Conversation 852-015

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The official of the stick in the closet seems to be what everybody likes.

So there it is.

It's a substantial stick.

And it doesn't even freeze.

Right?

Go for legislation.

They're very sensitive.

We scare people with that.

Coming back to the tax matters, we start with the bare essentials, basic essentials, as far as the benefits concerned.

I have to move on the property tax.

I have to move on the tax credit.

Those two, we have to get them.

when you come to the general problem of tax reform, I don't think there is a great deal in it for us.

I think you will get a lot on that.

First, I don't think there's much money in it, and I don't feel in the present time there's as much politics in it.

Maybe after talking to Wilbur, who more so feels now about tax reform.

And I also want to see what law takes about tax reform.

What I'm getting at is that that will help me evaluate what are basically your tax reform elements that you have and what you're supposed to equalize and all that sort of thing, more equitable in terms of the congressional and public support for it.

I'm not sure that...

At the end of the day, we have to decide as to whether we want a great long list of proposals and then perhaps get very little, or whether we are better off to concentrate on a couple of major goals.

There's a very good chance of either getting them or getting the issue very much done.

In fact, your list is very comprehensive.

Your books cover a much wider field than I realize to be content to.

What do you think, for example, Mills, which you might be safe to consider.

You can go over much of these individually.

I have not been willing myself or anybody else to go over any of this with anybody.

And what I would like to do, if it's agreeable with you, is to get people over it, and not to go over these things with suggestions, but to talk around a little bit more about some of these ideas so that I can get a feel of the kinds of reactions that people have.

I've hesitated to do that because as soon as I suggest something or other that people immediately include, I talk about it with you.

And, uh, that has an inference connected with it.

So I've, I've just, people ask me questions, and I'll, and I just say, well, you'll know what the president's tax proposals are with the president.

Let you know.

And, uh, I don't have anything more to say other than that.

I don't want to talk about these things that you've made.

The idea, the way I would approach it is that this is the year of the concentration of the Congress.

And we don't want to engage in idle gestures to embarrass the Congress and throw up things that we know the Congress has advanced against.

accept that you, that you must, we must start with it.

You can say there are only two, I think you should say both, that there are only two things that we, that the President's committed to, and these things are going to be ended.

Now beyond that, we're, we've got a sort of a clean, a clean blackboard to ride on.

And so let's just have, you can, and as far as tax reform is concerned, I unfortunately

I don't want to do anything here that's sort of catering to, although it's not defensive actions, it must be, it must be, it must be, I don't want to just cater to forces there.

Take four of the four of the turtles that you had before and stuff.

Talk a little to me about that now.

Those were to me extremely interesting.

Six points to four.

You would be generous about things that are negative in the sense that we

I have the view that the Burke-Hartkey taxing, making firms bring earnings back, or pay tax on their earnings, whether they bring them back or not, and then tax them fully, even without deducting for foreign taxation, is just my way of saying we want to end American investment abroad.

And Burke-Hartkey is so unbelievably irresponsible.

And yet, Connelly tells me to roll with him.

Well, no, I don't really think so.

What do you think, John?

I don't think so either.

I'm getting a little sense from it.

Well, I just don't.

It isn't respectable.

Is that right?

That's the sense of it I get.

that people say, well, here it is, the Indians are, there's a lot of steam, and that kind of thing, but this isn't something that any responsible man could be for, this kind of thing.

I asked you as an L.A. to particularly date this up with, of course, you've already reached out to Drake, but really, I'm really good at talking with him, and he has an international station, and all the rest of the same, but I'm quite a junior job to him, and I'm quite prepared for him, and I'm prepared for him, and I think he may be a good short-range politician for who he matters to this.

that long as possible.

It's like the tax strikes for the newspaper, the Guild of New York.

What they do, they close all the newspapers, and now there are only two, and soon there may be one.

And now that's true of the rest of the construction.

I mean, me and Ben, we'll see this.

I had a very brief discussion with him on trade legislation a couple of weeks ago, and he said, well, I don't know a lot about it.

He said, we haven't heard part of anything, but that's the...

that's way off and we want to expand world trade but uh we got to take care of our members and uh they've got to be able to know that they are people i can tell our people are our people for our people and um so he's i don't think he's all hung up on it and he for business

They have a special incentive, as it turns out, to explore abroad rather than to explore here.

And the way that works is that they can explore abroad.

They generate losses in the early exploration of some new country or new area.

Those losses come back into the United States and are directly deductible by them as expenses.

Then as the field

comes in and they start generating income.

The country taxes that income at our rates and therefore we allow that as a deduction from that foreign income and we don't tax it at all.

So we first subsidize the loss because it's a direct deduction from domestic income.

And then we don't get any tax collected

on the flow that takes place afterwards.

And that kind of skews the balance of incentives in favor of everything else.

That's where the foreign thing appealed to me.

I don't know what you said.

It probably wasn't the foreign thing, John.

Well, they appealed to me.

That's where I have to watch my domestic things, except for these two.

But it's this process in our energy work.

But on the foreign thing, I want to be sure that the foreign things

George, let's just be as responsible as we can be, and let's change these rules.

Now, the other thing that I ask you on energy, this is very, very hard for me to understand.

No, not urgent, Senator.

It's something I hope I'm right on.

I'm going back to that monumental work that you did down on the, uh, on the end course.

You know?

Now, can we not now dust that off and be for it?

Isn't that really what that was all about?

No, not this.

This, I know that's what I was writing.

But I'm talking about the imports thing.

And do you remember that I asked the liberals, would not now those who opposed, I talked to Conley about it, and he said, go ahead with it.

I don't think he knew what was all in it.

But he said, go ahead.

But will the independent oil operators still raise hell about all that?

What is your view?

They'll raise some hell about it, but I think prices are going up so strongly that they're being taken care of.

And we do have to think about incentives for domestic production.

The thing that you and I talked about before, and which I have Bill Simon working on, he's been appointed chairman of the Soil Policy Committee.

uh is to try to restructure the program recognizing we're going to bring oil in as that report suggested we have to we have to all right but arrange the program so that we we do have some restrictions we do have a preferred market and if you can use that market as a bargaining tool with the shah or with the

from Saudi Arabia, or whoever, and see if we can't get some mileage out of the program.

But let me tell you, the other thing that I want you to do is to go back to your oil study.

It's always seemed to me a great tragedy to have something done by a group of people working their tails off, like Arita, you know, and your staff.

And then, because, as we know, there were political problems in 1970, and about 600

and then say, then it's flush.

But I would imagine that many of the ideas in that whole study now, which were not politically saleable then, are totally on the way right now.

Did you ever read the study, John?

And I'm under the impression, George, that a lot of them have gone into effect.

by the way of events.

Of course, really what it boils down to is the difference between quotas and tariffs at this point, I would think.

Is that about the fundamental difference between what we have here now?

That's right.

We have the tariff.

That's a matter of technique.

And what we're now moving toward is the...

auction with a minimum price on quotes, which has a combination of a quota and a tariff.

When you set the minimum price, you're going to pay a second tariff.

But by auctioning the quota tickets, you still retain a quantitative restriction, and that can work out pretty well.

This is one thing that Long will be here about tomorrow.

He owns oil and gas properties.

His family does.

And so he's very committed to this.

He will keep that, my dear, a long push.

Well, he's for longer restricting the ARABs oil, as he calls them, and making it profitable for our domestic producers.

He says it's wrong to treat Americans that way, to keep their oil on the ground for national security purposes and bring in those ARABs oil.

And this argues against the Shultz study.

Well, now the quota device or the tariff device, either one is acceptable as long as you keep it high enough so that you have a domestic preference and you have incentive for your domestic producer.

Do you have an appointment at the local show study to remove all the quota choices?

No, no.

Our recommendation was that we rearrange the system tariff for some tariff quota arrangement.

and that we then take a step in the direction of liberalization, and that we have an executive office group that keeps track of this, and we take a step, and then we observe, and we see what happens.

And then depending upon what we see the situation to be, we take another step, and don't just sort of rush into it, but have a kind of an experimental process to see where we may have done better.

You have the...

In this tax proposal, we have this combination of the reduction of the top rate from $70 to $50, with a rearrangement of capital gains and the minimum tax, and a changed arrangement on these account-of-loss type things, which gets you into the oil area.

We also have a proposal that we're trying to

flesh out, I don't quite like the way we've got it, to in effect increase the allowances that come to somebody who explores when it's applied directly to exploratory work.

And one of the problems with the present system is that you get these intangible drilling costs and depletion allowance benefits

When you just do development work, you know the oil's there and you drill that well.

There's nothing exploratory about it.

And so we're seeking to, in effect, follow your Texas speech, see if there is some way we can go even further than the present system, but skew it all in the direction of exploration and away from just development wells.

And we felt that if we didn't, yeah, I saw that combination and then changed the balance of,

incentives to drill abroad versus drilling home, we might have to cross this again.

Was that that proposal that you had for a, uh, was that right?

Yeah, that's the best.

Did you hear that, John?

Yes, sir.

What do you think of that?

Well, here again, I think that has its place rather than a tax reform message.

It is a tax message.

could be well i think i think they need to go in both ways just as we have felt in the trade bill when we finally get down to it we'll want to have our foreign tax proposal out there at the time we have a trade bill and also at the time we talk about taxes undoubtedly however the tax

uh hearings and so forth by the place to hold to handle all the taxes i'm sure because you've got a terrific staff there to work with but just get better work politically we plan on the hands of the opposition if we come up with a big tax reform package on the other hand we come up with an energy package and a trade package energy so your lights work and crazy to have a job it seems to me that's that's the way to use these these tax changes right

looks, unfortunately, if you put it in there, looks in a tax bill, uh, if you set it up that way, if it goes first, it looks like you're doing something for the damn oil company, the loophole.

In other words, the loophole in the wrong direction.

I'm all for it, I understand.

But the drive, on the other hand, if you put it in this party, if you get it, that's why the two must go to 10.

Your energy thing should be ready to go.

So we've got to have this here, and then you say, no, we've got to tax this over here.

But, uh,

Well, I think we're sort of in a little direction where it looks as though trade is going to go fairly soon.

The energy business is pretty well briefed out anyway, and I don't know what extent the president's going to look at that.

But anyway, that is pretty fast track.

He seems to have only been able to put both these things out and then lay the tax later following it, and then he's going to get a great deal.

I do not like to see the text.

I don't think it needs to float this soon for you, John.

Would you ever go second, in other words, after energy or trade?

I don't know.

What's the timing on your hearing?

What do you got, six weeks, do you figure, before you all have to testify?

I think we have about four weeks.

Four weeks you have to testify.

Well, that's generally the changes that are out of the case.

Well, let me ask you to tell you this.

I have in mind that on the energy money, you know, we've got to have some things that are relatively non...

are relatively non-controversial and positive, to talk to the bipartisan leaders about it.

I want to push energy.

We've told them we're going to discuss energy with them.

And I want to have a big Google business down here on energy at some time.

So that's got to be arranged and scheduled sometime.

The other one is, I think the trade-in probably is one that what could be on a bipartisan basis.

Are you going to do that in California?

No, we won't.

We can't.

We won't get the trade message next week.

We won't be ready to go then.

I see.

I thought you were thinking if we do the devaluation, say, Monday, Sunday or Monday, you wanted to follow up with a trade speech.

Oh, you were thinking of Sunday and Monday this week?

Yes, sir.

Well, all this depends on what we discover are the attitudes abroad.

Well, you see, there's no way to have consultation with the Congress next week.

That's our problem.

They all belong on any sort of big meeting.

I don't know if you had anything, George, what your consultation would have to be, and everybody would understand it in this instance.

would be a hell of a lot of telephone calls that you'd have to make and others.

I mean, this could be done in the event.

And, uh, I hadn't, I hadn't had my, I was, I was listening.

We, uh, you just have to call them all and say, look, the President's not going to buy a part of the meeting.

We found out too many people were scattered around.

We just wanted to know this is over.

We decided to trade.

Well, I think Mr. President, the following day,

We lay that in there.

And if we were to go with an evaluation business early next week, we could still say, and the president is going to have, within two weeks, .

Well, that's easier.

That's better.

That's fine.

And then I can come back.

I won't be back here until Tuesday or the following week, probably, because I've got to be hammering some money.

And then we could come back.

meet the leaders on, say, Wednesday, and then bust out the trade thing right after the leaders.

And then you see, John, we could meet with the leaders.

I could do the trade radio thing at noon, and put that right out, give the leaders a copy of it, and say, here's a speech I'm making after, you know, we consult with them all and tell them, here's what we have in mind, and we ask for your support.

How's that sound to you?

Get the ground running here.

Yeah.

Now that you have everything, when can you be ready?

I understand.

On energy, we shouldn't come out full blown.

As I told you, I do want you to be sure that Congress sits in as the representative.

That's an outside interest.

Well, we'll give him a run at the comprehensive paper that has been prepared.

Does he know anything?

Yes, sir.

Now, that means that we'll have to wait for his idea to take him a week anyway to get into it.

What I've done is to turn flagging off.

Peter's just panned to get a message done.

Well, in order to get a timely time out of that, I'm ready for a message.

Yeah, well, see, they've got a huge option paper worked up.

And if you make all of the decisions that are laid out in there, there'd be ground for a very long, comprehensive, multifaceted message in a lot of legislation.

I told Peter to just cool it so that we could get this thing to copy so that he could get his views back in.

De Bonaventure has done a very interesting analytical piece on the option paper, which you ought to read, George.

It's a kind of...

Well, Devon did frame some very fundamental philosophical questions, first of all, about national security, which is his view.

And the whole thrust is that the assumption that you shouldn't import oil because it's inimical to the national security is just backwards.

No, sir.

He was tied up in the committee, and he's on his way to be here within five minutes.

He said, really, our basic national security has to slide in keeping the O.L.

in our graph, and in our common shell, and use the O.L.

until we can't get it anymore, and then use our O.L.

Now, that frames the issue between his point of view and Long's very, very good, in a way that it's not framed in the basic paper.

And there's a kind of a, there's a kind of a, to my study, so to keep that conclusion.

To a certain extent, although you have to have your levels of production here going in such a way that you have some bargaining between

Well, that's right.

So we need to explore and we need to prove these fields and we need to have production companies.

The system that you adopt has to be between the two extremes.

This weird thing is assumed to be eight and a half years off, and the problem that you're solving is between now and then.

That's basically what you're working on.

We got started late.

So it's the reason we started when we did, is that we realized that the previous administration had just come in.

Are we putting enough into the documentary?

Well, they say we are.

Now, we put some additional money in this budget, and they say we're spending all the money we can.

There's another point, as I understand it, probably George's or Lush's, and it's better.

There's a leapfrog in the pre-review.

I remember one time when I met with the scientists, they told me that Dick Tuller told me or somebody

rather than reader, something else beyond that.

There is.

There is a different system.

That's right.

It's one that goes fairly out of fashion.

It's not theoretically proven.

The nuclear reactors are theoretically proven.

They know they can do it.

It's just a fusion, right?

It's a fusion technology.

Exactly.

That's what we're talking about.

And it is still in the theoretical stage.

They're still working on that.

Nobody can assure anybody that the liquid metal fast-free reactor will work.

The Russians have some, and the French are into it, and some other countries.

But they're all prototypes.

Yeah.

What is the situation, John, now, for example, in the scientific community within the government, now that we are not, you know, without a science advisor and so forth?

This is a pretty good test of that.

Are you submitting that?

This is your science advisor, right?

Yeah.

Good.

That's great.

Now, are you submitting it to the group, to our scientific types around here?

Well, I'm going to ask you, and the breeder react, I think, the whole time.

We have to bring them into it, and they are in it, and I started to put some pieces away.

I'm sure we need to have Guy Stever, the head of the scientists, the former Carnegie Mellon guy, perhaps get his scientific group tapped in.

Could you get Stever, by all means, I want him involved.

Sure.

Now, Ed David was involved in the working group that worked on this.

I want him to be continually involved as one of the outsiders, bringing in Steeler and David and Connolly.

I told David that we'd like to have him on that seat.

On the whole thing, the whole energy thing, John.

Right.

Well, this energy paper needs more work.

And I think it would be good to have a common practical view of it also.

But what basically you're talking about here is a deregulation of the price of gas, number one.

Incentives, price incentives and other kinds of incentives to get more exploration, more development in the United States, more leasing of our, kind of on a shelf, more deep water ports to the United States.

I appreciate that beautiful picture of you

Your wife, daughters, and son-in-laws.

I'm certainly concerned that there's a predication for what I've done more than send you to.

That's right.

Probably get a lot of compliments on it.

That's right.

Well, I thought, well, you're getting busy now, aren't you?

We, I had, I had a case called yesterday, but I'm wondering which is the old R.E.A.P.

thing that I've already sold.

Yeah.

I guess I'll be finding any other, I'll come to Arkansas to, as in your question, to call the CERCIC.

I'm wondering if CERCIC are a great tool that you can find, that you can find the right kind of thing.

What is the one that you have a special interest in?

They're creating a school of social sciences, which is a new thing that, well, they haven't really scattered.

In addition to what they do have, they will have courses on such things as foreign service.

and encourage people to become interested in government.

I don't know what the social sciences are altogether, but it includes, what, everything St. Martin?

Biology and zoology and the other things that DJ asked me about.

But I tell them I'm not paying my name for that.

They're going to get very liberal in their instructions.

That's the trouble with the social sciences.

They're not about that very good.

It is social services and all of that.

That is what it is.

Especially the sociologists.

The psychiatry is what I'm into.

No sociologists.

That's the science.

I went out to see...

And, you know, we had a very rough day yesterday, as we did.

And they figured, actually, not last week, but a week this morning.

I mean, I called at midnight.

So I called at midnight out there last night.

He said he had a rather remarkable recovery.

Whatever the bleeding was, they had a problem.

So the correction was all to his advantage.

So I had to call him and run to check on him and see if he could take a visit.

So I said, well, that guy just looks fine.

You know, that steel brick that he grabbed, man.

And, uh...

Of course, he is aged 72, and just got all shot up.

It is very hard for a man much younger.

The doctor told me an interesting thing.

He says the tissue, whatever that is, is of a man 20 years younger.

I will say that he's probably in better physical shape, at least when he was younger than he is now.

That's right.

And his dentistry numbers are

And I think that basically, one of the major problems, of course, is liver.

And if nothing wrong with his liver, if it just bloats, it doesn't bring anything.

I don't think he does.

He's one of the most fun kind of hard shell, hard shell, non-drinking baths.

I don't know what these are.

But I think you're going to be, uh, I don't know whether that, uh, uh, I don't think I've ever been that much else than this one here, and I guess we'll be moving around with all that, which cuts back on R.E.P.

and all that.

I've told my farmers that I hope they've been able to rehab and live a long time and survive a year or two without being able to get out.

Well, actually, you know what we're trying to do here?

It's not great.

We've got the farmers out.

We've got some of those city folks, too.

But of course, we're just not able to build an entity.

Let me tell you, as we start this conversation, as we talk here, what I really want to talk to you about in general terms.

Well, you know the Innovation Army leaders here, so what we're going to have to ask them is not to raise things, but you also know that on certain fundamental things that it's going to come down at times to the fact that they're responsible folks like yourself.

And I don't have to sit down and work with them.

We won't work them all out, but we'll work out quite a few.

What I'd like to do

You know, it's a, it's a little, it's, if I want to speak quite frankly with you about it, it's a little different.

I mean, when Johnny Berger's gone, uh, the two of us, you know, it was a nice, nice time.

He doesn't know, he is not, you know, going to carry the, the, the, the way over there.

And he doesn't know a lot about this.

We would keep a very close touch with him.

Yes, he's a very fine man and so forth, but he's not going to be the leader that Johnny was.

He isn't going to lead those people.

Now, what I would like to do is if we could, from time to time, get together.

I mean, George told the farmer that we're not going to have a normal year.

We'll be at the bipartisan page and so forth, and we'll be posted.

But if we could sit down and talk candidly off the record about the matters that were before,

and maybe some other matters, too, would be very helpful.

Now, the purpose of this, too, is to take on taxing.

I was just talking to George earlier, and I said, now, what about the taxing?

I don't want to send down there to the Congress a bill that contains an awful lot of proposals that we know are sheer demagoguery and that we're not going to get action on.

I also don't want to be in a position of opposing proposals that are responsible for the rest.

We know, you know, the efforts for what we call tax reform, campaigns, and so forth and so on.

But now some of that's figured out.

And what seems to me now is this,

in that area.

If we can have some just frank talks, I can indicate to you a couple of places where I have made commitments.

There are a lot of other places where we

We think that foreign people, particularly for Georgia, are very interesting.

I think some of them are time-consuming, like energy and the rest.

There are a lot of them.

Well, this is too much of an issue, or not too much of an issue.

I did, voluntarily, one that I did.

The second point I would like to make to you is that we have a year of enormous interest in trade, and I know that there are remarks about it, which is what I think we should understand.

We didn't.

We didn't publicly take any decision on it because we don't want to shake the markets at this point.

And I want to know, but we probably, yeah, we probably .

But finally, I wanted to say that on the trade, you know, you of course have got to carry the labor report there.

And we have done a lot of very good thinking on that, which we would like to explore with you a little bit.

I don't know if you know about it or not, but it would preclude the extension of the most favorite name.

Oh, yeah, I saw it.

Well, that's another thing.

It doesn't apply to the Soviet.

It applies to my opinion as well.

It's probably the Jewish so-called education tax.

And how's the folks?

Now, there are 260 of us in the House.

I can't believe that's not exactly 60.

So it's a clear majority of the body that doesn't have to pass, but it could be by you or some of our people.

With Russians, show the deepness of our own feeling here about carrying out the agreement that was made, you recall, in 48.

All of the country's members of the UN took a position unanimously that the right of people to emigrate and to return free

Basically.

Now they say Russians were afraid of voting on that.

But all those that voted on that voted aye.

For it.

So this goes all the way back to 48.

Yeah.

And this is an issue, a real issue.

As I understand, you're a person.

I understand.

You know, you feel it.

It's a bargaining position.

As you know, we've accomplished a great deal with the Russians on this, and at the present time, the Israelis have got about as many Russian Jews as they can take.

Mr. Hale, I've talked to really that fine off-guard that the Jedi has.

So they've got to go carry more money from there in America?

Yes, Mr. Hale.

Really?

That's where we're going to end up?

Sure.

That's where we're going to end up.

I was the one after one night.

They sold three and a half million dollars.

I did a really long night night while I was there.

and they don't know how to raise the money.

It got stored in the river this last year.

Along the whole trade part, we have some ideas on that, which I am going to ask

Well, here's what I have in mind.

I don't want to get way ahead of myself.

I didn't want to crack the check, but I have in mind is a bipartisan meeting in about two weeks in which we will let trade package out.

But before that, I want George to talk to you.

Now, he'll be gone.

He'll be gone for... No, I'll be back at 9 to 19.

You'll be back at 9 to 19.

One thing, Mr. President, before he starts...

The situation hasn't changed in New York yet.

It's only improved.

Not in protectionist attitudes.

Well, we have some ideas on trade that will appeal to those attitudes and play the other.

That's what I mean.

Oh, I'm not talking about a long, wild candy round.

I'm talking about something else.

That's what I'm talking about.

I'm talking about a trade deal that will help us in this whole balance of payment thing, help our competitive position, but that will keep the, which will open the door for

And it's pretty interesting.

We've been counting it.

I told George, I said, look, there's no way we could put in that liberal trade deal.

And we're just not going to do it in the next election.

We've got to have some.

But we've got some very, very, we've got some hard-line things.

And what we'd like is your idea, you know, of giving us authority on some things like labor relations.

And believe me,

And I'm not one to think that we always lose about power and so forth, but we want more here.

But I do know that in an international arena, you can get a hell of a lot more of a bargaining for a culture that you can't by simply saying, well, now, I'll try to get this through the Congress.

They still have a right to move.

They are open.

They're open.

Yeah.

In the international field.

You can't do that.

So with that, now the...

We come to the monetary thing when I say I think you ought to talk in confidence to George.

We've got to keep that just among ourselves because obviously we are concerned because of the balance

This is one place where we've got to act without advance warning.

I don't know what you've got on your mind, but we've got to .

And this dual arrangement,

Whatever it is, I don't recall all the details of it, but they've not lived up to what they were supposed to do.

Uh, I think our society, I think our balance of things situation is so serious that, uh, really, consideration should be given to the opposition sometimes.

Oh, but I forgot to add, uh,

If you started offset, 10% drop to 5% the second year, and then zero the third year,

They can't accuse you of having it from the program.

Or if you go 15, 10, and 5, they couldn't even accuse you of that.

And I don't know what it seems to me like, and I've talked to a great number of people about it, George, just this afternoon, even, to Arthur Burns.

It seems everybody I've talked to has a legitimate, desirable course of action.

There's going to be a lot of hell breaks loose.

As you can imagine, I've been having a very extensive conversation with Burns and Schultz and I yesterday.

We have not announced them because we don't want to erase Mario of the monetary situation.

But what we would like to hear is your thinking on this thing as we move along.

I would go to business.

I would do it on the weekend, of course.

Yeah.

I think I started at 15 and dropped to 10, but that is the three-year period.

Both of you and I have been up and talking about us the past 10-1 year.

You're talking about the search hours, not the last search.

We've got to do something to stop this flow of enforcement in the United States.

Coming here, I think...

And he was picking all this up.

He said,

He says they don't have any confidence that your rate of inflation is going to remain less than our rate of inflation.

They think in two or three months the situation will be just reversed.

He says, I can't explain the reason.

This is the American citizen.

Yeah, yeah, yeah, yeah.

George, do you want to take the – before we get – why don't we get –

On the trade, with regard to the whole package and so forth, I will plan a bipartisan meeting

about two weeks from today, or maybe Wednesday, when everybody's back.

And that will be, and I will have done, we have done, I've done most of the preliminary thinking today, and we are, I mean, already, but I can assure you that it will be an approach that moves in that direction.

The direction you speak of protecting American jobs and avoiding flooding the American market with the Japanese and a lot of other people, which deals with some other problems.

But I think what we want to do with that is to sit down and have a wise choice meeting.

Congress only after we have that meeting.

Does that sound all right?

That sounds very right.

In the meantime, George will talk to you.

Have to go around.

Do you like to go around?

And you get back on the 19th.

That'll give you time to do it, George.

You get back on the 19th.

Now, incidentally, Mr. President, the other speaker in New Orleans is in Portland.

That's why I've got a leg on the 19th.

Oh, you're the American.

He imported the car here.

Funny thing is,

I'm going to leave it at that.

I'm going to turn it.

I'm going to have to do something in order to make my speaking engagement at noon tomorrow in Little Rock.

Speaking of Little Rock, I'm a broadcaster.

It's always a bad idea to keep the hall precincts out.

It's not what you need to.

Well, I did very well on it, so I'll be sure to do it.

We'll see.

We must have some of the same friends.

Look, I gave a note Saturday night before the election on Tuesday that I ever voted on it, so I can't afford to destroy it.

I'd like to have George to be in a position that he could give you a ring.

If you know this, we will have to move.

Quickly, without notice on this.

Thank you.

But if you could give Wilbur a little, you know, a little, you know, a little, you know, a little, you know, a little, you know, a little, you know, a little, you know, a little,

Now, second point is that

Why don't you just take a little time right now and trade things to some of the things that have been suggested on multiple purposes.

These are not final decisions yet, but there are points that have been suggested.

I'm making what was supposed to be making the speech today.

It's about three ordinary pages on our problems as we look into the future of the economy.

Well, the future of the economy.

And I ended by saying it's absolutely necessary for us to sit down in one conversation on money,

We might want to do that.

Let me tell you one thought that you might have here and that, which you might float out.

One of the problems, if you have a conference, like you do at the Smithsonian, you have plenty of countries.

They don't wear the name.

Terribly difficult.

What you have to do is to get a couple of countries like Britain and the U.S. together, if they will,

and what probably we gotta do is to get the British, the French,

the Germans and the Americans and the Japanese and put the big five together.

And then you sit down and you discuss trade, you discuss monetary, you discuss in addition to that, you've got to – what we have to throw into the pot is the fact that we hold the ring for all of them with our military expenditures.

We defend Europe, we defend Japan, right?

I don't like to link those things, but we do.

We should.

That's what you agreed to.

Absolutely.

And so, now that we're not ready for this yet, and this would come in several months, but I think the idea of an approach of that sort is something that's further downstream.

Because it's terrible.

It gets you just in a trade arrangement.

That's what they want, though, except the bridge.

Yeah.

I'm sure they don't want to discuss, they want to separate even the British.

Well, the British were fine on the trip here, but I had heard before that responding to European pressures wanted to separate trade on the current soil quality.

We can't vote on that.

So, let's spend not all on trade, we want to get to taxes, which is our... Now, understand, you're going to be on taxes, it's money you have to have, George.

Four weeks.

Six weeks.

Maybe in the middle of April.

Right.

Okay.

On a trade thing, George, what do you think we do now before we get burned down the street?

I might mention the main ingredients here.

In terms of the basic thrust of the IMF speech, as far as the trade side of it is concerned, we would think in terms of an integrated package, one that would give the president

negotiating authority.

I think you have made the point that there's no point in trying to negotiate unless you have some authority to go about as we understand it.

Well, they've seen that.

Good.

We were surprised by that.

Oh, sure.

We're going to try to see how we might move into some of the non-tariff barriers with the same kind of authority.

Although that's difficult because you have those types of laws and different kinds of bills.

But that would be one of the ingredients for how we should treat this.

Oh, they have forces.

Oh, good.

I'm able to think in terms of an explicit measure that would empower the president to find an answer to the question to declare a balance of payments emergency.

and be able to oppose the surcharge so that whatever legal questions there may have been about the imposition of the surcharge in 1971, we would, insofar as the US law is concerned, clarify that and make that clear.

By this, what you want is what you see we want .

The thing I think you may run into, George, and I want to get a little bit of steering on this, is this idea of here's the president asking, you know, this power-hungry president and all that, asking for all this power.

But the whole point is that we've got to, what we really think we need is we can declare an emergency and then impose a surcharge.

But that's, that gives us the opportunity to bargain with these people, like the Japanese.

Right now, the Japanese are going to be, you know,

Now, if you get the Japs in here, you've got it again.

You've got to threaten them with the search that you're, the search arm.

You've got to have that sort of an idle threat.

You see, if you had that power, what is an idle?

You might do it.

But you see, if we had that power and the law, look at the effect that has on the Japs.

I mean, we could, you wouldn't have to send a guy over there.

You'd call him home.

That's right.

Right?

You wouldn't have to do that.

Well, we don't have that.

That's right.

Yeah, we think so.

That would be nice to have in the law.

There's no question in my mind that that's your right to do it now.

I don't have a question whether you have the right to rescind it.

That's the only question I have on that.

I think you can do it in the law.

The notice would have the option of an iron finger, for instance, and also in terms of an announcement that this is something you're seeking.

would be a signal to other countries that, you see, that we've moved around here and our balance of trade hasn't improved and our balance of payments hasn't improved and we're serious now.

For example, assuming I have maybe the thing, well, maybe I have to do a 10-day strike, we might have something like that too, perhaps, but without holding that up yet until we test the water.

But we need two weeks from now.

We meet with the leaders.

We lay this thing out, assuming we don't change our minds.

I would send a message that day, or the next day, and then Nick would talk.

But then, the very fact that we have asked that, and that the leaders go out and say that we think that's a good idea, that enormously increases our bargaining leverage immediately.

So that's why we need a bipartisan club there at that point.

Go ahead, George.

We think we might have a sort of parallel ability of the president to declare not an inflation emergency exactly, but to describe a situation whereby in a condition of inflation he might respect certain products that are especially difficult for us.

We have in mind beef, for example, and the inflow of beef.

To lower that

and not be bound by some across-the-board type thing.

If our cattle aren't correct, we've got to have a B for the damn B price point.

As long as we do this in a reasonable way, the cattle should not seem to mind.

In fact, they feel that they're doing fine, and it helps them to be able to say, well, the government's doing all these things.

It's just that the imports are large in such a way that...

that we must take care of our own people and their fears and justified fears, in many cases, of being flooded.

And the Japanese have had the habit of picking out a particular segment of our market and innovating it.

And it's very rough on workers.

It's very rough on businesses.

And so we would think we should put in a safeguard system

that works when you have an impact primarily caused by imports, gives some room for judgment on when relief is called for, and gives some choice to the president about the form of relief that he might grant.

And we think it is undoubtedly a good idea procedurally to work this through the Tariff Commission.

provide a little bit of a buffer there to ensure that at the same time that the tariff commission is pinned down, they're going to have to move through.

And the tariff commission will allow you to stop the flow.

It's too late now.

The radio and television won't stop it before they have 80% of the market.

You would stop it while the air was moving.

Well, and then it could come in, but it couldn't come in

I said, now look, this Burkhardt thing and all that stuff, I said, that's a little bit nutty.

But on the other hand, the sentiment for that is there.

I said, no, you can't do something with nothing.

And I said, you certainly aren't going to beat it by going the other direction with the people that were getting followed.

And then, of course, with this balance of trade and so forth, this sort of hype of the whole thing.

And so, George, that's how these ideas have come up that George has, which now, which triggers up the pot.

So we then would be able, perhaps, to negotiate some of the other areas.

Now, go ahead, then, George, from there.

I think that when it comes to this question of the fears from expanded world trade, I believe, from what I have talked to the labor people and so on,

in a safeguard system than they are in a so-called adjustment assistance system.

They say we want jobs safeguarded.

We think adjustment assistance is burial insurance.

We think it's burial and welfare.

They don't like it.

And I think that my own opinion is that's become a real loser.

All the characters who operate in the trade field just think adjustment

I've always talked to Justin's assistants, because I know that was the correct thing to do.

But to George Thompson, the labor guy, right until the second thing.

But I have a feeling that in going and talking to the labor people, which the president

We just might make a sale of that on this kind of a program, particularly if we couple it with saying, now, we're not going to have any adjustment assistance programs in this trade bill, but we will lay down alongside the trade bill and commit to support

an unemployment compensation bill that will include federal standards for now.

Now, I want to go over a few things about this.

That sentence our Republicans

I think we have got to step up to it.

Well, that's fine.

You remember before we had two types of standards.

One had to do with, what was the second one?

And that committee didn't buy.

But they did buy, you remember, the one on two-thirds of the average.

What committee would get this?

No, we can't.

It's a part of the Social Security Act.

Oh, yeah.

No, it's not just one part of the Social Security Act.

But if you went out to that one.

How does that sound to you?

Did you get it out?

Absolutely.

Well, this would have been more fear.

This would have been real.

Well, let me see.

Let me see.

That's the point.

This is the sugar to the labor people.

Well, they're right.

They can't win it.

They know they can't.

I tried to count it.

They did win it in my state.

I got behind.

The governor got behind and told us what they had.

We moved it up to 60.

Then later on, we got it to 62 thirds.

It isn't fair to the fellow who's making, say, $300 a week to get an unemployment compensation based upon a $100 a week wage.

And that's what you do if you don't bring it up to, say, two thirds of the average.

Some people get more because they're not earning more.

Well, so there's a thrust, say, if we have an adjustment-type problem in income maintenance as part of that problem, let's fix our general system of income maintenance so it's adequate and not do something special because somebody has to label 100% into this place by the import.

I must say, because the ideas that people have about what you should do to make it workable, like Leonard Woodcock's ideas, wouldn't land us all in the courthouse.

They're wildly extravagant.

But that's one side of it.

And the other side of it is, at least as I analyze it, the big loss that a fellow takes when he loses his job for an importer or any other thing is if he has a non-invested pension.

Jack at least about 50 years old.

He's lost that.

And there really isn't any way for him.

He can't retrain.

That's the other way to do it.

What if we're going to not have appropriations?

I wish we did.

Of course you've got pensions.

That's part of the investment things here.

The program you set up last year did lop over some in the Education Labor Committee.

But I would want to handle it all, understanding that they're part of the jurisdiction.

They wouldn't have gone before us.

So they would go as far further than probably the membership was waiting for them to go.

I don't know what the percent is, but people who engage in work for contractors in the government, by and large, by and large are with that employer a maximum of three and a half to four years.

Because that contractor has the contract now.

Somebody else has the contract later on.

They go from this employer to that employer.

And they're not there long enough, if we're not careful, to earn any rights.

Now, what I've been thinking about, George, and you run this through your very fine mind and get your people to work on it somewhere, a pooling in a case like that,

where the employer doesn't have a separate pension fund, but he pays in with the rest of the contractors to a pooled fund on the basis of whatever benefits the individual employer has worked up with his employees, the employee gets the benefit later on.

The benefits will vary depending upon the contractual arrangements, but we can call it a pooling.

And that has to be done if we take care of this kind of people.

And it also, I think, would add greatly to the mobility of our workforce, if they knew that by changing jobs, they were not losing.

Construction industry people tend to be very interested.

Exactly.

You've got a lot of them like that.

But most of them are people that are working for contractors.

Right.

Yes, that's a problem.

But I think in this...

in connection with the trade bill.

The pension bill that the president sent up last year, we had a certain distance, but I think we would have to add on perhaps something of this kind.

That's something that had to do with termination.

What happens when a plant is terminated?

So the pension plan doesn't go the way you get it.

You've got to have some kind of reinsurance or some program.

This is something we have to worry about real carefully because, of course, it can get extremely expensive.

This is one of the lettering issues.

It is.

Oh, yes, but it's also shared by Bracknell and Lavery and by George and me, won't you?

Mm-hmm.

Did you cost them the money?

No, no, I didn't get most of it.

What I, what I have to do is letter, I don't know if this is feasible or not, but I ask you to think of an alternative to it.

That, uh, that your money is to be paid into one fund.

To go to the supervisor.

All that matters.

Paid into one fund.

I don't think you need any guarantees of that, or any insurance.

Well, you'd have some sort of uniform standard for the nature of the pension plan, but kind of consider it beyond the standard that we have now.

Well, you don't need to go to general membership pools and people like that.

I'm talking about those that are not so certain to survive, those that are not so big.

It might be less expensive than that, even though we'd have to pay the Coastal Police Administration

Well, at any rate, you've got a bumper, a bumper.

I mean, a whole lot of additional requests over the years for increases in Social Security.

This is a government-administered book.

All right, we'll come to that.

But I say I don't want to work on it.

Well, these would be the principal things in the kind of bill that we've been talking about.

I thought you'd have a variety of...

You've got to handle it with care, because it cannot be done just by us.

It's something that's got to be done, I think, by you.

The Japanese have done a certain amount.

We don't think they've done all that for the country.

How about Latin America?

Well, there is a way.

There's a way to do it.

There's a lot of other stuff for them.

We need the other ones.

I care for the Africans and all these other people, you know, but the Latins, you know, we should do something.

It's kind of a global organization.

You know, we're practically all of the Africans.

I'd like for you to find a way, George, to do that.

You won't get very much enthusiasm for state out of that, because they think you've got to treat everybody the same.

But the Latin Americans do deserve something from us.

And we didn't, you know, they just, to them, maybe it's a gesture.

It's a feeling that we did something for them that we didn't do for Congo.

They're very sensitive.

You see, Europe, take England.

England has got a special area.

the majority of the day.

It's not special deals.

And that's not true for Earth.

And they have all sorts of deals which give credit.

I don't know much about that.

I hear Latin America.

I think we ought to do something.

I know that tends to put the world in little pockets and compartments.

But that's the way the world is.

The world isn't going to be in our department.

Well, none of Europe is in the South American country anymore.

We don't, so they don't have, but we have figured out a formula that would, could be a formula that sort of applies to everybody, but the way we're working with, what about it, we figure it out by considerable in the way in which this, where should I say, where should I say, what about the next few years, they go their goal, where should I go, where do you know, it's great for us, I'm glad they are.

And when some of our people, the editorials and the rest, say Brazil doesn't have a democracy like we have, I say, look, it works for them.

And we can't respect a country with a different background to have our system there.

And it's that way in that store, too.

This is not fair.

This is foreign affairs and so forth and so on.

I'm not lecturing, as I used to in the lecture in the Philippines about Marcus's rule.

I mean,

Marcus is doing the best he can.

That's a very explosive situation.

I don't like it.

I mean, I would prefer it, but if the Filipinos are going to blow up without having a more tough agreement, we've got to go along with it for a while.

You know what I mean, sir?

Why should we be concerned about what other people have?

What we've got to be concerned about is how other governments treat us exactly how they treat their own people, unless it gets to genocide or something like that.

That's their own business.

You wouldn't ask for a repeal of any provisions of law in bargaining.

You probably don't even need to ask Congress to authorize you to bargain in the areas of non-tariff barriers, barriers against irons.

Most of ours would have to be revealed at all.

That's right.

That's what I said.

It's hard to go very far in that area.

But you don't need authority to do that.

I don't believe you.

No.

There's a question in our mind whether or not it would be...

They're still used to us there.

It could be directing to the president to endeavor to eliminate knowledge going toward barriers there and here.

Well, I think there's... One thing to be said for doing something like that is that...

Otherwise, all the emphasis tends to go on the tariff.

And in many ways, tariffs are the most desirable form of protection.

At least you know what they are, and you can see them.

Whereas all these more subtle non-tariff things are more difficult to contend with when we don't know what it was that...

to keep doing all the protecting of the non-terra area.

So I need some concentration on that.

If I were trading with you, I don't necessarily really have a lot of currency under pay compared to your account.

But then you may give me tariff and say, all right, my life's in other areas.

I think in our basic non-terra plan, combining it with the trade, it's because we've ever been in the past.

Let me just say one thing about the whole trade.

You can discuss a little bit further before that.

One thing I think would be very salutary in relation between the White House and President Trump is, you remember that hassle, which was just a misunderstanding, unfortunately, about the Japanese thing last year.

And I said, well, who the hell did it?

Nils Dillard did it.

I think that when we present this to our leaders, and also when we present it to the Congress and so forth, without, of course, compromising the

I think that we should talk in terms, to the extent that Wilbur is going, that we have consulted, and many of these are ideas that, you know, came out together.

But you see, you've suggested things here that we're doing, but that's not the right view.

In other words, if this is a cooperative action,

Because otherwise, we're going to get in a situation here where we'll send something down, and just because we send it down, you'll have an arm's, you wouldn't be this way, but you'll have an arm's pressure from some of your people to say, by God, now we're going to do something different.

No, no, the other thing is, you'll leave.

I mean, if you, actually, your thinking is so close to ours in economics that it was clear that we were shaking the other day, that if we could find a way to work with you,

on some of these things.

And I thought that's where you could agree.

You could say, well, how the trajectory of the trade should go for Nelson.

And of course, as a matter of fact, I want you to know I'm going to see Russell tomorrow.

He wants to see me on welfare reform, which is going to be an interesting concept.

I've said it in the bill over there.

That's right.

So I thought about it.

And he made a reason.

But what we want to do is to get this, to have a situation.

In this field, we can't do it with some committees.

It's impossible.

But in this field, with George's field,

The trade and tax field.

Particularly the trade.

The trade, I think, there ought to be a bipartisan involved.

It always was.

The tax field, that's tougher.

It's tougher because you've got, and we have too, we've got that kind of opportunity.

The Senate, which is on the Republican side, they're just bad as hell.

They will go.

My idea is, in other words, not to just put this out full-blown, and actually it will be the purpose of the program and so forth, and say that after consulting with the leaders of Congress on a bipartisan basis, after consulting with the labor leaders, after consulting with the business leaders, by presenting this program, our best thinking is to let you

And then, of course, we then, uh, the, uh, Wilbur can, to the extent that he's willing, and, uh, can, can say, yes, we need participants.

So I want you to remember this conversation as we go along.

Fair enough.

They'll ever be able, Mr. President, why they suggest this to the, uh, I said the same thing, that LBJ wouldn't ever continue to fight this, you know, that consensus I had.

President has to sit in here and see more and juggle more.

But as long as you don't know what's happening, you might be in a place where it's going to get.

The president has to do always what he thinks is the right thing.

Absolutely.

And you know that.

Don't deviate from that.

I won't cut you anything else.

I don't believe in the consensus.

What I'm speaking of is that there will be, there will be sharp divisions on our tax numbers.

We won't go as far in reform as you won't if someone wants you to go.

So we're going to stick it out there on the trade thing.

Now you'll say, for example, I'm sure that Jack Jadison will want to go much in the other direction because he's an enormous pressure in that New York community, you know, free trade or bust.

So we aren't going to go that far.

So what I meant, we're going to stick it out there, and we can't get a consensus.

What I meant is, I do think the consultative process is important.

And that's what we want to get.

We want to go with you.

And of course, as you know, when you set up the bipartisan leaders, you need talent.

I mean, that's about all you can do yet.

But you start with the council.

Because George is patient, and he's smart.

I think he's smart.

I think he's smart, too.

OK.

I'm going to send him around.

When he comes around, it's for the purpose of trying to get help or advice as to what to say on him.

So that's how he has it, you know, that code.

I didn't get nominated to the Democratic Academy for presence in here.

Like, did I keep you open?

That's right.

That's the best offer we had at that time.

He was singing.

and then Joe Fredrick, my friend, Fred Hartley, you know, is the union president.

He was the head of the headquarter town today before the second committee.

That was the old, old, old, old, old, old, old, old, old, old, old, old, old, old, old, old, old, old, old, old, old, old, old, old, old, old, old.

uh he must have done a good job because he said that finally that story appeared to understand what was taking place in this guiltless way he was asking him questions about what should be done and rather than blasted me with what you thought should be done it's very interesting

But in addition to the bipartisan meeting on trade, we will, within the next month, to maybe have a bipartisan meeting on energy.

And the energy thing will involve in Georgia.

I don't want to get .

It's going to involve your committee, because it has to involve quotas and imports and a lot of other things.

But .

If you would, if you would, when George, when he gets back, I'd like to get his views on that.

Russell, I know, has spoken to John Erdman.

Of course, Russell is deeply involved in a personal way.

And that has bothered me.

I'm poor artist.

and everything else is .

Let's take one.

Now, you went through Kerr Bales .

I didn't.

Kerr gas .

And it was cold.

I wouldn't take it cold.

On the gas .

Well, what about that, George?

So what we've got to do is to get the federal power commission to get the price it takes.

You ever try to do that?

Yes.

Is that a word?

Yes.

Federal Department of Justice, independent agency.

Well, I suppose I made it out.

I made one good apartment, I think, with a house.

You can give it to Taylor.

Good, with a Quayside agency of government.

But we were absolutely without gas in Arkansas.

Beyond 73.

No industry could come to the state that needed gas.

Well, they opened up this, they had an article to feed them in the western part of Oklahoma, and then they had them in the part of Texas.

300 miles away, which Stevens was operating under, so Lieutenant Gaston had a deal with him.

That would take us 10 or 15 years in the future in all of our estimates.

The only way he could get to it was to get the Federal Fire Commission's permission to build a 300-mile pipeline over there.

Bring it in.

He made his request.

The first recommendation of the staff was negative, opposed to that.

I got your appointment to come to my office.

The fellow who was in the net, the chairman.

I said, I'm not asking you to commit yourself or anything to do with it.

I want to know who on your staff over there I can talk to.

I may need to use the tube before getting out of here to get you to wake up.

That's right.

I'm going to tell him.

He said, if you want to mention him, you've got to start sat there in H-208 for an hour, one over on this one.

He said, I'm going to get a turn about this comment.

We're going to have to look and care about the state.

The state's not going to grow.

Well, he didn't know about that.

The next few weeks, we've got to see what happens with the report.

They were a little remote from that.

So the question itself, you know, so I said, well, let me ask you to do this.

Would you keep your mind open on the energy thing, including that, until we've talked to you.

We've had a study that's been, we've got books like this, and I'm going to work on it next week in California.

But, and George is in on it, and Earl, and a whole bunch, and we've got DeBona, and I was an expert, and Simon, the treasurer, is the head of the group, and planning, and it's a big, it's a big, we've got Rogers Morton, of course, it covers the whole landscape.

But on the energy thing, this is one where we may have to,

where we first, we were gonna present it by far, but where, where we've got to get away from what, you remember the beating of all of us who, who frankly, not because we were on the payroll of the oil bearers, you remember when they took a rural Francis Cates, that $25,000, Francis Cates, my God, he was so honest, he probably only had the $25,000.

But anyway, that was my friends from out there in California that did that, but anyway.

What I'm saying is that we know the energy now, not in terms of the fact that that's the energy you're going to make money, but in terms of this country.

We're going to be for the rest of it.

Fred Hartley is a good man.

He's a good man.

We're going to allow our situation in the next 15 years to get to where we are dependent on the errors of 50% of our needs whenever that happens.

You look to see what the prices will be.

That's $1.25.

$1.25 right now.

But George has made this point.

George has made the point that you've got to have bargaining leverage with what Russell calls the Hebrides.

But that's going to be retention left in trustee gas.

Well, in trustee is not controlled.

It is.

He said, no, no, I'm not controlling it.

It's selling anywhere from 52 to 62 cents.

How does the other guys?

Interstate.

If they send interstate, the maximum they give is about 30 cents.

Why does that make any sense?

Well, of course it does.

It doesn't make any sense that we'll pay a dollar and a quarter for the same amount.

Well, that's not a risk.

But if you would follow up, George, with John, on the energy side, let Erlandman,

I'd like for you, as I said, don't trouble yourself with this draft.

We can trade it out of the way.

But within a week after that, we're going to have a little talk with you about energy.

We have Dan Giorgio with the maybe Simon and the Pax Aspects.

Right now, I'm suggesting not to be in control of it entirely.

I think if I'm back, and if I, oh, they're going to bring back the 48 years, which will run these keys.

Yeah.

They won't let you, you, me, and everybody else have a way with it.

So I'm not going to accept an attribution.

I'm going to set it out.

Yeah.

If it could be done some other way, I think it can be.

Right.

Now on taxes and stuff, sir, I'd just say we're done.

There are tax aspects to a trade package potentially having to do with foreign earnings in various ways.

What I was going to say is there are some tax angles there having to do with trade.

There are some tax angles having to do with the energy problem.

And one thought we had was, in a sense,

to show those when we put forward the energy of ideas on those two subjects.

There's also the tax package that will handle those tax things as part of.

Here's what we have to do.

Here's what we do.

We send an energy message, and we discuss that in the by-products.

Then we send a trade message and put that out in the by-products.

And then we follow with the tax bill.

But in both the energy and the trade message, we say, all right, tax aspects will be included

how it was when you were coming off, and since you were coming off on the Middle East, what gives us time to get both energy and trade out of the trade media?

Well, you'd be interested to know that I activated myself the other day to hear from Mr. Volker to get the Treasury bank bailout before we go into the public witnesses on it.

And we'll do that, I think, now on the 1st of March.

And then open the following Monday, the 1st Monday of March, with our public witnesses.

You know what I mean?

We're going to be there six weeks.

can we uh uh george if you wanted to take over on taxes here for a minute well let me let me take over let me let me get it down to the bare bones as to what i have to send to ask you for and uh

I have made two political commitments on that, which is one, a tax credit for private schools.

I think we're together on that.

The question is how we get that in, but I've made that, and I've got to come through on that.

When I'm dealing with the bill that we reported, there are people who have never reported about what we made in December last year.

You can get that as a part of this bill.

But it has to be part of the major tax payment that goes to keep from embarrassing a lot of members.

Sure, sure.

Well, particularly if you're going to do the council.

I mean, they'd have a hell of a time.

And it would embarrass kids in the industry.

We were the non-councils who do the most for them.

I tried to get Jack Kennedy to do this when he was president.

He said, I can't.

I can't.

I need to set the window across to the president.

Oh, here we go.

Yeah, yeah.

Well, I don't believe in it.

I don't believe in it, because I believe in the dual school system.

Oh, you mean the teachers that educate the .

Second point is, and this is something we're working on now, we haven't got it all finalized, is provision for property tax relief for the elderly.

It's not a big bite.

No.

But it's one thing that's where there's really, when I see it in New England, for example, that elderly people with an income of about $2,500 are ranked less than $2,000 a year.

They have a third of their income in property taxes.

New England apparently is the place where it's the worst because, you know, it's the

wanted to wait.

I just knew if I did it in the campaign, I didn't have to produce on it.

Now, George, I've asked him to look over all the factory work things.

And he's given me a big checklist to take with me to California.

And it has everything.

My general feeling, I remember, is that I'm

to open that Pandora's box too far on the tax reform issue.

But I'd be interested in what you think.

Let me put it this way.

What do you think we ought to consider in these areas?

How far do we have to go?

It doesn't say we're not going to do what's right, which I agree with.

But sometimes we've got to realize what we're up against down there.

One of the basic things I want to do is to get the government out of the position of being a major stockholder in anybody's pocketbook.

Regardless of the earnings he has, whether it be investment income, which is now a 70% rate, leave the 70% rate, but just say,

that dividend income and all kinds of investment income would not be taxed, finally, at more than 50% of the adjusted gross income.

That's what we've got in the law now, earned income.

If I can do that, I want to toy with the idea, George, or something, on the capital gains.

If I'm given to agree, in addition to the recognition of ordinary income in part, when assets are sold for the same thing, let's say, and I've got that housing industry working on a profit for those people and the others, you've been very helpful to them, but what else to do?

Yeah.

They've got, like, now they've got to stay on the same thing.

I don't know.

I mean, I don't know what we're doing.

I don't know what we're doing.

At any rate, if we can avoid this conversion of ordinary income into capital gain, we can do so much with depreciation to stimulate benefits.

We can do so much in so many other areas.

If we need to have a special rate structure for certain things, let's just have a special rate structure rather than calling it all capital gains.

Deferred compensation paid upon retirement is not a

But why do we call it capital gain?

Because we don't want to put it into a rate structure that then used to go up to 91% or until this year, 72, went up to 70%.

That isn't fair to take away from that.

George has something.

Now, George, I don't know whether you're going that far, but this is an interesting philosophy.

Let me ask you a question.

Let's not be racist about it.

What do we do to our friends in Wall Street?

Send them right up the wall, Bob.

If you put the entire game in, yes.

But bear in mind, the capital gain now, I mean, capital gains are now 36.5%.

That's the tax return.

And there wasn't a ripple when we went from .5% to 36.5%.

This is the biggest moment in tax reform for the salary and wage people that there is.

Why let this man speculate?

And at the end of six months, have his income from the sale of assets treated differently from mine.

Basically, no matter what you're doing here, though, you're giving the man who specializes a break to your second tax point of 50%.

There are a lot of, there are a lot of people that that would make a difference.

You don't have, you don't, you don't have a little spectator, but you have big spectators.

But most of your capital gains are enjoyed by people of $100,000 or more than you have.

Oh, is that right?

Yes.

The figures show that.

I see.

You don't have a lot of that in the lower brackets.

Maybe let's have a whole.

As far as I'm concerned, I would exclude from capital gains tax.

Now here's what I'm going to do.

is to provide for the average income.

Now, to say you've only asked for 10 years, you'll pay your tax over a 10-year period of five.

You'll have to divide it by annual.

Five.

We'll just bring it up.

The average over that period of time.

If you sell it for two years, you've averaged it for two years.

So we'll be on 10 years.

But you run that through your computer and you're going to find that it's a more attractive package.

And I had all the liberals on the ballot for him.

So I think he's a real liberal.

That was the thing that I had service to.

Well, he had service.

He had that.

Now, I want to do this in the capital.

And they say, yes, I can.

I want to apply the same rule.

No more than 50%.

I'm 77%.

And then consider limiting the amount that a person can leave the charity or foundation.

During your lifetime, you can only give 50% of your gross income away the course of the year.

Why isn't that a good rule at death if you're going to pay a lot less rent than you now pay?

Now labor, of course, is going to want this capital gains at death, and I can work that out if we want to do it.

Let's take this case.

You've got $2 million of depreciation in your assets.

Put a $10 million on the state.

$2 million, the way I'm talking about it, would produce a million of capital gains income for the government.

Not deduct that million from the 10 for state tax purposes.

But figure out the estate tax on the 10 and take the million off there.

Take the million off the tax off the tax.

Then you don't have it up in the tax.

That's enough to do.

Now that gives you the answer to the argument.

I guess I've never been able to explain why should a son be given the increase in the base of the accident upon the death of his father merely because of the payment of the state tax?

You see, he gets today's market value as his base tomorrow, but the base of the father may have been 10% of it.

Now, these arguments are, I think, can be answered, and these are the basic things that they talk about that are unfair in the tax law.

And I think we'll find a way to do that.

Well, we agree that, certainly, we're not going to fool around with the deductions for margin to default and that sort of thing.

That's just enough.

Okay.

Because there is some work there that, to me, there is some merit in.

uh, in a floor.

That was recommended to us back early.

The committee won't take it.

In other words, that you only get to take credit for charitable contributions which exceed, say, 3% of your gross income.

Or you only get, uh, that is through a matter of expenses.

Uh, or that you could only take some other deduction that exceeded 3%, but the committee won't buy that.

Chair, I'm inclined to be

more charitable myself for another reason.

I'd rather have the money for him to go to Andrews College or whatever.

You know?

Or what do you think?

I don't know.

I don't think we're going to hear anything else to do about our job.

And that's what you heard.

I think that's what a charitable thing feels.

No, I'm very much for philanthropy.

So I say, to me, it wouldn't be faster.

Now, they could do such a thing as to deny the deduction of the tax paid, gasoline tax paid at the state level or something like that.

We did that, you know, in 69, the Senate took it out.

But the more you can grow up in that place, the more you can bring these rates down.

And I think the place where the rates are going to be needed is in the middle income markets.

We don't have a government program that doesn't think about housing, nothing.

They're out of all of it and yet they're paying all of it.

And that's why they're rich.

They're the ones.

They're the greats out of New Georgia.

They are raising hell.

That's meanest folks.

But it's the people below meanest folks, even.

They're what I call the five to ten people.

They are the hard-working people, just to keep them active for $5,000.

In any place.

But you go down, you can't live in the wood here for $5,000 anymore.

Or I don't think you can live in Little Rock for $5,000.

None of those.

That's why I was so interested last year when we got into welfare, to get the minimum wage up.

But when I started to multiply, I was $2 an hour, working 40 hours a week, 52 weeks out of the year with none of them.

Well, the bandwidth for it took themselves.

Barrett had come to the poverty level.

He's slightly under 40 right now.

And people don't realize that.

But you've got to make a distinction between these kids.

Is it going to work at all?

I mean, he's wrong.

He's wrong.

There should be a lower rate of help, you know.

You know who these people are?

They're unemployed.

They're women.

They're part-time laborers.

And they're kids, kids, who are probably coming in for the first time.

You've got to listen to George.

We've just got to let that thing run a lot of fun.

Later on, I'll sit down with that.

That's what George means.

The only two countries in the world, industrialized, that do not have a so-called beginner's wage rate compared to a higher rate are Russia and the United States.

Historically, we have more unemployment in these two countries.

What George is worried about is somehow undercutting the minimum wage.

This scurrilous mean invoker is going to use this.

as he sold base of employment and blew away with all his money.

He was staying back in the days when he was a young guy fighting in the trenches and threatened by the sweatshop operator.

And there just aren't many of those left.

They can't do it.

They can't do it because you'd only do it for money.

Also, it's a landmark to Kennedy these days.

It's a threat.

It's a different situation.

And his person, his member of his union is not dependable.

There's only one employer for a job anyway.

Well, we almost ran out of this stuff together, but now I'm very happy.

You've already done that with him, but this is another issue.

This is one incident.

I think it would re-figure out the figures of the way George did the internal running block in the United States.

Yeah, I felt that.

Do you remember when you heard that the Russians, when we said we had 18% of the money?

Everybody that was unemployed, whether he was able to work or not, was included.

I'm talking about when he was 65 years of age or older, was included.

Welfare people today, of today, would have been included in those statistics.

When we had a 6% unemployment rate, I figured it out.

I had a staff member figure it out.

Had we determined unemployment, say in 70 or 71, as we did in the early 30s, 33, 32,

if we could uh as i said on the bear home side uh we'd like to work on uh

tax credit for the private schools.

We'd like to work on the something for the elderly.

Now, obviously, simplification here for aid and education.

And then in these other areas that you have spoken about, we've already mentioned it.

Taxes that have to do with energy, a tax that we would trade.

George will discuss with you, and we will discuss that.

In these other areas that we've talked about,

I'd like to mark the checklist this week, George.

But I think that we've got a little more time.

I'd like you to have another go over the next week.

I was frankly going to mark the checklist this week.

But I think that I will do this, and I think you ought to.

You ought to have a go with him.

And you probably ought to have a go with her on the other side.

And we can't go too far right now.

But this will give us an idea of what's doable.

Well, I think, following your reasoning, we're focusing on parallel lines, and to a certain extent, strategically here.

if we have nothing to propose well there are inequities and there are problems ideas that are constructed in the sense of solving problems and are not destructive in the sense of removing the incentives in the system

But in many cases, we can shake these so they improve the incentives.

I just don't want to go too far along the lines of so-called catered to rich folks.

I don't want to be in that position.

I just want to do this right.

What you want to do is what I keep trying to say every morning in these panels.

It's fine to be ready to tell them about the total complete equity in the tax law.

But any time you start on that pathway of trying to obtain equity, you run smack in to some other national objective.

Why is it right for you to be able to pay less tax because you feel more generosity toward charity than I do?

I just don't conduct it, you see.

And why is it right for you to have some other privilege

I could use it, but I don't use it.

All of these things are involved.

But the big thing you've got to keep in mind is this.

In the past, when people were traveling, they were reliquary.

You run into some big social objective, like philanthropy, something else, like getting the women to leave the home and go to work.

The baby said, I don't have enough energy.

That's right.

You blind the energy that taxes that you use on social roles.

Right.

I remember when I was in law school, Charlie Long used to say it was a great study.

The tax system should not be used for social work.

Mr. Johnson said it in the area.

He's right.

I do use the tax system to raise the necessary revenue without forgetting the great chance of getting to North Carolina and China.

I remember.

He didn't leave for a while.

He didn't leave the house until it was nice and quiet.

He was 88.

88?

He has to be 92.

All right.

I think I just got a call from a sick lady.

She's a walker.

Oh, that's too bad.

She's making us roll over.

I started the day with that.

She's a great guy.

When I say you have another go on this,

When we get the energy, the trade, and the tax meeting by the end of, by maybe within two weeks, we'll be ready to talk on all three of us, trade, and we'll get to go sooner.

No, we won't have to go sooner, but we, we have plans.

If we, if, about two weeks, but about two weeks, it looks like it, unless it's on trade.

But then, let's have another go, where we can sit down and take a checklist and go over these things.

Is that all right?

Or not?

No, you said you wanted to know what I am.

But I have tried, I've said that I will try to do something to equate this burden of a single taxpayer versus, I don't know, any point in time.

I don't want to do it all at once.

It's about a billion, six hundred billion dollars.

Who are these, the single workers?

They're about, they have 36 million out in the United States paying taxes.

And they pay $1.6 million a year more than they would pay if there were tax like you and your wife are taxed.

I mean, my wife, because you earned the money in your back then.

I earned the money in my back then.

We get split income.

And some of these other taxes.

We did skip it in 69, where it would not be more than 120% of the 100% that they buy.

So if you think we should do something, I don't mean you shouldn't know about it.

I wouldn't.

All right.

You told me that.

But you put it out there.

Yeah.

I mean, I think it was a moment or the other.

We'll get together.

If you're going to be in a timeline, I mean, when you've got periods all day, because I can fix my schedule to shift to the afternoon when you want.

So the afternoon is better for you than the morning is better.

Yeah.

We get together at the afternoon or midday evening one time.

If I could be there in the morning when these were down to store bowls.

Or we might get together sometime, we might, what I, what you, what you, if you all have to deal with it, it might be sometime if you, you know, get together, you might, you might, we might go up to Camp David and just sit around and just spend a couple hours out there.

Sometimes you can do a little bit of work.

Jerry, my historian, Roosevelt, got me to go sit here at this desk.

and settle the peace of the world following World War II in the area that's going on.

And then these two chairs are like this.

And he said, Stalin is going to sit there.

No.

And Chiang Kai-shek is going to sit here.

Somebody asked me in town, I said, well, I don't know what Churchill said.

I don't know just which chair in this room is the furthest away from this conference.

Okay.

Good.