Nixon & Shultz on Treasury Department restructuring and Tax reform

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that would be a very bad tactic.

What would happen is that we

They will in the proper time.

But if we separate them, what they want to do is separate the two in order to have client issues and issues.

Yeah.

And if they don't separate them, I mean, I mean, if they don't go forward, you just go with it.

You just be acting secretary of the treasury and stuff like that.

Well, I think they will have a hearing fairly soon.

And they should, according to the nomination, have a last session.

That's the main thing.

You've got to go forward in the hearing, and Garst and Hamlet, which you'll come out, I'm sure, unanimous with, and it's right there, and then your floor opening will be almost automatic.

But if you separate the two, I mean, and put you ahead of Kleinbeach, then they've got to do it.

They then are totally irresponsible.

And the Kleinbeach thing, we're not asking them.

I think it will work.

I think it will work with the next two, maybe two weeks.

But yours is so simple, I mean, to track down.

And to me, I'm having to check to see whether you can be active.

I haven't checked that out.

I had to.

Well, I think it's important for you to do that.

If you are not confirmed by the time I return on the 1st of June, I want to send a copy of it to me.

I'd like for him to leave about then.

I think that's a good thing from two standpoints.

First off, I want him to take the trip.

But second, I think it's very important for you to be there in the saddle.

You know what I mean?

And it is good to have another guy hanging around because they've got to know who's boss.

And I think what you ought to do, what we ought to do is to, you've been

but you will be

Which would be a nice thing.

Okay.

Well, we've been in there.

There are reasons.

And he'll want to go.

I mean, I'm sure he wants to go since he's a kid, too.

But it's better from your standpoint to have him transition quick and shut up.

That's the reason I'm showing you your boss.

And that's about the right amount of time, isn't it?

Because he should stay 10 days.

I'm sort of intermixing briefings on the treasury, calls on senators and so forth, and disentangling from OFD.

That also gives a good reason for it.

You just say whether you're acting or in charge, and he will knock it back.

That's the way it's going to be.

So that's a, that gets you, gets the things started.

Okay.

We'll work that out.

On these things that I said, on the personnel things, George, you just, we just got to decide whether you think it's right now, sign the papers.

Well, I think the, but I would only say,

You've got to get, I just said, you've got to get a top-lying group of people that you have total confidence in to come up with a tax reform thing.

And you've got to get that in.

Don't let that be done with, well, Sherry Cohen and the rest of the work, and they'll come up with the same damn thing they have previously.

The other thing is that I think that you've got to examine the people over there and just

Tracery.

Tracery is, it's got, it's muscled on in the head now.

I know there are a lot of good men, but, you know, it's still muscled on.

I agree with that.

It really is.

And I don't, I don't like to do it, but I can strongly urge you to get to the people from out in the Midwest.

I mean, things are Chicago or a little bit in there.

Well, he doesn't know that the economic policy stuff too well.

On the other hand, he weighed in very well with us on the freeze and all of that.

And in terms of the operations over there, there's a huge...

uh, management job in the Internal Residence Service, Customs and so on.

The Internal Residence, you understand, we've got to get a hold of that man and run better than this guy.

And, uh, it's, in Treasury, see, the county is not a great job in terms of big plays and the rest of it.

He'd be the first man, he hasn't gotten a hold of running the organization.

You can run the organization.

you should just be just i want to look them all over and because i feel rather brutally they're going to all go for the whole bunch i will run like that and get your names ready pick the very best people you can and be ready to move into the new team and particularly a young team

I will have that plan right there.

I didn't want to mislead you yesterday.

I think to let go of these top people right now would have been very disruptive.

And they're very supportive of you.

Well, they're good men.

And they're good men.

We will find places for a channel for fellows like Walker and Booker and Chris.

Well, I will do that, and I think I did manage to run the Department of Labor, and I have got that.

I think you ought to get, I don't think he's going to do, I don't think he's going to be there, but I think you ought to give George Meany a call and say that the president, now that you're over there and you have a customary council and so forth, I'm afraid you're going to be in touch with him.

Why don't you talk to him?

Just go over and have a chat with him.

Find an excuse to talk to him.

See what I mean?

All right.

I've got to say that we, if we go down this road, which maybe, I don't know, they're going to start having a better job now.

I called and told him about this change, and good.

And I have a perfect little thing that I've been working with him on, because I felt good to stay in contact with him.

He's very interested in getting the golf professional ship for Lee Elder.

who's a Negro golfer here in Washington, at one of the National Park Service golf courses here in town.

It's a golf course that's right in the black area in the kitchen.

And he thinks that it would be nice for him to have a home course and so forth, and I do too.

So we're working with Raj Morton.

That's the first thing you can do on a 1.1.

Now, that shirt hurts all over here, I see.

He's after one of my appointees.

I'm gonna fire him.

I'm definitely gonna let her.

But I want to hold her in, and I want to make it fast.

Right now.

You just ordered.

And then when it's done, you call George.

You say to the president, you might tell him, you say to the generation that I was enthusiastic.

And I said, for you to break whatever channel is necessary to get it done.

And the order's gonna be it.

— 2 min 41 s with no transcribed speech —

The thing is, if you were a leader in the fight, you should know what the hell it's all about.

Also, if you were on the economic policy, you would fight burns, money supply.

you

— 1 min 1 s with no transcribed speech —

Now, first, the main thing is that you will see there's been a fight.

You should know what the hell it's all about.

Also, on the economic policy, you're fighting burns, money supply, and you're also fighting on convertibility, which is good.

And the main thing I think we really want to do, though, is to create a thing in the tax system.

That in the tax system is an abomination.

It is abomination.

You know what I mean?

It's too complicated and so forth.

I just think we've got to grapple with the problem.

I don't know how, when, or any of that sort, but if somebody can do a little thing.

I think, really, that what's happened here is we've complicated the state.

in using the tax system as a hodgepodge for purposes of social aims.

I think really social aims should be accomplished through legislation and appropriation rather than through the tax system.

Now, understand we're far down that road already.

I mean, we have charitable deduction, et cetera, et cetera, et cetera.

But what I'm getting at is that a simple tax system

I think it's desperately needed.

It'll put a hell of a lot of tax lawyers out of business.

That's just too bad.

That's good.

That's one of the reasons why I've always favored it.

Just call it value added, call it manufacturer's excise, call it anything else.

I favor that kind of an approach from the other, because basically it's simple.

You know, it's damn simple.

And they talk about loopholes.

There are no loopholes in it.

I've asked Milton Friedman.

to come down.

He's coming down next Monday.

He said, oh, wait.

I know this is probably not meant for everybody to say you were bringing a damn rat and a rifle.

But I think if you could get Bill to come down and frankly say that he loves me.

He's so bright.

It's so interesting to start there.

It's so interesting he can't do it.

Well, I'll sign him on and I'll get a good bit of his time.

He worships you.

Well, you can.

It's the way the person goes, but he can't say no to you.

As you know, I think the goddamn wage and price controls are no good.

Although they've worked pretty well so far.

Tell Milton Friedman that I really think we now need you.

And that he ought to come down and help you.

You tell him that.

Okay.

And forget Frank and I in the background.

I have to arm him, I'll do it.

But he's got to do it.

Maybe he could get his teaching load.

But then the other thing, you could say, I know we need three, four days of your time.

There are some ways that you could work out an extra year or, you know, over a temporary amount, $30,000 or something.

You need a couple of other very bright people.

Look around.

Look through your mind.

There are the brightest people you know in this field who are not radical leftists.

There must be three or four.

Now, freedom is too far to ride, frankly, for me and for you.

There are some guys that are not just animals.

There's so much happening over there now.

Friedman is creative.

And also, if you come up with something, Friedman will show you the holes.

And if there are holes, as fast as anybody, his mind works like a radiator.

And he tells you right after he'll tell you, or me or anybody.

Well, I will definitely get on that.

And I will be bringing in bright people as I go along.

And I will have a plan for it.

for our group once the election is over.

And we'll have work going on the task in front of us.

You just totally are right.

Shave up the trade because it hasn't been shaved.

Georgia hasn't been shaved since World War II.

The same dead people were over there.

The same kinds of people were there when Eisenhower was there.

They were never worth a damn.

I really mean that.

I don't mean they were crooked.

But they are not creative.

They are not creative.

So let's go.

Okay.

I have always, of course, go out and sit down with Wilbur Reynolds and law.

You've got to do both.

Tell the president that you would, and he'd ask you specifically to go out and not hear the specific replies on the last thing that he wants to.

the wall and play everything on its own.

Senator, the President admires you greatly and respects you for your time and your creativity and everything.

I don't know if that's irrelevant.

But we want your advice.

We want this to be a partnership working together.

And we're not going to have the House dominate the Senate.

Now, with Mills, you play exactly the opposite.

You just play the lion and go, now, we know we can't get any tax legislation through without you.

The President told me about his breakfast with you.

It was very, I think, very encouraging.

It made me very, very constructive concerning that we want to, we have, we have the ability to get the right kind of text, but you have no right of authorship on this thing.

You don't know that.

The outcome of the breakfast, I take it, was that there shouldn't be a tax bill this year.

Yeah, yeah, except that he's trying to wiggle his way around saying, well, maybe they should have some sort of a system whereby he has an idea of putting in a legislation that could be effective every five years, every exemption is reexamined.

That would create an unbelievable fee.

Great chaos and, you know, business planning and all that.

You can't do that.

You can't say that automatically.

I haven't talked with them as if both of those Republicans are in the state, but they don't really matter.

What I'd like to do is for you to handle some of that.

I don't have a very clear view of what it means.

I know it's not at this point where you're not there to discuss it in any specific setting.

Just don't make any commitments.

But be there, but you develop a personal relationship with these guys so that you and we're closer with them.

You just said the president is a realist.

He knows he can't win any of the tax cuts without your help.

Okay?

He wants to do it.

And you want to work with him.

Fair enough.

I'd be glad to do that.

I know them both fairly well.

Of course you do.

I didn't have a chance to collect my thoughts the other day when you asked me to do this.

Yeah, I didn't expect to have that.

However, you kind of talked about it, and I thought I might just review my understanding of some of the things that I take it you want me to do and the positions that largely we're on.

And this reflects, to some extent, discussions with Connolly and others.

Right, right.

But I would take it you want me to continue to maintain an overall relationship with CAAT on the budget and the budget strategy.

Exactly.

And CAAT will do the most- Very important.

So I will take steps to do that.

On the matter of the trade and monetary front,

We want to pursue our line that has developed that we're damn well going to see that America gets bargained for, right?

At the same time, we also have a line we're not withdrawing from the world.

We're not putting a circle around the United States.

We want to trade on fair terms.

But between now and the election, leave more to the protectionists and less to the undercutters.

I know my own purest thinking is to move in the other direction.

But between now and the election, George, we need to take basically the economy.

I don't want the story written with the effect that Scholes is backing away from the economy's strong position.

can view these orders to write nasty things about you, that's good.

I notice there's been a little of that already, because at the beginning of the international monetary crisis, I sounded off once or twice that we weren't going to sacrifice the domestic economy to any international monetary objectives, and that's been quoted.

So I'll continue to push that.

I take it also that

that you would like me to work closely with Peter and Peter Flanagan on the coordination of the international economic business.

Right.

More or less in the manner that Connolly did.

Absolutely.

I don't mean to exclude others.

But you have to guide him.

There has to be.

You have to guide him because Peter Flanagan is not an expert in this field.

He knows something about it.

You guide him.

That's what you do.

All right.

Well, all right.

You're responsible.

Well, then go on.

Go on.

Council.

You've got to appear, you've got to compromise your principles on it.

Nixon & Shultz on Treasury Department restructuring and Tax reform

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Also recorded on May 19, 1972

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Nixon & Shultz on Treasury Department restructuring and Tax reform

AI Summary

Audio

NARA Description

Nixon Library Finding Aid

Transcript (AI-generated)

Also recorded on May 19, 1972

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