Nixon White House Tapes ›Tape 14 › Conversation 014-154
Nixon, Ehrlichman & Bull on H.R. 1 and Tax Bill
Wednesday, November 17, 1971 · 1:27 PM–2:48 PM ET · White House Telephone ·9 min
AI Summary
President Nixon and John Ehrlichman discuss a political strategy to neutralize a proposed amendment to the Tax Bill by Senator Charles Percy, which would provide federal subsidies to states for welfare costs. Fearing the amendment’s $2.8 billion price tag and its potential to undermine administration revenue-sharing goals, the pair decides to offer a political concession to Percy—an agreement to support his initiative later if H.R. 1 moves forward—to prevent the amendment from being introduced. They agree that a veto of the tax bill is not a viable option due to other critical provisions like the investment tax credit and auto excise reductions, ultimately opting to make a deal to avoid the fiscal impact of the amendment.
- H.R. 1
- Tax Bill
- Charles Percy
- Welfare Reform
- Revenue Sharing
- Richard Ogilvie
- Federal Subsidies
Audio
Transcript (AI-generated)
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Thank you.
Coming right on, sir.
Thank you.
Is this the president's line here?
Hello?
John, Steve Bolt.
Can you talk on the telephone to the president?
Yeah.
Okay, let me ask him to pick up just one moment, please.
Hello?
Yes, sir.
Hi, John.
I just need to let you know that we have been trying to help Ogilvy and that the price is just too high.
I see.
And we're going to have to cut them loose.
We've been working very intensively at this with Percy and Ogilvy.
Percy wants us to move H.R.
1 back up either 20 or 25 percent closer.
In other words, the first year cost of H.R.
1 would be 20 or 25 percent higher.
And he wants an administration commitment to support his amendment to H.R.
1 to that effect.
It's about a billion dollars as a price of not putting in his amendment to funnel a lot of early money to Illinois as an amendment to the tax bill.
You mean he has an amendment to the tax bill?
Right, which he's holding over our heads.
We've been trying to come up with money for Illinois on the sly, on the side, to keep him from putting this thing in.
And we have found as much as Ogilvy said he wanted, but the ante keeps going up every time we get close.
We've finally gotten to the point where we just can't go any higher.
All right.
And so... Are you going to give him that much or not?
Well, we won't give him anything under these conditions because if Percy puts the damn amendment in, we're going to need every nickel we can lay our hands on in case it passes.
So what does the amendment do?
Is that the one that provides for a takeover of everything above 125%?
Yes, sir, and immediately.
You see, we would be immediately subsidizing the states...
for their current welfare cost to the tune of 125%.
And it's an open-ended thing because they control the eligibility.
How much would it cost, his amendment?
Well, his amendment cost us about $2.8 billion, as near as we can figure.
My God, is it going to pass?
Well, there's a lot of pressure up now because Ogilvy has gotten a lot of governors behind it.
In other words, it's a substitute for revenue.
Sure, and for welfare reform, perhaps.
Yeah.
Well, what position does the House take on it?
What about Mills and his group?
Well, the chances are Mills will not stand in the way of this.
He would see it as the answer to his prayer, in a way.
Well, the chances are then you aren't going to be able to defeat it, isn't that correct?
I think that's correct.
We can't veto the tax bill, John.
Well, then the alternative would be to make a commitment to Percy that we would support his amendment later if and when Long brings out H.R.
1.
And then behind the scenes, maybe we could screw him by just making sure it never came out.
What is his amendment, in effect?
Well, his amendment is to start the benefits under H.R.
1 sooner.
In other words, he'd go up the same kind of a thing, 120 or 125 percent of current costs immediately, pending the effective date of H.R.
1.
Yeah, but H.R.
1 would have to pass.
That's right.
That's right.
I would not be concerned about that.
Okay.
On the ground that, frankly, I don't think H.R.
1 is going to...
Make it.
Going to make it.
Well, all right, then why don't we play that game?
Fine.
I mean, I think looking at it very realistically, I don't think you're going to be able to, I mean, if
If this amendment passes, I mean, I cannot be in a position, John, of vetoing the tax bill.
I see.
Because everything else is in it.
Is that what the recommendation would be, to veto it if the amendment's in it?
No, I think there's a lot of loose talk to that effect that's bouncing around because it's getting higher and higher.
They lost revenues.
Yes, I understand.
But you and I know that it may be one of those things where we have to grin and bear it.
I understand.
With the idea that maybe it's...
Let's face it.
It may be the way we get the stimulus that we were going to get through revenue sharing.
Yeah.
Right?
Yeah.
And it's out there in the consumer's pocket.
And this is down the tube.
Oh, I think, well, so you come down to this.
But what does it gain then to commit this to Percy?
He'll give up on his amendment?
That's right.
And he says he's got his co-sponsors lined up to join him.
Mm-hmm.
Mm-hmm.
But then what happens if he gives up on the amendment?
That all that we do by giving up by going with Percy is to move up the effective date of H.R.
1 in effect?
In effect.
We don't change any principles?
No.
I'd do it.
Okay.
Okay.
Good.
Let's try.
Don't you think so?
Well, as we talk it out, I can see that.
Right.
I think that's where we are.
Let's be quite realistic.
We cannot veto the tax bill.
I mean, I just can't do that because of other things, the auto exercises and the investment tax credit.
Those two things are in it, right?
Right.
Now, with those two things in it, even with all this crap that's in it, we probably aren't going to be able to veto it.
Yeah, I see that.
Under those circumstances, I think we ought to get out a terrible provision.
I mean...
I mean, this thing would be terrible.
Yeah, it would be a one-year raid on the Treasury.
One-year raid on the Treasury and the rest.
And looking at it from Ogilvy's standpoint, of course, do you really believe Percy means what he says, that he would do that?
I think he would.
I think he's gotten himself into an impossible situation because he's held himself out to... To be responsible in all the rest.
Yeah, yeah.
And now...
Well, now I think he feels that his bluff's being called, and he's got to go forward with this thing.
See, he's got Ogilvy looking down his throat, and Ogilvy's got 40 governors behind him.
Yeah.
And I have no doubt but what Percy is hearing from every governor in the United States except Rockefeller, and Rockefeller's told him to go to hell.
It's a bad idea.
Why does he say that?
Well, because he can see it'll take all the steam out of revenue sharing.
Is that it?
Sure.
He called me this morning to tell me this.
I see this.
So he's not for Percy's Amendment?
No.
He's taking a much more long-headed view.
How would Rockefeller tell you?
Well, of course, so do I.
This goddamn thing is the wrong way to do it.
Sure.
On the other hand, so therefore we ought to try to beat the amendment.
and pay what price we have to pay, don't you think?
Well, if we go to war on the amendment, we'll probably get rolled.
Even with Percy changing?
Oh, if Percy changes, there won't be an amendment.
That's what I mean.
That's right.
That's right.
We ought to head it off.
That's what I mean by beating it.
Pay what price we need to not to have an amendment.
I read you.
Because the alternative is to have the amendment.
And then what's...
and then pay the price, and then let's see what happens to HR1.
Yeah, yeah, yeah.
Nothing may happen to it.
Okay.
Or do we feel something may?
Well, I don't know.
Long is playing a very mysterious game on this, and nobody really knows where he is.
Well, if it happens, it happens, and just moving it up some, it's just not going to make something that's already bad a little worse.
Yeah, it'll be a very bad bird in the hand.
Yeah.
Okay, well, I'll...
But isn't it worse, John, to confront this thing of having what you call this one-time rate on the Treasury?
Yes.
Yeah, it's very...
Which is bad business.
It isn't helpful.
It's intolerable.
It's intolerable in terms of the revenue-sharing thing and...
It just bails out governors and so forth.
Do you think so?
Right.
That's my feeling.
All right, sir.
Well, that's where we'll go.
Reagan's against it, too.
Oh, is that so?
Yeah, he said he was against it.
That's interesting.
Mainly because he's open-ended, as he puts it.
That's his argument.
He's against it on principle.
Oh, he's right on it.
Okay.
All right, thank you.
NARA Description
On November 17, 1971, Stephen B. Bull, White House operator, John D. Ehrlichman, and President Richard M. Nixon talked on the telephone at an unknown time between 1:27 pm and 2:48 pm. The White House Telephone taping system captured this recording, which is known as Conversation 014-154 of the White House Tapes.
Nixon Library Finding Aid
Conversation No. 14-154
Date: November 17, 1971
Time: Unknown between 1:27 pm and 2:48 pm
Location: White House Telephone
Stephen B. Bull talked with the White House operator.
[See Conversation No. 293-6A]
Request for a call to John D. Ehrlichman
-The President
Bull talked with Ehrlichman at an unknown time.
Ehrlichman's situation
-The President
The President talked with Ehrlichman at an unknown time.
Richard B. Ogilvie
-White House efforts
-Charles H. Percy
-Desired amendment to House Resolution 1 [H. R. 1]
-Administration aid to Illinois
-Desired amendment to Tax Bill
-Federal subsidies to states
-Cost
-Wilbur D. Mills’ views
-Possible veto
-Possible White House deal with Percy
-Russell B. Long's action on H. R. 1
-Provisions
-Prospects for H. R. 1
-Possible veto
-Revenue-sharing
-Possible White House deal with Percy
-Effect on H. R. 1
-Possible veto
-Percy's intentions
-Governors
-Nelson A. Rockefeller's view
-Revenue-sharing
-Call to Ehrlichman
-Possible White House deal with Percy
-Prospects for H. R. 1
-Long
-Ronald W. Reagan's viewAlso recorded on November 17, 1971
- 014-153 1:26 PM · 9 sec — President Richard M. Nixon, White House operator, and Stephen B. Bull talked on the telephone from 1:26 pm to 1:27 pm.
- 293-004 1:26 PM · 3 min — President Richard M. Nixon and Stephen B. Bull met in the President's office in the Old Executive Office Building from 1:26 pm to 1:27 pm.
- 293-005 1:27 PM · 2 min — President Richard M. Nixon and Manolo Sanchez met in the President's office in the Old Executive Office Building at an unknown time between 1:27 pm and 2:48 pm.
- 293-006 1:27 PM · 7 min — President Richard M. Nixon, Stephen B. Bull, and John D. Ehrlichman met in the President's office in the Old Executive Office Building at an unknown time between 1:27 pm and 2:48 pm.
- 293-024 1:30 PM · 1 min — President Richard M. Nixon and Clark MacGregor met in the President's office in the Old Executive Office Building from 1:30 pm to 1:32 pm.
- 293-025 1:32 PM · 14 sec — President Richard M. Nixon and H. R. ("Bob") Haldeman met in the President's office in the Old Executive Office Building at an unknown time between 1:32 pm and 1:42 pm.
- 293-026 1:32 PM · 2 min — President Richard M. Nixon and Manolo Sanchez met in the President's office in the Old Executive Office Building at an unknown time between 1:32 pm and 1:42 pm.
- 293-027 1:32 PM · 11 sec — President Richard M. Nixon and the White House operator met in the President's office in the Old Executive Office Building at an unknown time between 1:32 pm and 1:42 pm.
Cite this conversation
Conversation 014-154, November 17, 1971. White House Tapes, Richard Nixon Presidential Library and Museum, National Archives. Audio and AI transcript via Easy Nixon, https://www.easynixon.org/tapes/014-154 (accessed September 18, 2026).