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Conversation: 905-010

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Start Date: 26-Apr-1973 10:24 AM

End Date: 26-Apr-1973 11:20 AM

Participants:

Nixon, Richard M. (President)Shultz, George P.Ehrlichman, John D.Bull, Stephen B.

Recording Device: Oval Office

905-010a.mp3

905-010b.mp3

NARA Description:

On April 26, 1973, President Richard M. Nixon, George P. Shultz, John D. Ehrlichman, and Stephen B. Bull met in the Oval Office of the White House from 10:24 am to 11:20 am. The Oval Office taping system captured this recording, which is known as Conversation 905-010 of the White House Tapes.

Nixon Library Finding Aid:

Conversation No. 905-10

Date: April 26, 1973
Time: 10:24 am - 11:20 am
Location: Oval Office

The President met with George P. Shultz and John D. Ehrlichman.

       Greetings      

       Shultz’s memo


       Fiscal policy        

               -President’s position       

               -Congressional action         

               -“Top tax rates”        

                      -Administration’s position             

                      -Congress          

                      -Effect on capital gains           

                      -Individual income

                      -Earned income

                      -Interest and dividend         

                      -Effect on capital gains           

                                -7-

    NIXON PRESIDENTIAL LIBRARY AND MUSEUM

                        Tape Subject Log
                      (rev. September-2011)

                                                Conversation No. 905-10 (cont’d)

                -Tax shelters
        -Reduction proposals
                -Administration’s position
                       -Congress
-Capital gains tax
        -Internal Revenue Service [IRS] [?] 

                -Compromise           

                -Increase        

        -Congress
-1969 tax bill
-Estate taxes
        -Charitable deductions          

                -President’s position        

                -“Big government” advocates          

                       -Wilbur D. Mills [?]
                -“Egalitarian sophistry”
                       -Great Britain
-Congress’s role
        -Administrations’ position
                -Leaks
-1969 tax bill
        -Treasury Department
-House Ways and Means Committee
-President’s position
        -Opposition to estate, capital gains reform

        -Bill signing        

        -Treasury Department’s role           

                -Dealmaking
-Executive sessions with Committee
        -Shultz, William E. Simon
-Simplification
        -Lee H. Henkel, Jr.
        -Forms
        -Elimination of dividend exclusion
                -Reaction of New York Stock Exchange
                       -Impact on small investor stock purchases
                -Compared to other deductions
                                      -8-

     NIXON PRESIDENTIAL LIBRARY AND MUSEUM

                            Tape Subject Log
                          (rev. September-2011)

                                                         Conversation No. 905-10 (cont’d)

                        -Gas tax               

        -Retirement income credit                    

                -Government revenue                       

                        -Social security                    

                -Reasons         

                -Eliminate earnings deduction                      

                -Eligibility          

                        -Retirement age                      

                -Cost increases                

                        -Social security                    

                -President’s schedule                    

                        -Yawning                   

                        -Coffee              

        -Forms
        -Retirement income credit                    

                -Cost        

                -Social Security                 

                -Beneficiaries              

                        -Federal employers
                        -Municipal government employers
-Estate and gift taxes
        -Administration’s position                   

                -Testimony             

                -Proposals           

                -Congress’s role                  

        -Consolidation         

                -Controversy              

                -Wealth management                       

                -Compared to capital gains                       

                -Wealth management                       

                        -Transition rules
                                -Lon Scaife                    

        -Unification of rates            

        -Marital deduction             

                -Liberalization               

        -Generation skipping trusts                    

                -Proposal          

                                                -9-


                   NIXON PRESIDENTIAL LIBRARY AND MUSEUM 


                                        Tape Subject Log 

                                      (rev. September-2011)

                                                               Conversation No. 905-10 (cont’d)

                                       -Controversy
                                       -Rejection
                        -Capital gains at death [?]
                               -American Bankers Association
                                       -Proposal
                               -Congressional relations
                                       -Shultz’s role
                                       -House Ways and Means Committee
                                               -Mills
                                       -Administration’s position
                                               -Opposition
                                               -Transition
                                               -Issues
                                                       -Capital gains at death
                                                       -Rates
                                                       -Marital deduction
                                                       -Unification of rates
                                                       -Generation skipping trusts
                                       -Bipartisan Congressional leadership meeting
                                               -Purpose

Stephen B. Bull entered at an unknown time after 10:24 am.

       President’s schedule        

              -Bipartisan leadership meeting       

                      -Topics        

                             -Taxes compared to foreign aid          


Bull left at an unknown time before 11:20 am.

       Fiscal policy
               -Taxes
                        -House Ways and Means Committee
                              -Hearings on taxes
                                     -Mills’s calendar
                                             -Administration’s position
                                                    -Timing
                                      -10-

            NIXON PRESIDENTIAL LIBRARY AND MUSEUM

                               Tape Subject Log
                             (rev. September-2011)

                                                      Conversation No. 905-10 (cont’d)

                     -Executive session
       -Administration’s position        

             -Support for elderly, parochial schools, minimum tax 

             -Simplification         

                     -Christmas tree metaphor
                     -Compared to 1969 tax rates
                     -Shultz
                     -Mills
                             -“Open rule” issue
                     -Estate and gift taxes

Phase III wage and price controls
       -Congress
       -Meeting
              -John T. Dunlop, Troika        

              -Arthur F. Burns       


Fiscal policy
        -Tax on interest and dividends paid to foreigners
               -Mills’s proposal
                       -Possible effects
                               -Capital investment
                               -Tax treaty negotiations
                               -Foreign tax shelters
                                       -Switzerland
                                       -Accountability
                               -Disparity
                       -Administration’s position
                               -Mills’s leadership
        -Tax receipts
               -Fiscal years 1973 and 1974 increases over budget estimates
                       -Public knowledge
                               -Bonkers, underwriters
               -Re-estimate of receipts
                       -Methods of publicizing
                               -Shultz’s testimony
                               -President’s statement
                                         -11-


            NIXON PRESIDENTIAL LIBRARY AND MUSEUM 


                                 Tape Subject Log
                               (rev. September-2011)

                                                         Conversation No. 905-10 (cont’d)

                                      -Economic Stabilization Act [Phase III]
                                               -Congressional action
                                               -Bill-signing statement
                                               -Support for program
                                               -Voluntary support of business, labor
                                               -Budget deficit
                                                       -Tax receipts
                               -Shultz’s testimony
                                      -Separate stories
                                      -Effect on Congress
                                      -Questions about receipts

US trade balance
       -Deficit
       -Council of Economic Advisor’s [CEA] skepticism

President’s oil import program’s effects
       -New refineries
                -Effect on jobs, supplies, prices

US economy
      -Production
             -New orders

Investment tax credit
       -Schultz’s testimony before Congress
       -President’s view
       -Herbert Stein’s statement
       -Burns’s proposal
       -Mills’s opposition
       -Stein’s statement
               -Effect on financial markets        

                       -Schultz’s testimony        

               -Pierre Rinfret’s call to Ehrlichman 

       -Shultz’s testimony         


Economic Stabilization Act
                                        -12-

            NIXON PRESIDENTIAL LIBRARY AND MUSEUM

                                 Tape Subject Log
                               (rev. September-2011)

                                                       Conversation No. 905-10 (cont’d)

       -Congressional action            

              -Administration’s position         

                       -Phase III implementation         

       -Freeze and price rollback 

              -Public support             

                       -Labor         

                                -Price freeze      

                       -Business             

                                -Wage freeze         

                       -Cost of living freeze         

              -Dale DeWitt, Rinfret, and John B. Connally 

       -Rollback compared to freeze 

              -Burns          

              -Publicity          

              -President’s action              

       -Public relations [PR]
              -Troika meeting
              -President’s Advisory Committee on Labor-Management Policy meeting
              -Ehrlichman’s view
                       -William Baroody, Jr.           

                       -Campaign               

                       -Slogans             


US economy
      -Price increases        

              -President’s view           

              -Wholesale          

      -Annual rate
              -Consumer Price Index [CPI]          

                     -Decline           

                     -Meat            

      -Phase III
              -Publicity        

                     -Price controls          

                     -Effect on consumers         

      -Labor negotiations           

              -Troika bargaining            

                                          -13-

            NIXON PRESIDENTIAL LIBRARY AND MUSEUM

                                  Tape Subject Log
                                (rev. September-2011)

                                                             Conversation No. 905-10 (cont’d)

              -Rubber industry settlement           

       -Phase III       

              -Public relations          

                     -President’s letter to editors            

                     -Radio, television [TV]              

                     -Shultz, Stein         

                     -Barody           

                     -“Merchandizing Manager”                  

                     -Advertising Council             

                     -Phase III enforcement             

       -Economic Stabilization Act          

              -President’s signing statement            

                     -Cost of Living Council [COLC]                  

                              -Treasury Department               

              -Congress’s rejection          

                     -Administration’s response               

                              -Price increases           

                                      -Rollback             

                              -Voluntary control program

                                      -Business, labor
                              -Inflation, budget
                              -COLC
                                      -Funding
                                      -Dunlop

Harry S. Truman
       -Action on rail strike 

              -Robert A. Taft, Sr.’s reaction 

              -Duration         


Economic Stabilization Act
      -Congress’s rejection
             -President’s response
                     -Public speech
                            -Forum
                            -Chamber of Commerce
                     -Voluntary control program
                                                -14-


                   NIXON PRESIDENTIAL LIBRARY AND MUSEUM 


                                      Tape Subject Log 

                                    (rev. September-2011)

                                                                Conversation No. 905-10 (cont’d)

                                     -Collective bargaining
                             -Political positioning with regard to Congress

       Wage and price controls 

             -Termination         

                    -Possible effects       

                            -Election cycle             


       President’s schedule      

              -Troika meeting       

                      -Economic Stabilization Act           

                            -PR planning         


       Request for Dr. [First name unknown] Brennan [?]

Shultz and Ehrlichman left at 11:20 am.