Conversation 534-011

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Well, how are you?

Good to see you again.

How are you?

Thank you.

What do you want to do?

What would you like?

The two of us first.

What do you want?

All right.

You were nice about what I said.

That was all.

Say, I know, I know, I know, I know, I know, I know, I know, I know, I know, I know, I know.

How you doing?

Well, now, let's see.

We got four men here today.

I'm gonna give you a couple of them.

See the seal?

There you go.

So it's kind of a nice little turn, isn't it, Roy?

Thank you very much.

And thank you to you all for coming.

You probably got there by the end of the day.

Now for the...

You all got here a lot more wives.

If I could give this to your wife, I love that.

You get it, sir.

If you give it to your girl, I'm gonna say hi to you.

There you go.

Thank you, sir.

And actually, you get one of those, too.

How are you, golfers?

I am.

Oh, here we go.

Oh, I know you.

You played, you played out there with, uh, Mr. Martin all that much.

I bet you played well there.

You know, I don't think that they've gotten all the money.

No, I can't get it in the belly.

I can't play the chorus.

You know, that's where Gilchrist is.

It's hard to get in there, too.

That's a marvelous question.

You ever hit the oil well over there for the first season?

I haven't.

Before Christ's day, he hit the oil well.

You know, on that first full season.

You know, I like the game.

These are strong balls.

The president used to be a lot of money.

Well, I always tell the vice president his troubles.

Well, there you are.

And they are good both of them.

There you are.

Thank you.

That's pretty good.

Yeah, that's right.

You got her.

She's probably got a pretty good swing.

Yes, yes.

Now, I give you everything you can.

Yes.

I give you everything you can here.

We wish you the best.

All right, sit down.

Sit down here.

And then I'll sign your... Oh, Polly, we want a picture of this.

You stand by me, looking over my shoulder.

This could be a better picture.

This is your domain, you know, as a member of the...

There you are.

This is what you get if you hang on the wall.

Now, we'll put this, uh, well...

But I gave you a chance last time.

.

Also, what's the date?

Today is June 3rd.

So this is all over here.

People can easily watch what they're doing all the way around the corner.

Also, when you do it on air, it becomes even better.

It's sad.

You got some good stuff.

Thank you.

That's awesome.

Good.

Thank you.

I was just on the, uh, I don't remember the other group, but, uh, a song that, uh, I played before, and it was a really good song, and it played, and it was a really good song, and, uh, it was a really good song,

I'm afraid of that.

What was the year?

I think it was 53 or 54 in that period.

I think it was 54.

I attended a little life before we were born.

That's a good point.

Thank you, sir.

Well, let me say that we are quite, in a sense, selfish when you hear, not selfish for ourselves,

political party within the country.

You're a celebrity, maybe quite cold turkey.

As a celebrity, there are just lots of people that will listen to you that might not listen to political celebrities, from politicians to celebrities too.

And I was delighted when Leonard told me our other thoughts here when you were on your last visit here.

I didn't feel that there's so much to answer.

But I was just thinking, Tim taking his field of drugs,

inspiring young people you can go out and find this and you make it you say sandy davis jr says it really will send them it'll turn them on uh whereas if they hear the preacher said maybe not the teacher maybe not uh the judge certainly it's too late uh did they hear the uh maybe an athlete yeah that's why for example i've been very

He's a great fellow.

He's going to make a speech, you know, around Mark Starr, you know, with young people.

The great tight end from Baltimore, you know, he's the head of the... John Mackey.

John Mackey was in here the other day.

You know him?

He's a terrific guy.

And he's gone out and he says, oh, I'm going to talk to young people.

The rest of us in the literature don't go down this road.

Take this room, this is the bedroom.

And this is, and basically don't, not in terms of morality.

Morality won't send it anymore.

But in terms of, well, look, if you want to get someplace, if you want to mount something, if you want to get wherever, maybe we're, sure, we can.

Maybe we all make a mistake sometime.

We all try this or that or the other thing.

But in the end, remember, you can't destroy your mind and your body.

But in the end, that's the real problem, you know.

If you can approach something in the business of morality, it won't go to young people like we were all young.

Everybody makes his share of mistakes.

But the point is to say, if you really want to get ahead,

We really gotta, well, that's my theory.

And as they say, I rap with young kids, and I always say to them, you are so concerned with the problems of society.

How can you hope to make them better if you don't do this kind of stuff at any time, right?

Well, the thing, too, is that we put it in a track list of the performance.

A performance.

You could not go on for a performance.

I mean, you're very disappointed we're going on television.

For a big performance, sir.

Maybe you know you're going along and have a lost weekend.

But boy, when that performance comes, you're going to be on board.

They could pick a great actor like John Barrymore.

Of course, Barrymore could act better.

He's so good.

I mean, it actually killed me.

It killed me physically.

I mean, it killed me physically.

Uh, now, I think that, uh, I think in your case, it's, it's, uh, really, and it's not just a question here, I said, gee, we need a second Davis to go out and help us out, you know what I'm saying?

Just, uh, just to make sure we talk about this, and when you do, you talk to, uh, maybe someone, you know what, let them know you live on it, the government is out to represent, work for it, you know what I mean?

You can't help people that won't help themselves.

If they won't help themselves, there's no way.

And there's a lot of opportunities in this country.

They can go, you should start your own company.

Two of us started in a very different light, and I had an initiative.

You know Randall, the congressman?

Pardon me if I'm talking too much.

No, it is not.

Well, he encouraged the drug problem.

I told him, he made it up yesterday when I was talking.

and I said, Congressman, I want you to know we, when I had met with the Black Caucus, I said that he'd raised, and I said, we followed up, we got this done, and he was very pleased, and I said, you get a lot of credit.

He said, you know, I was just thinking,

He says, how proud my grandfather would be if he could see me now getting a call from the President of the United States.

He says, he wouldn't believe it.

And I said, well, Congressman, I said, my grandfather wouldn't believe it if he saw me making the call.

That's what it is.

So we all come from my family.

We were proud of that.

Your dad obviously gave you a lot of inspiration as my dad did.

But I think that young people, kids have got to realize that today, when you really come down to it, the elite in this country are the least, are frankly, the least capable of governing.

But I mean, when you find what is happening to the children of the so-called better families,

Believe me, they're for the real problem.

They should be leading.

They should be standing up.

This is the magical thing now is for them to, you know, put a pot or worse.

And so, basically, the guts of this country still is in, and it's predictory now, is to be found.

It doesn't mean somebody can get the belief that they may not have it, but less and less they have it.

But the guts is to be found.

and people who come from all segments of our society.

There's a lot of character.

There's a lot of good in a lot of us.

The fact that the kid started in the ghetto, that he grew up in a poor family, and all that sort of thing, doesn't mean that he should just throw in a sponge and go, I can't do it.

In fact, he may turn out to be a stronger person than the kid that had it all given to him.

If he kicks it, he kicks it.

All of the opportunities that are there, and he's got a professional license, and he said, look, hey, man, I want to do it.

I said, I don't hear that, because I came up, I was able to make it a profession.

And I was relieved from everything else.

I said, because I, instead of taking the anger that's going to get out on someone else, utilize the anger so that it comes from another direction.

Work for it.

In other words, get educated and learn something, you know.

And because your country is here to help you, if you want it, and you're so right.

So when you say that it's coming back around in a circle to reading the day with the man on the street to get the best chance in the world, it'd be only to get that done.

Tolstoy wrote about this many years ago, quite a lot of later years.

Of course, he had the great novels, Born Peace, Not a Cry, and all that when he was younger.

In his later years, it became quite philosophical.

Some of it a little, we think today, kooky, but he put it sort of in these terms.

Every individual is, of course, basically two individuals, and there are two instincts.

There's the creative instinct and the destructive instinct.

There's the anger instinct, of course, and there's the building instinct.

And he says the real, the secret of a great life is to be able to sublimate, sublimate those characteristics that would destroy our anger and sublimate them.

And those same energies that destroy, build, the same energies that build and destroy, the same energies that

that gets you to crash out are the energies that can sort of bring people together.

And that's what you've got to tell these people.

So the fellow that, for example, is a hater, the fellow that's bitter, the fellow that's detractive, potentially is a man that can be very great, curiously enough.

And the individual who isn't going to make it is a fellow that isn't either.

the bland people.

In other words, I think this is one way you can encourage some of these kids.

And I know what they are.

They're black kids.

They're white kids.

I mean, as you know, the problems are, as I said earlier, but when you find a kid who's, say, they call him, he's been a troublemaker, or a grump, or a re-aid, because basically he's just too, he's just full of beans and full of energy, and he's got to track shop and do something.

Now, that kid may well have within him, if he supplements those instincts and puts them in the other, in the mark of creation, he may have what it takes to build.

That's what he was telling me.

And you can really challenge these.

He said, that's what I tried to do.

I know how to call the cameras and move the foot.

And I read something, had a rap session.

I said, don't you let the camera produce it.

Sorry, I'm going to stop.

Take the anger, which I think is negative, and make it positive.

In other words, utilize that anger and put it in a positive way so that you can walk out of here

Really, you know, standing on the corner going right on and all of that is marvelous if you need it for an image of a kind for the community.

But 10 years from now, you've got to be prepared to face a society in which those things will no longer be said.

Yeah.

You know, it's true.

I must say to brothers and sisters, yeah, that makes sense.

Well, basically, there's a...

There's so much goodness in the...

I want you to know, as I'm sure you do, I know you're entering into black colleges.

We're doing more than has ever been done.

The thing we've got to do is to, we've got to get them, you know, where they qualify at the colleges.

for the assistance, but I put a lot of heat behind it.

We're not doing as much as I want done yet.

You've done more, but we want to do more, and I read you sometimes in and out.

I'll tell you, keep pushing down.

All right, I can't thank you enough.

Well, we thank you for coming in, and thank you for your

Please, little individuals, let me say something else to you.

When you talk to people in the entertainment field, you know, they say, well, you know, I think life is pretty, a very great deal.

I look back on my friends in entertainment, I'm sorry, the people I know, you, those, of course, I know the older generation, people like Bob Boone and the rest of you.

And what you have done, you have brought some lightness and some relief.

uh some hope that you're just getting many ways just by that don't ever die that's a great thing

And Secretary Richardson may join me in a minute.

He's the head of our Bureau of Budget Management.

Now, Senator, I'm just going to talk to him.

He's just trying to haul our budget over the wheel.

But I tell you, he is enormously interested in the black college.

He's just, he's been out making speeches for, and he recognizes that, you know, it's a big ol' party, nobody else has done it.

But I just want you to know that here's a problem.

They say, so, and I go around and spread that word out in my own way.

But you do, and they get our word supported.

And the kids now are so aware of the implications of these meetings.

And they're trying to make it work.

And they're trying to build it.

What's your kind of support?

It seems to be more than ever.

It's always not enough.

But you can see the percentage rising.

I would like to do an adventure, which I do on an individual basis.

I'm going to show the University of Colorado what I'm going to do.

I just finished one.

It's on the next college in Chicago.

Like, I'm gonna try to get a unit of performance, and we can go to the people college and do a big special or something, and get all the money.

Let me suggest that one of you hand those out for expense, please.

Yes, sir.

Because, you know, they didn't even have some capitol.

I mean, people like to save all their money.

I will.

Thank you.

Yeah, he was a marvelous performer.

I saw his song in 1954 at the, uh, at the, uh...

It was over...

I'm representing you at the, uh, ribbon cutting, and I presented your letter, and you presented me with that, and you can see it.

I said, uh, he said, uh, you can't possibly press this to the mail.

It's delivered by hand.

Well, I hope that is what they had something to do with it.

I had lots to do with it, too.

Well, I just want to say, uh, the, uh, everybody here never sent money, uh, to any part of the rest of that, all the rest of it.

One of the three of his best friends that you can potentially see in the 50s.

And he was playing with a couple of cabanas.

And with his uncle and his father.

The three of them were without question the greatest act that you could possibly see.

I mean, the three of them.

You know, his uncle and his father were just marvellous performers.

Marvellous people.

And I sat there.

He came out after his April stage speech.

And I said, I'm just enjoying it here.

I thought that was interesting the other day.

You know, the Urban League, you know that picture?

When you were vice president, he was a waiter at a bar, of course.

That's right.

He's a colleague at the University.

I'm sorry to keep you waiting, but he always had a little time to get charged up.

He started talking about drugs and inspired people, you know.

It's nice.

You know, he's just, you know, it's a battle.

It's a battle.

He's, of course, you know, he's seen it all.

He's lived it all.

I mean, he's been on this stuff and everything in his life, so he's a good road to go down.

He's lived it fast, I know.

I mean, this is, you told us.

It's very important.

Well, go ahead.

I saw a David Frost show a while ago.

It was pretty good.

Was he?

Yeah, it must have been about six months ago.

I don't know.

Yeah.

Extraordinary range of facility as an entertainer.

But then there would be interludes of discussion with Frost, which is, you could see that the turnover of his mind was splashing around the subject.

It's clear.

It's very clear.

His wife, you know, he was married to a Swedish girl for a while.

And then that's when he brought in the other wife.

And she's quite young.

She said, well, I had a great time together.

And she said, you know, I met Sammy Davis before you were born.

And he said, that's almost correct.

Well, tell us what our problems are in cutting off the systems or getting to where we're going.

This is one of those cases when I think, fortunately, we're not faced with an emergency decision.

But it's one that, talking with John Erickson the other day, we thought was important enough and troublesome enough so that we should seek an opportunity to review it with you and get your reactions.

You may want to, maybe we don't have to have any decision today, really.

It's a follow-up of our meeting in San Clemente with Governor Reagan.

Well, Rockefeller presents a somewhat distinguishable problem, and one which, as a result of recent action by Jim's department, I think we can handle without much trouble.

So, although there are some elements of the situation in common.

At any rate, just to review briefly the chronology since San Clemente, we announced at that time that there were roughly 70 changes in California welfare law that we had approved.

reviewed in a preliminary way, that out of this number, there were about 38 that presented no apparent problem under the terms of the Social Security Act, and that we would receive and review carefully applications from the state for waivers to permit the state to go ahead with other things they wanted to do.

that on their face would raise questions of consistency with the Social Security Act.

We've been able to deal with some of these problems in various ways that have eliminated them as issues.

We've reinterpreted our regulations in one another way, have gotten rid of the problem.

In the case of one important thing the state wanted to do, we have said we could grant them a waiver.

This involves payments.

token payments by recipients of Medicaid for prescription drugs.

And the health guy in California did a good job in submitting to us an application for an experiment in the use of these token payments, which we certainly should approve.

The welfare people

California and have not yet submitted to us anything which even looks like an experiment.

And in any case, we will have some very serious problems with a couple of things they want to do.

It's really those things that we thought we should discuss with you today.

Most important of them, in terms of its policy and political implications, is a proposal to

institute a system of what is, in effect, work relief.

In other words, that people receiving, who are potentially employable, who are on welfare, should, in effect, work off the welfare check.

And this, obviously, has quite a lot of appeals.

You know, the average reaction to this, if you put it to people in the poll, would be, why not?

Why shouldn't the bumps be put to work?

The problem, though, is that this is inconsistent with the idea that somebody who is working should be better off than somebody on relief.

The whole idea of the work incentive that is built into our own welfare reform bill now.

I think I might stop here because both Jim and George are really better able to speak to the implications of that issue.

It was one that was

that George was directly concerned with when the welfare reform program was in the process of development.

And Jim, I think, can certainly speak better than I can to the repercussions within industry and labor of this kind of approach.

We might come back then to the question of what are the implications for HR1 itself.

of our going along with an experiment of this kind on a statewide basis, assuming that the state eventually was able to cast it in the form of a plausible experiment.

Well, it seems to me that any superficial examination comes down on the side that somebody's getting some benefit out of doing something to get that benefit.

So that's a great appeal.

I'm afraid that on at least two bases, we're walking into a swamp on this thing.

We accept that kind of thing.

First is, whatever the hazard is, you should put it with H.R.

1.

H.R.

1 says that a person who refuses to take a regular job, or any job he's referred to that he's capable for, he gets cut off.

But it's another thing to say that a person who is capable of working goes out and just works off that, but does not have a job,

does not get wages, does not get, is not part of the free labor markets.

And I can see nothing that would be a greater hazard to HR1 with regard to the moderates and the liberals than to try to institute that.

Because we get into such a kind of situation where we have to look seriously at these kind of proposals like Senator Long has for his dead dog provision, so-called.

Everybody's short even means picking up dead logs along the highway.

One of his concepts is that you just never get that sold to the moderate and liberal groups, which you need at least a certain amount of support on.

So H.R.

1 is a tremendous hazard.

That's the immediate one.

The longer-range one is what it does to the American wage system and the free labor market.

We've got some principles just taken automatically for granted.

The person who works is better off than the moderate.

The second one is equal pay for equal work.

How does this work?

The work relief is the same work, is that right?

Now, they refer somebody to a public agency and say, put so-and-so to work, he's on relief, and make him work X number of hours a week to work it off.

That's about what it might be.

Now, under Long's provision, he would even extend this into the private sector and get us into all sorts of messes.

The one that California's talking about is that work would be on public kind of work.

So, I say the first hazard is this business of worker being better off if he works than if he doesn't.

The second one is the equal pay for equal work.

We've always

maintain a wage system in this country that if you're married and have one kid or ten kids, you make a dollar and 80 cents an hour for one kind of job and two dollars an hour for another kind of job.

Under a worker wage system, your pay is based on the number of kids you have, the number of dependents that you have under welfare, and you'll get this confusion that people work on the same kind of work with different kinds of pay.

And the second and third thing is that it's like a

seems to me as a problem, this connection, is the whole wage system itself that is based on the idea that you get paid wages when you work.

It isn't that you go out and work for somebody because somewhere else you're getting some kind of support.

So I would say that in the short run, you can expect immediate negative response

labor side and the management side in the long run, as you certainly would, because of the start of the free labor market system.

And they would soon come to realize this, and we'd be mixing up one kind of wage system with the kind that has been traditional in industry, and we'd be writing off trouble when we did.

So my feeling has been that we ought to try to find some way to accommodate

their objective, that is, people that are employable should work.

If we set down some conditions for them, they would be paid wages, they would be received equal pay for equal work, and if they wanted to supplement that for people that had additional dependents, well, that's a special kind of supplement.

And finally, that anybody who works better off than one who doesn't, and

work with them on incorporating these kinds of provisions into their concept, rather than just rejecting the concept of it.

Well, Mr. President, I have to say that I don't know what we do about it in the court.

No, well, the real question is, I suppose, one of the concerns for H.R.

1

One side concerned for various forms of public reaction in the middle and relations with Governor Reagan on the other side.

We've made quite a lot of the notion of getting people off welfare and on productive work.

And it seems to me we have a

a stake in that being an operative and practical proposition.

It's going to operate much better if, when somebody does get put into a work situation, he or she's a little better off, and there's some draw to that as a matter of incentive.

And we've worked hard to do the same with the wing program.

One of the things we insisted on in the new public employment, the public employment,

And it seems to me a problem will arise if that general idea of welfare to work is tried in a way that is likely to fail.

Does it stand for the idea of this general proposition?

Let me see the other side.

What is the argument?

Well, I think what happens is, without having talked to the governor specifically about this a little bit, and generally speaking, it's no good.

I think it's a real trap.

If he brings a request and says, I want to put these guns through, and appears to be saying, oh, I'm not going to do that, then he, in effect, is, is, is, is, is, is, is, is, is, is, is, is, is.

So we have to often recognize that we counter our response to this thing.

We have not responded to it yet.

This is the only one left.

We joined another one.

I'm aware that John works for our community.

He apparently worked on the radio service, which is a great thing for him to do.

I wasn't going to look at it, but I just wanted to know what it is.

I didn't think there was any way that it would work out.

There wasn't, unless Frank was willing to wield his truths, to be sure.

And he brought O.E.

over around in very critical style.

Well, on this, you see, we've got to look at both sides of it.

We can think of a modern liberal support for H.R.

1, but we've also got to think of

what happens to the conservative anti-inspections?

And Ray DeChargent and a few others, and recognizing, too, that in the Senate, as you know, our major problem is, I think, not on the liberal side, but on the conservative side, and at least was the problem, and I guess it still is with Russell Long, and leaving DeChargent on the side, and National Courts, and all this, and all this, got a committee on the other side.

How will they look at all this?

I suppose Russell Long could be

I don't think that it's a conservative, even if they were able to finance it.

to get some similar approach.

I don't think it could survive.

I think that both industry and labor would bring together very powerful opposition to it and get knocked out on the floor.

But the greater danger from the conservative response is that they will say, you have

OK to this California experiment.

This will give us just the kind of test we need of a work-related program, welfare reform.

We had to remember last year the problem constantly of why don't we just enact a bill that provides for a test in the welfare reform program rather than the program itself.

And that is, I think, the likelier possible consequence of the approval of the test.

But let me add a couple of other things that really got to be thrown into the picture.

To be sure, conservatives all around the country would applaud, and it might help.

But there would be another consequence to you and to the administration, which I think is very serious and has got to be looked right in the eye.

Given the uproar that would result, and I now have a better feel for it, as a result of getting letters from a number of other people, you know, there's been enough surface to the effect that I was all ready to approve these waivers.

So the considerable reaction has already set in.

And some senators have demanded to GAO investigate what they allege would be an abuse of my authority in granting the waivers at all.

And we have, I thought it was the better part of valid, transmitted a request from California for waivers to the GAO so they could see them.

But subject, however, to the strict injunctions they keep from public disclosure.

Indeed, they only would be told in California that we would treat them confidential.

There's a mean letter.

There's a good deal of press speculation as to what is going to happen.

And I'm very much concerned that our going along with this would be interpreted in purely political terms as a deal with Reagan for some political purpose of yours under which you have knuckled under to Reagan and that we would never escape that label of the result.

Apart from, so we end up in effect maybe

pleasing some conservatives and maybe satisfying Reagan, although I think that Reagan's own political situation in California appears to be one in which he needs the issue.

And he brought in the issue.

And the forecast seems to be that he may have to go to referendum on welfare reform.

His budget is badly out of balance.

What happened?

They turned him down.

They turned down his welfare reform.

They left him with a budget out of bounds.

And, uh, plus a quarter million or some enormous amount for California.

And, uh, he's got...

I don't know.

It should be a fair say.

It wasn't 10% at all.

He needs a...

He needs a bill on him.

and uh the legislature's failure to reform welfare could very well be that bill honestly and he can go to the people on this and he probably could i guess could uh make a very good show in my referendum oh god the enactment of hr1 though could very well make the referendum move because the effective date of the of hr1 would be july 1 this year

you know, July 172 for some provisions and for the working poor provisions and so on, July 173.

But it could make...

It'll have to be.

But the passage of the bill by the Congress would have certainly a sharp impact on the significance of the referendum for a state program.

I mentioned a couple more things.

I think you'll have potentially all the pieces of this picture.

I've referred a couple of times to the authority I have under Section 1115 of the Social Security Act to grant waivers and provisions of the Social Security Act for purposes of a test or experiment.

And we feel that we are justified then that this is the case of the Medicaid payments for drugs.

And we are now in a position where we can do this in the three relatively small areas of New York where Rockefeller wants to put into effect a rather elaborate point system whereby they can supplement their basic federal benefits by doing various good things.

And in the case of the jobs, public service jobs there,

Jim is in a position to make the form of these jobs and the basis of payment consistent with our manpower legislation and HR1, so we can put that aside, I think.

But both of them do involve what on their face we could say to GAO, or we could say in the court suits that may be instituted anyway, are approvable experiments.

So far, California...

hasn't come forward with anything in the case of the work relief approach that even looks like a test or experiment.

They've submitted a few pieces of paper and said, give us the waiver, in fact.

And I can stall for a while, considerably longer, some while longer, on the basis that we need at least something that I could defend as a

experimental project grant application as a basis for the exercise of discretion to grant the waiver.

We have had four meetings with their staff in Sacramento and so on.

We still haven't got anything that looks like an application.

Then we would, the next stage would bring us to what Jim referred to a while ago maybe as a modified approach of some kind that did incorporate a wage incentive of some sort

We could talk about this.

I mention these things just by way of saying that there may be means for a while of avoiding a showdown.

How long that is possible, hard to say.

We would have to visualize the prospect that in the meanwhile, the narrow, cumbersome AGW

short-sighted bureaucracy with sabotaging this great scheme.

You might or might not at some point along the line want to use me as a whipping boy, but I really foresee all kinds of trouble for you if I just say, okay, Governor, I think it will look like, I think it'd lose the suit probably.

But now, let me ask this, what are we giving him?

He got what he wanted from Carlucci.

Is he getting any of them?

He weighed some of the things.

Yeah, well, we said some things.

This is probably the sexiest part of it.

That and one other thing I haven't mentioned, which is always subsidiary, which is

150% limitation on eligibility, which means, technically, that no one can get benefits if their total income is at or above 150% of the basic family payment level.

This sounds very good on its face.

The trouble with it is, though,

If a person does get a job and raises their earnings from $200 to $300 a month, they keep $16.

If they raise their earnings from $300 to $400, they keep none of it.

And of course, in H.R.

1, what we've tried to do is to assure that they would keep some of the money they earned without a dollar-for-dollar loss benefit.

That is the other big problem, just to get the whole thing out here.

I don't see how we can give him that either without a lot of problems.

Presumably he's interested in getting people off welfare and out of work.

That's the idea.

And he would like to be successful in doing that, because we'd like to be successful in doing that.

Certainly anyone would grant that if somebody is better off when working than on welfare, that's going to help make it work.

How much it helps, we don't know, but we think it will help quite a lot.

But it's a matter that helps us.

And with this public service money that you've got, you've got the wherewithal

to make that idea operative and put some money into the thing.

And get something that'll be good for reading because it'll help give him a program that's more likely to work.

That'll be good for us.

Well, let me also say this.

You may have forgotten.

That 20% bumper is all over the California.

It's only gone up really down in Jersey this morning.

California's first to go, so that gives you a good kicker there.

Maybe you've got, would that get you into bargaining?

But isn't this money, what kind of money we got for public service?

For public service, 20% of that is discretionary.

You see, that's the money of the Congress.

We told Lashley we got it this year, but it's quite a few jobs, and California can get a good chunk anyway with the other 20% of the territory.

I think this is a hell of an idea because

In other words, we don't provide the jobs.

And rather than having him do it on the California relief, see the point?

And you get the 20% idea.

Now, the point is that the work, the point is, the point is, it must be sold.

This is the way I would do it for this department.

The way to sell this is to say, look here, this is what we can.

We've checked, we've put it up, of course, we've checked legally and so forth, and I'm not going to tell you.

As Ellen said, we go out and work.

We really think it's fine.

He's like, you believe the court will knock it out?

All right, fine.

But, Governor, I think we've been greatly concerned about your problem, and the problem in general, and California's problem.

And so what we're going to try to do is to, we've got the public service planning thing, and we're going to put a big kicker in California.

I know you can't tell him that he's going to get it all.

and then that'll raise hell too.

Some other states say, why don't we get it?

But you can say, others, you say, look, there's so many jobs that are going to be provided under this program.

I'm just wondering if you can say this.

So many jobs that have come to California.

It's real money.

Is that what you had in mind?

That seems to me.

Everybody gets to have a game like that.

And not every other game is the only thing.

I'm sure not.

But everybody has the issues.

We've got a question.

We've got to test it on that.

We've got to test it.

I thought we were doing this for the purpose of getting people all the unemployment rolls.

This is getting them all the welfare rolls.

Are the two the same?

Are welfare people on?

Are they listed as unemployed?

They are, but we would also have to watch the problems of veterans with preference who are not welfare people.

So it wouldn't all go for welfare.

But there's something about it.

Yes, sir.

And that's the way we plan to solve the New York problem that you're talking about.

Of course, in New York, it doesn't take a whole lot of money, but they only have three experimental areas in New York.

It's one of the reasons why it's easier to grab waivers, is they look like experiments being conducted in three different areas, and there's various controls and comparisons.

It's the kind of money we talk about.

Well, it isn't enough to take care of all the welfare people.

It's the kind of money we talk about.

What is this bill?

How much?

A billion dollars a year.

You can't get up to that rate of spending.

You're talking about California, a hundred million dollars.

Plus something extra.

Well, let's say it's a hundred million.

A hundred million is quite a few jobs this summer.

Oh, yes.

That's a,

It's not as many as you think, but it was not your fault.

So, I mean, if you realize that the only way to solve the employment problem is to find another place to work around it.

You know, you know, you know, you know, you clean the place up.

This is the biggest tingle drop in history.

yeah let's see john

That's a very good game.

Well, maybe we have to.

I'm sure we do.

It seems to me he's coming with something very powerful.

That's my point.

If he could come in and say, look, we're listening out.

We've got this bonanza.

I want to talk to you.

Now, here it is.

And here's a way that we can do it.

And we'll work directly with your office.

And here's $100 million.

That's a hell of a lot of money.

Oh, yeah.

When you consider that to the extent that the $100 million pays a living wage, there's a direct offset for those people receiving that wage who would otherwise be on his welfare.

There's an offset for that matter in the federal matching of those amounts.

He'll be quick to point that out.

No, but at the welfare, we pay, you know, for every dollar that the state spends for somebody in welfare, the federal government is spending another dollar.

But we don't want to lose sight of the president's other point.

We don't want him to get to the position where he just takes this $100 million.

Could we do this?

I think it's a germ of an idea here that could really make some music.

Could we pull back off now and see what sort of a pattern we could develop, what sort of a program we could present to them?

And then Elliot is supposed to go out and brief him on H.R.

1 at some time, and maybe we can discuss that.

I don't know if Elliot would drop off there at the time we have our conference on goals and things.

He might not stop him for a little while.

That'd be a good time to stay fine.

Fine.

That's about two weeks.

Yeah, they said on the whole it's better for me to...

to deal with him in Sacramento.

But I talked to Mies yesterday and he said they wouldn't be ready until this budget crisis was over.

And he said he figured it would be a week or 10 days.

And I said, no, we were going to be in Sacramento after the 7th.

And he said, fine.

Couldn't agree more.

You should go up and see him or call him at his corner office.

So that interval would be described.

The Supreme Court saved us from another compliance crutch.

Remember, we had one problem which they finally straightened out and we did okay.

But what they did was, one thing HR1 will do is eliminate an awful lot of these compliance problems.

It won't entirely do so, but we still need consistency with the wage incentive devices in HR1, but it will eliminate it.

Most of them.

The first problem we had with California was that they didn't comply with the amendments enacted in 1967, which said that the state had to keep its benefits standards consistent with rises in the cost of living.

So we said, well, if you don't, we had a hearing and there were two or three court suits.

And we finally said, I'll tell you,

Do something about this.

Unless you do something about this, we'll have to cut off all federal payments to California.

$900 million a year in welfare.

Federal funds, including Medicaid.

Yes, sir.

So they finally took action, but they coupled the action they took with another new gimmick.

which we couldn't square with the Social Security Act.

We told them, fine, we're glad you've now fixed point A, but unless you do something about point B, we'll have to institute new hearings.

Fortunately, now, we've been taken off the hook on point B because they say the Supreme Court in California has enjoined the state from putting step B into effect as a violation of the Social Security Act.

So we didn't have to do anything in this case before she did.

But I didn't think this was a part of it.

Oh, yeah.

Yeah.

I don't want you to hide it.

We know that Kelly is a great liberal, because people know it, so we're just going to keep him.

I'm serious about that.

Thank you, sir.

This is a clock of the unknown rate.

On the average, there are seven recoveries where you take the rate of the recovery that's supposed to have started and you match up the different

the years 49, 58, 61, and 67.

This is this, so that I can chart all those lines, this is the average.

The average is about, this is the wave that I'm on here.

And when the recovery starts, the pattern of the passage,

But that's what Milton Friedman's point was, wasn't it?

There is a drop-in on that plan.

It always comes.

But I've had a heart that burns as a memorandum, George, and you said it's an economic policy.

You know that, right?

You read it.

You know about the other day.

Well, he says that it doesn't happen anymore.

Well, Tom said about it.

He doesn't hear 67.

Well, I think he said 67.

It didn't.

It wasn't even recession.

That's right.

This is the average.

Show me 58.

Oh, here's 58.

Nice.

One thing about 58 is it took a little while to happen.

It's taken a little while to happen here.

I'll show you this.

Show me our here.

Here's 61.

Here we are.

That's us.

I'm going to recover here.

Right here.

What do you mean?

Is that when the GNP begins to rise?

What do you mean by when the recovery begins?

How do you determine?

How does that be determined?

Yes, it does.

It is, some of it is an arbitrary judgment, but it's an alliteration of things.

I believe in the case of the, the, the case of the Nostradamus.

So, but this is a very, you know, the same thing as the Bible.

They think that we cover everything up.

That's, you see, but that's, that's the vulnerable part of this one.

We have plenty of hindsight about the others.

We can say that.

But in this one, we're, you know, making proxies here.

The one that is, George said, is 2.7.

The economy says it has been moving up.

That's what ours is hanging higher longer.

Right.

Well, this 5.6% seems odd and so on.

Nevertheless, you know, we just don't know that far out of line with the way things have gone in the past.

So that, uh, I wouldn't say you don't need all of this.

It's not just a spurious figure.

I mean, it's an obvious one.

Will the press say it's a spurious figure?

I don't know if you've heard a lot of people are commenting on this, but apparently what that says is that it's a spurious figure.

They all said these figures are terrible, because they don't like the way that the employment actually went down.

What they did was they quoted that on a whole channel.

It's important to notice that these other ones, because of the period here, they come up to 58 and up to 61.

And ours kind of grew up to a little bit of an R-shape.

Ours went up and then down, and ours went up and then down.

This, this, this, is this the drop?

You can't have had another time to drop that much.

It's a very big drop.

Of course, that will get a lot of attention.

I've been certain it was going to drop as a result of this kind of comparison, but I couldn't say when.

What I meant is,

No, on the basis of not looking around the country and so forth, did you see things?

No, I did not.

We have had a decline in the level of initial claims for unemployment insurance.

I haven't seen that.

It came down, it's sort of been itching up again.

Anyway, it's down a lot from the peak, and if you compare the total unemployment rate with the insured unemployment rate,

The insured is smaller because not everybody is covered.

You see a band there.

There was a tendency at certain times for the band to expand or contract, but it's expanded a great deal by now.

And we know that insured on a point of the figure is a very reliable figure.

It just represents that adding up, it's not based on a poll or anything.

It just adds up the number of people who come in and got the checks.

So that's a good figure, and that has also moved off of previous peaks.

So I think there are, this is not something that you just run off and think that you can run off further.

While in terms of numbers, it tends to be concentrated among youth, there are some other indicators that take men 25 and over to grade drops of 3.6 and 3.3.

or take married men, which, you know, we talked about, I can't tell you about the backbone of the labor force, that dropped from 3.3 to 3.1.

So that's very solid stuff.

It's all across the board.

It isn't.

Teenage dropped from 17.3 to 15.8.

So you've got that.

Also, the speed of adjustment problem is, you know, I don't blame the

the technicians that it's hard to do it because in the first place, these employment non-employment statistics do have big seasonal swings in them.

There's no doubt about it.

But over the past five years, look what we've had.

We've had a big buildup into the armed forces, taking just these young people who enter the labor force, particularly at this time of year.

And then we've been having a drawdown.

So all of the recent experience that they're building seasonal factors on are sort of, that's all unusual experience.

And so their seasonals are kind of mixed up.

And one doesn't know for sure.

We worked out various offers of seasonals just to see what it might look like.

And one that is known,

more reasonable than when they're using, still has the unemployment rate down to 5.8%.

They've been dropping about 5 tenths of a point.

Every one they try to retrieve, they all bring it down some.

5.6 is what they're going to use, right?

Yes, 5.6 is what they're going to use.

Let me ask you something else.

Have we taken, frankly, the biggest brunt of that now, haven't we really?

Yes, we have.

Well, that's adorable.

But I mean, we really started taking the brunt of that.

I mean, we don't have a great lot of more people who have been a huge number.

They've been coming out of the radar for the last few months at 1.2 million a year, and that'll drop down to about 1 million a year toward the end of the summer, and then we'll be continuing on down there.

Also, in our defense-related employees, I think we don't worry.

Government purchases of goods and services, that number, that will start to rise in the next quarter for the first time.

Because of the defense cutbacks, I'm sorry, the aerospace cutbacks we've had.

And also because some of your pros and stuff, and that comes loose, as I know you will, that will get to a very large factor, but that helps.

What do you expect then?

to give an idea of the flow of seasonality and also the significance of employment expansion in the private sector.

Taking the raw figures, unadjusted for anything, just as they fall, total employment in January was 77.2 million.

by June and had risen to 79.5 million.

That's 2.3 million jobs in that six-month period.

So when you start talking about public service employment and 100,000 jobs or something, well, you can put it in your back pocket compared with what the economy generates when it expands.

Now that, however, I would have to say that is, on the whole, a seasonal movement.

You always get a rise in employment in the first six months of the year.

But the volume of it is important to see and to an extent it's kind of amazing that there isn't more of a response to the reality because the average guy doesn't seasonally adjust what he does particularly.

The same thing is true on unemployment.

The unemployment rates without any seasonal adjustment at all

I'll just read, beginning January, 6.6%, February, 6.6%, March, 6.3%, April, 5.7%, May, 5.3%.

Now, of course, in June, you get this influx of people in, and it jumps up the real unemployment rate to 6.5%.

That's all these young people coming into the labor market.

That happens all the time.

It happens less this year than last year.

And what happens less this year than last year?

The seasonal adjustment takes care of it.

So I think I'll tell you where you're going to get the poor mouth most.

I don't mean your shop this time.

I feel a little about that, but you've got them.

Don't have to get too much.

I've got that suppressed now by repressing.

You're going to get it.

All right.

And, uh,

I think it would be a better, he better not.

I mean, he's good, but you see my point is that this, all the nice theories and so forth, I mean, even though he knows that this is, that this is, that this is gonna worry the Jesus out of him because his whole letter is based on this assumption that unemployment had a part of it and it needed to go up.

Unemployment.

Now what's he saying now?

This is factually this.

Yes, it's just that, I don't know what he's saying.

Well, I predict that's where it's going to get popular.

On the Steele thing, not because he's a bad man, but because every man, we're all the same way, every man tries to justify his predictions, even if they're wrong.

That's the way we all are.

On the Steele thing, there is a, yes, sir, a, I know this is an old shirt, they're coming down, but I just said, we put that out.

Yes, we did.

That's good.

That's a potential talking paper which I can develop and put some, you know, numbers and more substance if that sounds like an approach you'd like to use.

Well, let me ask you this, and maybe before we leave, you see, who are we talking, who do you want us to talk to here, really?

I mean, all of us, but are we trying to influence the industry to do something, or influence the field, the industry to do something, or are we just trying to make a record in terms of

In other words, do we really expect that this meeting will influence anybody, or is it just cosmetic, which you can imagine?

My number one feeling is you're doing this, and should do it, to show an activist role.

Right.

But if it's an artist, fine.

We're going to show that.

Now, within that role, within that, the main thing you can gain is to avoid doing things.

Avoid doing things.

this industry is involved in a long strike.

That, to me, is the worst thing that has happened.

We must not have a strike.

That's right.

You're most likely to get a strike in this industry at the present time if the bigs, the big steel companies, feel that they can take a hard-line position and get away with it on the basis of serving the national interest.

And I say that because I'm convinced

There are some of the babes that would like to use this circumstance as the basis for shaking off the littles in this industry.

And I'm worried about that for two counts.

One is that they might get away with it.

If they did, it would take a long time to do it, and that would be the worst thing that could happen to us.

The second is equally bad, is that they try to do it, and the littles run around and make a side settlement in opposition to them, and their settlement is going to cost more than it would if they held together.

I say, we ought to avoid leaving anybody the impression that they're fighting our battle.

And that the damn thing ought to be settled by collective bargaining.

I say this because I'm as convinced as anything.

And whatever you say, I say to any of the rest of the state here, on this circumstance, and whether there is a strike or whether there isn't a strike, the settlement is going to be within five minutes of the percent of the speaker's certain anyway.

And this is the way the plan is.

giving anybody the basis for saying that at the present time, it was...

In other words, you can't have a government if we want him to have a strike, rather than pay more.

You've got to have a... Well, you've got to have a... What do they want from us?

You know, I thought they did for a while, but Abel's handled this very well.

He's cooled off his troops much better than I ever thought he could.

I personally feel that inflation, I know it is,

that we've got to, if we can, avoid a strike in this industry.

Particularly because the recovery, frankly, the recovery is, at this point, more important than having a non-inflationary settlement.

When I say non-inflationary, the settlement will be inflationary.

But I think that you've got to lean more toward keeping the recovery going than toward fighting inflation simply through the steel settlement, particularly with what you say about five-tenths of a percent.

What the hell are you talking about?

So the same benefit structure is much more costly to the steel industry.

and they can't afford the canned venements, they'll want to, in effect, give the canned costs, which they might basically have to stick to.

That's where the tough bargaining for the internal people is, and they have to struggle with that.

I think there is something that we can get out of this potential, which would be good, other than just the cosmetic side, and that is,

if somehow they can come out of this negotiation, hopefully without a strike, but with a constructive spirit of some kind, that they recognize more clearly the problems their industry has.

They've got to work, and they've got their work cut out.

They've got some sort of mechanism for doing that, and we stand in the position of having helped that and being willing to work with them.

to the extent that we can in the governmental side of it.

Now, just what that amounts to, I don't know.

I'm sure they would wind up coming in with proposals about tax arrangements or this and that or the other thing.

And, of course, the imports.

I think it's important to stress that the import control is only a temporary subject.

I agree with George.

What should be the format of the meeting?

Should I sit in the whole thing?

I don't understand.

If you're going to have cosmetics, I'm just going to sit there.

Well, wait a minute.

I can't.

We don't like it.

I've talked about this quite a lot.

I gather you can, the earliest you leave for Kansas City is 11 in the morning.

This is scheduled for 10.

So any format might be like this.

They come in at 10.

They come in the cab for a cab.

And I come in.

And we have three reports in effect before you come in.

Paul McCracken on Herbstown reports on their little compendium of relevant facts.

Nat Samuel's

reports on progress in negotiating a limitation on imports.

Here, we're working with them.

We're not threatening them.

Our posture is, we're trying to work this out, we know you want it.

And we're not threatening, we're going to knock, take this away, and so on, but we're supporting.

So that's supportive.

And Jim reports, her counsel will be there, Bill Essary, that as far as mediation, we are ready to work with them, and we're at their disposal.

So we have that, and we take no more than half an hour of that, maybe less than half an hour.

Very great.

We hand them the report.

That gets distributed publicly.

And then we can have a position so that you can know when we have completed that.

And then you come in, and you go around, shake hands with them, and then make your statement.

And when you get through with your statement, you leave.

and there isn't any discussion.

You don't want me to have discussion here as a matter of anything.

Well, what they will do, if you do that, I think what the companies are asking to do is to say, well, all right, Mr. President, what do you think we should settle for?

What do you think, what will you put up with in terms of price increases?

So, and that puts you on the spot.

This format, and I think it might be well to add on to here some opening statements that you're not here to tell them

what to settle for, what you work to do, just what you want to say, and I'll make it happen.

We're not going to tell them to settle for it.

We're not going to take responsibility for inflation.

On the other hand, we're going to tell them we don't want to strain them, that it would not be in the national interest, that we do want them to come out with this constructive spirit, and that we think that it's in their interest and the national interest for them to make the settlement of it.

and some of it is, and some of it is.

Well, I think if you stay away from that and say that they're gonna do whatever they're gonna do, and how they're gonna do it, their self-interest, financial interest, and so on, you ought to throw their attention to these long-run problems that they have, and which we're concerned about, too.

And somehow out of this, whatever they settle for, those problems are gonna be there, and they ought to use this occasion

to get something that's- I'm sorry to say this is the most important in terms of the future of the steel industry for years to come.

The future of this company will have a massive impact on the economy of this country.

And therefore, we're calling upon the statesmanship working it out, not simply the usual.

We cannot afford it this time.

because the nation depends so much on that.

Just tell them that.

Well, I would go a little soft on that because they're important.

They're important to a fair degree because of their symbolic, traditional importance.

Actually, if they're, you heard Jim Roche the other day say he had a 90-day supply of steel.

A third of the flow of steel can be maintained in the strength.

the country could take a long steel strike.

And the real sufferers would be the industry.

Well, you could take a long steel strike, but you couldn't take the second one.

That's the thing.

We don't want to recover it.

But it seems to me that it would be good if you sort of mounted it out a little way, perhaps not as lengthy as you did with the productivity dimension.

But some of that...

material that gets a person in the cabinet room and gets them feeling, gee, there are bigger problems than me around here, and I fit into them, and I'd like to make a contribution.

I didn't put that down here, but I think so.

Now, this, I should point out, represents what I would call a constructive approach to the meeting.

That is, it's

It's not conciliatory exactly, but it says we want to work with you.

There is an entirely different approach that you could take, you could go in, kind of on the Jack Kennedy steel pot rotation business and raise hell with them and tell them they should have no price increases and a low wage settlement and so on.

I believe that you would be telling them that they had to do a lot of things that would not come to pass.

And hopefully that's where you would be creating

It's also a different time and a different time bargaining process.

And I think this fits your style and the administration's style better.

And I think of parallels.

I had to have a meeting the other day with this fellow Jack Greenberg from the Inc. Fund.

who gave me a lecture about how we should handle southern school desegregation.

I mean, you can sit there and listen to that guy talk, and you know he couldn't get agreement from anybody on anything.

He's just not that kind of a guy.

He wants to have a fight.

Sure.

Whereas in your approach, it was one of certainly there's a law, we're going to obey the law, but let's work with it.

And I think that...

So that's more in keeping with the way we've gone about things and that works better.

People appreciate it.

We all make sure we appreciate it.

They may appreciate the fight with the Christians.

They like to hear the people roiling around raising hell on them too.

That's really good.

That's what they call leadership, you know.

Yeah.

I'll get you a fuller briefing paper with the names of the people and fill this out.

And also a few bits of information such as how many workers are there in the industry and

A few bits and pieces like that.

I always impress people.

Good.

All right.

Thank you.

I'll get you back here.

All right.

Thanks very much.

I'll check in with you if I may.

Oh, sure.

Absolutely.

Right.

There you go.

Thank you.