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1975/12/10 - Republican Congressional Leadership
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1975/12/10 - Republican Congressional Leadership
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James M. Cannon Files (Ford Administration)
James Cannon's Meetings Files
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The original documents are located in Box 54, folder "1975/12/10 - Republican
Congressional Leadership" 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States of America his copyrights in all of his unpublished writings in National Archives collections.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 54 of the James M. Cannon Files at the Gerald R. Ford Presidential Library
THE WHITE HOUSE
WASHINGTON
December 9, 1975
MEETING WITH REPUBLICAN CONGRESSIONAL LEADERSHIP
Wednesday, December 10, 1975
8:00-9:30 a.m. (90 minutes)
The Cabinet Room
From: Max L. Friedersdorf m.6.
I. PURPOSE
To report on the President's trip to the Far East and
to discuss the issues of energy and tax cut legislation
with the Republican Congressional leaders.
II. BACKGROUND, PARTICIPANTS AND PRESS PLAN
A. Background:
1. Both Hugh Scott and Herm Schneebeli have announced plans
to retire, and Presidential letters have been sent. The
President may wish to again express regret about the
plans of Scott and Schneebeli to retire.
2. The President has just returned from a Far Eastern trip
to the Peoples Republic of China, Indonesia and the
Phillipines.
3. The House has a tax bill providing about $17 billion in
permanent tax reductions comprised of about $13 billion
in personal income tax cuts and $4 billion in tax reduct-
ions for business. Repeated attempts by Republicans in
the House to couple the tax reduction bill with a spending
ceiling for Fiscal Year 1977 were unsuccessful.
4. The tax bill was taken up by the Senate Finance Committee
on Tuesday, December 9. Senator Long supports separating
the tax reduction from tax reform and passing a temporary
(6 month) tax reduction at the level of current withholdin
rates coupled with some form of Expanded Stock Ownership
program and the earned income credit. Furthermore,
Senator Long is convinced that the Senate will not pass
a spending limitation on Fiscal Year 1977 expenditures
at this time.
5. Energy conferees were scheduled to file the energy bill
conference report (S.622) by midnight Tuesday (December 9)
and Floor consideration in the House and Senate could
occur late this week.
-2-
B. Participants: See TAB A
C. Press Plan:
Press Office to announce as a regular Republican
leadership meeting; White House and press photographers,
if requested.
III. AGENDA
See TAB B
IV. TALKING POINTS
1. China Trip - See TAB C
2. Tax Cut Legislation - TAB D
3. Energy Legislation - See TAB E
FORD
AGENDA
8:00-8:15 a.m.
The President convenes the meeting and reports
(15 minutes)
on his trip to the Far East.
8:15-8:30 a.m.
The President calls on Secretary Kissinger and
(15 minutes)
General Scowcroft for additional comments on
the trip.
3:30-8:35 a.m.
The President introduces the subject of the tax
(5 minutes)
bill.
8:35-8:40 a.m.
The President calls upon Secretary Simon for
(5 minutes)
comments on the tax bill.
8:40-9:00 a.m.
The President requests leaders' comments on the
(20 minutes)
tax bill. (Representatives Rhodes, Schneebeli,
Conable; Senators Scott and Curtis)
9:00-9:05 a.m.
The President introduces the subject of the
(5 minutes)
energy bill.
9:05-9:15 a.m.
The President calls upon Frank Zarb for status
(10 minutes)
and analysis of the energy bill.
9:15-9:30 a.m.
The President calls upon leaders for comments
(15 minutes)
on the energy bill. (Representative Brown,
Senator Fannin)
9:30 a.m.
The President concludes the meeting.
P.
FOR
SECRET
TALKING POINTS
People's Republic of China
1. I went to China with the intention of sustaining and building
on the dialogue which we have established with the leaders
in Peking over the last four years. I believe this serves
the most fundamental interests of our country: to help
shape the evolution of a more stable balance among the
great powers; and to create the conditions for a more
permanent and realistic relationship with a country with
almost á quarter of the world's population.
2. I went to Peking with no illusions. We clearly have basic
areas of disagreement with the Chinese. Quite apart from
the differences of philosophy, culture, and social systems,
they perceive the state of the world in much more ominous
terms than do we. They believe the prospects for a new
world war are substantial. They maintain a bitter hostility
toward the Soviet Union that is reflected in both political and
military confrontation.
3. For all these areas of difference, we did find much in common
with the Chinese. Although our approaches to dealing with the
Soviet Union differ, given our varying positions in the world
and our respective national interests, we share a distrust
of Soviet intentions. The Chinese support a strong NATO,
as we do. They urge the Japanese to maintain strong ties to
the U.S., a policy of obvious value to us. They wish to see
Soviet influence excluded from the Middle East. And we both
are wary of Moscow's efforts to extend Soviet influence directly
or indirectly into such places as Angola, the Indian Subcontinent,
and Southeast Asia. I believe my talks with Chairman Mao
and Vice Premier Teng strengthened the basis for continuing
parallel actions on these issues of common concern. We also
clarified our areas of continuing difference. I indicated, for
example, that our people find it difficult to accept some of
the Chinese criticism of our policies that serve their own
interests as well as ours -- as in the Middle East.
SECRET
DECLASSIFIED
E.O. 12958, Sec. 3.5
NSC Memo, 11/24/98, State Dept. Guidelines
By
WHM
NARA,
Date
5/15/00
SECRET
2
4.
On Korea, our public policies clearly differ, but my impres-
sion is that the Chinese would not find instability on the
peninsula helpful to their security concerns any more than we
would. I believe they will oppose the stirring up of trouble
there.
5. On Taiwan and the normalization question, the Chinese did
not press for a change in the present situation. They know
that there are strong feelings in this country, and they see
that our influence there keeps the situation stable. At the
same time, their interest in the eventual completion of the
normalization process has not changed. I believe that it is
important that that should at some point take place -- for
the larger strategic interests involved -- but there was no
attempt to resolve the specific timing and the actual modali-
ties of a new arrangement.
6.
As you know from the public announcement, the Chinese very
helpfully provided information on seven MIAs lost in past
years along the Chinese periphery. Hopefully this may
encourage Hanoi to be more forthcoming in accounting for
our Indochina MIAs.
7.
To summarize, I believe my four days in Peking contributed
to the strengthening of our relationship with the People's
Republic of China in a manner that will further our efforts
to create a more stable international situation.
Indonesia and the Philippines
1.
My visits to Indonesia and the Philippines were especially
useful parts of the Pacific trip. They put our overall relations
with the region into perspective in the context of my trip to
China and our active dealings with the Japanese this past year.
2.
Both President Marcos and President Suharto said that the
fall of Vietnam and Cambodia last spring had produced very
real questions about the future role of the U.S. in their part
of the world.
SECRET
SECRET
3
3. My visit elicited comments from both of them that they do
not want the U.S. to retreat to a "fortress America. 11 They
want us to play a constructive and responsible role in Asia.
I told them this was precisely our intention. My speech at
the East-West Center in Hawaii on Sunday was designed to
explain to the American people our overall approach to the
Pacific region.
4. I was highly impressed by the receptions we received in both
countries, particularly in the Philippines. We have many friends
and much public good will in these two countries. They are
looking to us for leadership and support. I told them both that
we want to sustain strong and friendly relations.
5. President Marcos is basically concerned with two aspects of
our relationship: achieving more favorable terms of trade for
Philippine products, and revising our base arrangements so
that it does not appear as though they have no control over them.
Marcos genuinely wants the bases to remain. He told me the
Chinese had not in any way pressed him for their removal.
6. We agreed that we would negotiate on both subjects in the near
future. We hope to include investment guarantees that would be
helpful to American investors, as well as trade arrangements
which are in Philippine interests, in our overall treaty. While
we may agree to some changes in the base arrangements, there
will be no reduction in our operating capability.
7. Indonesia is a country which merits our close attention and
interest. It is the fifth most populous country in the world.
It is also rich in oil resources, although its per capita income
is still very low.
8. Indonesia is a member of OPEC, and we have tended to lump it
together with the other OPEC countries when enacting restrictive
or retaliatory legislation. I do not believe this has been a wise
course. Indonesia has not in the past supported the harshest
OPEC actions, such as the embargo and the full amount of the
recent ten percent price increase.
SECRET
SECRET
4
9.
The Indonesians are concerned about the possible spread
of Communist subversion in their country. They keep Peking
and Hanoi at arms length and try to react quickly to possible
threats.
10, The Indonesians also indicated they want to encourage U.S.
investment in their country.
SECRET
PARTICIPANTS
The President
The Secretary of State
The Secretary of the Treasury
The Administrator of FEA
HOUSE
John Rhodes
Bob Michel
Sam Devine
Jack Edwards
Barber Conable
Lou Frey
Jimmy Quillen
Guy Vander Jagt
Al Cederberg
Bill Broomfield
Herm Schneebeli
Bud Brown
SENATE
Hugh Scott
Bob Griffin
Carl Curtis
Bob Stafford
John Tower
Ted Stevens
Cliff Case
Milt Young
Paul Fannin
Cliff Hansen
STAFF
Bob Hartmann
Jack Marsh
REGRETS
Dick Cheney
Phil Buchen
M.C. John Anderson - out of town
Max Friedersdorf
Bill Baroody
Jim Cannon
Jim Lynn
Alan Greenspan
Brent Scowcroft
Bill Seidman
Vern Loen
Bill Kendall
Bill Greener
Pat O'Donnell
is
FC/
Charles Leppert
Tom Loeffler
Bob Wolthuis
Russ Rourke
Comparison of Tax Cuts Relative to 1972-74 Law
(in $ billions assumes 1975 Income Level)
Tax Reduction
President's
Individual Cuts
Act of 1975
H.R. 10612
Proposal
-- standard deduction
$ 2.5
$ 2.5
$ 4.0
changes
- - exemption/taxable
income credit
$ 5.3
$10.2
--
-- personal exemption
--
--
$10.1
-- rate changes
--
:
$ 6.6
1
-- earned income credit 1/
$ 1.5
--
--
-- house purchase credit
$ 0.6
- -
:
$ 9.9
$12.7
$20.7
Business Cuts
--- investment credit
$ 3.3 2/
3:0
3.0
-- small business rate
$ 1.5
$ 1.5
$ 1.5
and surtax exemption
changes
-- 2% corporate rate
--
- -
$ 2.2
reduction
-- Six point utility
--
---
$ 0.6
package
$ 4.7
$ 4.5
$ 7.2
Total Tax Cuts
$14.6
$17.2
$27.9
1/ Includes both refundable and non-refundable portions.
21 Includes extra 1 percent credit for ESOP's.
(For additional detail see Annex Tables 21 and 22.)
TALKING POINTS: TAX REDUCTION AND SPENDING RESTRAINT PROGRAM
1. There are two broad objectives of my tax reduction and
spending restraint program. First, the reduction in the
level or rate of growth in Federal spending was designed
to make a start toward regaining control over the exces-
sive rise in government expenditures which has been a
major force behind the inflation of recent years.
2. Secondly, the tax reduction was designed to provide relief
for the American taxpayer who has witnessed a larger and
larger portion of his income sent to Washington in the form
of taxes. My tax program was structured to focus relief
among those middle income Americans who have borne the
major burden of greater taxes.
3. I have insisted on coupling my proposed tax reduction with
a comparable reduction in the growth of Federal spending.
To legislate a permanent reduction in Federal revenues
without a simultaneous reduction in the level of Federal
expenditures is to delude our constituents that we are
providing them a tax cut. We only substitute the capri-
cious tax of inflation for the income tax we seemingly
cut.
We must summon the political courage to consider both tax
reductions and expenditure restraints together. We must
avoid the temptation to do what is easy today and put off
what is difficult until later.
4. I am convinced that the great majority of Americans desire
sustained economic growth without inflation and are will-
ing to support the measures necessary to achieve this goal.
This is the purpose of my program. It is a program which
is fair and achievable and a program for which I am proud
to request your wholehearted support.
5. Some have suggested that establishing a limitation on Fed-
eral spending in FY 1977 now disrupts the congressional
budget process. But this is a convenient criticism rather
than a substantive one. To recognize and explicitly acknow-
ledge the parameters within which one is going to make bud-
getary decisions is a constructive rather than a disruptive
step. Establishing a level of Federal spending permits
all those in the government to realize the bounds within
which they must operate. We all know from our individual
experience that we should not decide how much we would
like to spend first and then see if we have enough resources
to accommodate that level of spending. Rather, we deter-
mine what level of spending we can afford and then make our
decisions within that constraint.
TALKING POINTS FOR
REPUBLICAN LEADERSHIP
MEETING
WEDNESDAY, DECEMBER 10, 1975
1. I have not, as yet, made up my mind on whether I will
sign the omnibus energy bill now in Conference. This
will be a tough decision on my part and while I have
heard from most of my advisors, I will not make a
final decision until I see the final bill.
2. On the one hand, this bill incorporates several of my
major proposals outlined last January and begins the
decontrol process, so long sought by this Administration.
And while I feel this is the best possible piece of
energy legislation I can expect before the election, it
does have several major drawbacks, particularly the
decontrol provision which will not provide adequate
incentive for increased production in the next two years.
3. I hope, nevertheless, that whatever my final decision
is, you will support that decision in the Congress.
4. As you know, natural gas legislation is expected to reach
the House floor for a vote in the near future. Frank,
will you please give us a status report on this
legislation?