preserve America's ethnic mosaic.

The distinction should no longer be made between veterans who have seen wartime as opposed to peacetime service.

There's no way of pricing.

And so your 144 is, as I say, I think a very, very conservative estimate.

Could we ask her one question?

How much have we decreased?

Taxes, in other words, assuming the same level, so essentially the commando offices is what, 30 billion or something like that.

Is that 21 billion on the individual?

22 billion on the individual.

All right, how about the corporate?

No, that's 20, what is it?

I want to get the comparable figure to the 144 increase.

Let's put it this way.

Since this administration has come in, we have reduced income taxes by $22 billion, right?

Is that right, Johnny?

That's what it is.

Well, if you kept the same rate, that's about what the tax would have been.

That's what I mean.

That's right.

We have reduced the same rate.

In one year, in one year, the McGovern program, without the $1,000 gimmick,

without the $1,000, would increase income taxes by $144 billion, which would be a massive increase in taxes.

And what are we going to do about the economy, of course?

You take that much out of the economy.

Yeah, right.

Now come along with your $1,000 thing.

You put that in.

That's what the $1,000 on the net would add another $185 billion to this, or a total of $329 billion.

So the $1,000 program adds $185 billion more.

That's what we have.

What was the total?

The total is $329 billion.

The platform includes a substantial increase in welfare.

We net out the platform's increase.

And that's what pulls it down from the $210 billion down to $189 if you use his $1,000 numbers.

All right, there you go.

But if you include, the thing to do is to take the $1,000 on the platform.

$1,000, he can't get away from that.

What do you get with the $1,000 and the platform?

$329 billion more than we're now spending.

All right, so the big point is, forget the spending.

We have to have a $320 billion tax increase.

That's what it is.

And people really want to see the enormity of it.

And that's it.

This is the promise.

If you enact a government program, including $1,000 a person, it's great money.

You say, well, maybe I'm not short of $1,000.

All right, how does $200 billion strike you?

Today only.

There's one other point on our own tax reduction that I think is worth mentioning, certainly in many areas.

And that is that under this administration,

nine and a half million families no longer have to pay income tax, who had to pay before.

They've been taken completely off the road.

Well now the other, in terms of the tax reduction, I suppose nobody's going to believe they've ever had it.

Ninety million people have been removed.

And I'm not saying it's bad, it's much better for taxpayers, basically, which would mean bad.

The second point is, as Herbert had mentioned, in the lowering of brackets,

There's been a decrease in income tax of 66%, right?

But even take that, the follow-up middle there, it's 16%, isn't it?

Well, 10,000 family of fours have the income tax reduced 26%.

Well, in the 10,000, it is 26%.

15, it gets down to around 16%.

20% of 15,000.

Again, the Social Security Act, it drops about another 5% to 6%.

10,000 would be about 20% for a 10% vote.

Again, I think you asked, are we going to have this kind of material, documentary form?

We can put this together.

I could say one, perhaps, suggestion.

You've got these guys from the House and Senate that really have got the time.

read these very responsible figures that you have heard of all of a sudden.

But if you could just put one little sheet on the front, and I know we've tried this on you, but I'd just say it, but say it bluntly and correctly, and then in the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the,

If you add in $1,000 in it, it would require an increase of $320, whatever it is, by $50,000,000.

a massive increase on it.

To take an example, it would mean that the average man before would have an increase of $2,500 a year in his taxes.

I was scared the hell out of him.

The whole business here

to state that there isn't anything for nothing.

You know, when you read those things over, I was thinking about the veterans.

A lot of the veterans organizations believe that non-service connected disability should be treated like the rest.

A lot of people think the federal government ought to take over all nursing homes.

These are wonderful things.

They have a lot of appeal, a lot of money.

If you ever argue about what they're for, you're dead.

What we, what they will be arguing about, help the poor, help the old, help the veterans.

What we have to do is to say, vote for Montgomery.

It's a vote to increase your taxes by so much in order to help a bunch of people in welfare.

If you put it that way, then get on with it.

But if you ever get to arguing the merits, forget it.

Mr. President, could I clarify one figure?

Yes.

the tax of the family for under the government budget, the 300 plus billion increase.

What would that be?

We have, the president said it, and I think that it certainly is double, and it's probably a bit more than that.

It's more than that.

It's at least $3,000 a year, and it's $12.78.

1,272 for a family of 12,500, about 1,000 for a family of 10,000.

And if you double the requirement, it would go up to- Two and a half double.

Yeah.

Basically, you're 184 to 320.

We can run it down.

Right.

But we need to get $1,000 in each person that's paying.

All right.

Give them 4,000.

Yeah.

Now, before we get, Mr. President.

Before we get too euphoric on this thing, I think we better look at the point that we're supplying everybody free medical care, free nursing home care for their aged parents, and if we start talking too many details about what the McGovern program is going to do, it's going to look pretty attractive to quite a lot of people.

And if their family of four gets $4,000 and they pay a huge tax to treat them, of course it will work and everyone knows.

That's what you're talking about.

bear in mind is that the welfare .

See, we're talking about the working families, the families for the people that get the $1,000, but there's all the welfare people who don't work at all.

So actually, your tax breaks are going to be a little bit bigger.

President, one little .

We can duplicate them.

What we'll do is do the cover sheet as the president requested, and then we'll send it back up to Jared for anybody who wants to use that, too.

But we can get that out by, I hope, by the end of this week, everybody.

It's all developed.

See what happens.

The reason CAP has broken this down both ways is that for the $1,000 thing, this is all being pulled.

But taking it without the $1,000, because they'll get off of that.

Here is the most conservative estimate.

Here is the moderate platform, according to .

All right, here's their moderate platform.

That, where you don't get $1,000 a person.

is an average increase of $1,000 every month in foreign taxes, a $184 billion increase in taxes.

Mr. President, I suggest a good starting point for that.

Tom Eagle, when I faced the nation in mid-July, said that the McGovern program wouldn't mean higher taxes.

McGovern hasn't said how much.

We're saying how much.

They could talk about trying to borrow some to cover it, but the simple fact is that with the debt regulation, that's right, that pushes interest rates up and everything else.

So it's perfectly fair to hold them to the fact that this kind of increase means this sort of a tax increase.

Mr. President, other than this McGovern material that's new today, all of this other material that Herb mentioned and

The tax information on production of taxes plus speech inserts and backup charts and statistical work has been distributed to members.

And if you don't find it in your offices, if you let me know, we'd like to check our distribution system.

But they should have been up there last week.

Well, that was sort of a cover-in, John.

When it comes from me to you.

It's covered with a blue border fact sheet with a blue eagle in the upper left corner.

And it comes through the leadership offices.

And if for any reason you don't have your copy, let me know and we'll get you substitutes.

The clue is not symbolic enough.

Yes, sir.

In addition to the simplified forms, just for credit, we're going to send each of us back.

Yes, sir.

Because my wife and I are going to send them to Congress and they're not reading everything.

When they're going to make a speech, they...

They do.

It'll all be better.

And also, the reason you have the background material is when you go on Q&A, question and answer, then you've got to have that stuff.

All the cover sheet is to give you the lines for the lead for the press release.

Then on that Q&A, sure, you've got those figures and those facts.

You can see right into them and back it up.

The only other topic that I was asked to cover, I'll do it in about two minutes, and that is to prevent our getting this kind of increase, a short word should be said about the spending ceiling bill.

And I think we're making pretty good progress on it.

I think Cook sent around some very interesting excerpts from Lyndon Johnson's book at the time they got the spending ceiling in 68.

And it was interesting to note that right in this room,

The Johnson cabinet was sitting around arguing and discussing how they could possibly avoid having a spending ceiling imposed on them.

It's exactly the other way around here.

We're urging the adoption of a spending ceiling.

And we have a very good one in the form of Frank Booth's bill.

H.R.

16-09-0.

There was a lot of discussion going on yesterday that others, I think, more appropriately bring up the data on about the progress of it, and it seems to me that there's a good bit of movement and that there's a real hope for it.

The only way we know right now that we can see the key thought plays from just ballooning up on this, there are points always made in the China Economic Committee by Senator Fulbright and others that

that the Congress, particularly they say the Senate always uses the appropriation .

Therefore, we should blame the Congress and so on.

What happens is appropriation bills come out about even but the other bills that require spending.

passed with great frequency and do require a very substantial increase in office.

So the only way really to force some programs to be stopped and to enable us to say that when we get a new emergency like a flood that we have to add in on top that we can pull something out from the bottom is a spending statement.

It is literally, as Herb said,

cloud on the economic horizon is this fear of depletion and fear that the budget's out of control.

So with a spending ceiling, I think we've allayed those fears.

We hope the international economic situation, the dollar and balance of payments, all of those things, if the country and the world were told that we were going to hold our spending to 250, it isn't a starvation program.

Outlays in 1971 were $211 billion.

in 72 or 231, and so we'd be going to 250 if we had this ceiling.

That would be $19 billion as opposed to a $20 billion increase the previous year.

It's entirely within the needs of the country, and it's close to being... Not in any way.

And it's perfectly...

not only possible, but actually it's a pretty good vote for a lot of people to cast because it's a vote that enables those that wanted to say that they have been for fiscal responsibility and then turn around, as the Democrats do, and go after more spending.

I actually had a one-line catch, and I think it would be very helpful, and it's what I very deeply believe.

You put this in there as a one-liner, a vote for a spending signal.

is a vote against tax increase.

There's no question about that.

It's a vote for a spending ceiling.

Now, I'm not suggesting that if we don't get it, there will be a tax increase.

What I am suggesting is that if you do not get a spending ceiling, then, of course, the buck will come right here, and bill after bill will come up, and you'll have veto after veto, and Congress will roll it on some of them.

And then there's a very great danger that you will be replaced

with excessive spending and a possible tax increase for the Congress force.

But if you want to read, if you want to buy insurance against a tax increase, vote for a spending ceiling.

Believe me.

There's no question about it.

That'll do it.

If you have a suspending ceiling, we know we can guarantee there's no taxes.

What were those figures, Cap?

In 1971, the outlays were $211.

In 1972, they went up to $231, or an increase of $20.

And from 1972 to 1973, if we had a spending ceiling, they would go to $250.

The lending ceiling is related to fiscal 73.

That's right.

But it allows, actually, Jerry, virtually the same increase in overall spending annually that we had last year.

So it's not a starvation.

What it does isn't unrealistic.

What it does is prevent us from going to really astronomical figures.

And as you all know, once you do that in one year, it sets the base for the next year.

So it's essential to get it not only for 73 and all the inflation and the taxes that the President mentioned.

And that's exactly right.

There's no way to prevent taxes, really, if you don't get it.

Except your veto.

You don't.

Except your veto.

One other thing I was going to say, the political standpoint, if you realize it.

to realize if you get it, it makes the legal problem less difficult.

Because you've got something there that you can go, well, I've got a spending ceiling and I can't spend the dough.

But if you don't have it, I mean, if you get something down here, it's very hard to put to the present.

We're to blame for jacking it up.

All we can do is really have that one for us.

all the burden, all the blame is on the President who has to make the reductions, and that's why Lyndon Johnson fought so hard when it was suggested by the Congress then.

But there's no question that it is essential, and otherwise this will go way into the 260 range in no time without the vetoes, and it will also mean that for 74,

We have just about impossible task of getting anything at all within range of the registry.

So a tremendous amount of our ability to hold right at 250.

It's a very simple bill, a very good bill, and it covers everything so that it would enable us to do the job.

Mr. President, I'd like to bring up two related subjects.

I'll let them give you a report on what progress.

But we're faced, either tomorrow or the next day, in the House,

question of whether or not we should fight with the prospect of a veto on a legendary GW appropriation bill.

If we can have some affirmative and yet not ironclad comment about the prospect of a veto, we can get enough votes, I think, to sustain

How much is it above the budget?

It's about $2 billion.

You've got your signal.

Frank has a precise figure of $5,760.

It's tough.

It's very tough.

It's a loser politically and the rest.

But we cannot approve any spending bill of that magnitude.

There's just no way.

Now, the one time that we rolled on that was Social Security.

I think we can get the votes and I think this is the place to make the fight because it is an irresponsible appropriation bill.

So we had the votes on the motion to recommit.

Well, let me say, I know this is a tough one, but it calls for the House guys that are coming up.

Sometimes we put you voting against kids, voting against, well, people who are sick and all the rest.

It's rough.

But you can see our problem.

Right.

And I agree.

It's just there.

But let me say, put it on the basis that a vote, a vote for, or...

or amounts that substantially exceed the President's budget is a vote for a tax increase.

Put it just as bluntly as that, as it will be.

He got this budget right from down to where we're all saying, you know, Shultz went out and he was a very responsible man.

I mean, when you compare Shultz with John Connolly, and John Connolly's very responsible, but now he'll be a little political.

George is political, all right, but he also has to be very, very responsible.

But George knows very well, very well that you cannot have any substantial increase over this budget without having a tax increase.

simply buy into another round of inflation.

So it's just as cold turkey.

The only way is, you're never going to win.

You're never going to win.

As all of you know, you can't win fighting something good on the basis of saying, well, I'm for health education and so forth, but less money will do it.

Just fight it on the basis that, on the attack, the point is, the clowns that are voting to increase this budget are voting for tax increase.

And then there's the tax increase.

because you're against the tax increase.

If the debate is on that, you have a chance to win public relations from the state.

If the debate order comes down to whether or not you're voting for more money to subsidize leveling teachers, you might lose.

I'm glad to ask this question of you, Mr. President, and Terry.

When this HW Conference report comes up, are we going to fight and try to vote it down, or are we going to let it go?

We got a letter yesterday from Richardson saying we should vote it down.

Should we have a vote?

We already have a vote.

We've been meant to give us enough.

We have to lose some of our people who want people to change them.

On a...

For us not to fight it, for us not to vote against it, I think is a sign of weakness.

And I believe a strong vote against it is a sign of strength.

And I think it fortifies the president's position when the document gets down here.

There are people like that because there have to be some of those companies later in the day.

I can't vote against it.

I can't say anything because I've already voted for him.

Mr. President, we are, of course, the worst defendants in the Senate.

We raised the AGW bill so much.

After it came to the floor of the Senate, on the final roll call, I voted against it then.

in order for the progress vote to pave my way to sustained veto.

There is, however, one point that disturbs me, and to the Bureau of the Budget, the representative here, I want to point out.

It is true that the Senate padded up that bill, padded it up with, oh, in fact, various other funds, more than I know,

But just at the point when some of us on the committee were making the hardest fight, and I'm talking about in the committee, the hardest fight to hold down these addictions, the Bureau of Obstruction sent out two new items that happened, that came to us after we left the house.

Both of them good items, wonderful items,

$800 million for black lung.

The other was the, uh, you got him on the wind program.

Now, I don't question what $800 million on black lung is necessary, but I doubt very much if you're going to spend $800 million in the coming fiscal year.

Uh, if that has come up, $400 million for fiscal 73,

with a plan of $400 million more fiscal 74.

And if the wind program had also come up, it would have enabled us, while still fighting to cut some of the subluxation on, it would have enabled us to send that bill out of the Senate without that.

The problem was that the Black Loan Authorization Bill, which had passed a few months earlier, required apparently very dark computations of a billion dollars in 1973.

And for that reason, we didn't cut it.

We will probably, because it's a required mandatory program, we'll probably have to add 200 million to it later.

I personally cut it down to 800, so it wasn't quite so bad.

The win amendments were fully offset by other reductions in the HMW bill, so that the request for additional work incentive programs...

funds were completely covered by offsets.

The black lung bill, there's just nothing you can do about it.

It's 800 million.

It's about 200 million less than the bill mandates.

So there was no way to avoid it.

I was getting a certain number of calls because we held it longer than we should have anyway.

Well, that explains the black lung situation, although it can't make me believe that we can spend

effectively and intelligently that amount of money in one year.

I'm not afraid of that.

But we made the mistake, it was written in the statute, the wind situation, it would have been offset, but I said, I'm guilty in my righteousness as enemy and leader.

In the college, they just add to this HW every year, and it's the most obese thing you have.

But the Senate is the one, we're the ones that put the big chunk on it.

But part of that fight came because of authorizations that came from what's happened to the House.

I'm not defending what the Senate did.

I think it was an atrocity, and for that reason, I was one of, I don't know, just half a dozen

I suggested a couple of other brief things in terms of recent patients.

Let me see if Captain Foley is sitting down.

The $32 billion defense cut must also come up very, very hard.

Now, let me say, this has been very substantially pulled by us recently.

And the way we must present this

If you present it simply in terms of a $30 billion, $30 billion pension, unless it's no layer to it, which is stiletto going into jobs, you're going to lose all your jobs and other things, that'll work there.

But across the country, by not a very big market, because the people aren't quite that stupid, but across the country, a slight majority of people favor a cut in the pension period.

So you don't win, just saying, he's for a $30 billion cut, we're not for a $30 billion cut.

The key point, and this is really, there's always one thread, the key point is this.

They made a $30 billion cut in the past, which would make the United States

Inevitably, and immediately, second the Soviet Union in power.

We'd be the second strongest nation in the world, and it would be a very dangerous world.

It would destroy the chance for arms limitation in the future.

It would destroy the ability of the United States to conduct a viable foreign policy in the Mediterranean, the Mid-East, any place else where it goes.

But more important, the key thing is this.

Do you want the defense cut, which will make the United States second Soviet Union?

Let me put it this way.

The defense budget that we have presented is only going to keep us even.

I would like to say it was more than that.

We're ahead in a few categories, behind in a few.

But it keeps us even.

We're now, at that time, a parity between the U.S. and the Soviet Union.

And the present budget will keep us even.

The reason we haven't overtried them with the rest is that we know that they're going forward with various things.

And, of course, there are other countries that say, but what does it mean?

You've gone to China, you've gone to Russia, and we still have to have a high defense budget.

Well, have in mind, of course, that the percentage of the total budget going to defense is the lowest in 20 years.

The percentage of GMP going to defense is the lowest in 20 years, and so forth and so on.

But that's one of the key points.

The $30 billion cut in defense, in fact, I could say a $5 billion cut in defense, even an $8 billion cut, will condemn the United States and be second to the Soviet Union because they aren't cutting.

Now, this doesn't mean we will not cut the fence.

It does mean we're not going to do it unless we have an agreement.

If they do, we will.

And the way to get that, as we demonstrated through Saul, is to have an ongoing program.

And then, like when they did, we have a treaty now.

We are going to have it.

And so we knock that out.

On offensive weapons, we'll do the same thing.

But they assume it's coming out.

The other point is, any cut of the fence now will completely destroy our ability to make the real breakthrough

On SALT, SALT was terribly important because it was a beginning.

It had never happened before between the two major powers.

We've limited offensive nuclear weapons, I mean offensive nuclear weapons in certain categories, and we have a treaty totally limiting defensive weapons.

But in phase two, we're now going to tackle a harder problem, and that is we are going to tackle the whole range of all offensive nuclear weapons.

We're going to tackle that.

Those negotiations will begin in October in Moscow.

The President of the United States goes to that table with a unilateral $32 billion cut.

Forget it.

We're not worth talking to.

And it will not be that way.

Why do we bargain so hard?

Why do they bargain so hard?

Because he is trying to make sure the other doesn't have an advantage.

Here, by that kind of a cut, we give them an advantage.

And the United States is second.

with six carriers as opposed to 16.

You simply are second on the sea, for example, where we now are first.

That's one example.

And so on down the line.

Now the other point that should be made in terms of presenting our figures so that you hang on to the 32 billion, and I've digressed here,

When you get that $184 billion figure, be sure you say that first, leaving out the $1,000 program, because that's such a way out thing.

We'll put that out on one front.

Leaving that out.

The platform which the Democratic candidate approved and which is considered to be his more moderate platform, this is what he's barking down to, would add this much in spending.

His cuts, including the $32 billion defense, would only subtract this much.

And so the net increase is 184.

He sure has put it that way.

You get my point?

Now, the platform did not put it that way.

It's 144.

The 185 is 144, but that's the net of his defense cuts.

That's my point.

It takes the net of the defense cuts out, you see.

Because the typical lie in the view of the other politicians in the Senate is to say, well, gee, we're adding several billion in this and that deal.

They've got to balance the budget through cutting defense.

And that's the line I'm going to take.

But the point is that a cut of defense to $32 billion doesn't make a hell of a debt in 184.

That's the point.

There's no way you can balance...

You can balance the spending and the rest by cutting the fences against these huge increases in the others.

But these are the kinds of facts that the guys that go out, congressmen and such, you've got to have.

Because they get on a talk show, they're immediately going to say, but aren't they going to take another defense?

You say, oh no, because they're going to cut 32, but they're going to add 184.

Whack them right in the back.

Didn't they have to increase unemployment to get...

Oh, sure.

Oh, you know, the... With an investment.

So if you want to increase taxes, you don't want to close it down.

And if they increase all of their uncontrollables associated with unemployment.

We have an estimate.

Don't even estimate that.

Another figure, incidentally, that will be so very good, human advantage, where we don't get much of a good press these days, but any of that, one thing that looks very good...

If you know, there is a standard theory, and perhaps Herb would not agree with the theory, but in any event, there is a standard theory that when the percentage of the take

you know, the percentage of the take goes over a certain amount, then you've gone past the point of no return.

The British virtually have passed it.

That's why they're probably finished as an economic problem.

All right.

I mean, and you're either going to have, in other words, you're either going to have a government-oriented economy or a private enterprise-oriented economy.

Now, when you get up to a $320 billion increase in taxes, I think you're going to find there that the percentage of the take rather than the, I mean, taking federal, state, and local government

All the taxes, the percentage you take is likely to be quite a bank.

That's $200 million increase in taxes when you figure a trillion dollar economy.

That's an increase in taxes.

That's $500 million.

You're up to 50%.

We're just about 34% now, our GMP, and this means that the United States are going to totally change the economy of the United States.

In other words, it's a radical change.

We've got to get this point across that there is a real choice this year, a choice between those who are against the state's rule.

My God, we have reformed and tried to reform more than anything else.

We have moved area after area after area with very responsible programs, but we are not for destroying

that great engine that makes it possible to do all these good things.

And that's, of course, individuals, private enterprise and the rest.

But if you go over 50 percent, if you go over 50 percent, let's put it this way, it means the people of the United States are going to be working more for the government than for themselves.

That's the Dan Wood line to use.

That is the kind of a program he's for.

And Mr. Perry, do you have any revenue marketing here as to what this does to the revenue?

In other words, there's 329.

billion dollar increase in expenditures, isn't that deficit increase your dollar take?

Well, we don't know.

It's almost impossible to figure what he's going to do with his tax program.

He's talked three or four different ones, and he cut out all exemptions, all exemptions, all capital gains, special treatment.

all health, medical, agent, everything.

If you cut all that out and then impose the 33% tax rate, which you talked about for a while in May, or a higher tax rate,

It isn't anything that you can really reduce the figure.

But I don't think using this present tax structure, I suppose you could interpolate and find out what this would do to the deficit.

Yes, you could indeed.

If you take together the only figure we have, if you add up everything that he talked about in the way of tax changes,

your revenues would increase by an additional $240 billion, which would not cover the $1,000 program.

He's talking about $100 billion in debt.

Even with the wild change in his tax program, he's talking about.

A number that's of some interest is that total personal taxable income is taxable income after exemptions and deductions is now about $450 million.

So he's proposing a budget that's bigger than that.

Yep.

Mr. President, let's hear it here again.

The total personal taxable income is about $450 billion.

That's not corporate.

That's after individuals.

And he isn't proposing a budget that is bigger than that.

It's a current budget plus the 180.

Yep.

Yes, I'm suggesting reducing it and then show $32 million in defense.

You see, the point is about the $32 million in defense.

I want the number used for two reasons.

One, hang on with it.

And second, show that it's nothing compared to what he's adding to you.

It's evident that $32 million is achieved in three years.

I just don't want to...

Mr. President, we're talking about this $32 billion cut in defense.

We're talking gut politics.

I've talked to Clark McGregor about this, and I think it's one way in

500 communities throughout the United States, we can really make political hay.

Every military base, Army, Navy, Air Force, or Marines, has a civilian advisory group that works with the commanding officer.

And they're Democrats, they're Republicans.

It's been put together in Clark-Hassett.

The McGovern $32 billion cut, Mel Laird and Luke's answers,

Now that document ought to be distributed to every one of these civilian advisory groups.

as a document of facts and let them... Mr. President, Mel Laird has a press conference at 11 o'clock on Thursday, and he's going to spell this out in a typical, pungent Laird rhetoric, and we're going to attach that to these materials and get them off the table.

Every once in a while.

It scares the hell out of people who live in these communities that are invasive.

Well, aren't they in that situation?

Well, you'll remember.

You'll remember when I was in Utah, in their state, and spoke at the Marble Touch Network in 1970.

And there was a losing cause for other reasons.

But I remember there were pictures outside of there about mostly some faces we were seeing.

Hill Air Force.

They killed us.

Hill Air Force.

All right.

I then went over to San Jose, San Antonio, and Ray said, Chief, you've got to say something about some sort of an installation.

I said, you're going to close it.

They murdered us with it up through there.

They just killed several.

I mean, of course, the only thing that we'll be finding when we die, I find it to be clear that the only damn thing we were keeping open was that thing up at Portsmouth.

He's my advisor, but seriously.

And that kind of thing has never really appealed to me, because it really is Democratic, and it's worse.

But if you don't mind, go ahead.

I have a question.

I inquire as to whether any of the government economists have ever had any experience in government, because we've got to get behind the government at some point, as to whether the economists have rocks in their head.

Well, they're experienced in government.

That's why they're back.

Well, I know.

I want to know what they do.

I use it either way.

Well, one of them was formerly a member of the Council of the United States.

I'm not sure what that's for.

That's enough.

One was an ambassador to India.

I think the others are younger.

We're not there yet.

Mr. President, could I change the subject and ask a question on the report so that you can get back to your hearings?

A problem that we're going to be dealing with in California, don't be so responsible.

Be a politician for a while.

I keep remembering that I'm a pastor.

It's very difficult.

It's the first time I've ever been a pastor.

As a state chairman, it's hard to do.

Starting today, we're taking up on the floor of the House the general debate on the foreign aid military authorization bill.

We're going to start voting tomorrow on the end of war amendment, as they call it,

And we've made a lot of plans, and I think we're going to get a maximum effort.

We aren't quite sure what the Speaker and Hale are going to do yet.

Fort Carl is just, you know, hanging, going through hell.

It's the way to put it.

I think at the final analysis, they'll probably help us, although it's not decided by any means.

Let me ask this hypothetical question, and it may not be hypothetical, and it puts us in the same position you and the Senate were placed in a couple of weeks ago.

If by chance we are unable to strike the Hamilton Amendment from the bill, between the efforts of our leadership and others, we can beat that bill.

Which means, to be categorical, it knocks out $400 million for Israel, it knocks out several hundred million dollars for Korea, it knocks out a hundred million or more for the Chinese Nationalist government, it knocks out all the related programs.

And Les and I and others have saved that bill in the past by the skin of its teeth.

We can beat it substantially if the amendment is defeated.

Now, I've never voted against one.

I've always tried to support them.

But I'm not convinced we might not be better off, if that amendment's knocked out, to take a real hard line and put the fear of God, as the Senate did,

in the minds of some of these people who want what they want, but who aren't really concerned about whether we knocked the Hamilton Amendment out.

Any guidance we can get on this?

would be helpful i'm willing to kill it just to scare the hell out of these people because i think we can recover uh as i think juice felt when he took the action that he said recover that on continuing this would be a tough decision hopefully we can win and we're working as hard as we can with the help of your staff

But if we don't win, my present inclination, and I'm being very frank, is that we ought to beat the Danville.

Well, that's what I want to know.

Before I make this point, I'd like to make this point here.

When they said in the war that...

We lost either 10 or 11.

It was inexcusable.

Bob felt even more angry about it than I did, and I'm glad he did.

We lost these 11.

He had the toughest vote as possible in the second year of Stevens.

It's actually, if you can understand a lot, if you can understand Stevens, I mean anybody in a very close race, but Bob Moulton, I mean he stands tough working though with Henderson on his one.

He stands tough.

I beg four of those men, the most likely to do it, to give me a pair, anything.

I've given men pairs over and over.

Not one of them was good.

One pair would have enabled the Vice President to break a tie.

Constantly, the Democrats maneuvered this so that the Vice President never gets a chance to vote on a tie.

Bob knows how that goes.

He was ready in any one of the forms that they got.

We had another strategy.

Before that, I had one vote in reserve on the table that broke the amendment.

I recommended that the gopher broke on the broken amendment and tabled it.

I was overruled by some station somewhere down here who tried to ache an amendment which I co-sponsored.

The moment we put the Asian Amendment on, we took four people off the hook.

We carried it, I think, 51 to 47.

They promptly left us, some of them, and then we lost the First Amendment, exactly as I predicted the day before.

I think Bob would underscore my strategy here.

We could have lived.

I would like to make the point that when I evolve a strategy up there, I'll take the responsibility for losing it.

But I don't like my strategy overruled down here.

I think I can save you one hell of a big picture.

You would prefer not to have it.

I would prefer not to have it.

It's not being critical.

It's for the future.

Believe me, sir, we work something out.

I'm on the bridge.

I'll take responsibility.

But when I don't work it out, then I have this one chance to make this point.

Now, you want to report on this?

Right.

On no fault do we expect the vote by 8 p.m. today.

We have defeated you.

objectionable amendments.

The Hart Amendment got seven votes.

The Kennedy Amendment, attesting to its present popularity, got 11 votes.

I've got control, I meant to say.

I've got control.

I'm very curious as to if I could just ask.

I was frankly very surprised to see the low votes for that with all of the support that I seem to feel for it.

Well, the reason was, it was, I mean, he said, shortly after that, he went up and confiscated, the Hartfield confiscated all guns, and provided reimbursement at $25 a gun.

He could have made a nice problem.

Oh, and you could have bought a Spanish pistol at $15 and gotten $25 in the government.

Why did he do that?

I mean, I don't know.

Why not though?

Well, what's the argument?

Well, you don't use that.

It doesn't kill rabbits.

No, sir.

About the defeat with Siding last time, it's run and chill.

The whole Senate.

That was about... Well, I think it's anything that's drastic, that's a law amendment, which... Well, there's a whole convention in the United States.

Then there was the candidate amendment, which required a broad state of registration.

What's the objection, I think?

What's the objection to registration?

Well, the ancient registration was the ancient objection that if the federal government knows that everybody that's got a yard around here in this country, the federal government could act repressively and seize all the dollars in some sort of way.

There is one other objection.

Yeah, what is it?

Many, many sportsmen owned a lot of valuable guns, that is, a half dozen shotguns and four or five rifles.

And they, one sensible objection, I have all this thought it was silly to talk about communists coming in here and finding out where the guns are.

The other objection is, if you'll forgive my saying, the sportsmen in this country are the ones sensible, Jason.

I haven't heard this one before.

I've heard sportsmen.

They say that once they register their valuable shotguns and rifles, that a revenue-hungry Congress next thing will put a tax on them every year.

That makes a real extension on it.

Okay.

Well, I guess why don't we go on.

Well, this is one area where I skipped ahead of myself.

I meant to say that we can't afford to stay in the box today.

We bought our handguns not later than six o'clock Wednesday.

This is a few of the things that I said.

Is this the end of the Saturday night special?

Well, the Saturday night special is what we will probably end up with.

We don't know what amendments will be adopted, but up to now, no amendments have.

If it is not too far advanced, it would be my guess that the end of the Saturday night special bill will probably pass.

I know some colleagues won't comment, but I think it will pass if it isn't over-amended.

That would get rid of .

And then we'd come up with the interim agreements .

The Jackson language has been worked at.

We are getting a number of good co-sponsors on that now.

The Fulbright miscraft would still be against it, but Senator Higgins seems to have changed his mind and accepted it as he likes it.

The committee will be its usual impossible self.

Can I ask a question there?

Is it true that the White House is behind the Jackson language?

Yes, that has changed.

The problem there, the problem there actually, first of all the Jackson, the Jackson language simply states in the resolution the, basically the understandings which we indicated unilaterally at the time that we entered the agreement.

So the agreement of this was a very brief one.

And each side of course unilaterally had the right to state its interpretation.

the Senate, in our view, had every right to include those understandings just to underline their resolution.

The difficulty with the first version of the Jackson Amendment, it had one sentence in front of it, which was an unobstructed

that we figured that they were going to bust the thing out of this room.

Maybe they do, maybe they will, but we have our options in case that is open.

With that, out of that, there's no problem, and we support it.

That'd be good.

So if I may say so, poses this political problem when you're talking around the country, and that is,

what we're saying in that wording of the Jackson Amendment is that we are not permitting, we won't keep our own agreement even if they are technically within the wording of that agreement.

In other words, it still says that if they enlarge or modernize so that it becomes a threat to the survivability of our forces, even though it's within the terms of the agreement,

And where that can serve as a bridge of the river.

Yeah.

You're thinking of?

And that was taken out.

This is about what that sentence was, that even though they may be technically within the agreement, if we deem it to be to the disadvantage of the United States, we would deem it a breach and justifiable for breaking of the negotiation, particularly given the thought that if, because of our

that intuition almost to the effect is being bought by Mike.

That's correct, and that sentence has been taken out.

Perhaps in your debate today, we should be sure that that's understood.

Well, I think it's a good point.

We tried, we worked on it, I worked on it just over the weekend.

We cleared up the language in Jackson.

We're not at the end of the decision.

We won't satisfy you.

So I think the language is more mild now, and I don't think the clause is even more predatory than promised, sorry.

Then we go on to group one, the evaluation of the appropriation of the discussion and revenue sharing and grace conference reports including public works.

I would like to ask Bill Young to comment on the

But could I suggest this, and this is something I would not suggest to you, if it is coming from the White House or something, if that subject comes up and you're giving advice, the lack of units present for is a first that we would discuss in this capacity meeting like that.

There is a present requirement.

We had a hell of a time, a lot of people, in the Senate, and in the House as well, who, frankly, were distrustful of such agreements.

They were worried about them.

And he said, we're going to, if we look this way, we're going to have a harder time dealing with our, basically, our hawks and supporters.

Now, the fact that this is a state of security, the fact that there is a language of disarmament, will, in effect, change the Soviet Union that, in the event they were tempted

to try to take advantage of this thing and move it one way or another with the build-up of the field, that the temper of this country would be, and of this Senate and House, would be to move also.

So I think the fact that that is in there will help us in the days to come when we'll start to shy across the bow.

The important thing to take out was the language which directly struck into the Soviet signal that we don't trust.

I think that's the way I was driving.

uh, it's about to come in, I don't know.

Well, the conference committee that based on public works, I guess only $16 million they write down over the clusters.

$16 million.

The agriculture, the city of Maine raises $50 million in loans for ROE, $20 million in RG, and we've been used to holding up those funds anyway.

There's about $100 million, well, there's an increase in sewer water.

And that's supposed to fit into this new rural development program.

But otherwise, I don't think 10 places is much over.

Agriculture.

You mean agriculture?

Yeah.

There are 481 million of them.

Yeah, I give the main increase to some others in the environmental area.

But these loan funds are usually 1,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000.

by the committee.

And our committee is in a bad shape where all the Republicans are going there and they're all liberal.

They're liberal, they seem to have a plan to get on that corporation.

You know, we lose the Electoral Committee, we get verged, verged by it.

Every single member of the, a positive member of the KTW subcommittee, I'm ranking on that.

Every single one of them.

is a liberal, I'm the only conservative on the committee.

Are you conservative?

Huh?

Are you a conservative?

Well, I hope so, but I'm sorry.

Not, Lowe said I'm not.

I've been reading Lowe.

He said you're a liberal.

I'm always afraid to shout this back, but may I bring this up to you, Mr. President, just one second.

Assuming that that bill is vetoed, and assuming the veto is sustained.

Now, last time that happened,

If you remember, we worked out with the Secondary and others, a 2% decrease was even for every 2% across the board.

And we got a bill that you could sign.

Now, at that time, Magnuson

He did not throw in the roadblock.

He didn't help, but he didn't throw in the roadblock in that way.

He served notice.

Now I will buy him.

Take out the pistol out of your hand.

He served notice to me.

Confidentially.

There's that seat, Joe.

And I didn't think I was going to come back in with a new version with a percentage-wise cap, get it by.

I was going to get away with it, which means that if it's vetoed, my reply to him was, well, that's all right.

If it's vetoed, you either let us cut it or else.

All we will do is insist on nothing but continued resolution, using last year's appropriations.

And I think we will, I'm just throwing myself to see how appropriation numbers in the House, how you feel about it.

I think if that veto is sustained, I fear it won't be the same by May, but I would expect it in the House.

Then, I think we, we,

probably we'll be wasting our time if we fight again.

We've got a new bill with the cut down the size of student center.

I think we've got to make the fight on just continuing last year's vocations, the rest of this year.

What's the action on this?

Well, we're six percent over on that now.

So you talk about two percent, we're six percent over.

Yeah, this time we have to be a larger percent.

We have to be a larger percent, right.

Well, I would go along with it.

It seems to me about the only reason I think our chances, because they love, they would love, politically, to back a single situation.

the fight about the president was that he vetoed the aid for Henry Captain all the free time, right?

Well, Mr. President, maybe I'll just hear a word about the foreign operations that the House could send over a bill.

And would this be within the authorization of the Senate by the Foreign Relations Committee?

I think that foreign races, but he wouldn't bother, so we could accept it.

I know he would send one over and I'd get a nap.

But that foreign race, depending on what's further in the room.

That's all that's going.

If I had a comment, again, we've got to face with the fact of life that we need the authorization.

I hope we don't have to, but if we do,

It's my understanding, Frank, that the Committee on Appropriations will then report out their appropriations bill.

So you'll get a better rule.

get a rule.

So you will, in effect, bypass the Committee on Foreign Affairs and the Committee on Foreign Relations.

Now, out of the past, we've become our greatest allies under the legal system.

And so, I don't see any dire consequences except the hurt feelings of the Committee on Foreign Affairs and the Committee on Foreign Relations.

That's all.

after the last leadership meeting over that statement.

Yes, it's reported up.

It's all been reported up.

Yeah.

I have to go to the government of the conference.

We got to go to the government of the house side on the procurement bill, which we're going to do at 2 o'clock this afternoon.

I just like to read one point.

Jerry Weiss, the chairman of the court, it doesn't matter what we're going to do about the Hamilton Amendment, because it's all going to go to the procurement bill, of course, and it's brought to them.

Now, the effect of what we do at MARTA will affect our cost of funding.

I don't know if there's anything more that the White House can do in this space or not.

I mean, it's fun more and more thought about it.

Because it's just as fair that we kill this thing in some way along the line.

Because then that's going to give the countries who are, even the Senate countries on the Democrat side, are able to knock that out of there.

But we've got to get the ladies to stand up when they go back to the Senate.

Mr. President, my recollection is correct.

Probably 15 Republicans who have heard of some of these kind of amendments in the past.

I have one good bit of news.

Cy Halvern promised me

shook hands on it, he's going to vote with us tomorrow.

Now, I'll wait and see, but I have evidence that in the presence of others, he promised me categorically he would vote with us.

Now, is there any chance of you meeting with maybe five or six of these people

We won't send Regal down, we won't send McCoskey down, but if there were five or six, it might just make a difference whether we win or lose out of this campaign.

I couldn't believe it, but Cy promised me, shook hands on it, and let's see what happens.

You were legally pretty good.

Oh, damn right I was.

Could I give you a quick report of the House?

Sure.

The main thing, Mr. President, of course, is this foreign aid authorization.

But we are...

There's one other thing that makes the Senate to give us some guidance.

The OEO authorization...

is coming up for approval, surgery, or pride.

I understand our Adam and Adam, who's backed up by the White House, has now given the Senate countries a second thought, and that they might go back into conference and accept your views on legal services and a more responsible figure on the authorization.

Is that right, Pete?

I'm not sure I understand.

Javits would offer the amendment to recommit it back into conference.

which is, I think, a victory for, well, it may be, but if you want to knock out the whole bill, it's going to be difficult.

If you want to knock out the whole bill because of Shriver's previous connections with this, then she'll run around with it pretty strong.

It may be that you don't want to do that.

You may want a chance to be John.

I was talking to John Irvin and John Hawkins before, actually.

But I think that signal order comes from downtown.

And I don't know how we can stop Chattel Tenningham.

This is what his present information is.

to clean up the legal services that you're pointing.

I got it.

Where's John?

Hey, John, you've been talking to Jack, haven't you?

Yes, and I think Tom has, too.

And our understanding is that he wants to reconvene a conference and clean up the legal services and reduce the authorization level to our requested levels.

which would give us a bill that theoretically at least we had signed.

And that was pretty frightening.

One of our concerns is that we'd like, frankly, we'd like to keep OEO a little off balance during this next few months.

And if we could go on a continuing resolution, we'd be much happier with it than some sort of a two-year extension.

That place still has an awful lot of strider people in the woodwork that we can't get out.

And we'd like to have them live a life of uncertainty over there.

So if there's any way to get it on a continuing resolution basis, I think politically it would be the wise thing to do.

Well, may I offer a little different point of view, John?

If you are forced to veto OEO and also forced to veto AGW, I think you're in the worst position politically.

I would rather make the total fight on AGW

and clean up OEO and legal services.

Now that would be my own question.

Well, you have to do it in the context of about six or seven retailers actually, Jerry.

Because we're going to have a lot of others that are going to be...

I think what Jerry's concerned is the...

is putting the OEO and the HEW together from there the substance may override the money or the other factors.

Now the OEO thing, of course, as long as you've got the legal services in it, there's no problem.

It'll be legal because we cannot accept it on a land basis.

But I would have a feeling that Javits can't clean it up.

I don't know.

Well, I'm the best judge on that.

I rather think it was a change of thought on some of the Republicans we've had trouble with that we like.

I think you're right, Joe.

Al Kui tells me that Javits is willing to capitulate to whatever the White House wants.

I mean, that's the word I get.

And for that reason, I think we're better off politically

but our total focus on the AGW appropriation bill, rather than to fight two battles and let them magnify the issue with two beetles in the same general area.

Well, I have the same opinion, because rival will have every leak in the world.

Oh, you give him this one big issue, he's not got brains enough to talk on many of them, but you give him one on which he's well-researched, you get help.

There's one other matter, Mr. President, that the House is struggling with.

It's the question of busing.

The Rules Committee reported out the constitutional amendment.

Bill Calmer is cooperating entirely.

He's not going to bring it up unless he's forced to.

In the meantime, hopefully this morning, the Committee on Education and Labor is going to report out your guidelines, Bill, with some modified compensatory education funding.

If that's done today, and I think we have the votes,

Then Bill Comer is going to convene the Rules Committee and hopefully get out that education and labor bill.

And that would then be brought up prior to the consideration of the constitutional amendment.

Isn't that what Bill tells you?

We have the other bill out of this year that we're going to have to make a decision on.

We're going to have executive sessions on that.

Well, if you're going to wait forever, we'll be waiting forever.

Yes, but keep your fingers crossed.

Al Kui and the others tell me we've got the votes in education and labor.

If they can ever sit down long enough to actually have a vote,

We've got some strange allies, General Herr and Bill Ford from Michigan, who are more gung-ho than some of our people.

But I think that is the best way to handle it.

If we can possibly get an affirmative vote, I would still take the bill out of the judiciary and not set it up for another clamp on the educational aid.

But that decision better have made something happen before it went wrong.

Another committee meeting at 10.30 this morning.

I hope they ask for it.

We've got one question on the continuing resolution.

I think you ought to be aware of.

Mayon told me yesterday that some of their people are going to try to put the end to the amendment on the continuing resolution.

Well, they'll have more trouble on that than we'll on an authorization.

But you ought to know that this is in the works.

Well, I think we, incidentally, I have just received a note from Inspector Dick Hobbs.

I must say, in Virginia, this is on yesterday.

We've got on the cover, 32 particular legislators, and one more legislator, including President Kofman on the side, and so forth and so on.

All of them.

support us.

Most of these are Democrats.

Some are switching to Republicans.

Others are staying Democrats.

So it's a question of the reasons that are local that matter.

But many of that I can talk to the city.

It's a very different situation.

It's a Virginia where a lot of things, politically, this country starts with.

It has made a dramatic change.

It's really, the Washington area, you really never really understand.

It's interesting that it's here.

It is of such consequence.

It's quite different, for example, from the situations in 19...

Well, we carried Virginia in 52, in 56, in 60, and of course in 68.

But in each of those instances, our support was a direct file with Harry Bird doing his usual thing, Harry Bird Sr., of privately being for us, privately letting some of his people work for us, but without bringing the Virginia establishment moving out.

What is new about all this is that you have a combination here of the growing Republican Party in Virginia plus the responsible Democrats.

publicly joining together, not such as a witness election, but to continue after that in the new coalition.

And it could be that we're getting to trust with spreading some other states.

But I'm digressing and I can only say with regard to Dick that we appreciate his services in the House and here in the leadership.

We're glad that he's going to

If you have the opportunity, you might implore those 32 Democratic legislators to have a little compassion in general.

They had approval.

So it's more than an approval, it's an election of this temporary performance that expires 30 days after the legislature convenes.

And the two houses of the legislature, even jointly, elect, nominate, and elect.

Dick and Gil, what the president said out of Virginia, maybe I should have stayed there.

I'd like to be interested in this.

Senator Cohen, I guess they wanted a certain understanding with him that if he was a Republican, they wouldn't do certain changes to him.

Is that right?

All right.

I'm running with it.

Sorry, Senator.

Okay.

That's it.

I'm looking for the governor since he's down there.

I'm sorry about this.

No, the president down there, he stopped back here to report something.

I'm catching you.

Report it.

Right.

Look at that.

He's got issues and answers, I think.

I don't know.

Now, he'll check with you, but I want you to know when he decides to come back with him, you know, so that's what you're looking for.

All right, sir.

Okay.

We'll see what happens.