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1975/03/20 - Mike Duval (1)
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James Cannon's Meetings Files
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The original documents are located in Box 43, folder "1975/03/20 - Mike Duval (1)" of the
James M. Cannon Files at the Gerald R. Ford Presidential Library.
Copyright Notice
The copyright law of the United States (Title 17, United States Code) governs the making of
photocopies or other reproductions of copyrighted material. Gerald Ford donated to the United
States of America his copyrights in all of his unpublished writings in National Archives collections.
Works prepared by U.S. Government employees as part of their official duties are in the public
domain. The copyrights to materials written by other individuals or organizations are presumed to
remain with them. If you think any of the information displayed in the PDF is subject to a valid
copyright claim, please contact the Gerald R. Ford Presidential Library.
Digitized from Box 43 of the James M. Cannon Files at the Gerald R. Ford Presidential Library
8:45 AM - Meeting Mike Duval
Thursday, March 20, 1975
On Energy, Regulatory Reform
]
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Ash mike
Mila in to to stop see
me about This
Bls clienes
with me
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Cannon & Diwal)
(Meeting Mar. 20, 1975,
THE WHITE HOUSE
WASHINGTON
March 10, 1975
MEMORANDUM FOR
JIM CANNON
FROM:
MIKE DUVAL
SUBJECT:
REGULATORY REFORM
Following up on our meeting Friday, the following is a brief
summary of where we stand on this project.
PRESIDENTIAL STATEMENTS
In his address to a Joint Session of Congress on October 8 of
last year, the President stated:
I ask the Congress to establish a National Com-
mission on Regulatory Reform to undertake a long
overdue total re-examination of the independent
regulatory agencies. It will be a joint effort
by the Congress, the Executive Branch and the
private sector to identify and eliminate existing
Federal rules and regulations that increase costs
to the consumer without any good reason in today's
economic climate.
I will require that all major legislative pro-
we
posals, regulations and rules emanating from the
Executive Branch of the Government will include
carteat
an Inflation Impact Statement that certifies we
have carefully weighed the effect on the Nation.
I respectfully request that the Congress require
Congos
a similar advance Inflation Impact Statement for
its own legislative initiatives.
In the Fact Sheet, issued by the White House concurrently with
the State of the Union Address, the President stated that he
would resubmit his proposal to create a National Commission on
Regulatory Reform.
CURRENT STATUS
z
The President's efforts to reform the economic regulatory
activities of the Federal Government are focused on two fronts:
2
1. Independent Regulatory Agencies. The President's pro-
posed National Commission is not likely to be enacted by
Congress in a form which meets the President's objectives.
Although the proposed legislation was introduced in the
93rd Congress, only the Senate held hearings and no bill
was reported out of committee in either House.
The President decided not to push this legislation hard
as a part of his State of the Union Address for three
reasons: first, if Congress ultimately does act on the
Commission, the lead times involved to get the legislation
and implement it would result in a final product long after
the battle against inflation must be fought and won. Second,
the chances of legislative success are very slim and we're
likely to get a Commission which could do more harm than
good. Third, if Congress does hold hearings and otherwise
actively considers creating such a Commission, this will be
used as an excuse to delay action on legislation targeted
at reform of specific agencies.
Our Commission bill was submitted by OMB to the 94th Congress
but has not been introduced in either House. A somewhat
similar bill has been introduced in the House and, in the
Senate. Also, Government Operations and Commerce Committee
have jointly requested a special rule to create an ad hoc
Senate Committee on regulatory reform. It would be funded
with $750 million and last eighteen months.
The President does intend to submit specific regulatory
reform legislation covering at least:
surface transportation
aviation
financial institutions
Fair Trade Repeal (has already been submitted)
Robinson-Patman Repeal
2. Executive Branch Action. The President has signed an
Executive Order requiring the Inflation Impact Statement.
In addition, OMB has issued a circular which implements
this Order. The circular expands the coverage to include
all economic impacts, not just inflation. This program
is intended to be highly decentralized with the departments
establishing specific criteria defining which actions are
covered by the Order and the criteria which will be utilized
in analyzing these impacts. In addition, the circular clearly
deals the Council on Wage Price Stability into the Inflation
Impact review.
CC: Dick Dunham
Jim Cavanaugh
THE WHITE HOUSE
WASHINGTON
March 10, 1975
MEMORANDUM FOR
FRANK G. ZARB
FROM:
MIKE DUVAL
SUBJECT:
LNG - MARAD CONSTRUCTION SUBSIDY
I understand that you are thinking of raising the LNG question
with the President tomorrow.
As I stated at the ERC meeting, I continue to believe that the
cryogenic ship construction subsidy question should be treated
separately when this issue is brought before the President. As
you know, the maritime subsidy question raises a host of prob-
lems which are not covered by any analysis of Export-Import Bank
financing or the general economic feasibility and energy policy
implications of imported LNG.
It is my recommendation that the Simon Task Force on the Maritime
Industry consider the cryogenic shipbuilding subsidy question and
that their recommendation be included prior to any Presidential
decision.
CC: Bill Seidman
Jim Cannon
Jim Lynn
THE WHITE HOUSE
Pat
WASHINGTON
March 3, 1975
issues
Transportation
MEMORANDUM FOR:
JERRY JONES
FROM:
MIKE DUVAL
SUBJECT:
NEW HIGHWAY AND AVIATION LEGISLATION
Following up on your memorandum of February 18, the
following coordination has been accomplished and is
under way with Congress.
Acting Secretary John Barnum, has visited with Senators
Magnuson, Pearson, Randolph and Baker concerning the
aviation and highway legislation. In addition, I will
be having lunch this week with the head of the majority
and minority staff of the Senate Public Works Committee
to discuss the highway bill. I have already met with the
minority staff leader of the Senate Commerce Committee on
Aviation and I discussed it briefly with Senator Cannon.
Barnum also met with Congressman Harsha for a brief meeting
on both peices of legislation. In addition, I met with
Harsha, Don Clausen and Cliff Enfield (their chief staff
man) to discuss the highway and aviation proposals in
some detail. At Mr. Harsha's suggestion we have scheduled
a detailed briefing on Monday for the Public Works Committee
staff which will be conducted by DOT. Also, at Harsha's
suggestion I will be meeting with Chairman Jones on Tuesday.
We expect to have a brief report for the President by mid-
week which describes the Hill reaction to our proposals.
It is, of course, important that Bill Coleman review these
proposals prior to their submission. I have talked to Barnum
about this and he advises me that Coleman already has been
briefed and is studying the proposed legislation.
In terms of timing, the House Public Works Committee could
begin hearings on the highway bill as early as the week of
March 9. Therefore, I have advised OMB and DOT that we
should be prepared to submit the transportation legislation
by the end of this week.
2
There are three potential problem areas which we will
monitor closely. First, Republican members of Congress
are obviously going to oppose strongly, (1) extension
of the Highway Trust Fund only for the Interstate System
(they 11 want the Trust Fund for all highway construc-
tion) and, (2) the proposed general aviation landing fees.
Second, Bill Coleman may have some problems with the pro-
posals. Third, there is still strong disagreement between
the Hill, DOT and OMB concerning the deregulation proposals.
CC:
Jim Cannon
Jim Cavanaugh
Bill Kendall
Vern Loen
Wally Scott
Called The 2/19
copy sent tomike
JNC
THE WHITE HOUSE
WASHINGTON
February 18, 1975
ADMINISTRA TIVELY CONFIDENTIAL
MEMORANDUM FOR:
JIM CAVANAUGH
FROM:
JERRY H LIVEN
SUBJECT:
New Highway and
Aviation Legislation
The attached memorandum to the President on the above subject
has been reviewed and the following notation was made:
-- A lot of work should be begun
immediately with Harsha and others,
including Don Clausen of California.
Would you please put together a legislative strategy plan which
will implement the President's instructions and submit through
the Office of the Staff Secretary.
Thank you.
cc: Don Rumsfeld
Jim Lynn
Jack Marsh
THE PRESIDENT HAS SEEN
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET
WASHINGTON, D.C. 20503
INFORMATION
JAN 23 1975
MEMORANDUM FOR THE PRESIDENT
THROUGH:
Roy L. Ash
FROM:
Walter D. Scott
SUBJECT:
New Aviation and Highway Legislation
Following discussions with you in early December concerning
legislation for the extension and modification of the Federal
aviation and highway programs, agreement has been reached on
the major provisions of these proposals. DOT is currently
drafting the necessary legislation. Key aspects of these
proposals will be highlighted in your Budget Message. In
addition, we recommend that the legislation be transmitted
with a short, written Presidential Transportation Message
within three weeks.
The aviation and highway proposals were developed with the
objectives of:
--Increasing the efficiency and effectiveness of these
programs by focusing Federal financing and oversight
on national transportation system requirements while
increasing state and local direction and flexibility.
--Dealing equitably with the complex trust fund/user
charge policy issues in both programs by better
matching dedicated revenues, beneficiaries, and
program costs while proposing a straightforward
solution to the deferred funds problem.
-Ensuring that the Administration is a full partner
in Congressional deliberations by proposing programs
with reasonable Congressional and interest group
support.
The aviation legislation will provide contract authority to
fund the Airport Grant Program at $350 million per year and
to extend authorizations for the FAA Airway Facilities Program
at $250 million per year through 1978. Under this proposal,
most airport grant funding will be shifted from individual
Federal project approval to a formula distribution system.
2
Federal aviation operating expenses will be funded from the
aviation trust fund, and user fees will be adjusted by instituting
general aviation landing fees (requested in the last Congress),
decreasing the air carrier ticket tax on domestic passengers,
and increasing the international departure tax. Unobligated
grant funds of $0.2 billion will be allowed to lapse. Attachment
A provides more detail on this proposal.
The highway legislation will provide $22.7 billion of contract
authority for the Federal-aid highway program for 1977 through
1980, and extend the highway trust fund through 1980. Con-
struction of the interstate system which will be financed from
the trust fund, will be expedited by increasing funding levels
and focusing efforts on completion of unfinished segments
critical to national intercity connectivity. The non-interstate
programs, to be financed from general funds, will be consolidated
from over 30 restrictive categorical grants into three broad
programs with provisions for "off-system" funding. Trust fund
receipts will be reduced to the level of the proposed interstate
system expenditures by shifting 2¢ of the gas tax into the
general fund and permitting states to preempt 1¢ of all motor
fuel taxes ($1.2 billion) in 1978. In addition, the $11 billion
of deferred highway funds will be rescinded or exhausted by not
requesting additional funds for 1976 and the transitional budget
period. Attachment B provides more detail on this proposal.
Although these initiatives contain many provisions that will be
supported by certain interest groups, the proposals for elimi-
nating deferred funds and reducing the scope of the highway
trust fund will face broad and substantial resistance. Authori-
zations for these programs have come from user financed trust
funds, and in most cases are already apportioned to State and
local bodies. We have reviewed many alternatives for reducing
or eliminating unobligated balances, and have reluctantly con-
cluded that there is no painless way of dealing with this
problem. The straightforward approach recommended in these
proposals essentially calls for "wiping the slate clean" for
these programs. Likewise, it appears necessary to limit
highway trust fund receipts and restrict its program to elements
with high national interest if we are to get long term highway
funding levels consistent with our fiscal objectives and other
program priorities.
Overall, the proposals offer an opportunity to substantially
increase local direction and management of these major grant
programs while focusing the Federal involvement on projects
of national interest. Most states, local bodies, and user
groups will strongly support these efforts to eliminate un-
necessary Federal involvement in and increase the efficiency
and effectiveness of these grant programs.
Attachment A
Aviation Legislation
Key objectives of legislation are to:
Reduce Federal involvement in local airport development and
increase local flexibility in use of funds.
Establish principle of user responsibility for financing a
portion of airway system operating costs.
Allocate user fees more equitably among aviation system users.
Stop the growth in aviation trust fund "surplus" and eliminate
unobligated airport program funds.
Continue funding Federal airway capital development at present
levels.
Airport grant provisions would authorize a three-year program which
would:
Provide for direct formula grants to air carrier airports ($50
per air carrier departure with a $25,000 annual minimum per
airport) to replace present project approval program. ($260M).
Expand projects eligible for funding to include development of
passenger and baggage handling facilities (but not terminals
per se) and eliminate local matching requirements.
Establish a $50M annual discretionary capital assistance and
planning grant program to meet special requirements of national
priority at air carrier and general aviation reliever airports,
not adequately provided for through formula funding.
Allocate general aviation grants on a formula basis to the states
with gradual shift of program management and funding responsi-
bilities to the states. In 1978, the last year of this
transition, states would fund the program from preempted Federal
aviation gas tax revenues.
Allow $194M in unobligated airport grant funds to lapse on
June 30, 1975.
Overall increase the annual new obligational authority for the
airport grant program from the present $325M to $350M while
reducing the Federal involvement (and Federal grant admin-
istrative staff).
Aviation fee structure would be modified to more equitably match
fees with the burden different users place on the system by:
-Reducing the domestic passenger ticket tax from 8% to 7%
($110M annual reduction).
--Raising the international enplanement fee from $3 to $5
($30M annual increase).
--Instituting new general aviation landing fees of $5 and $10
at airports with FAA traffic control towers as proposed in
the Budget Restraint Message. ($80M annual increase).
Airway facility authorizations for Federally owned and operated
traffic control and navigation equipment would be continued for
three years at the present $250M annual level.
Trust funding will be extended to include the $430M annual
maintenance costs for airway facilities, currently funded from
the general fund.
Aviation interest group reaction to the proposals will be mixed,
but probably generally positive.
--Airport operators (includes many cities) will strongly
support the direct formula grants. They will push for
a larger overall program.
Air carriers will support the domestic passenger tax reduction
and most of the formula grant changes. They will push for a
larger tax decrease.
General aviation interests will support the general aviation
airport proposals, but will strongly oppose landing fees.
-State aviation officials will support most of the airport
grant proposals.
--All groups will oppose lapsing of airport grant funds and the
opening of the trust fund for operating expenditures.
Congressional reaction will probably also be mixed.
House Public Works and Transportation Committee will be handling
aviation legislation for first time. Anticipate positive
reaction to formula grant proposals.
-Senate Commerce Committee will probably resist additional
delegation to the states and trust fund changes.
-Ways and Means reaction on revenue proposal is uncertain. Will
be substantial air carrier pressure to move legislation.
GERALD FORD
Attachment B
Highway Legislation
Key objectives of the legislation are to:
--Increase the efficiency and effectiveness of highway
assistance programs by providing additional state
flexibility for non-interstate highway system while
focusing Federal efforts on the critical national
aspects of the Interstate system.
--Strike a long term balance between user receipts and
trust funded programs at a level consistent with
Administration's long term funding priorities.
--Provide a proposal for dealing with the immediate
problem of the $11 billion Federal-aid deferral in a
manner consistent with the Administration's fiscal
objectives.
Federal-aid highway Interstate assistance, financed from the
trust fund, would increase significantly through 1980 while
Non-Interstate assistance, financed from the general fund,
would be held at the 1976 level.
Program Level (Billions of Dollars)
1975
1976
1977
1978
1979
1980
TOTAL
4.6
5.2
5.4
5.6
5.8
5.9
Interstate (Trust Fund)
(2.5)
(3.0)
(3.2)
(3.4)
(3.6)
(3.7)
Non-Interstate (General
Fund)
(2.1) (2.2) (2.2) (2.2) (2.2) (2.2)
State preemption of 1¢ per gallon of the Federal motor fuel
tax would be permitted in 1978. The potential annual $1.2
billion in added state revenues would provide a substantial.
infusion of funds for local highway construction and
maintenance problems.
Interstate funds would be focused on unfinished segments
necessary to national intercity connectivity by apportioning
some of the interstate funds on the basis of unfinished
critical links.
Four broad program areas (Interstate, Rural and small urban,
Urbanized, and Safety) would replace the present maze of
categorical grants. Funding would be permitted from these
program areas for roads not on the Interstate, Primary or
Secondary Systems.
GERALD FORD
2
Trust fund receipts would be reduced by the shift of 2¢ per
gallon of gas tax receipts into the general fund and the
local 1¢ per gallon preemption of motor fuel taxes.
Receipts would equal the proposed Interstate System
program level so that trust fund receipts and expenditures
would be balanced.
Deferred funds would be eliminated by rescinding the $3.2
billion "advanced" year Interstate allocation, requesting no
additional Federal-aid authorizations for 1976 and the
transitional period, and rescinding all unobligated balances
as of September 30, 1976.
Interest groups will generally support the revised program
structure and the increases for the Interstate System.
States should strongly support provisions providing for
state motor fuel tax preemption as this will substantially
increase revenues and local flexibility.
Highway interest groups will strongly oppose rescission and
trust fund modification.
Congressional Committees will undoubtedly strongly oppose many
of these provisions, particularly the rescission proposals.
Substantial negotiations to reach a viable solution is the
deferral and long term trust funding problems should be
anticipated.
GERALD FORD
THE WHITE HOUSE
WASHINGTON
March 12, 1975
MEMORANDUM FOR
DONALD RUMSFELD
FROM:
MIKE DUVAL
SUBJECT:
MICROWAVE LANDING SYSTEM - INQUIRY
BY CONGRESSMAN FRENZEL
On January 22, you wrote to Bill Frenzel and advised him that
the Domestic Council would look into an issue he raised con-
cerning FAA's decision on a microwave landing system.
The issue boils down to whether or not FAA commits itself to
a landing system based on scanning beam or Doppler technology.
This is a major decision involving four years of intensive
research, two highly competitive technologies, both with major
industry support, and a split between the U.S. approach (scan-
ning beam) and the British (Doppler). Frenzel was concerned
that one of his constituent companies, Honeywell, would not
get objective evaluation by FAA because of "
an
apparent
tilt against the Doppler equipment" by the Federal officials.
Pursuant to your instructions to follow up on this, I raised
the matter with John Barnum. The U.S. decision -- in favor of
the scanning beam technology -- was made in late February by
an intragovernmental task force consisting of FAA, DOT, DOD
and NASA. Barnum's memorandum, which is attached, lays out
in detail how this decision was made and I concur in his
assessment that it was a fair process.
Although the FAA decision was announced over two weeks ago,
there has been surprisingly little reaction from the Congress,
industry or the British. I tried to call Congressman Frenzel
to discuss the decision with him, but so far, he has not
returned my call.
My recommendation is that no further action by the White
House. I will continue to monitor the situation.
OF
DEPARTMENT
THE SECRETARY OF TRANSPORTATION
WASHINGTON, D.C. 20590
UNITED STATES OF AMERICA
February 18, 1975
(see It- take Call David Issued to
MEMORANDUM FOR:
Mr. Michael Raoul-Duval
Associate Director
Domestic Council
SUBJECT:
Microwave Landing System
Development Program
&
Monday
This is in response to your memorandum of February 8 concerning
the Microwave Landing System (MLS) selection process now underway.
The MLS program is a joint undertaking of DOT, DOD, and NASA
to develop a long-term successor to the Instrument Landing System
(ILS) currently in use at over 300 U.S. airports to provide approach
and landing guidance in poor weather. Executive leadership for this
program has been the responsibility of the Federal Aviation
Administration.
This program, underway since 1971, is now completing the second
phase of a three-phase effort. In this phase, engineering feasibility
models of two different beam-forming techniques -- scanning beam
and Doppler -- were constructed, tested, and analyzed. Prior to
entering the third phase which involves the construction of pre-
production models, it is necessary to select a single technique.
This technique will also be the one forwarded by the U.S. for con-
sideration as a worldwide standard by the International Civil Aviation
Organization (ICAO).
A recommendation for the U.S. technique selection was made in
late December 1974 by a Steering Committee including technical
experts of the FAA, DOT, DOD, and NASA. This recommendation,
the result of a four-month intensive analysis effort, was subsequently
2
approved by an independent MLS Advisory Committee consisting
of aviation experts both inside and outside the U.S. Government.
Final review and decision on the technique selection is the responsi-
bility of a four-man MLS Executive Committee representing FAA,
DOT, DOD, and NASA, with each representative required to have
what
the concurrence of his organization. This final selection action by
the Executive Committee has been underway since early January
and is scheduled for completion by February 19 or 20.
decision ??
The above several-level recommendation and approval process,
agreed upon by FAA, DOT, DOD, and NASA, provides for a very
full and objective review of the two contending techniques and of
all related considerations. I believe you can be assured that a
complete review and appropriate decision will be made, and I see
11
no reason to consider any change to the Executive Committee efforts
in progress.
You should be aware that there are two major electronics manu-
facturers (or groupings of manufacturers) associated with each
technique. Their interest in the selection is very high and has
been expressed by letters and visits of their senior personnel.
The Executive Committee has taken great care to ensure that they
had a full opportunity to make their positions and concerns available
for consideration.
The Chairman of the Executive Committee is David Israel, Deputy
Associate Administrator for Engineering and Development, of the
FAA. He will be pleased to provide you directly with additional
background and details as you may deem necessary.
426
you Likum
8183
THE WHITE HOUSE
DECISION
WASHINGTON
March 10, 1975
7111
MEMORANDUM FOR
THE PRESIDENT
FROM:
JIM CANNON
SUBJECT:
TRANSFER OF THE NAVAL PETROLEUM
RESERVES FROM NAVY TO INTERIOR
This memo is to ask whether you have changed your position on
the matter of transferring Naval Petroleum Reserves from Navy
to Interior.
Congressman Melcher is the sponsor of a bill (H.R. 49) recently
reported favorably by his subcommittee of the House Interior
Committee which would transfer responsibility for the Naval
Petroleum Reserves from Navy to Interior.
Congressmen Melcher and Bell have stated publicly (Tab A) that
they have "unofficial" word from the White House that you would
be "delighted" to have their bill pass the Congress. Since such
a transfer differs from the position taken in your Energy Independ-
ence Act, the Melcher-Bell statement has led to questions from
Navy, DOD, and the Congress as to whether you have in fact changed
your position.
The matter is particularly urgent because Administration witnesses
will appear at Senate Interior Committee hearings tomorrow at
10:00 a.m. and specific questions are expected as to whether you
favor transfer of the Reserves to the Interior Department.
RECOMMENDATION
I recommend that you authorize a response during the hearings which
will make clear your current position.
DECISION
Indicate that the Melcher-Bell statement apparently is
based on a misunderstanding of your position.
Indicate that the Melcher-Bell statement reflects your
current position.
P-080
(PETROLEUN)
WASHINGTON (UPI)
my
PRESIDENT FORD WAS REPORTED TODAY TO HAVE
DECIDED TO SUPPORT LEGISLATION CALLING FOR THE TRANSFER OF THE NAVY'S
UNTAPPED UNDERGROUND PETROLEUM RESERVES TO THE INTERIOR DEPARTMENT.
CHAIRMAN JOHN NELCHER, D-NONT. OF THE HOUSE PUBLIC LANDS
SUBCOMMITTEE TOLD REPORTERS OF THE "UNOFFICIAL" SWITCH BY THE
PRESIDENT AFTER THE PANEL UNANIMOUSLY APPROVED à BILL PROVIDING FOR
THE TRANSFER OF JURISDICTION.
NELCHER SAID FORD APPARENTLY HAD NOT SAID ANYTHING PUBLICLY
BECAUSE HE HAS SENT CONGRESS A PROPOSED BILL CALLING FOR PRODUCTION
FROM THE ELK HILLS RESERVE IN CALIFORNIA UNDER CONTINUED NAVY
JURISDICTION.
BUT MELCHER SAID THE WHITE HOUSE HAD *PRIVATELY* AND
"UNOFFICIALLY" SAID THE PRESIDENT "WOULD BE DELIGHTED TO HAVE (THE
CON
P-082
ADD 1 PETROLEUM, WASHINGTON (UP-080)
BUT HALGHER SAID THE WHITE HOUSE HAD "PRIVATELY" AND
UNDEFICIALLY SAID THE PRESIDENT *WOULD BE BELIGHTED TO DAVE 1112
COMMITTEE) BILL MOVE QUICKLY.*
THE BILL APPROVED BY UNANIMOUS VOICE VOTE OF THE INCUSE PANEL WOULD
TRANSFER BOTH THE ELK HILLS RESERVE AND THE NAVY'S HUGE ALASKAN
RESERVE TO THE INTERIOR DEPARTMENT FOR ADMINISTRATION,
LIKE THE ADMINISTRATION BILL, IT CALLS FOR PRODUCTION AS QUICKLY
AS POSSIBLE FROM THE FLK HILLS RESERVE AND FOR FURTHER EXPLORATION OF
THE ALASKAN OIL FIELD,
MELCHER SAID HE WOULD PUSH FOR HOUSE ACTION ON THE BILL WITHOUT
FIRST REFERRING IT TO THE HOUSE ARMED SERVICES COMMITTEE. THE BILL
NOV GOES TO THE PARENT HOUSE INTERIOR COMMITTEE,
HE ALSO SAID HOUSE SPEAKER CARL ALBERT HAD BULED THAT THE
LEGISLATION WAS PROPERLY REFERRED TO THE INTERIOR COMMITTEE DESPITE A
PROTEST BY REP. JOHN MOSS, D-CALIF. WHO CONTENDED IT SHOULD HAVE
CONE TO THE ARMED SERVICES COMMITTEE.
UPI 02-28 03:03 PED
FORD
GERALD
LIBRARY
NAVAL PETROLEUM RESERVES LEGISLATION
Question:
Congressman Melcher has indicated that the White House has sent an
"unofficial" signal that you would be "delighted" to have the Congress pass
his bill which transfers the Naval Petroleum Reserves to the Interior
Department? Do you favor his bill?
Answer:
My legislative proposal (Energy Independence Act of 1975) calls for
Congressional action to permit us to move forward with exploration,
development and production of the Naval Petroleum Reserves. After careful
consideration, I did not propose transferring the reserves from Navy to
Interior because my objective for sound use of the reserves can be met
without transferring the reserves from Navy to Interior. I continue to
believe that my proposal is the best approach.
M.Duval(G.R.S.)
3/6/75
[ca.3/15/76]
TEREPAL
DEPARTMENT
FEDERAL ENERGY ADMINISTRATION
WASHINGTON, D.C. 20461
ADMI ADMINISTRATION
OFFICE OF THE ADMINISTRATOR
MEMORANDUM FOR THE PRESIDENT
File
FROM: Frank G. Zarb
THRU: Rogers C.B. Morton
SUBJECT: Energy Legislation Compromise
The attached briefing book includes talking points for your
Tuesday meeting with key Republicans on the House side and
an option paper and supporting analyses of possible energy
legislation compromises.
We are not asking for any decisions at this time and I will
schedule another meeting later in the week for your decisions
on the next steps and directions in developing a compromise
legislative program.
GERALD FORD FIBRARA
TABLE OF CONTENTS
TAB A - Talking Points
TAB B - Options for Energy Legislation Compromise
TAB C - Energy Program Comparison
TAB D - Economic Safety Valve
FORD i LIDRARY 038870
TAB A
FEDERAL
ADUSHA
FEDERAL ENERGY ADMINISTRATION
WASHINGTON, D.C. 20461
ADMINIST
ATION
March 15, 1975
OFFICE OF THE ADMINISTRATOR
MEETING WITH ROGERS MORTON, FRANK ZARB, BILL SIMON, HENRY
KISSINGER (TOM ENDERS), JIM LYNN, BILL SEIDMAN, MAX FRIEDERSDORF
JACK MARSH, ALAN GREENSPAN, REPRESENTATIVE SCHNEEBELI,
REPRESENTATIVE CONABLE AND REPRESENTATIVE BROWN
Tuesday, March 18, 1975
11:00 A.M.
The Oval Office
From: Frank G. Zarb
I. PURPOSE
To discuss possible compromise strategies with Republican
congressional leaders.
II. BACKGROUND, PARTICIPANTS AND PRESS PLAN
A. Background: We have been making some progress in
moving towards compromise with the House Ways and
Means and Commerce Committees on a national energy
program. The ranking minority members of these
Committees have been invited to discuss possible
compromises with you today. A decision memorandum
from the ERC is attached which outlines these
alternatives.
B. Participants: Roger Morton, Frank Zarb, Bill
Seidman, Max Freidersdorf, Jack Marsh, Alan
Greenspan, Bill Simon, Henry Kissinger (Tom Enders),
Jim Lynn, Herman Schneebeli, Barber Conable, Bud
Brown
C. Press Plan: None at this time.
III. TALKING POINTS
1. As you know, there is now considerable activity in
Congress on developing an energy program.
2.
I've postponed the second and third dollars of
my import fees for 60 days and hopefully we can
have a legislative program by then. If not, I
do intend to impose the remaining import fees.
3.
Members of the Administration have had extensive
discussions with Congressmen Ullman and Dingell,
and Senators Pastore, Jackson and Long.
4. Our strategy is to attempt to get acceptable
legislation from Ways and Means and the House
Commerce Committee as early as possible.
5. This morning I would like to discuss the major
areas of potential compromise and get your views
before I make my decisions later this week.
6. Let me ask Frank Zarb to go through these areas
and briefly discuss the alternates we are
considering.
TAB B
OPTIONS FOR ENERGY LEGISLATION COMPROMISE
Background
Members of the Administration have been meeting extensively
with the Chairman and staff of the House Ways and Means
Committee and other Congressional committees to pursue
areas of possible agreement on the energy program.
Based on these discussions, it appears that it is now possible
to develop a compromise position on your energy tax program.
While a compromise is possible, major concessions on both
sides will likely be necessary.
There are numerous areas of agreement between the Ways and
Means program and your own. (Tab C compares both programs
and summarizes agreements and disagreements.) In general,
while our disagreements are significant, Ways and Means is
already further toward our goals, strategies and philosophies
than any of the other enunciated Democratic plans. Hence,
any compromise with Ullman will place him further out on a
limb and be subject to major weakening or deletion by the
rest of the Congress. It is clear, however, that Ways and
Means recommends different types of energy taxes than
recommended by the Administration and may recommend limitations
on the President's ability to impose import fees.
The other major House activity is in Representative Dingell's
Subcommittee on Energy and Power, which has jurisdiction over
7 of the 13 titles in your Omnibus energy legislation. While
Mr. Dingell started out philosophically opposed to your approach,
he appears to be moving closer to the Ways and Means philosophy.
But, there will be major problems getting several of your
proposals through his committee.
The Democratic leadership's program developed by Representative
Wright and Senator Pastore is being divided into several
components and we remain far apart in terms of our thinking.
The Senate seems to have a firm grip on this program and will
be more difficult to deal with than the House.
We have concentrated our efforts with the House Committees
since they will report out a bill on our tax proposals first
and since they are more likely to compromise towards our
objectives. The major disagreements can be boiled down into
four areas:
OPTIONS FOR ENERGY LEGISLATION COMPROMISE
Background
Members of the Administration have been meeting extensively
with the Chairman and staff of the House Ways and Means
Committee and other Congressional committees to pursue
areas of possible agreement on the energy program.
Based on these discussions, it appears that it is now possible
to develop a compromise position on your energy tax program.
While a compromise is possible, major concessions on both
sides will likely be necessary.
There are numerous areas of agreement between the Ways and
Means program and your own. (Tab C compares both programs
and summarizes agreements and disagreements.) In general,
while our disagreements are significant, Ways and Means is
already further toward our goals, strategies and philosophies
than any of the other enunciated Democratic plans. Hence,
any compromise with Ullman will place him further out on a
limb and be subject to major weakening or deletion by the
rest of the Congress. It is clear, however, that Ways and
Means recommends different types of energy taxes than
recommended by the Administration and may recommend limitations
on the President's ability to impose import fees.
The other major House activity is in Representative Dingell's
Subcommittee on Energy and Power, which has jurisdiction over
7 of the 13 titles in your Omnibus energy legislation. While
Mr. Dingell started out philosophically opposed to your approach,
he appears to be moving closer to the Ways and Means philosophy.
But, there will be major problems getting several of your
proposals through his committee.
The Democratic leadership's program developed by Representative
Wright and Senator Pastore is being divided into several
components and we remain far apart in terms of our thinking.
The Senate seems to have a firm grip on this program and will
be more difficult to deal with than the House.
We have concentrated our efforts with the House Committees
since they will report out a bill on our tax proposals first
and since they are more likely to compromise towards our
objectives. The major disagreements can be boiled down into
four areas:
FORD
GERALD
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- Timing of import reductions.
- Conservation focus on gasoline.
- Use of allocations, quotas and purchasing authority.
- New auto efficiency incentives.
A number of proposed compromise actions are presented in the
remainder of this memorandum along with their expected impact.
In summary, they would have the following effects:
1975
1977
President's goals
1 MMB/D
2 MMB/D
Savings from Admin.
program
1.0 MMB/D
2.1 MMB/D
Estimated Savings from
Ullman Plan
0.5 MMB/D
1.4 MMB/D
Estimated savings from
compromise program
0.5-0.7 MMB/D
1.7-2.0 MMB/D
You will be meeting on Tuesday with senior Republicans from the
Ways and Means Committee and Dingell's Subcommittee. No decisions
need be made on these alternatives until after that meeting.
I. TIMING OF IMPORT REDUCTIONS
Perhaps the major conflict is the difference between quickly
achieving the 1 MMB/D and 2 MMB/D reductions to stem any
increase in vulnerability and desire of some in the Congress
to phase in a program very slowly to avoid economic impact now
and allow a gradual transition. Many in Congress, and several
outside economists alike, appear convinced that the rapid drop
in imports under the Administration's program would cause major
economic impacts. Some accommodation is obviously necessary.
Congress favors no action in 1975, little or no action in 1976,
and a 4-8 year phase-in of price increases from proposals such
as a gasoline tax or decontrol. Such timing makes any savings
in 1975 unlikely and your 2 MMB/D 1977 goal unreachable.
Options:
There are two phasing options which might be adopted by the
Congress.
Option 1
FOND
A 3-5 year phase-in of the import fees, decontrol,
and other taxes. Dingell, whose subcommittee has
GERALD
jurisdiction over decontrol, is leaning towards
a 5 year phase-in.
-3-
Option 2
A 2 year phase-in of the program, coupled with an
"economic safety valve" which would delay each phase
after the initial step, if the economy does not
recover as expected.
Using an "economic safety valve" will be complicated and subject
to being placed at a level where it effectively precludes
any action. However, it may be the only way for the Admin-
istration and the Democrats to compromise on a program which
can meet your 1977 goal. The 3-5 year phase-in is
easier to administer, but means a significant abandonment
of both of your short-term goals.
Recommendations: Adopt Option 2.
- Phase in your petroleum tax program between now
and the end of 1977.
Leave the $1 crude oil import fee in place,
add a $.50 product import fee on July 1, 1975,
and add another $.50 fee to product imports on
July 1, 1976. (Add $1 more to import fees
on July 1, 1977, if you reject the partial
gasoline tax in the next section.)
Allow old oil to be decontrolled in three equal steps
by releasing 1/3 of the old oil from price controls
on July 1, 1975 and 1/3 more on July: 1 of each year
thereafter. This would be the equivalent of raising
old oil prices by $2 per barrel at each step.
--
Phase in natural gas deregulation.
Deregulate new gas now.
Place a cap on new gas wellhead prices which
would be $.75 per MCF for 1975, $1.00 for 1976,
$1.25 for 1977 and then no cap.
- Phase in the natural gas excise tax in three 10¢
increments each year starting July 1, 1975.
- Provide for a statutory economic safety valve which
would defer the next annual increase automatically
if economic conditions deteriorated. (Tab D provides
more details.)
GERALD ADDRESS ? FORD
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Presidential Decision:
Agree
Disagree
Comments:
II. CONSERVATION FOCUS ON GASOLINE
The Ways and Means Committee originally put forward a large
gasoline tax which would rise from 5¢ per gallon beginning
sometime in the latter half of 1975 to 40¢ per gallon by 1979.
The latest indication is that Representative Ullman will request
a gasoline tax of 7¢ in 1975, rising to between 35-40¢ in 1979.
This tax can save significant quantities of fuel. It should
be noted that a lower gasoline tax, coupled with phased decontrol
and excise taxes is the permanent equivalent of the Administration's
proposed "gasoline tilt.'
Options:
A gasoline tax is considerably more popular than across the
board increases. However, with decontrol and partial import
fees, a much lower gas tax is needed to save an equivalent
amount of fuel. The only options available are:
Option 1
Oppose any gasoline excise tax.
Option 2
Agree to a gasoline tax, but at a much reduced
level. There are two major alternatives under this
approach:
1. Accept a schedule of:
5¢ in July 1975.
additional 5¢ as of July 1976.
additional 5¢ for a total of 15¢ as of July 1977.
GERALD FORD NIBRARY
-5-
2. Accept a even lower gas tax which, along with the
rest of the program, achieves the original goals
for 1977 (probably 10¢/gallon on gasoline at its
maximum).
Recommendation: Adopt Option 2.
Accept a phased, but lower gasoline tax, at the minimum level
needed to achieve our original goals. The net effect of the
phased in excise taxes, decontrol and the gasoline tax is to
increase all prices by about 12¢ per gallon by 1977. Gasoline
prices would be up by 18¢ while all other products would increase
by only 7¢.
Presidential Decision:
Agree
Disagree
Comments:
III. USE OF ALLOCATION, QUOTAS AND FEDERAL PURCHASING
AUTHORITIES
The Ways and Means Committee has proposed the use of gradually
decreasing quotas to meet our energy conservation goals. After
extensive discussions, the Committee seems convinced that quotas
that actually restrict supply would necessitate the use of
allocation with significant adverse consequences. The Committee
also suggested the use of a Federal purchasing authority to
acquire all U.S. imports, but they recognize the complexities
of such a program.
Options:
The use of quotas or purchasing mechanisms are philosophically
opposed to our program, but politically popular. Our options
are:
Option 1
FORD
Oppose these mechanisms completely.
GERALD
Option 2
AND
Develop variations of quotas which do not have
significant adverse effects and adopt a discretionary
Federal purchasing authority for strategic reserves
purchases.
-6-
Option 3
Implement Federal purchasing authority to restrict
supply.
Recommendations: Adopt Option 2.
- Agree to a very loose, standby quota system.
Would be designed to cut imports by no more
than the demand reduction that would be
achieved by the final conservation tax program.
Levels could be frequently adjusted by the President
as conditions change.
Authority to use an auction to allocate the
rights to import among domestic refiners and
importers.
- Agree to a Federal purchasing authority which
would only be used to purchase oil for the U.S.
strategic reserve, and not interfere with the
current market mechanisms for normal U.S. imports.
This authority, while representing a possible final
bargaining point, could become very powerful and
could affect prices at the margin.
Presidential Decision:
Agree
Disagree
Comments:
IV. NEW AUTO EFFICIENCY INCENTIVES
As part of your energy conservation program a voluntary
agreement to achieve a 40% improvement in new car efficiency
was reached with the major domestic auto manufacturers.
The Congress generally feels this is an insufficient
guarantee and is proposing either legislatively imposed
efficiency standards or a tax on large autos to discourage
both their manufacture and purchase.
GERALD FORD LIBRARY
-7-
The recent EPA ruling on auto emissions will require a
renegotiation of our voluntary agreement with the auto
manufacturers -- giving even more impetus to a legislated
solution. The Ways and Means Committee strongly favors the
tax approach and suggests a tax schedule which would place
no taxes on autos which get over 20 or 25 miles per gallon
and a tax rising to between $500 and $1000 per auto for cars
with less efficiency. The tax would be phased in starting
with the 1977 model year.
While we favor the voluntary approach, it also appears
that the tax approach is far superior to regulatory standards,
if we must accept some additional actions.
Options:
Option 1
Oppose any tax.
Option 2
Work with Committee. to develop a viable tax option.
Recommendations: Adopt Option 2.
-
Accept a tax on less efficient autos starting with the 1978
model year, and work with Ways and Means to develop it.
- Indicate that the auto emission standards problem
must be simultaneously resolved. (The likelihood
of a rapid resolution of the auto emission standard
problem is slim.)
- Indicate you will strongly oppose regulatory
standards in addition to the tax disincentives.
- Some of your advisors feel that we should continue
our current position in order to keep the pressure
on revising the auto emission standards.
Presidential Decision:
Agree
Disagree
Comments:
FORD
GERALD
LIBRARY
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V. OTHER TAX AREAS
The Ways and Means Committee has indicated a general desire
to include other tax incentives for insulation retrofit,
coal conversion, coal production, and industrial energy
conservation. While these are not likely to be as signi-
ficant either substantively or politically, we will continue
to work with the Committee to evaluate these options and
come back to you once the details are developed.
Recommendation:
That in evaluating these options we indicate that none will
be acceptable on their merits unless they can be fully financed
out of tax revenues generated by the gasoline tax, import fees
or windfall profits taxes.
GERALD ANNUSIT ? FORD
TAB C
ENERGY PROGRAM COMPARISON
GOALS
President
Ways and Means
Assessment
1975 - 1 MMB/D reduction
1975 - not specified
Compromise on timing and
1977 - 2 MMB/D reduction
1977 - 1 MMB/D reduction
level possible
1985 - imports of 3 to 5 MMB/D
1985 - imports of 6 MMB/D
SHORT TERM PROGRAM
President
Ways and Means
Assessment
Taxes/fees on all petroleum
Taxes on gasoline
Compromise on timing and
and natural gas
gasoline emphasis possible
Old oil decontrol and new
Phased decontrol and
Compromise on timing possib
natural gas deregulation
deregulation
Windfall profits tax
Windfall profits tax (oil,
Details could probably be
gas and coal) and depletion
worked out
allowance I repeal
Not included
Import quotas and allocation
Major philosophical differe
Amendments to coal conversion
Not included
Need to discuss
authorities
BERALD
B.FORD
LONG TERM PROGRAM
President
Ways and Means
Assessment
Energy Supply
LISBERTY
Naval Petroleum Reserve
Naval Petroleum Reserve
No differences
development
development
Aggressive Outer Continental
Government exploration of
Major philosophical differe
Shelf leasing
Outer Continental Shelf
1 MMB/D synthetic fuels program
Incentives for synthetic fuels
Details need to be develope
Electrical utility rate return
Utility tax credits
Major differences on scope
and tax incentives
program
President
Ways & Means
Assessment
Clean Air Act Amendment
Not included
Not in Ways & Means
Standby price floor
Not included
Need to discuss
Conservation
40% auto efficiency standards/
Taxes and rebates
Compromise possible if Clea
emission changes
Air Act can be included
Thermal building standards
Not included
Not in Ways and Means
Insulation tax credit and low
Incentives for insulation
Need to develop details,
income grants
compromise possible
Not included
Incentives for industry
Need to explore cost/benefi
of program
Emergency Measures
1.3 billion storage program
Storage program & standby
Compromise likely
and standby measures
measures
GERALD
R.
FORD
TAB D
TAB
ECONOMIC SAFETY VALVE
There are several possible ways to implement an economic
safety valve with respect to energy actions. The major
decisions that would be needed are how often to use the
mechanism and what economic indicator should be linked to it.
Frequency of Use
To be meaningful, the economic safety valve should be used no
more frequently than every 9-12 months. With the lag times in
reporting of economic indicators and the slowness in development
of trends, more frequent cycles would be difficult and misleading.
It is proposed that the initial import fee and steps towards
decontrol be implemented without any economic indicators test.
Thereafter, additional steps towards decontrol or import fees
would be on an annual basis provided the economic indicators
used as the safety valve are not negative. If they are, the
next phase of the tax or decontrol increases would automatically
be postponed six months and the process would be repeated.
Economic Measure
There are three obvious candidates for use as the economic
measure: inflation, unemployment, and GNP. With each of
these, there would have to be a relatively accurate forecast
of the economy to estimate the safety level.
The inflation rate would be a poor choice as it does not
represent economic health, would be difficult to predict, and
would not be largely affected by these incremental steps.
The unemployment rate is likely to be the measure with the
greatest political and social appeal. It is easy to understand
and directly affects the average citizen. There are two major
disadvantages with using unemployment as an indicator:
1. It is unlikely that anybody would commit to an
unemployment level above 8% and would most
likely say that unemployment would have to be
below 6-7% for the next steps to occur. This
might effectively preclude any next steps even
before the program was implemented.
2. The energy program has very little impact on
unemployment, but tying the increments to
unemployment might suggest a connection.
FORD
GERALD
LIBRATA
ENERGY
NOTES ON ENERGY MEETING - MARCH 18, 1975, 11:15 A.M.
Attending:
Congressmen Brown
Congressman Schneebeli
Congressman Conable
Zarb, Greenspan, Marsh, Cheney, Friedersdorf,
Zausner, Connor, Seidman, Lynn, Morton, Cannon,
Carlson, Duval
Key Points Made
President:
Concerning our efforts to deregulate natural gas,
we must target in on the individual Congressional
Districts. We must determine unemployment, rising
costs, etc., and make sure that the Congressmen
that are opposing deregulation are aware of the
impacts in their District. Specific focus should
be on Congressman Sharp.
Is anyone trying to organize labor and management
to target in on individual members concerning our
energy program with particular emphasis on natural
gas?
Leonard Woodcock should be of help on emission
standards.
Concerning Elk Hills, Navy has been dragging its
feet. The President has told Schlesinger that
he wants action on the proposal and it is now
beginning to move. The Navy had better under-
stand that the President will endorse the Melcher
bill if DOD doesn't get moving. The President
will be going to California to visit Elk Hills
and the geothermal plant in Northern California.
The President referred to the negotiations in the
Middle East. We need stand-by authority to allocate,
etc., in the event of another embargo.
The President thought Zarb's suggestion that he
call in Jackson, Magnuson, Pastore and Long might
be a good idea as a method of getting the Senate
energy movement synchronized with the House progress.
Responding to Congressman Brown's comments, the
President stated that we must move on selling
revenue sharing. Told Jim Cannon to work up a
plan on this which will include going into the
Congressional Districts to drum up support.
&
FORD
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817
2
Congressman
Don't make too much haste on the energy program.
Schneebeli:
Ullman is moving closer and closer to us.
We must consider and determine what to do with
revenues collected by energy taxes, some revenue
decreases being planned by Ways and Means. This
includes proposals to increase the capital gains
treatment.
Congressman
The President should make Ullman look good. He's
Conable:
moving towards us but has considerable problems
from the Democratic Caucus and the freshmen
Congressmen. The President's program is "Rube
Goldbergish" but it is realistic because it
doesn't require Congress to take action.
Politically, the President is getting through
to the American people on the delays in Congress
in passing an energy program. However, legisla-
tively, the pressure could work against the
President because Congress might be panicked
into passing a bad law. Time is on our side in
terms of getting a better bill.
Concerning coordinating pressure on particular
Republicans to enact natural gas deregulation
and the energy package, John Harper, Bob Michel
and John Rhodes are responsible for this.
Al Ullman is likely to get his legs cut off by
the Democratic Caucus.
Congressman
Ullman and his staff do not know what the capital
Brown:
requirements are of industry for exploration and
production of energy. This is a major weakness
in light of proposals under consideration in
Congress concerning depletion, etc.
Staggers has been emasculated and is no longer
effective. Moss is running the Interstate and
Foreign Commerce Committee, and this presents
a threat to Dingell. Moss is closely allied with
the new members.
3
Most of the Committee members are ready for
gradual deregulation of old oil along the lines
of 10% each six months over 3-1/2 years.
Committee also favors stand-by quotas and some
sort of a Federal bid sale mechanism. What is
likely is an establishment of the mechanism with
the President having stand-by authority to use it.
One way to get deregulation of natural gas is
for Congress to authorize the FPC to redefine
what constitutes regulated gas. One lever on
Dingell concerning deregulation of natural gas
is through Detroit and the auto industry.
We should keep deregulation of natural gas and
old oil tied together. (The President indicated
he agreed with this.)
The key point in deregulation is to put the
onus on the Federal Power Commission.
We should separate out the auto emission question
because of the sulfate problem. Dingell wants
to keep this tied to energy because of a sub-
committee jurisdictional fight with Rogers.
They are likely to come up with a tax on new
automobile mileage.
The following is a schedule for the Dingell
Committee:
1) They will finish this week background
hearings and start to develop a staff
outline.
2) During the recess, the staff will draft
legislation.
3) After the recess, there will be the usual
"role playing" when various Committee members
attack the staff draft bill.
We must get a task force around the country selling
revenue sharing the same way we did inititally. It
can also push energy. We need to get the Democrats
who oppose revenue sharing because this will alien-
ate county officials, mayors, etc.
4
We cannot defeat Consumer Protection Agency bill,
but we can prevent a bad bill. New York Times
editorial attacking the Senate action exempting
labor should be utilized as an argument in our
favor. If labor is included, the chances are
that no bill will come out. A good point in
the Senate bill is the requirement for an
Economic Impact Statement The key guy in
the House for us on CPA is John Erlenborn.
KEY ACTION ITEMS
1. We must develop an active plan to sell our proposal to
deregulate natural gas. This must include targeting on
individual Congressional Districts through management
and labor. We should develop a scenario showing what is
likely to happen next winter when the weather won't be
abnormally warm and the effects of the recession will
have abated. There could be very serious natural gas
shortages. We should simulate what they will be and take
steps to notify State and local officials.
2. We need a strategy concerning auto emissions. One question
is whether or not to split the whole issue off from the
energy package, and the second question is whether or
not to treat the 1977 problems separately.
3. We need to think through how we should balance the
political benefits of pressuring Congress for their
failure to come up with an energy program versus the
legislative risks of prompting them into ill-advised
action.
4.
We need to review our efforts to mobilize support among
management and labor for the overall energy package.
5. We need to develop a plan to sell Revenue Sharing and
to tie other key programs to this effort, such as energy.
6. We should follow up on the comments of Congressman Brown
concerning the Consumer Protection Agency.