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The original documents are located in Box 59, folder "1976/06/11 - Economic Policy Board"
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States of America his copyrights in all of his unpublished writings in National Archives collections.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
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copyright claim, please contact the Gerald R. Ford Presidential Library.
Digitized from Box 59 of the James M. Cannon Files at the Gerald R. Ford Presidential Library
ECONOMIC POLICY BOARD
EXECUTIVE COMMITTEE MEETING
AGENDA
8:30 a. m.
Roosevelt Room
June 11, 1976
1.
Report of Commodities Policy Coordinating
State-Treasury
Committee
2.
Analysis of Esch-Kemp Bill
Gorog-OMB-Treasury
I
3.
Commerce Trade Figure Releases
Commerce
THE WHITE HOUSE
WASHINGTON
June 9, 1976
MEMORANDUM FOR ECONOMIC POLICY BOARD
EXECUTIVE COMMITTEE MEMBERS
FROM:
WILLIAM F. GOROG
SUBJECT:
Esch/Kemp Job Creation Legislation
Congressmen Esch, Kemp and others have drafted a proposed alternative
to H.R. 50 (Humphrey-Hawkins) to be offered as a substitute when the
bill is brought up in the House -- probably after the Democratic
National Convention in July.
The Esch/Kemp proposal contains the following add-ons to our package
of existing Administration proposals:
"Zero budgeting", involving a four-year phased
review of all Federal program authorizations with
first-year priority on employment and training
programs, a complicated system of GAO reports
and audits, and mandated MBO budgeting by OMB.
Also, Treasury would develop a consolidated financial
report for the U.S. using accrual accounting.
A 4 percent decrease in the corporate tax rate phased
over three years (2, 1, and 1 percent).
A boost in the investment tax credit to 12% across the
board, plus an additional 1% for contributions to
employee stock ownership (ESOP) plans.
Extension nationwide of our accelerated depreciation
program for high unemployment if found beneficial
by Treasury upon evaluation.
A special capital recovery amortization schedule providing
for five-year accelerated double declining balance depreciation
for equipment and ten-year accelerated double declining
balance depreciation for buildings.
- 2 -
One-year amortization of pollution control facilities.
0
A 10% tax credit (with maximum limit of $1,000,
$2,000 for joint returns) for increased personal
savings.
O
A year-round youth employment program plus es-
tablishment of a Youth Conservation Corps.
o
An employment tax credit program partly dependent
on unemployment rates.
Attached are memoranda from Treasury (Tab A) and OMB (Tab B)
commenting on the tax and fiscal policy impact of the proposal as
now drafted.
Attachments
TAB A
OF
THE THE TREASURY
DEPARTMENT OF THE TREASURY
WASHINGTON. D.C. 20220
1789
ASSISTANT SECRETARY
JUN 9 1976
MEMORANDUM TO: Economic Policy Board
Executive Committee
FROM: Charles M. Walker
w
SUBJECT: Esch-Kemp Bill
This memorandum is an analysis of the revenue effects
over the next 5 fiscal years of the draft Esch-Kemp Bill,
which combines pending Administration tax proposals with a
number of additional capital formation proposals.
The revenue cost of the total package is enormous.
After taking into account the effects on the economy, the
total cost would be $48 billion in Fiscal Year 1977 and $83
billion in Fiscal Year 1981, which are, respectively, $20
billion and $26 billion more than the cost for pending
comparable Administration proposals.
The revenue estimates for the Esch-Kemp Bill have first
been estimated using income levels consistent with Troika
projections (line 1 of Table 1, the detail of which is shown
in Table 2). These Troika projections underlie the President's
proposed tax cuts for Fiscal Year 1977. However, the tax
cuts in the Esch-Kemp Bill substantially exceed those
recommended by the President, by more than $25 billion in
Fiscal Year 1977 alone. The proposed additional tax cuts
can therefore be expected to generate substantially higher
levels of nominal GNP as a result of which there will be
some offsetting revenue pick-up by the Treasury (line 2).
The last line of Table 1 indicates the net reduction in
receipts beyond the President's tax cuts and job creation
proposals after taking into consideration offsetting
revenue gains.
It should be noted that no judgments are rendered here
on the division of nominal GNP between real income changes
and price changes. However, massive tax cuts such as those
recommended here should substantially increase inflation in
-2-
the economy particularly after the first year or two when
the economy may be expected to be much closer to its full
employment potential.
At an earlier meeting of the EPB Executive Committee
it was agreed to repackage the various pending Administration
proposals relating to capital formation and job creation as
a single bill, but not to identify the Administration at
this time with additional proposals. The draft Esch-Kemp
Bill contains a number of costly additional proposals:
-- A permanent 12 percent investment credit,
rather than the 10 percent permanent
investment credit recommended by the President,
-- An additional 1 percent investment credit
for contributions to employee stock owner-
ship (ESOP) "plans,
-- Larger corporate tax reductions than recommended
by the President,
-- One-year amortization for pollution control
facilities,
-- A 10 percent tax credit (with maximum limit
of $1,000, $2,000 for joint returns) for
increased individual savings,
-- A special capital recovery amortization
schedule providing for five-year accelerated
double declining balance depreciation for
equipment and ten-year accelerated double
declining balance depreciation for buildings,
-- A tax credit based on employment of individuals,
partly dependent on unemployment rates.
Individually, a number of these proposals present very
serious difficulties from a tax policy standpoint and we
would strongly oppose them. Collectively, they represent
a package of tax reductions of such a magnitude that their
espousal would be irresponsible.
We very strongly recommend that the Economic Policy
Board adhere to its previous decision.
Table 1
Comparison of Estimated Receipts Effects Resulting
from the Esch Substitute to H.R. 50 and
the President's Comparable Proposals
(1976 Law)
($ billions)
:
Fiscal Years
: TQ : 1977 : 1978 : 1979 : 1980 : 1981
Gross revenue loss resulting from Esch
substitute to H.R. 50
-9.5 -54.4 -70.2 -83.1 -95.4 -105.5
Offsetting revenue gain due to economic
stimulus on nominal GNP 2/
+0.7 +6.0 +9.7 +14.3 +18.4 +22.1
Net revenue loss
-8.8 -48.4 -60.5 -68.8 -77.0 -83.4
Net revenue loss resulting from the President's
tax cut and job creation proposals 3/
-5.5 -28.2 -36.6 -42.0 -49.1 -57.4
Difference in net receipts (Esch proposals
minus the President's proposals)
-3.3 -20.2 -23.9 -26.8 -27.9 -26.0
Office of the Secretary of the Treasury
June 9, 1976
Office of Tax Analysis
1/ Assumes same underlying economic assumptions as under the President's program.
2/ Estimated revenue gain resulting from additional stimulus on nominal GNP.
3/ Consists of the President's tax cut proposals plus rapid amortization in
areas of high unemployment, BSOP, financial institutions reform, corporate
integration, and estate and gift tax reform.
Table 2
Estimated Reduction in Receipts Resulting from
Congressman Esch's Substitute to H.R. 50
(1976 Law)
($ billions)
Esch Substitute to H.R. 50
:
Fiscal Years
Section :
Provision
:
TQ
:
1977
:
1978
:
1979
:
1980
:
1981
203
Personal exemption changes
2.4
10.8
11.5
12.1
12.7
13.3
Standard deduction changes
.7
4.5
4.6
4.8
204
5.0
5.3
205
Individual rate reductions
1.6
7.0
7.4
7.8
8.2
8.6
1/
---
-----------
---
207
Per capita credit
1/
-----
---
---
---
207
Optional taxable income credit
208
Earned income credit
1/
---
-----
---
---
-----
211
Permanent 12 percent investment credit plus
additional 1 percent ESOP credit - Individuals
*
.4
1.0
1.1
1.1
1.2
...
Corporations
.3
2.6
4.4
4.7
5.0
5.4
212
Corporate tax rate reductions
.9
4.4
5.9
7.1
7.7
8.2
213
Rapid amortization in high unemployment areas-
---
*
*
Individuals
.1
.1
.1
---
*
.1
.3
.5
.6
Corporations
214
One-year amortization for pollution control
facilities
.5
2.0
1.6
1.6
1.5
1.5
10 percent personal savings credit
.6
6.4
6.7
7.4
8.1
8.9
215
Broadened stock ownership plans
---
.3
.4
.5
.6
.7
216-20
---
---
.7
3.3
6.8
222
Corporate tax integration - Individuals
--
1.1
3.0
4.6
6.5
Corporations
223-29
Estate and gift tax relief
*
.1
1.1
1.5
2.0
2.6
230
Capital recovery allowances - Individuals
.1
1.3
2.7
3.8
5.0
5.1
Corporations
1.2
7.4
12.1
16.9
20.1
20.6
312
Job creation tax credit - Individuals
.1
.6
.9
1.0
1.0
1.0
Corporations
1.2
6.6
8.5
8.7
8.9
9.2
Total individual
5.4
31.4
36.4
40.7
47.2
53.5
Total corporations
4.1
23.0
33.8
42.4
48.3
52.0
Grand total
9.5
54.4
70.2
83.1
95.4
105.5
Office of the Secretary of the Treasury, Office of Tax Analysis
June 9, 1976
Less than 50 million.
1/ No change over present law.
2/ Differs from estimate for President's proposals because of deferral on small gifts.
TAB B
OFFICE STATE IMPRESIDENT STATE a UNITED
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET
WASHINGTON, D.C. 20503
June 7, 1976
MEMORANDUM FOR: DOUG METZ
PP
FROM:
RUDY PENNER
SUBJECT:
Esch/Kemp Bill
Attached are two memos. The memo from White to
Shipley makes cost estimates for those outlay
programs not in the President's Budget. The memo
noted "Title I" states why OMB has testified
against such measures in the past.
Attachments
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET
DATE:
June 4, 1976
WASHINGTON, D.C. 20503
REPLY TO
ATTN OF:
CVA/Labor
SUBJECT:
Esch/Kemp Bill, June 2 version
Jerry Shipley
1. The following sections in prior drafts have, appropriately,
dropped out: reauthorization of the regular CETA titles;
reauthorization of CETA Title VI; the UI amendments.
The last two would have been harmful to present
Administration objectives.
2. A new Youth Incentive Program title has been added. This
is essentially the same as the Youth Title from Mr. Esch's
proposal of October 9, 1975, H.R. 10160, except for the
elimination of the requirement that the school year jobs
pay at least minimum wage, and some minor® technical
changes. Attachment A provides a set of assumptions and
methods used to calculate the cost of the new title. In
summary, the net estimates are:
Youth Incentive Program
Net Outlays in Millions
(amounts over President's Budget)
1977
1978
1979
1980
1981
3,830
4,293
4,756
5,179
5,602
We note that the new Youth title makes no reference to
the existing CETA Title I youth activity. Under that
authority, prime sponsors are expected to spend about
$750 million for youth in FY 1977. The bill's sponsors
may wish to make some reference to this resource in
their explanatory material. Perhaps they could state
that their intent is that all youth needs be met by the
new title, thus freeing the Title I money, if prime
sponsors so desire, for service to the long-term
unemployed and other priority groups. This is not
quite consistent with the inclusion of the "school to
work" language in Title I, but it would help explain
at least one way the present resource could be accounted
for. As a practical matter, the new Title I authorities
for Youth would be hard to distinguish from the existing
programs at the operating level. Of course, the whole
2
title is another step away from the consolidation
achieved with the enactment of CETA. However, the
Administration cannot object on principle, since we
have proposed separate summer youth programs.
3. Part B of the Esch/Kemp Title III, Programs for the
Long-Term Unemployed, does not have cost implications
over existing resources. Some additional experimentation
or labor market information activity might result, but
there are ample discretionary resources now available
to accommodate this. The majority of the amendments
provide for heightened sensitivity on the part of the
prime sponsors and the Secretary to the problems of
the long-term unemployed and problems caused by the
transition from school to work.
4. The bill still contains the language giving added
emphasis to the development of job banks/job matching.
The sponsors should be made aware that the Department
has been unable to date to come up with a plan to spend
effectively the resources now available for the
expansion and further refinement of the system. GAO
has recently reported to an oversight committee on the
Employment Service that its analysis indicates that
the Department is not ready to expand the system;
further testing and development is needed. We recognize
the attraction in theory of speeded job matching and
enhanced labor market information made available through
job banks. However, it is quite likely that more harm
than good will be done by putting added pressure on the
Department.
5. As a technical matter, since the reauthorization of
Title VI no longer is included, Section 307, which adds
priorities for the long term unemployed within Title VI,
should be dropped. The Title VI authority expired
December 31, 1975.
6.
The Youth Conservation Employment Program was reviewed
by the YCC examiner (Satterfield). The judgment on
this program is that, while there will always be work
that can be done, the present budgets for Agriculture
and Interior are adequate to do what can be justified
on reasonable cost/benefit grounds. Attachment B
provides the assumptions and methods used in estimating
the cost of this program. All costs are additive to
the President's Budget. In summary, the estimates are:
3
Youth Conservation Employment
Outlays in Millions
1977
1978
1979
1980
1981
10
1,500
1,687
1,500
1,500
7. The EDA examiner (Howland) reviewed the directives to
the Secretary of Commerce (pp. 138-9) to focus on areas
of high unemployment. There are no direct cost
implications to these portions. However, the sponsors
should be aware that the President's budget for 1977
includes reductions of $137 million in EDA from the
1976 level, principally in the areas cited in Esch/
Kemp. The remaining EDA activity is to be targetted
as the bill would direct.
Barry White
Budget Examiner
Attachment A
Costing of Esch/Kemp Title III Youth Incentive Program
Enrollment level
There is no statement in the bill as to the expected size
of the program. CETA Section 304, the Summer Youth
Employment Program is repealed, and the minimum appropriation
for the Youth Incentive Program is the 1976 appropriation for
Section 304, or $528 million, which provided almost 900,000
jobs. Since the level has gone up each year, we assume
starting in 1977 at 1 million, and increasing 100,000 each
year thereafter. Since the summer program is to be closely
related to the school year program, we assume the same
average level throughout the year.
Unit cost
We presently calculate average unit cost for a summer youth
job as follows: 234 hours times the minimum wage ($2.30
per hour); add 7% for benefits; add 6% for administrative
cost; minus out 3% lapse. This gives an FY 76 cost of $595
per summer job.
For Esch/Kemp we make the following assumptions:
-- retain the minimum wage as the average. Even
though the bill allows going lower, we assume
that the number below and the number above the
minimum are likely to cancel out. We assume no
increase in the statutory minimum.
-- retain the 7% for benefits.
-- increase the administrative cost to 10% even though
the bill allows up to 15%, and permits equipment
and space rental. We would see the types of jobs
as not requiring major equipment and space costs.
Administrative cost would increase, but using the
Prime Sponsor mechanism ought to permit some
continued absorption.
-- retain the 3% lapse.
-- hours per week and number of weeks breaks three ways:
2
(1) For the summer: 40 hours per week for all
participants for 10 weeks. Some would
clearly work fewer hours, but the bill
emphasizes the full-time work authority.
It also provides for increased efforts
for training, which increase cost.
(2) For school year: 1/2 the participants part-
time at 20 hours; 1/2 the participants full-
time for 40 hours. Each slot funded for 40
weeks.
President's Budget
Esch/Kemp repeals Section 304 of CETA, which is the present
Summer Youth Employment Program. The Budget provides
preliminary estimates for this program each year. It is
the President's intent to reserve judgment on the size of
the summer program needed each year until March, when the
data become available projecting youth unemployment and
other relevant factors. Allowances in the budget estimates
are:
1977
1978
1979
1980
1981
400
360
320
320
320
Costs by Fiscal Year ($ in millions)
FY 1977:
1,050
1 million summer youth slots
2,100
500,000 full-time school year slots
1,080
500,000 part-time school year slots
4,230
-400
President's budget estimate for summer
3,830
FY 1978:
1,155
1.1 million summer youth slots
2,310
550,000 full-time school year slots
1,188
550,000 part-time school year slots
4,653
-360
President's budget estimate for summer
4,293
3
FY 1979:
1,260
1.2 million summer youth slots
2,520
600,000 full-time school year slots
1,296
600,000 part-time school year slots
5,076
-320
President's Budget estimate for summer
4,756
FY 1980:
1,365
1.3 million summer youth slots
2,730
650,000 full-time school year slots
1,404
650,000 part-time school year slots
5,499
--320
President's Budget estimate for summer
5,179
FY 1981:
1,470
1.4 million summer youth slots
2,940
700,000 full-time school year slots
1,512
700,000 part-time school year slots
5,922
-320
President's Budget estimate for summer
5,602
ATTACHMENT B
Cost Estimate for Esch/Kemp Youth Conservation Employment
Estimate of costs is based on a number of assumptions including the
following:
100,000 employed for 9 months
300,000 employed for 3 months.
Full-year employment cost:
100,000 @ $10,000 average annual cost = $750,000,000
300,000 @ $10,000 average annual cost = $750,000,000
Facilities cost: $750,000,000
Average annual cost based on:
Wages and benefits
- 5,200
Administration (direct) -
2,800
Overhead
- 2,000
10,000
Facilities cost based on:
Construction cost $10,000 per man if 50 man camp
New facilities will be necessary to facilitate 25%
of program.
Program would not reach full operation until 1980. Also assumes that other
constraints in bill would allow this level of operation.
Costs by FY ($ in millions)
FY 1977
FY 1978
FY 1979
FY 1980
FY 1981
Planning
10
--
--
:
--
Construction
--
375
375
:
--
Operation
--
1,125
1,312
1,500
1,500
Total
10
1,500
1,687
1,500
1,500
TITLE I
The Administration supports the basic intent of Title I
of the Esch amendment to H.R. 50. The Administration has
gone on record in support of periodic quality assessments
(evaluations) of the various activities of the Federal Govern-
ment, along with the full use of such assessments in decision-
making as to the future of such activities.
However, this proposed amendment to H.R. 50 shares the
overriding problem found in other similar legislative proposals.
It is far too mechanical and inflexible. The following
comments focus on provisions that directly affect the
Executive Branch agencies. The Legislative Branch agencies, such as
the General Accounting Office and the Congressional Budget
Office, are in a better position to assess the effect of
provisions that directly affect them.
Required authorizing legislation coupled with program control
reviews
Sections 102-113 would impose a series of requirements
designed to ensure that existing and proposed new programs
be reviewed intensively before they are renewed. These
sections would require, among other things:
-- that legislation authorizing new budget authority
(except when financed by a trust fund) be terminated
on October 1, 1980 (Sec. 102) ;
-- that, generally, subsequent bills, resolutions, or
amendments authorizing budget authority for programs
be limited to not more than four fiscal years (Sec. 103) ;
2
--- that new program authorizations be further limited to
one fiscal year and programs previously authorized be
limited to two additional fiscal years (Sec. 104) ;
-- that proposed changes to programs funded by trust
funds or permanent budget authority be preceded by a
report of "program control review" (Sec. 105) ;
--- that whenever legislation authorizing new budget
authority is required, a prior congressional committee
report on a "program control review" be conducted
(Sec. 110) ;
-- that agency heads submit an analysis of their programs
and activities and an evaluation of the effectiveness
of the programs and activities whenever requested to
do so by authorizing committees conducting the
"program control review" (Sec. 112 (1) and
-- that, when requested by those committees, OMB submit
a similar report from the standpoint of the budget
functions, as well as the impact of the program or
activity on the economy (Sec. 112(2)).
These requirements would impede rather than induce
serious program evaluation. They would discourage selectivity
and the assignment of priorities in program evaluation efforts
and would substitute for it the grinding out of reports that
struggle to discuss all the items of information required for
the program control reviews for all the required reauthoriza-
tions. These sections of the amendment would, in short,
3
overload the ability of agencies to produce thorough program
evaluation studies and flood the Congress with reports of
less than adequate quality.
Intentionally or otherwise, the proposed amendment would
add to the paper flow required by the Congressional Budget
Act. The President is required by the Congressional Budget
Act of 1974 to request the enactment of legislation authorizing
a new program or activity for at least the first two fiscal
years. The substitute would limit the Congress to report
new program authorizations for only one fiscal year.
The President's budget
Section 114 of the proposed amendment would require that,
beginning with the 1979 budget, the President's budget include,
for each Government program or activity, information on the
budget-year objectives as well as a comparison of past year
achieved objectives with planned objectives.
As Director Lynn has testified, this effort would be
staggering. There are more than 1,000 Federal domestic
assistance programs alone. The information required to be
included in the President's budget would be so great that
detailed analysis by the OMB and agency staff would--necessarily--
give way to "pro forma" examination. The quality of the
information would be suspect because, over and above the
extremely difficult conceptual and technical problems associated
4
with developing performance measurements, the development of
measurements that would be acceptable to the several interested
parties would require a managerial effort of a magnitude that
neither the Executive Branch nor the Legislative Branch now
has, or for that matter, would likely be willing to divert on
such a scale for this purpose.
Printing of fiscal note on legislation
The Esch amendment would also require (Sec. 118) that
every bill or joint resolution of "a public or private
character which has been introduced in either House of
Congress shall be printed only when there appears at the
bottom of the first page thereof a fiscal note." The fiscal
note is required to cover five fiscal years or the authorized
duration of any program authorized by the legislation and
must be furnished by Executive Branch agencies within 72 hours.
The note shall state estimates of the "direct and indirect
costs and savings" that would result from the bill.
It is unrealistic to expect Federal agencies to review
proposed bills and to provide useful estimates of direct and
indirect costs and/or savings within such a short time.
Moreover, to require the Federal agencies to provide this
information for each of the more than 10,000 bills and joint
resolutions expected to be introduced each year would impose
a considerable and unnecessary workload burden. The
5
Congressional Budget Act now requires that reports accompanying
legislation providing new budget authority or tax expenditures
contain similar information. In fact, in recognition that
five-year projections may not always be practical, that Act
allows the exemption of such projections provided that the
report accompanying the legislation contain a statement of
the reason for such impracticability.
Statement of purpose
Section 2 (6) of the proposed amendment cannot be supported
by the Administration. The section states that "National
policy over the past decade has been to discourage, rather
than encourage, job creation and growth in the private
sector." Surely, this is not this Administration's view of
its national policy over the past eight years.
DEPARTMENT Co COMMICK
THE SECRETARY OF COMMERCE
Washington, D.C. 20230
MNITED STATES OF AMERICA
MEMORANDUM FOR L. William Seidman
Executive Director, Economic Policy Board
SUBJECT: Commerce Trade Figure Releases
In response to the EPB Executive Committee's decision March 22.
1976, we have worked out with the Bureau of the Census as revised
"Summary of U.S. Export and Import Merchandise Trade release
(attached) which we believe gives parity to the c.i.f. import
numbers. The Bureau of the Census has discussed this matter with
OMB, and it appears no formal clearance or review will be
necessary.
Therefore, if the Executive Committee of the EPB concurs with the
new format, we would propose to make the revision commencing with
the release on June 25.
To meet this deadline, perhaps the EPB Executive Committee could
deal with this matter the week of June 1.
John Thomas IT
Acting Secretary of Commerce
Attachment
SUMMARY OF U.S. EXPORT AND
IMPORT MERCHANDISE TRADE
"February 1976
FT 900-75-2
For Release
March 26. 1926
Seasonally Adjusted and Unadjusted Data
10:00 AM.
(Including Unadjusted Data on imports of Petroleum and
Petroleum Products)
F.A.S. EXPORTS AND F.A.S. IMPORTS
F.A.S. EXPORTS AND C.I.F. IMPORTS
Seasonally Adjusted
Seasonally Adjusted
The Bureau stated that during February 1976, exports
The Bureau stated that during February 1976, exports
on a f.a.s. (free alongside ship) U.S. port of
2. f.a.s. (free alongside ship) U.S. port of exportati
exportation basis, excluding Department of Defense
basis, excluding Department of Defense (DOD) Military
(DOD) Military Assistance Program Grant-Aid ship-
Assistance Program Grant-Aid shipments, were valued :
ments, were valued at $8,800.1 million and that
$8,800.1 rillion and that general imports on a c.i.f.
general imports on 2. (.a.s. foreign port of
(cost, insurance, and freight) U.S. port of entry has
exportation value busis, amounted to $8,910.9
amounted to $9,592.7 million. 23
million. 1 = 3
Based on the above f.a.s. export and c.i.f. import
Based on the above export and inport figures, the
figures, the February merchandise trade balance was 5
February merchandise trade balance was in deficit
deficit by $792.6 million, as compared to the January
by $140.8 million, as compared to the January 1976
1976 deficit of $770.3 million.
deficit of $72.6 million.
During the 4-nonth period, November 1975 - February
During the 1-month period, November 1975 February
1976, exports averaged $9,140.7 million per month, a
1976, exports averaged $9,140.7 million per month,
level slightly above (about 1 percent) the $9,060.8
2 level slightly above (about 1 percent) the
million average reported for the preceding 4-month
$9,000.8 million average reported for the preceding
period, July-October 1975. Imports on a c.i.f. valu.
4-month period, July-October 1975. Imports on a
basis averaged $9,366.9 million per month for the cu
1.a.s. value basis, averaged $8,711.6 million per
4-month period, about 9 percent higher than the $s,6
month for the current 4-month period, about 9
million average reported for the preceding 4-month P
percent higher than the $8,021.2 million average
reported for the proceding Amounth paried
Unviinated
Table 1. U.S. Exports (f.a.s. Value Basis), General Imports (f.a.s. and c.i.f. Value Basis), and Merchandise Ti.
Balance, Adjusted for Seasonal and Working-Day Variation, by Month: January 1973 to February 1576
(in millions of dollars. See Explanation of Statistics for information 00 coverage, definitions of export and i:
values and trade balances, and sources of error in the data. All data shown for 1975 and 1976 reflect seasonal
adjustment factors introduced in January 1976)
F.a.s. Exports and f.a.s. Imports
F.a.s. Exports and c.i.f. Impor
Period
Exports 1
Trade
Imports
balance
Exports 1
I;
Imports
bai
1975
January-February
18,128.0
17,553.1
+ 504.9
18,128.0
18,87S.9
January
9,373.4
9,635.5
- 262.1
9,373.4
February
10,377.7
8,754.6
7,927.6
+ 827.0
March
8,751.6
8,501.2
+
8,685.2
7,466.5
+1,218.7
8,685.2
April
8,039.2
%
8,647.6
7,958.5
+ 689.1
8,647.6
May
8,546.5
+
S,221.5
7,266.2
+ 955.3
8,221.5
June
7,816.7
+
8,716.1
7,103.5
+1,612.6
8,716.1
7,652.2
July
8,893.8
7,832.2
+1,051.6
8,893.8
August
8,413.0
8,979.2
+
7,877.2
+1,102.0
8,979.2
September
8,478.8
+
9,145.7
8,205.1
+ 910.6
October
9,145.7
8,829.9
+
9,221.6
8,170.4
+1,051.2
9,224.6
November
8,795.2
+
9,109.3
8,203.5
+1,205.7
9,409.3
December
8,820.5
+
9,249.9
8,525.7
+ 721.2
9,219.9
9,165.5
+
1976
January-February
17,903.5
18,116.9
- 213.4
17,903.5
19,472.4
January
9,103.4
9,176.0
- 72.6
February
9,103.4
9,879.7
8,800.1
8,940.9
- 140.8
March
8,800.1
9,592.7
April
Key
June
July
August
September
October
November
December
"Represents exports of Comestic and foreign merchandise excluding Department of Defense Military Assistance Prog
Grant-Aid shipments.
EYES ONLY
MINUTES OF THE
ECONOMIC POLICY BOARD
EXECUTIVE COMMITTEE MEETING
June 10, 1976
Attendees: Messrs. Simon, Seidman, Lynn, Ussery, Richardson,
Zarb, Walker, Porter, Penner
1. Senate Finance Committee Tax Reform Bill
The Executive Committee reviewed a memorandum, prepared
by the Treasury, on the Senate Finance Committee tax
reform bill. The discussion focused on the legislative
prospects for the bill and the Administration's position
on specific provisions in the bill.
Decisions
The Executive Committee approved the recommended positions
outlined in the memorandum with the following modifications:
The Administration will seek to exclude charities from
the impact of the minimum tax provision.
The Administration will oppose the 2 percent investment
credit for an ESOP unless the Administration's BSOP
proposal is adopted.
The Administration will support the 5-year amortiza-
tion of pollution control equipment for the electric
utility industry provided that there is a normalization
provision.
The Administration will oppose the provision for the
nontaxability of contributions to group legal service
plans.
The Administration will support the provision permit-
ting members of the Armed Forces Reserves or National
Guard to make tax deductible IRA contributions to an
Individual Retirement Account (IRA) for a year in
which the service in the Reserves or National Guard is
less than 90 days (excluding active duty for training).
Treasury will coordinate the recommended positions on the
energy portions of the bill with HUD. Commerce will pro-
vide Treasury with their comments.
EYES ONLY
RBP
EYES ONLY
MINUTES OF THE
EPB/ERC EXECUTIVE COMMITTEE MEETING
June 9, 1976
Attendees: Messrs. Seidman, Lynn, Zarb, Train, Cannon, Dixon,
Seamans, Darman, Zausner, MacAvoy, Moskow, Porter,
Katz, Perritt, McGurk, Penner, Arena, VanHorne,
Hardy, Fri, McCormick, Kearney, Duval, Leach,
Lissy, Gage, Fisher, Zahradnik
1. Scrubber Technology
The Executive Committee reviewed three alternative scrubber
technologies currently in use or under development: (1) coal
cleaning; (2) combustion modification; (3) flue-gas desul-
furization. EPA reported on a series of flue-gas desulfuri-
zation processes and demonstration projects currently under
way and on various physical and chemical coal cleaning
development processes.
ERDA reported on the status of development of coal-oil
slurries, solvent refining of coal, and fluidization bed
combustion. The discussion focused on the incremental
costs of different processes, the construction lead time
differential between oil-fired plants and coal/nuclear
power facilities, and the present incentives for industry
to select either oil or coal as a future source of power.
Decision
FEA, ERDA and EPA will prepare a paper examining the trade-
offs involved in the need for more coal-generated power
and compliance with existing and prospective air quality
standards in the context of the development of new emission
control technologies.
2. Synthetic Fuels Legislation
ERDA briefly reported on the legislative status of the
synthetic fuels commercialization program.
Decision
ERDA will coordinate Executive Branch agency efforts to
support the pending synthetic fuels legislation.
EYES ONLY
EYES ONLY
2
3.
Administration Position on Minimum Wage Legislation
The Executive Committee briefly reviewed a draft memoran-
dum prepared by the Department of Labor on the Administra-
tion position on minimum wage legislation and a letter
from Secretary Simon outlining the views of the Department
of the Treasury on the minimum wage issue.
Decision
A revised memorandum will be prepared to reflect the dis-
cussion and will be circulated to Executive Committee
members for their comments and recommendations prior to
submission to the President.
4.
Special Session on International Summit Conference
The Executive Committee will hold a special session at
6:00 p.m. this evening in the Roosevelt Room to review
the first drafts of the papers prepared for the inter-
national summit conference in Puerto Rico.
EYES ONLY
RBP