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The original documents are located in Box D9, folder "Ford Press Releases - Taxes, 1965-
1973" of the Ford Congressional Papers: Press Secretary and Speech File 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. The Council 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States of America his copyrights in all of his unpublished writings in National Archives collections.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 D9 of The Ford Congressional Papers: Press Secretary and Speech File at the Gerald R. Ford Presidential Library
Statement by Rep. Gerald R. Ford (R-Mich.)
FOR IMMEDIATE RELEASE
on proposed reduction of excise taxes.
May 17, 1965
Republicans favor a reduction of excise taxes which were initially
levied as a wartime emergency measure.
If we are to have this reduction in revenue, we must also find a way
to reduce non-defense spending to a comparable amount in order to maintain
fiscal responsibility.
It must be kept in mind that the United States is committed militarily
in two theaters of conflict, 6000 miles apart. And, there are indications
that Communist aggression may break out elsewhere in the world.
Our Nation must remain strong and ready to meet any emergency in the
battle against Communism. Therefore, we must maintain a fiscal position
which will be the foundation for a measured, meaningful military effort at
almost any moment.
Congress should carefully weigh the need for a $4 billion excise tax
reduction without a cutback in non-defense spending at a time when the
Nation is taking a carefully calculated military stand against the forces
of Communist aggression in two hemispheres.
# # #
LIBRARY
Statement by Rep. Gerald R. Ford (R-Mich.)
FOR IMMEDIATE RELEASE
on proposed reduction of excise taxes.
May 17, 1965
Republicans favor reduction of excise taxes which were initially
levied as E wartime emergency measure.
If we are to have this reduction in revenue, we must also find a way
to reduce non-defense spending to a comparable amount in order to maintain
fiscal responsibility.
It must be kept in mind that the United States is committed militarily
in two theaters of conflict, 6000 miles apart. And, there are indications
that Communist aggression may break out elsewhere in the world.
Our Nation must remain strong and ready to meet any emergency in the
battle against Communism. herefore, we must maintain a fiscal position
which will be the foundation for a measured, meaningful military effort at
almost any moment.
Congress should carefully weigh the need for a $4 billion excise tax
reduction without a cutback in non-defense spending at a time when the
Nation is taking a carefully calculated military stand against the forces
of Communist aggression in two hemispheres.
# # #
Statement by Rep. Gerald R. Ford (ReMich)
"Tax Credit Plan"
June 23, 1965
The tax credit plan to assist students and their parents in meeting the
expenses of higher education, which the House Republican Conference today
endorsed, has been a major objective of Republican policy for many years. Our party
platforms in both 1960 and 1964 contained strong planks in favor of the tax
revision to lighten the burden of the costs of education.
Year after year Republicans have introduced legislation to ease the present
tax burden on amounts spent to pay the mounting costs of higher education, In the
present Congress alone 22 House Republicans have introduced tax credit bills for
this purpose and in the Senate 17 Republicans co-sponsor the tax-credit approach.
I believe we can justifiably call the tax credit approach a truly Republican
approach.
We have found strong support for tax credit among those who know best the
needs of American higher education... the educators themselves. An extensive survey
of college and university presidents and trustees, educators, and others interested
in education found them 7 to 2 in favor of tax credit legislation.
President Johnson has opposed tax credit legislation. Yet only last Monday,
in signing the bill to reduce excise taxes, the President indicated that further
tax reduction is needed. We Republicans agree. We realize that there are many
competing claims for relief from the burden of Federal taxation. But, we
:
feel that none has greater prearity than the higher education of the next generat-
ion of Americans.
As Republicans we have been united behind the tax credit approach for many
years. We are united today. We sincerely hope that our efforts will produce much
needed relief for millions of American students and their parents in meeting the
burdensome costs of higher education. For in today's world, higher education is
not a luxury, it is a vital necessity,
# # # # #
Statement by Rep. Gerald R. Ford (R-Mich)
"Tax Credit Plan"
June 23, 1965
The tax credit plan to assist students and their parents in meeting the
expenses of higher education, which the House Republican Conference today
endorsed, has been a major objective of Republican policy for many years. Our party
platforms in both 1960 and 1964 contained strong planks in favor of the tax
revision to lighten the burden of the costs of education.
Year after year Republicans have introduced legislation to ease the present
tax burden on amounts spent to pay the mounting costs of higher education. In the
present Congress alone 22 House Republicans have introduced tax credit bills for
this purpose and in the Senate 17 Republicans co-sponsor the tax-credit approach.
I believe we can justifiably call the tax credit approach a truly Republican
approach,
We have found strong support for tax credit among those who know best the
needs of American higher education, the educators themselves. An extensive survey
of college and university presidents and trustees, educators, and others interested
in education found them 7 to 2 in favor of tax credit legislation.
President Johnson has opposed tax credit legislation. Yet only last Monday,
in signing the bill to reduce excise taxes, the President indicated that further
tax reduction is needed. We Republicans agree, We realize that there are many
competing claims for relief from the burden of Federal taxation. But, we
feel that none has greater priority than the higher education of the next generat
ion of Americans,
As Republicans we have been united behind the tax credit approach for many
years, We are united today. We sincerely hope that our efforts will produce much
needed relief for millions of American students and their parents in meeting the
burdensome costs of higher education. For in today's world, higher education is
not a luxury, it is a vital necessity.
#
#
#
#
#
From: House Republican Conference
Rep. Melvin R. Laird, Chairman
Contact: Duff Reed
filecapy
Room 2246 Rayburn Building
225-7086
Washington, D. C.
FOR IMMEDIATE RELEASE: Wednesday, June 23, 1965
HOUSE REPUBLICANS OFFER TAX CREDIT
BILL FOR COSTS OF HIGHER EDUCATION
The House Republican Conference announced today the adoption of a resolution
to support tax credits legislation covering tuition and other expenses of higher education that would
effect millions of Americans parents.
The proposed legislation, which represents an amalgamation of tax credit for
education bills previously introduced by 23 Republicans in the House and 19 in the Senate, would
allow an individual a tax credit against income taxes of as much as $325 per year to cover college
and university tuition, fees, books, supplies and other equipment. The tax credit would also apply
to persons providing these expenses to individuals other than their own children.
In announcing the Republican policy position, Conference Chairman Melvin R.
Laird (Wis.) said," Tax credits to meet the rising costs of higher education were included in the
Republican platforms of 1960 and 1964. The research of our Task Force on Education, and the
Republican unity that I believe will be fort coming behind this legislation mean that this long-
sought objective could now become a reality. We've got the right issue. The only obstacle now
is whether we have the right number." Calling attention to the wide range of tax cuts recently
proposed by the Administration, Congressman Laird stated, "I can think of no form of tax relief
more in the national interest than one which will encourage a greater number of young Americans
to complete a college education. This is a fiscally sound investment in our nation's most valuable
asset, its students today and its leader tomorrow."
Minority Leader Gerold R. Ford (Mich.), commenting on the need for relief
from the burdensome cost of higher education, stated: "President Johnson has opposed tax credit
legislation. Yet only last Monday in signing the bill to reduce excise taxes, the President indicated
that further tax reduction is needed. We Republicans agree. We sincerely hope that our efforts will
put into law tax credits for college and university expenses. For in today's world, higher education
is not a luxury. It is an absolutely vital.necessity."
The Republican tax credit proposal comes as a result of efforts in recent months of
the House GOP Task Force on Education, under the direction of Congressman Albert H. Quie
(Minn.), to come to grips with the ever-increasing costs of providing college and university training
without interfering with the traditional independence of our nation's institutions of higher learning.
The Task Force held public hearings in New York City on May 24, 1965 in which a substantial
majority of the witnesses indicated strong support for a tax credit approach to these problems.
According to Task Force Chairman Quie," Nearly 1,000 educators, trustees and others interested and
knowledgeable in the field of education were queried on the subject of tax credits. Of the more than
900 who replied, about 75% are in favor of legislation of the type we have introduced today." Call-
ing assistance to education in the form of tax relief "high priority" Quie declared, "One of the
most significant results of this legislation will be the added motivation given our young people to
seek a college education. When parents realize that a substantial part of the costs of higher
education will be met by tax credits, they will turn heaven and earth to see that their children
pursue this vital training."
###
U.P.I
FOR IMMEDIATE RELEASE
MARCH 29, 1966
STATEMENT BY HOUSE MINORITY LEADER GERALD R. FORD, R-MICHIGAN
It is unfortunate that President Johnson is actively thinking about a
5 to 7 per cent personal and corporate income tax increase as a weapon
against current inflationary pressures in preference to a cut in non-military
federal spending.
However, I fully understand his concern that Democrats in Congress
probably will add $1 billion to his budget instead of reducing non-military
federal expenditures. I can assure him that Republicans would be glad to
help him cut spending by as much as $5 billion as an alternative to a tax
increase.
Mr. Johnson mentioned three possible courses of action to halt the
inflation that has become all too apparent to most of us--wage and price
controls, spending cuts of $5 billion or more, or a $5 to $10 billion tax
increase. We Republicans believe a reduction in non-military spending is
easily the best course, and we would be glad to help Mr. Johnson and the
Democrate in Congress take that road.
# # #
U.P.I
officially
FOR IMMEDIATE RELEASE
MARCH 29, 1966
STATEMENT BY HOUSE MINORITY LEADER GERALD R. FORD, R-MICHIGAN
It is unfortunate that President Johnson is actively thinking about a
5 to 7 per cent personal and corporate income tax increase as a weapon
against current inflationary pressures in preference to a cut in non-military
federal spending.
However, I fully understand his concern that Democrats in Congress
probably will add $1 billion to his budget instead of reducing non-military
federal expenditures. I can assure him that Republicans would be glad to
help him cut spending by as much as $5 billion as an alternative to a tax
increase.
Mr. Johnson mentioned three possible courses of action to halt the
inflation that has become all too apparent to most of us--wage and price
controls, spending cuts of $5 billion or more, or a $5 to $10 billion tax
increase. We Republicans believe a reduction in non-military spending is
easily the best course, and we would be glad to help Mr. Johnson and the
Democrate in Congress take that road.
# # #
FORD : LIBRARY GERALD
STATEMENT BY REPRESENTATIVE MELVIN R. LAIRD (R-Wis.) FOR IMMEDIATE RELEASE
CHAIRMAN, REPUBLICAN CONFERENCE
April 6, 1966
HOUSE OF REPRESENTATIVES
The Republican Conference of the House of Representatives this morning
discussed the current state of the economy of the nation. It heard reports
from Representative Frank T. Bow of Ohio, ranking Republican on the Appropriations
Committee, Representative John W. Byrnes of Wisconsin, ranking minority member
of the Ways and Means Committee, and Representative Thomas B. Curtis of Missouri,
ranking minority member of the Joint Economic Committee.
The Administration has within the past two weeks at various times denied
the seriousness of inflationary pressures, urged businessmen to cut down on
investment, blamed housewives for not putting on their glasses and taking a good
look at prices when they shop, suggested a whopping tax increase and then backed
away from this suggestion, finally talked vaguely of cutting spending by
$1 billion in the present fiscal year, even as it continued to ask for supplemen-
tal appropriations.
We again call on the President to end this confusion, to face frankly the
growing problem of inflation and use the most direct weapon at his disposal to
counteract it by reducing the planned level of Federal spending this year and nexc.
We do not want another tax increase. This year the taxpayers' burden has
already been increased by higher social security taxes higher excise taxes,
advanced withholding, and by general tax rises by state and local governments.
All these increases already imposed are reliably estimated to run about
$8 - $10 billion.
Reduced government spending is preferable to a tax increase as an anti-
inflationary measure for three reasons.
First, every dollar cut from spending is a dollar less of inflationary
pressure. When government raises taxes, on the other hand, it takes many
dollars that would have been saved if they had been left with taxpayers. Every
dollar of a tax increase, then, does not reduce inflationary pressures to the
same degree as a dollar cut in spending.
Second, the government cannot persuasively call for reductions in private
spending when it fails to exercise restraint in its own spending. It cannot
expect businessmen and consumers to follow the advice which it refuses to heed in
managing its own affairs.
Third, a tax increase will encourage recklessness in government spending.
It is not likely to produce the fiscal restraint which government should observe
in the present economic situation.
In controlling inflation, the timing of governmental action is all-important.
LIBRARY
Action must be taken before the fire becomes a conflagration. The longer the
Administration dallies, the more drastic the action that finally will be needed.
#
#
PRESS RELEASE
For Release
Sunday, November 27, 1966
Representative Charles E Goodell of New York, Chairman of the
Republican Planning and Research Committee of the House of Representatives,
today released a report entitled "A Proposal for General Aid to State and
Local Governments through Sharing of Federal Taxes."
This report is based upon a study submitted last summer to the
Planning and Research Committee by Dr. Richard Nathan, an economist now with
the Brookings Institution.
The plan offered by Mr. Goodell calls for sharing a fixed percentage
of revenues from the individual federal income tax with state and local govern-
ments for purposes which would be determined by the recipient governments.
Beginning at 3 per cent of the receipts of the tax, the amount shared would
be increased in steps to 5 per cent.
Under this proposal 50 per cent of the federal grant would be allotted
to the states for purposes determined by the states, 45 per cent would be
allotted to states for unconditional allotment to local governments, and 5 per
cent would be devoted to strengthening state administrative machinery and
practices. Local government includes local educational agencies.
"This proposal," said Congressman Goodell, "seeks to provide for the
great public needs of the 1960's and 1970's by equipping state and ocal govern-
ments to meet these heeds. It is an alternative to the philosophy of the Great
Society which would meet these needs by massive expansion of federal programs
and by further proliferation of narrow categorical grant-in-fid programs that
end up in administrative confusion waste, and centratized control
"Interstate competition for industry limits the revenue-raising
potential of the wealthiest states. An inadequate tax base limits the poorer
states.
"General and unconditional aid through sharing of federal revenues
offers a means of providing the services required by the American people with-
out reducing state and local governments to administrative subdivisions of
the central government.
"This proposal is not offered as a substitute for any existing
programs although in time it may permit reduction of some of them. There is
urgent need to bring order to the maze of confusing and duplicating federal
programs now in existence, but this is a separate problem."
GERALD FORD VIBRARY
A PROPOSAL FOR GENERAL AID TO STATE AND LOCAL
GOVERNMENTS THROUGH SHARING OF FEDERAL TAXES
BY
REPRESENTATIVE CHARLES E. GOODELL OF NEW YORK
The Republican message on the State of the Union presented in January,
1966, contained the following appraisal of the current state of American federalism:
Our nation has thrived on the diversity and distribution of powers so
wisely embedded in the Constitution. The Administration believes in
centralized authority, ignoring and bypassing and undermining State
responsibilities in almost every law that is passed. As a result, our
constitutional structure is today in dangerous disrepair. The States
of the Union form a vital cornerstone of our Federal system and the
headlong plunge toward centralization of power in Washington must be
halted.
As a major step toward redressing the balance in the American federal
system, the message proposed that Congress enact a system of tax sharing, long advo-
cated by Republicans, to return to the states a fixed percentage of personal income
without federal controls. Funds from this source will lighten the load of local
taxation, spur solution of vexing problems, and revitalize programs in education,
health, and welfare at the local level.
The general principle of this reform has been endorsed by the Republican
Governors' Association and by the Republican Coordinating Committee. In the 89th
Congress, more than 30 Republican members of the Senate and the House of Representa-
tives introduced legislation providing for some form of sharing federal revenues
with state governments with a minimum of federal direction.
Plans for general and relatively unconditional federal grants to state
and local government are not new. The Presidential Commission on Intergovernmental
Relations appointed by President Eisenhower studied this type of reform in 1954-55,
although it recommended against its adoption. One hundred thirty years ago, the
federal government put into effect a system of revenue sharing on a one-shot basis,
by distributing to the states the surplus accumulated in the national treasury.
Foreign nations with a federal system such as Canada and Australia have long provided
bloc grants to their political subdivisions. In many of our states, there are
systems of tax sharing with local governments analogous to proposals made for
adoption at the federal level.
Recent interest in revenue-sharing proposals was stimulated particularly
by a proposal made in 1964 to President Johnson by Walter W. Heller. This proposal
was taken up by a presidential Task Force headed by Joseph A. Pechman of the
Brookings Institution. The idea has not received a favorable reception from the
White House.
The studies, proposals, and actual experience in the field of general aid
and revenue sharing have all been taken into account in the formulation of the
proposal made in this paper for a system of general aid to state and local govern-
ments with as few federal strings as possible.
The proposal made here could--and perhaps should--be considered as part
of a broader program to strengthen states and localities which would include not only
general aid, but tax credits and appropriate measures to simplify and consolidate the
complex and highly fragmented array of existing federal grant-in-aid programs.
General Aid Objectives
The general aid tax sharing legislative proposal made in this paper has
been designed to achieve certain basic objectives, among them:
1. committing the Federal Government in a substantial and meaningful
way to a re-invigoration of our federal system, long a major
bulwark of American democracy;
2. giving recognition to the legitimate claims of local governments
to being a part of any general aid program;
3. placing emphasis on the enhancement of the leadership and over-all
policy formulation role of state governments in the state-local
sector;
4. preserving to states and localities full discretion as to the
expenditure of their general aid funds;
5. incorporating a measure of equalization for the poorest states;
6. rewarding with bonuses states and localities which make the greatest
tax effort; and
7. making the general aid program sufficiently flexible so that Congress
and the Executive Branch can review and revise it as circumstances
require.
Each of these objectives is important. Among the most important is the
inclusion of cities in the general aid program.
With the steady increase in metropolitan area growth, many states have
recognized the need to make local governments effective political jurisdictions.
Home rule in many states permits localities to make major policy decisions on their
own. The impressive rise in state aid to localities in many cases has shored up
this political authority with needed fiscal resources.
Near the turn of the century (in 1902), total state aid to localities
accounted for only 6% of local revenues. Twenty-five years later in 1927 (just prior
to the Depression), state aid accounted for 10%. In the next decade ending on the
- 2 -
eve of World War II, this figure more than doubled, rising from 10% of local
revenues in 1927 to 23% in 1938. In the post-war period, state aid rose still
further. During these years, it has consistently accounted for between 28% and
29% of local general revenues. 1
In fiscal 1965, state aid to localities was $14 billion. This was nearly
$3 billion more than total federal aid to states and localities. It was 30% of
total local general revenues and one-third of total state general revenues. 2 These
figures warrant emphasis. In light of recent and steady tax increases in many
states, the twin facts that states devote over one-third of their own revenues to
state aid for localities and provide 30% of total local revenues certainly indicate
that co-operative federalism is a working reality at the state-local level.
A new general aid program should be based on a concept of American
federalsim which accurately reflects present relationships between state and city
and which gives appropriate weight to the high costs of public services in cities
(particularly the central cities of large metropolitan areas) where concentrations
of lower-income families often require special educational, employment, rehabilita-
tive and other services.
This state-local general aid tax sharing proposal is distinguished from
most other proposals, including that of Dr. Heller, in that it gives local govern-
ments--as well as states--needed additional resources to meet basic and vital tasks
of government. As far as the cities are concerned, it should also be noted that
this proposal differs markedly from the recent "Great Society" proposal to pick out
a handful of cities, and with federal funds and federal inducements spruce up se-
called "demonstration areas."
In sum, this proposal, in providing general aid to states and localities,
rests on a view of American government that is both positive and current. It
involves a commitment to a federal system of government, within which innovation
can come from all levels, and within which all citizens can participate actively
in the democratic processes of government so vital to our nation. In both these
respects--innovation mindedness and an orientation towards active citizen participa-
tion at all levels of government--this approach at this time is far preferable to
the further enlargement of a "Great Society" in which innovation can only come from
1 Data from U. S. Department of Commerce, Bureau of the Census, Census
of Governments 1962, Historical Statistics on Governmental Finances and Employment,
Vol. VI (Topical Studies) No. 4, p. 49.
2 Ibid. Governmental Finances in 1963-64, p. 31.
- 3 -
the top and in which active citizen participation is a political principle of
very low value.
3-Part General Aid
General aid funds from the federal government should be provided to the
states to be used as follows:
- 50% for state purposes;
- 45% to be redistributed by the states to local governments
as unconditional general aid; and
- 5% to be allocated to the states for executive staff and
management purposes as a means of improving the central
staffing and management functions of state government.
1. 50% Share for the States
The 50% share for the states might be expended directly by state agencies
or distributed in whole or in part to subdivisions for purposes determined by the
state.
This share for the states, as well as the 45% share for localities, should
be provided by the federal government on an essentially unconditional basis. The
only federal requirements should be those applicable to all federal aid payments
under the Constitution and various federal statutes, including Title VI of the
Civil Rights Act of 1964 prohibiting the use of federal aid funds for programs or
activities in which discrimination exists.
Examination of recent state-local expenditure patterns warrants confidence
in the ability of state and local governments to utilize effectively general and
unconditional federal aid payments. Joseph A. Pechman, in a 1965 paper on
"Financing State and Local Government," showed that in the decade 1953-63, state-
local expenditures more than doubled and that additional resources were devoted to
what are regarded as "urgent" public service needs. Forty per cent of the increase
in state-local expenditures over the decade went for education, the fastest-growing
area of state-local spending. (This accounted for $14.6 billion out of a total
increase of $37 billion.) Besides education, spending also doubled for sewerage
and sanitation, natural resources, highways, police and fire protection, and health
and hospitals, as shown in Table 1.
- 4 -
TABLE 1
General Expenditure of State and Local Governments by Major Function, Fiscal
Years 1953 and 1963 (dollar amounts in millions)
Amount
Increase 1953-1963
Function
1953
1963
Amount
Per cent
Per cent
distribu-
increase
tion
Total general expenditures
$27,910
$64,816
$36,906
100.0%
132.2%
Education
9,390
24,012
14,622
39.6
155.7
Highways
4,987
11,136
6,149
16.7
123.3
Public welfare
2,914
5,481
2,567
6.9
88.1
Health and hospitals
2,290
4,681
2,391
6.5
104.4
Police and fire
1,636
3,468
1,832
5.0
112.0
Natural resources
705
1,588
883
2.4
125.2
Sewerage and sanitation
908
2,187
1,279
3.5
140.8
Housing and community
redevelopment
631
1,247
616
1.7
97.6
General control and
financial administration
1,263
2,474
1,211
3.3
95.9
Interest on debt
614
2,199
1,585
4.3
258.1
Other
2,572
6,343
3,771
10.2
146.6
ᵃExcludes insurance trust, liquor stores, and public utility expenditures.
Includes federal grants-in-aid.
Source: Paper by Joseph A. Pechman, March 26, 1965. Data from U.S. Bureau
of the Census
2. 45% Share for Localities
The 45% share for localities should be distributed to governmental sub-
divisions as general aid. While the state would determine the basis of allocation,
it would not prescribe the use to be made of these funds.
3. 5% Share for Executive Staff and Management Improvement by the States
One of the most compelling needs of many states today is improvement of
state executive and management functions. Some states have lagged in these fields,
often because of a lack of funds. Pressures for higher spending for education,
health, welfare, and urban development have overshadowed the development of
executive staff machinery and the improvement of state management services.
- 5 -
The 5% share proposed here for executive staff and management improve-
ment by the states should be defined as 5% of a state's basic general aid allocation,
i.e. exclusive of equalization. States which receive equalization general aid funds
would first compute 5% of their general aid allocation minus equalization, and then
allocate their remaining general aid, including equalization, 55% to the state and
45% to localities.
This feature of a tax sharing plan would put emphasis on the need for:
- active, well-staffed state budget offices;
- qualified executive planning personnel in such fields as
fiscal planning, development planning, and policy formulation
and co-ordination; and
- sufficiently high salaries for top-level management personnel
to attract and hold capable people in state government.
This 5% fund is the only part of the 3-part program under which expendi-
tures would be subject to federal approval. Approval would be by the proposed
Administrator of General Aid in the U. S. Treasury Department with the assistance of
the U. S. Civil Service Commission or any other federal agency with which he chooses
to consult. The Administrator should also be authorized at his discretion to waive
this 5% requirement upon request by the Governor of a state. In this case, the
5% would be included in the state's general aid allocation so that the state in
question could use 55% of its total general aid on an unconditional basis for state
purposes. This authority to waive this 5% requirement is provided so that those
states which already have placed priority on executive staff and management functions
will not be required to devote federal general aid funds to these areas.
4. General Aid Tax Sharing Fund
The General Aid Tax Sharing Fund, as proposed in this paper, would initially
annually receive revenues equal to 3% of Federal individual income tax revenues,
with the proviso that in no case shall the amount received by the fund in any given
year be less than the amount received in the previous year. This proviso would
protect states and localities from a general aid cut-back resulting from recession
or future federal individual income tax reductions. Estimated federal individual
income tax payments for fiscal 1967 would mean a transfer of approximately $1.8
billion to the General Aid Tax Sharing Funds as proposed here.
Over a four-year period, the percentage of individual income tax revenue
- 6 -
distributed should be increased in steps to 5%. 3 Each year, revenues of the Fund
would be distributed among the states on a quarterly basis by the Administrator of
General Aid in the U. S. Department of Treasury. Ninety per cent (90%) of these
funds should be returned to the states on a population basis, weighted by an index
of tax effort. This part of a state's general aid grant would be referred to as
its basic allocation. The remaining 10% of the General Aid Tax Sharing Fund would
be set aside for equalization purposes.
The General Aid Tax Sharing Fund should not be a separate trust fund in
the federal budget. These expenditures should be included in the administrative
budget. Advance estimates of basic general aid allocations should be made public
and sent to the governor of every state at least 90 days before the commencement
of the fiscal year.
5. Equalization
The 10% of the funds reserved for equalization should be allocated among
the poorest one-third of the states, defined for these purposes as the 17 lowest
states in per capita personal income. The computation of equalization allocations
should be based on the most recent state-by-state per capita personal income data
available. Equalization allocations should be announced no later than April 1 of
the fiscal year prior to the fiscal year to which they apply. Notices of equaliza-
tion grants should be sent to the governors of all eligible recipient states by
the Administrator of General Aid.
These various requirements for a one-quarter advance notice of equaliza-
tion and estimated basic general aid allocations are intended to allow states and
localities ample time to incorporate these data into their plans for the utilization
of general aid funds.
The computation of equalization grants among the 17 eligible states shall
be in proportion to population weighted by the reciprocal of per capita personal
income. Figures given below demonstrate the effect of this equalization approach.
State per capita income data for 1964 are presented in Table 2 with the states divided
into thirds.
3A beginning percentage other than 3% could, of course, be selected. For
example, legislation could provide that in the first year, 2% of federal individual
income tax revenues would be allocated for general aid--this percentage rising by
1% every year (or two years) until it reaches 5%.
- 7
TABLE 2
1964 State Per Capita Income
Top 16 States:
1. Delaware
$3,460
2. Connecticut
3,281
3. Nevada
3,248
4. New York
3,162
5. Alaska
3,116
6. California
3,103
7. Illinois
3,041
8. New Jersey
3,005
Bottom 17 States
9. Massachusetts
2,965
10. Maryland
2,867
34. North Dakota
$2,133
11. Michigan
2,755
35. Maine
2,132
12. Ohio
2,646
36. Vermont
2,119
13. Washington
2,635
37. Oklahoma
2,083
14. Hawaii
2,622
38. New Mexico
2,041
15. Oregon
2,606
39. Idaho
2,020
16. Pennsylvania
2,601
40. West Virginia
1,965
41. Georgia
1,943
Middle 17 States:
42. North Carolina
1,913
43. South Dakota
1,879
17. Missouri
$2,600
44. Louisiana
1,877
18. Colorado
2,566
45. Tennessee
1,859
46. Kentucky
1,830
U.S. Average
$2,562
47. Alabama
1,749
48. South Carolina
1,655
19. Indiana
$2,544
49. Arkansas
1,655
20. Rhode Island
2,514
50. Mississippi
1,438
21. Wisconsin
2,490
22. Wyoming
2,441
23. New Hampshire
2,377
24. Iowa
2,376
25. Minnesota
2,375
26. Nebraska
2,349
27. Kansas
2,346
28. Montana
2,252
29. Florida
2,251
30. Virginia
2,239
31. Arizona
2,233
Source: U.S. Bureau of the Census,
32. Texas
2,188
Compendium of State Government
33. Utah
2,156
Finances in 1965
Using 1967 estimated Federal individual income taxes and current
personal income data, the average basic general aid allocation in a distribution
of 3% of Federal individual income taxes would be approximately $8.50 per capita. 4
A 10% equalization fund distributed as proposed here would increase the per capita
grant to Mississippi (the bottom State) from $8.50 to an estimated $14.50 - an
increase of $6.00. North Dakota (the first State among the lowest 17 in 1964
per capita income) would have its share of general aid increased from $8.50
4The tax effort adjustment would mean States with a high tax effort
would receive more than $8.50 and States with a low tax effort would receive less.
However, the average basic grant for all the States would still be $8.50 under
the program proposed here.
8 -
to $12.50. The States in between North Dakota and Mississippi would receive
increases in their allocations ranging from $4.00 to $6.00 per capita.
6. Tax Effort
As noted above, basic general aid grants should be distributed according
to population weighted by a measure of tax effort. Tax effort should be defined
for these purposes as State and local taxes combined relative to personal income.
Thus, a State's basic general aid grant would be determined by the ratio of State
to U.S. average tax effort multiplied by an amount which bears the same ratio to
90% of the General Aid Tax Sharing Fund as State population bears to the total
population of all States.
Table 3 presents U.S. Bureau of the Census data for 1963-64 showing the
top and bottom five States in tax effort as defined here.
TABLE 3
State and Local Taxes Per $1,000 of Personal Income:
Top and Bottom Quintiles, 1963-64
Top Quintile
Wisconsin
$126.07
Minnesota
121.73
California
120.65
Arizona
120-11
Vermont
119.78
U.S. Average
$103.52
Bottom Quintile
Virginia
$ 87.75
Missouri
85.69
District of Columbia
81.92*
Delaware
81.68
Alaska
80.78*
*Alaska and D.C. also stand out as receiving
much larger amounts of Federal aid than other
States, partially explaining their lower tax
effort standings. In 1963-64, Alaska and D.C.
ranked first and fourth respectively in per
capita Federal aid.
Source: U.S. Bureau of the Census, Governmental
Finances in 1963-64.
This proposed tax effort adjustment is most easily understood by
illustration. The following illustrations assume a general aid plan allocating
3% of Federal individual income tax revenues.
- 9 -
The number one State in 1963-64 tax effort is Wisconsin. With a tax
effort bonus, Wisconsin would receive approximately $10.00 per capita as its basic
general aid allocation, compared to $8.50 (i.e., the amount which would be
received by a State with tax effort exactly equal to the national average).
This bonus would mean the Wisconsin's total general aid grant would be $40
million. Without the tex effort benus, it would be $33 million. Thus, the
bonus increases its grant by $7 million.
The bottom State in tax effort in 1963-64 was Alaska, although there are
rather special circumstances involved. One important reason why Alaska's tax
effoct is so low is the extremely large amount of Federal aid which it receives.
Alaska ranked first in per capita Federal aid in fiscal 1964 with aid of $365.54
per capita - $313.27 above the national average of $52.27. With this proposed
tax effort adjustment, Alaska would receive 06.65 per capita in basic general
aid as compared to a national average of $8.50.
Taking the largest States in the bottom and top quintiles, California
(the largest State in the top quintile) would receive $9.85 per capita and
would have its general aid basic grant increased by $24 million from $153 million
to $177 million as a result of its tax effort bonus. On the other hand, Missouri
(the largest State in the bottom quintile) would receive $7.10 per capita,
cutting its basic general aid grant from $47 million to $31 million.
Eight States among the 17 lowest per capita income States in 1964 would
receive both equalization grants and tax effort bonuses (Idaho, Louisiana, Maine,
Mississippi, New Mexico, North Dakota, South Dakota, and Vermont). Taking
Mississippi as an illustration, the State would receive a total of $15.30 per
capita, broken down as follows:
$6.00 per capita equalization grant
.70 tax effort bonus
8.50 basic allocation
$15.20 total
7. State Responsibilities for the Administration of General Aid
Under this legislative proposal, heavy reliance is placed on the role of
the State in that: (1) States receive the largest share of general aid on an
unconditional basis; (2) States are responsible for the distribution of general
aid to localities; and (3) a special effort is made to improve the policy-making
- 10 -
LIBRAR
and policy coordination role of the States through the 5% executive staff and
management improvement fund. The governor of every State should be made responsible
for the submission of the four reports listed below necessary to keep the public
informed about the use of general aid funds and in order to provide needed
information to the Administrator of General Aid in the U.S. Department of the
Treasury.
The Administrator should be given authority at his discretion to
establish definitions of expenditure categories for statistical purposes and
to suggest to the States organization and format as a means of promoting
consistency in their reports.
a. State General Aid Expenditure Plan: At the beginning of each fiscal
year (i.e., no later than July 1), States should be required to
submit a plan on the anticipated use of the general aid funds
allocated to the State on an unconditional basis. The Federal
Government would not have authority to approve or disapprove
planned expenditures with State unconditional general aid funds.
State General Aid Expenditure Plans would be submitted for
information purposes only.
b. Report on Distribution of General Aid to Localities: States
should be required to submit a report by July 1 of each year
on the system of allocation to be used for the distribution of
general aid funds to localities. Reports should include data
on the shares to be received by individual localities.
C. Executive Staff and Management Improvement Plan: States
should be required to submit an annual plan for the proposed
use of the 5% general aid funds for executive staff and
management improvement purposes. The uses of these funds
would have to be approved by the Administrator of General Aid.
As in the case of the two preceding reports, the deadline
for the submission of this report should be July 1.
However, States which propose expenditures for these purposes
commencing at the beginning of the fiscal year would as a
practical matter have to submit this plan sufficiently in
advance of July 1 to receive the necessary approval by that date.
- 11 -
d. Year-End General Aid Report: States should be required to
submit a Year-End General Aid Report for each fiscal year by
December 1 of the succeeding fiscal year. These reports would
serve the obvious purpose of permitting an opportunity for the
Congress, the Executive Branch, and the public to evaluate
the general aid program. Reports should include data and
information on the expenditure of general aid funds in
reference to: (1) the use of State unconditional general
aid allocation; (2) the distribution of general aid by
the States to localities; (3) major uses of general aid by
localities; and (4) the actual expenditure of executive
staff and management improvement funds.
In connection with area three of the Year-End Report (major uses by
localities), States should have the responsibility for collecting data from
local governments on the uses of general aid funds. This does not give States
authority to approve or disapprove - merely the right to full expenditure
information from localities.
8. Federal Administration of General Aid Funds
Responsibility for the administration of 3-part General Aid at the
Federal level should be assigned to the Administrator of General Aid, a new
office to be created in the U.S. Department of the Treasury. (His position
in the Department could be similar to that of the Internal Revenue Commissioner).
His responsibilities should include:
- the distribution of general aid funds;
- assuring compliance with the provisions of the Act;
- approval of proposed State executive staff and
management improvement expenditures;
- publishing a report for each fiscal year;
- advising and assisting the President and the
Congress on intergovernmental relations; and
- providing information and technical assistance
to the States on request to assist them in the
implementation of this program.
The Administrator should also be required to establish an advisory
committee on statistics to make recommendations for revisions in the various
distribution formulas set out in this Act. This would be particularly useful in
- 12 -
connection with the 4-year review and revision of this program discussed below.
For example, there is considerable evidence that existing personal income data
understate the income of persons in predominantly farm States. If true and of
substance, this would give these States an advantage in the distribution of
equalization funds and under the tax effort adjustment. Another statistical
question which should be examined by such a committee involves the incorporation
and effect of a population factor in the distribution of general aid funds by the
States to localities.
The Administrator should be responsible for reallocating on a straight
population basis funds not used in a given fiscal year. This would involve
funds in excess of estimates that go into the General Aid Tax Sharing Fund and
amounts not used by States and localities, including those withheld by the
Administrator for failure to comply with the provisions of the Act. Failure
to comply would, for example, be grounds for witholding amounts equal to any
executive staff and management improvements funds used for other than approved
purposes. It could also involve funds withheld for failure to comply with State
reporting requirements or Title VI of the Civil Rights Act of 1964. In any case
where the Administrator withholds funds, provision should be made for reasonable
notice and a hearing. Consideration should also be given to including the right
to judicial review.
9. Congressional Review and Revision
An important feature of this General Aid Plan should be a review and
revision of the program by Congress after 4 years. The U.S. Advisory Commission
on Intergovernmental Relations (which serves the President and Congress and has a
relatively independent position in government) should be assigned responsibility
for a comprehensive report on this program at the end of two and one-half years.
This report, plus the annual reports of the Administrator of General Aid, should
be referred to the appropriate Committees of Congress (or to a select or special
joint committee) which would hold hearings, conduct whatever studies it deems
necessary, and make recommendations for revisions to the Congress. Recommendations
for revisions should also be requested of the President. Governors and other
appropriate State and local officials should be invited to present testimony
for the consideration of the Congress in the review and revision process.
- 13 -
CONGRESSMAN
NEWS
GERALD R. FORD
HOUSE REPUBLICAN LEADER
RELEASE
FOR RELEASE IN FRIDAY PM's
MARCH 24, 1967
STATEMENT BY HOUSE REPUBLICAN LEADER GERALD R. FORD, R-MICH.
The sag in the American economy has become so serious that I believe it will
deepen into a recession unless President Johnson publicly abandons his request for an
income tax increase--now.
I urge the President to withdraw his tax increase proposal because this action
undoubtedly would help to restore consumer and business confidence in the economy.
The tax increase request is hanging over the heads of consumers and businessmen like
the Sword of Damocles.
If the economy recovers its vigor and if a far greater deficit looms in the
Johnson budget, the President could reinstate his tax increase request at that time.
There currently is mounting evidence of a severe slowdown in the economy and
indications of more drag to come.
1. --We have tnessed a big slump in industrial output, shortening of the
factory work week and a new drop in housing starts.
2. -Inventories have reached dangerous levels due to the massive buildup of
stocks last year and a falloff in consumer demand.
3. --New orders for durable goods were cut back in February to the lowest
level in 18 months.
4. --Payrolls in the private sector decreased last month for the first time
in nearly two years.
5. --The real net spendable earnings of an average factory worker declined
$1.13 in February to $85.34 a week in terms of 1957-59 dollars--$1.79 below last
year at this time.
6. --The purchasing power of the average factory worker's weekly pay has
dropped two per cent over the past 12 months.
The only justification the Administration can offer for an income tax increase
is that it is needed to hold down President Johnson's planned federal deficit. It
would be far better for the President to cooperate with Republicans in Congress to
cut domestic spending. The risk of recession is too great for the President to keep
pursuing a guns-and-butter policy.
###
FOR THE SENATE:
FOR THE HOUSE
Everett M. Dirksen
THE REPUBLICAN LEADERSHIP
OF REPRESENTATIVES:
of Illinois
Gerald R. Ford
OF THE CONGRESS
Thomas H. Kuchel
of Michigan
of California
Leslie C. Arends
Bourke B. Hickenlooper
of Illinois
of Iowa
Press Release
Melvin R. Laird
Margaret Chase Smith
of Wisconsin
of Maine
John J. Rhodes
George Murphy
of Arizona
of California
H. Allen Smith
Milton R. Young
of California
of North Dakota
Issued following a
Bob Wilson
Hugh Scott
Leadership Meeting
of California
of Pennsylvania
Charles E. Goodell
of New York
PRESIDING:
Richard H. Poff
July 13, 1967
of Virginia
The National Chairman
Ray C. Bliss
William C. Cramer
of Florida
REPRESENTATIVE FORD:
IMMEDIATE RELEASE
The guessing game continues over higher Federal income taxes
sought by the Johnson-Humphrey Administration. But meanwhile, there
isn't the slightest doubt that we are going to have higher invisible
taxes -- the silent sales tax on everybody's paycheck and pension
which economists call inflation.
Now we hear about an 9%\instead of a 6% income tax surcharge.
Under the steady escalation of consumer prices over the past year a
family of four earning $10,000 already has paid an invisible tax three
times the surcharge. Most housewives realize this -- even if the
bureaucrats do not!
The most recent official Price Index figures, those for the
month of May, reveal the sharpest increase since last year. The Labor
Department's own Bureau of Labor Statistics sees no likelihood of
relief in the months to come. The chief of that Bureau predicts an
additional two and one-half per cent price increase before long.
Does the Johnson Humphrey Administration know what is happening
to us? Does the Johrson-Humphrey Administration care? Does the
Johnson-Humphrey Administration plan to take the steps necessary to
protect the American people from these rapidly rising living costs,
which will cancel out any wage increases, drain family budgets and
shrink the pensions of the aging even further?
Mr. Ackley, the President's chief economic advisor, sees as
solutions only a tax increase or what he calls "responsible use of
(con't)
Room S-124 U.S. Capitol-(202) 225-3700
Consultant to the Leadership-John B. Fisher
MR. FORD
July 13, 1967
private wage and price restraint." On the latter point, Mr. Ackley
appears to be an Alice in an economic wonderland.
The Johnson-Humphrey Administration incredibly refuses even to
test-fire the best weapon for fighting inflation it holds in its
hands, common-sense cutting and prudent postponement of non-essential
Federal spending. To this Administration, more domestic spending
is the sure cure for everything, including its setbacks in last
November's elections.
Higher inflation is here. Are higher income taxes just around
the corner?
Therefore, our Question-of-the-Week:
Mr. President: More Inflation - More Debt - What Next?
SENATOR DIRKSEN
July 13, 1967
To spend beyond income means to go into debt. To go into debt
means to borrow. To borrow means to add to the money supply. To
increase the money supply means to add to the cost of goods and
services. There is but one real answer -- to keep spending within
income -- to live within our national means.
Very closely related to ballooning inflation is the national debt,
which has now risen, with the approval of this Democrat-controlled Con-
gress, to 326 billions. To call it the national debt is accurate.
Equally accurate and much clearer is its right name -- the public debt --
for this is without any question whatsoever a debt the American public
owes and, one day, must pay.
Next time you walk into a bank, take from the display rack at
the counter a copy of that bank's balance sheet and statement of
condition. You will immediately find listed among its principal items,
"U.S. Government Bonds". How did the banks acquire these U. S.
Government Bonds? They did it with the money deposited with them by
you and by me! Make no mistake about it -- you and I, American citizens
all, owe this incredible public debt!
The interest alone on this debt will soon be more than 14 billions.
You and I -- the owers of the public debt -- will be paying over a
billion dollars per month in interest on it for years and years to come.
Can you picture our grandchildren facing this debt, which they too will
have to pay?
Unless and until the Johnson-Humphrey Administration is brought
up short by the American people, inflation will stop creeping and will
begin galloping!
Therefore, our Question-of-the-Week:
Mr. President: More inflation - More Debt - What Next?
CONGRESSMAN
NEWS
GERALD R. FORD
HOUSE REPUBLICAN LEADER
RELEASE
-- FOR IMMEDIATE RELEASE --
July 19, 1967
Statement by Rep. Gerald R. Ford, R-Mich.
President Johnson has begun his big buildup for an income tax increase. It
is deliberately low-keyed. He does not want to scare anyone by talking at the
outset of an increase larger than a 6 per cent surtax although it is thown his
advisers are urging 10 per cent.
At the same time, the President reportedly has ordered his department heads
to tell him where federal spending can be cut, by as much as 15 per cent. Reports
are that Defense Secretary MeNamara is planning à $10 billion postponement of
Pentagon purchases but that HEW officials are balking on the economy order.
The President yesterday said there may be "adjustments" in his income tax
increase request but that he has not yet made a decision. He was saying in
effect that he still is unsure what to recommend in the way of a tax increase
on July 18 despite the fact he urged a 6 per cent surtax as of last January to
take effect July 1 of this year.
The economic picture is fuzzy Although the economy began moving in the
second quarter of this year after stalling during the first three months, there
is no certainty of a big upsurge in the second half of 1967. An income tax
increase could depress the economy to a point where consumers would run for cover.
They are still cautious after being downright timid early this year. According
to Sen. William Proxmire, chairman of the Joint Economic Committee, the second-
quarter gain in Gross National Product represents economic growth of only 2 per
cent on an annual basis.
The President has launched a two-pronged campaign--an apparent move to cut
back federal spending and a bid for more tax revenue. I firmly believe at this
time that only a spending hold-down is needed. If the Defense Department can
postpone spending by $10 billion in fiscal 1968, then other federal departments
also can make meaningful and substantial cutbacks. Avoidance of a tax increase
would give the American consumer the new confidence he needs.
President Johnson has said a tax increase would not be "primarily" due to
either the high level of non-defense spending or to Vietnam War costs. He said
he needs the revenue. The latter statement has the ring of truth. He wants the
tax increase as a vehicle for continuing his present guns-and-butter policy.
I believe the American people are willing to pay for the Vietnam War but
they want all the fat trimmed out of the Johnson budget. I believe they would
prefer an austerity budget to a tax increase.
President Johnson says Americans are actually paying about $24 billion less
in taxes than they did when he assumed the Presidency in late 1963. But he makes
no mention of the disastrous Johnson inflation of 1966 when the loss to savers
was $27 billion during that one year alone, due to the drop in the value of the
dollar.
Mr. Johnson raises the specter of another sharp rise in interest rates, like
the Johnson interest rate jump of 1966 which set a 40-year record. He neglects
to mention that government borrowing forced by high-level government spending was
a big factor in that interest rate climb.
Government spending is a prime source of inflation. Government spending and
borrowing is a compelling factor in pushing up interest rates. The threats of
a fresh round of inflation and a new interest rate rise are directly due to
Mr. Johnson's excessive spending plans. Under the Johnson method of economic
mismanagement, the budget will always be out of control.
The federal government needs a tax increase only if the projected level of
domestic spending is to be continued. What the American people need and want is
a cutback in domestic spending, not more income taxes.
#HH
REPUBLICAN
REpublicAN NATiONAL COMMiTTEE
LATIONAL COMMITTEE
1625 EYE STREET, NORTHWEST, WASHINGTON, D. C. 20006
NATIONAL 8-6800
Ford
NEWS
FOR RELEASE
IMMEDIATE
July 24, 1967
The following statement was approved today by the Republican Coordinating
Committee, meeting in Washington, D. C.:
THE JOHNSON-HUMPHREY ADMINISTRATION AND YOU:
HIGHER PRICES, MORE TAXES, GREATER DEFICITS
Spokesmen for the Democratic Administration have confirmed our prediction
of April 3rd that the Federal Government's deficit for fiscal 1968 could run
"from $25 billion to $30 billion or more." We repeat that "present fiscal
policies are creating a time-bomb that can Lead to serious economic trouble
for the nation."
The central cause of the troubles is the massive annual increases in Federal
Government spending. Although we are today engaged in the third largest war in
the nation's history, thus increasing defense expenditures by 68 percent, non-
defense spending is up since, 1960 by 97 percent and is, therefore, a major reason
for the ballooning of the Federal budget. Non-defense spending has risen more
than defense spending, and constitutes a larger proportion of the whole.
This spending has not achieved the results intended in terms of reducing
poverty and unemployment and in fact has, through high costs of living, contributed
further to the hardship of many of our citizens. Comparison of the Democratic
record since 1961 with the Republican record of 1953-1960 shows that the number of
FORD
families living in poverty has been decreasing at the same rate, average annual
unemployment is higher and the average annual increase in the Consumer Price
LIBRARY
Index is greater.*
-MORE-
*See Appendix 3
-2-
In so doing, they have been creating and stockpiling economic problems,
the consequences of which are just beginning to be apparent.
As a by-product of the massive spending increases, the Government has run
a budget deficit every year since 1961.
By July 1st, 1968, these deficits will have totalled over $60 billion. Actual
developments have already shown the projected deficits have been underestimated;
worse is to be expected. They have required the ceiling on the National Debt to
be raised 14 times in this period and increased the interest costs of the Government
from $9.2 billion to $14.2 billion, an increase of 50 percent over the period, and
an increase of 20 percent in just the last three years. Interest on the debt is
the second largest category of Government expense, after Defense, and accounts for
ten cents out of every dollar of government expenditures.
The deficit of $1.8 billion originally projected for 1967 now is some $10 billion,
the second largest since World War II.
The 1968 deficit, originally estimated at $8.1 billion, it now appears will
definitely be over $20 billion. Treasury Secretary Fowler had admitted it may go
as high as $24 billion; House Ways and Means Committee Chairman Wilbur Mills
estimates it could exceed $29 billion. In its latest request for lifting of the
debt ceiling, the Administration asked for a $29 billion increase, thereby
revealing its considered judgment as to how much leeway is needed.
And these deficits do matter. To go into debt means to borrow. When the
government borrows by selling debt paper to the Federal Reserve and commercial
banks it adds to the money supply, inflating it and causing pressure to increase
prices. When it borrows in the private financial markets, it competes with
business for investment funds, decreasing the amount of risk capital available
for economic growth and job creation. At the same time this competition for
funds drives up interest rates.
-MORE-
-3-
Also, savings eroded at the rapid rate of 4.2% last year.
As a result, under the Johnson Administration, the American people can
look forward with dismay and apprehension to:
Renewed inflationary pressures
Higher interest rates and tight money
A record budget deficit
A tax increase substantial enough to reduce people's ability to pay
higher prices, but not effective in preventing a monumental deficit,
or in stemming inflation
A gold crisis requiring further reduction, if not complete withdrawal,
of the gold backing of our currency
A period of profitless prosperity risking a recession severe in
proportion to the extent of the impending inflation
Further deterioration of our position of world leadership as the
economic base on which our diplomatic and military strength depend
is increasingly eroded
The alarming prospects may not be obvious to the citizen who is hard put
trying to make ends meet. But it is the role of political leadership to exercise
vision in the conduct of public affairs and to shape policy to avoid the pitfalls
ahead rather than offer glib explanations for failure afterward.
The course clearly called for, and repeatedly urged by the Republican Party,
is one of restraining the growth of government spending to a sustainable level.
This is the course of prudent progress. The record shows it produces better
results at less risk for the individual and the nation.
THE REPUBLICAN REMEDIES
Our Task Force on Federal Fiscal and Monetary Policies has clearly set forth
the Republican Recommendations for a safe and sane set of economic policies designed
to achieve all the valid goals of economic policy at a sustainable rate with minimum
risk. They are available in these publications:
-MORE-
-4-
The Balance of Payments, The Gold Drain and Your Dollar, August 1965
The Rising Costs of Living, April 1966
A Call for New Fiscal Policies, April 1967
What the recommendations add up to is that America must live within its
means. It must hold government spending in check. Even the richest nation
cannot reach all its goals all at once without courting economic, social and
political disaster.
WE, THEREFORE, CALL ON THE ADMINISTRATION TO SUBMIT A NEW BUDGET FOR
1968 WHICH REFLECTS A NEW POLICY OF POSTPONING AND RESTRAINING THE GROWTH OF
NON-DEFENSE EXPENDITURES, IN PREFERENCE TO RAISING TAXES OR ALLOWING THE HIDDEN
TAX OF INFLATION TO FINANCE ITS EXPENDITURES.
We believe moderation and restraint are a small price to pay to avoid
such an awful risk.
7/24/67
Appendix 1
FACTS ON GOVERNMENT SPENDING
Government Spending Increases
The following table is from our April Report "A Call for New Fiscal Policies. "
A fourth column estimating 1968 expenditures based on current estimates has been
added.
Expenditures of the Federal Government for 1960,
1965, and 1968 Showing Percentage Increases
(Billions of Dollars)
1960
1965
1968
1968
(actual)
(actual)
(budget) (current estimates)
Administrative Budget
$76.5
$96.5
$135.0
$142.0
$ Increase over 1960
--
$20.0
$ 58.5
$ 65.6
% Increase over 1960
--
26.1%
76.5%
85.6%
$ Increase over 1965
--
--
$ 38.5
$ 45.5
% Increase over 1965
--
--
39.9%
47.2%
Cash Budget
$94.3
$122.4
$172.4
$179.4
$ Increase over 1960
--
$28.1
$ 78.1
$ 85.1
% Increase over 1960
--
29.8%
82.8%
90.2%
$ Increase over 1965
:
--
$ 50.0
$ 57.0
% Increase over 1965
--
--
40.8%
46.6%
SOURCE: Calculated from figures in the Budget of the United States Government.
Current 1968 estimates from National Industrial Conference Board figures.
It should be noted that the average annual increases in government spending
since 1965 have been more than three times the average annual increase of the
of the preceding ten years.
Appendix 2
DEFENSE VERSUS NON-DEFENSE SPENDING
The following table shows clearly that non-defense spending has risen more
than defense spending, and constitutes a larger proportion of the whole.
Defense VS. Non-Defense Spending as Proportions
of Total Federal Government Spending 1960-1968
(Billions of Dollars)
Fiscal
Percentage
Percentage
Year
Defense
Non-Defense
Total
Defense
Non-Defense
1960
$45.7
$48.6
$94.3
48.5%
51.5%
1961
47.5
52.0
99.5
47.7
52.3
1962
51.4
56.3
107.7
47.7
52.3
1963
53.4
60.4
113.8
46.9
53.1
1964
54.5
65.8
120.3
45.3
54.7
1965
53.4
69.0
122.4
43.6
56.4
1966
58.5
79.3
137.8
42.5
57.5
1967 (est.)
71.3
89.6
160.9
44.3
55.7
1968 (est.)
76.8
95.6
172.4
44.5
55.5
% increase
% increase
% increase
1960-68: 68%
1960-68: 97%
1960-68: 83%
1965-68: 44%
1965-68: 39%
1965-68: 41%
SOURCE: The Budget of the United States Government
Appendix 3
DECLINING PROPORTION OF FAMILIES LIVING ON $3000 PER YEAR OR LESS
1953-60
Average Annual Reduction:
.75 percentage points.
1961-1965*
Average Annual Reduction:
.76 percentage points.
ANNUAL INCREASE IN LIVING COSTS AS MEASURED BY THE CONSUMER PRICE INDEX
(1957-1959 = 100)
1953-1960
1961-1966
Average Annual Increase: 1.4%
Average Annual Increase: 1.9%
AVERAGE ANNUAL UNEMPLOYMENT AS A PERCENT OF THE WORK FORCE
1953-1960
1961-1966
4.9%
5.3%
Source: Economic Report of The President, 1967.
*Latest figures available.
-- FOR IMMEDIATE RELEASE --
August 3, 1967
STATEMENT BY REP. GERALD R. FORD (R.-MICH.), HOUSE MINORITY LEADER
When Mr. Johnson talks of a $23.6 billion deficit without his
10 percent income tax surcharge, he is talking about continued federal
spending at present and projected levels set by his Administration.
For this and other reasons, I continue to state emphatically
that the President has not made a case for an income tax increase.
I will not concede that the present level of Federal spending
cannot be cut back sufficiently to avoid a tax increase.
The way to avoid the President's 10 percent surcharge is to make
expenditure reductions equal to the anticipated revenue from new taxes.
The President inaccurately labels this a war tax. This is not a
war tax because the need for the tax can be eliminated if sufficient
domestic spending items and non-Vietnam defense items are cut and others
deferred.
As for the proposals which would freeze the automobile and telephone
excises at existing levels and speed up collection of corporate income taxes,
these will have to be considered in the light of their impact on the
industries involved and the economy generally. It must be remembered that
the auto industry is the bellwether of the economy and has only recently
climbed out of the slump into which it was plunged by mismanagement of the
economy by the Johnson Administration.
######
office Capy
-- FOR IMMEDIATE RELEASE --
August 3, 1967
STATEMENT BY REP. GERALD R. FORD (R.-MICH.), HOUSE MINORITY LEADER
When Mr. Johnson talks of a $23.6 billion deficit without his
10 percent income tax surcharge, he is talking about continued federal
spending at present and projected levels set by his Administration.
For this and other reasons, I continue to state emphatically
that the President has not made a case for an income tax increase.
I will not concede that the present level of Federal spending
cannot be cut back sufficiently to avoid a tax increase.
The way to avoid the President's 10 percent surcharge is to make
expenditure reductions equal to the anticipated revenue from new taxes.
The President inaccurately labels this a war tax. This is not a
war tax because the need for the tax can be eliminated if sufficient
domestic spending items and non-Vietnam defense items are cut and others
deferred.
As for the proposals which would freeze the automobile and telephone
excises at existing levels and speed up collection of corporate income taxes,
these will have to be considered in the light of their impact on the
industries involved and the economy generally. It must be remembered that
the auto industry is the bellwether of the economy and has only recently
climbed out of the slump into which it was plunged by mismanagement of the
economy by the Johnson Administration.
######
CONGRESSMAN
NEWS
GERALD R. FORD
HOUSE REPUBLICAN LEADER
RELEASE
--FOR IMMEDIATE RELEASE--
October 6, 1967
STATEMENT OF REP. GERALD R. FORD, R-MICH., HOUSE MINORITY LEADER
There is great rejoicing among Republicans, as there is in Heaven, over one
sinner that repenteth.
I can only commend and applaud, therefore, President Johnson's confession
that "all taxes are burdensome, but the cruelest tax of all is the inflation tax."
Mr. Johnson certainly has seen a great light since that day (June 30) when
he ventured to the grassroots to try out his 1966 campaign defenses, and told
an audience in Des Moines:
"On the inflation front, if you are distraught, if you are worried about
high prices, if you have a stomach ulcer because of high wages, if you are
concerned about hogs bringing too much, calves bringing too much, or wages
getting too high, and you are really worked up about inflation, it may be that
you ought to vote Republican."
Well, last November the American people were really worked up about inflation,
and they took the President at his word - they voted Republican and sent us a
net reinforcement of 47 anti-inflation Republicans in the House of Representatives.
With their help, we have been able in this Congress to serve notice on the
President that the American people won't accept his political formula of guns
and butter, more war and more welfare, higher taxes and higher inflation.
"When these folks start talking to you about inflation," President Johnson
defiantly declared 15 months ago, "you tell them that is something you only
have to worry about in Democratic Administrations."
He was right then and he is right now when he calls inflation "the cruelest
tax of all." But he is wrong to blame all inflation on the "inaction" of this
Democratic Congress, just as he was wrong last year to blame it all on Democratic
Administrations. We had serious inflation then and we have it worse now. The fact
is it is the fault of spendthrift Democrati Administrations and spendthrift
Democratic Congresses. The American people may have to wait until November 1968 to
correct this situation, but in the meantime Republicans in the Congress accept
the President's new attitude toward the evils of inflation with gladness.
Republicans will continue to do all we can to check inflation and effect wartime
economies.
###
CONGRESSMAN
NEWS
GERALD R. FORD
HOUSE REPUBLICAN LEADER
RELEASE
--FOR IMMEDIATE RELEASE--
October 6, 1967
STATEMENT OF REP. GERALD R. FORD, R-MICH., HOUSE MINORITY LEADER
There is great rejoicing among Republicans, as there is in Heaven, over one
sinner that repenteth.
I can only commend and applaud, therefore, President Johnson's confession
that "all taxes are burdensome, but the cruelest tax of all is the inflation tax."
Mr. Johnson certainly has seen a great light since that day (June 30) when
he ventured to the grassroots to try out his 1966 campaign defenses, and told
an audience in Des Moines:
"On the inflation front, if you are distraught, if you are worried about
high prices, if you have a stomach ulcer because of high wages, if you are
concerned about hogs bringing too much, calves bringing too much, or wages
getting too high, and you are really worked up about inflation, it may be that
you ought to vote Republican."
Well, last November the American people were really worked up about inflation,
and they took the President at his word -- they voted Republican and sent us a
net reinforcement of 47 anti-inflation Republicans in the House of Representatives.
With their help, we have been able in this Congress to serve notice on the
President that the American people won't accept his political formula of guns
and butter, more war and more welfare, higher taxes and higher inflation.
"When these folks start talking to you about inflation," President Johnson
defiantly declared 15 months ago, "you tell them that is something you only
have to worry about in Democratic Administrations."
He was right then and he is right now when he calls inflation "the cruelest
tax of all." But he is wrong to blame all inflation on the "inaction" of this
Democratic Congress, just as he was wrong last year to blame it all on Democratic
Administrations. We had serious inflation then and we have it worse now. The fact
is it is the fault of spendthrift Democratic Administrations and spendthrift
Democratic Congresses. The American people may have to wait until November 1968 to
correct this situation, but in the meantime Republicans in the Congress accept
the President's new attitude toward the evils of inflation with gladness.
Republicans will continue to do all we can to check inflation and effect wartime
economies.
###
18 October 1967
IIIIIII
U. S. HOUSE
OF REPRESENTATIVES
REPUBLICAN POLICY COMMITTEE
REP. JOHN I. RHODES, (R.-ARIZ.) CHAIRMAN
140 CANNON HOUSE OFFICE BUILDING
TELEPHONE 225-6168
10
HOUSE REPUBLICAN POLICY COMMITTEE CALLS FOR AN IMMEDIATE CUT IN FEDERAL SPENDING
The House Republican Policy Committee supports a reduction of at least
$5 billion in governmental expenditures. Immediate action must be taken to reduce
the anticipated administrative budget expenditures for fiscal year 1968 from
$136,500,000,000 to $131,500,000,000. The President's adamant refusal to recommend
or to institute meaningful cuts in spending has made it imperative that Congress
impose a ceiling on expenditures. The disaster laden cycle of tax and spend,
inflation and ballooning deficits must be broken.
In fiscal year 1960 the nondefense spending by the federal government was
$48.6 billion. The estimated nondefense spending for fiscal year 1968 is $95.6
billion. This is an increase of 9%. In the five year period of the Johnson-
Humphrey Administration, the federal government has spent $60.487 billion more than
it has taken in. The interest alone on this deficit will cost the American taxpayer
$2.8 billion a year for every year it remains unpaid.
The second and third installments on the grandiose Great Society program
are now due. In 1965 and again in 1966, when the Republicans were outnumbered two
to one, President Johnson and his rubber stamp Democratic majority in Congress
hastily enacted a flood of new and extremely costly programs. This was at a time
when the cost of the Vietnam War was continuing to escalate and it was completely
foreseeable that it would soon reach its present rate of $2 billion a month. The
combination of Great Society spending and increased defense expenditures has resulted
in an inflationary spiral that has now reached an annual rate of 4.4%. Moreover, the
cost of living has risen 12.6% since the Democrats took office in January of 1961.
(over)
Since 1961 the Democratic Administrations have embraced the philosophy
of unlimited government spending and budget deficits. Despite repeated and ever
more urgent danger signals, the Johnson-Humphrey Administration has refused to put
its fiscal house in order. It has consistently underestimated the cost of the War
in Vietnam and the size of the budget deficit.
In January 1966, the Johnson-Humphrey Administration submitted a $112.8
billion expenditure estimate that proposed defense expenditures of $60.5 billion.
This was a totally unrealistic figure in view of the massive federal spending.
However, the Administration continued to adhere to its original estimate. In fact,
on September 8, 1966, the President not only reaffirmed the earlier estimate but
assured the American people that total expenditures would be cut back by at least
$3 billion. It was not until after the November elections that the American people
finally learned the truth. In January 1967, the Administration disclosed that fiscal
1967 expenditures would amount to $126.7 billion and not the $112.8 billion previously
forecast.
Just last January the Johnson-Humphrey Administration forecast a deficit
of $8.7 billion for fiscal 1968. In June this figure was completely discredited when
the Administration was forced to obtain from Congress a borrowing authority that
would accommodate a deficit of $29 billion. However, it was not until August 3, 1967
that the Administration finally acknowledged the precarious state of the economy. On
that date, the President forwarded a message to Congress wherein he urged the immediate
enactment of a 10% surtax. In this message, it was stated that unless expenditures
were tightly controlled and the tax increase imposed, the deficit for 1968 could be
more than $28 billion.
The Republican Members of Congress have consistently called for a reduction
in governmental expenditures and the immediate establishment of spending priorities.
In March of this year, the House Republican Policy Committee urged the enactment of
a resolution that would return the Budget to the President and request that he
(more)
-2-
indicate the places and amounts where he believes substantial reductions may be made.
During the 85th Congress, President Eisenhower responded to a similar resolution by
recommending reductions of $1.342 billion in a Budget of $73.3 billion. The
Democratic-controlled Congress has refused to grant this resolution any consideration
whatsoever.
As the economic indicators have become more and more alarming, the Republi-
can call for economy in government and a reduction in expenditures has been echoed
and reaffirmed in almost every quarter.
The Joint Economic Committee has called for a reduction or deferral of low
priority and nonessential spending. This would, according to the Committee, reduce
the anticipated deficit and the government's demand on the financial markets and
leave more funds to private borrowers and would lower interest costs.
Almost without exception, those testifying before the House Ways and Means
Committee regarding the President's request for a 10% surtax stated that governmental
expenditures must be reduced. It also was noted that a reduction in expenditures has
a far greater dampening effect on the inflationary fires than an increase in taxes.
The distinguished Chairman of the House Ways and Means Committee, Repre-
sentative Wilbur Mills (D-Ark.) stated in an October 9, 1967 U. S. News & World
Report interview:
"I think the first order of business, even though action on Appro-
priations bills hasn't been completed, is to relay to the Government
departments instructions that they must reduce spending by a fixed
amount.
Now, I would feel much better about it if we could have some advice
from downtown-from the Budget Bureau and the White House-with respect
to where each individual program might be trimmed.
The executive branch, in my opinion, has a lot better idea of where
there may be excesses in the budget-excesses over what is really
needed, or what somebody thinks is needed-than does Congress. If
any of these excesses can be eliminated, we should be told."
(over)
-3-
Even President Johnson has joined those who are concerned by the present
inflation. In a recent statement he acknowledged that:
"All taxes are burdensome but the cruelest tax of all is the inflation
tax.
Most prophetically it was just fifteen months ago that President Johnson also stated:
"When these folks start talking to you about inflation, you tell
them that is something you only have to worry about in Democratic
Administrations."
Real expenditure control must be achieved by examining and making basic
changes in the mushrooming Great Society programs. To date, the Johnson-Humphrey
Administration has refused to consider this approach. It demands its tax increase
in return for dubious promises of future frugality even though it is a fact that
whatever funds are made available to this Administration are always spent. According
to the October 15, 1967 edition of the Washington Sunday Star, the President opposes
the drive to force him to cut spending and is "concentrating now on escaping blame
for the distress he expects to afflict the economy because Congress refuses to raise
taxes."
One of the underlying reasons that this Congress is unwilling to grant a
tax increase is the well founded doubt that the additional revenue would be used
to reduce the deficit. If the President is really sincere about wanting a tax
increase, he must take the first step toward reestablishing his fiscal credibility.
He must at least cooperate in making a significant cut in the expenditure level of
this government.
There must be restraint in federal spending and an immediate implementation
of expenditure priorities if we are to avoid a runaway economy that may lead to
governmental control of wages, prices and credit, as well as further increases in
taxes. This can be achieved through the Republican proposed limitation on govern-
mental expenditures. We urge its adoption.
-4-
Congressional Record
United States
of America
PROCEEDINGS AND DEBATES OF THE 90th CONGRESS, FIRST SESSION
Vol. 113
WASHINGTON, THURSDAY, OCTOBER 19, 1967
No. 168
House of Representatives
"RESOUNDING VICTORY FOR THE TAXPAYERS"
Achieved through the Republican-proposed Limitation on Expenditures
Mr. BOW. Mr. Speaker, this summary
civilian payroll expenses to 95 percent of
is second ranking Republican on the Ap-
of the economy debate of the past 4
the budget estimate, by limiting research
propriations Committee, cut participa-
weeks might well be called an "open let-
to 90 percent of the budget estimate, and
tion certificate sales by nearly $2.5 bil-
ter to taxpayers." Our work in the House
by requiring that agencies absorb all of
lion.
during that period has given American
the cost of the civilian pay increase.
The Bow limitation on the Whitten
taxpayers the first real reason to hope
In this action the majority embraced
amendment would hold spending to
that spending can be checked and tax in-
the Bow expenditure limitation which
$131. 5 billion.
creases may be avoided and inflation can
had been offered on six of the regular
These are solid accomplishments, but
be brought under control.
appropriations bills. Bitterly opposed by
I should like to point out that savings
The action of the House yesterday, if
the majority last spring, it was adopted
of an additional $2 billion might have
sustained by the other body, must save
on only two of the bills. This Bow
been made if over 40 other individual
American taxpayers at least $5 billion.
amendment limited all the expenses of
Republican amendments to appropria-
It may save $10 billion. This saving is
an agency to 95 percent of its estimated
tions bills had been accepted by the
guaranteed by the Bow expenditure
expenditures and it would have saved
House.
limitation which says that the President
$778 million had it been accepted on
Members of the House can expect to
may not spend more than $131.5 billion
these bills.
be subjected to heavy pressure in the
in the fiscal year, except for essential and
Although the Mahon resolution was a
next days and weeks from all of those
unforeseen expenses of the war in Viet-
great step forward, Republicans insisted
who have a special interest in Federal
nam. Inasmuch as he has estimated his
that it did not go far enough. I offered,
spending. The White House can be ex-
spending at $136.5 billion, we are assured
and the House accepted, the Bow ex-
pected to lead the attack on our economy
the $5-billion saving. And, since his agen-
penditure limitation of $131.5 billion.
drive. Taxpayers will be threatened with
cies were spending in July and August
The House then substituted the Whit-
reductions in Government services, towns
at an annual rate of $145 billion, we may
ten amendment, with the Bow limitation.
and cities will be threatened with cur-
be saving twice that amount.
The resulting bill provides that spending
tailment of various programs, and every
The first intimation that the House
may not exceed the level of the previous
effort will be made by the bureaucracy,
was ready to cut expenditures came Sep-
year except for the necessary military
with its vested interest in spending, to
tember 27 when we sent back to the Ap-
expenses in Vietnam, the Post Office and
bring pressure on us to restore spend-
propriations Committee its 30-day
Internal Revenue services, veterans' and
ing cuts and reverse our position. I hope
"spending as usual" resolution. We did
social security payments, and a few other
Members will stand firm, for the vast
so on a rollcall vote of 202 to 181, The
items.
majority of Americans, struggling under
Bow expenditure limitation had been
The final rollcall vote was 253 for and
the heaviest burden of taxation in his-
ruled out of order but the debate that
143 against.
tory and fighting the most vicious infla-
day was centered on that amendment
This is a resounding victory for the
tionary spiral in many, many years, are
and many people, including the Asso-
taxpayers.
supporting us and they need our help.
ciated Press, interpreted the action of
It is a gratifying vindication for the
the House as a "mandate" to the Ap-
Republican leaders who have been urg-
Mr. RHODES of Arizona. Mr. Chair-
propriations Committee to cut spending.
ing economy since the first days of this
man, the House Republican policy com-
session.
mittee supports a reduction of at least $5
Then followed the debate of October 3/
In the early days of the session, Re-
billion in governmental expenditures.
when, once again, the Bow amendment
publicans had little support for these
Immmediate action must be taken to re-
was ruled out of order. But, progress had
efforts and our victories were few and
duce the anticipated administrative
been made. The chairman of the Appro-
far between.
budget expenditures for fiscal year 1968
priations Committee, the gentleman from
Yesterday that situation was changed,
from $136,500,000,000 to $131,500,000,000.
Texas [Mr. MAHON] told the House that
and the welcome support of many Mem-
The President's adamant refusal to rec-
our committee would make every effort
bers from the majority party gave us the
ommend or to institute meaningful cuts
to find means of cutting back appropria-
margin of victory that we have lacked
in spending has made it imperative that
tions already recommended. The House
throughout the year.
Congress impose a ceiling on expendi-
voted to allow until October 10, for that
Summing up our activities to date, we
tures. The disaster laden cycle of tax and
effort. The Senate extended the date
have cut the appropriations bills con-
spend, inflation, and ballooning deficits
until October 23. Yesterday's debate was
sidered in the House by about $4 billion.
must be broken.
occasioned by that approaching deadline.
We may be able to raise that figure to
In fiscal year 1960 the nondefense
The resolution presented yesterday by
$6 billion before the session ends. Since
spending by the Federal Government
the Democrat majority illustrated a re-
not all of the money authorized in these
was $48.6 billion. The estimated nonde-
markable and commendable change of
bills is to be spent this year, the savings
fense spending for fiscal year 1968 is $95.6
direction, as a result of the previous de-
cannot be estimated precisely. They
billion. This is an increase of 97 percent.
bates. It would have saved at least $1.5
should reach $3 billion to $4 billion.
In the 5-year period of the Johnson-
billion by placing a 30-day moratorium
Two amendments by the gentleman
Humphrey administration, the Federal
on new hiring and contracts, by limiting
from North Carolina [Mr. JONAS], who
Government has spent $60.487 billion
(over)
more than it has taken in. The interest
places and amounts where he believes
force him to cut spending and is "con-
alone on this deficit will cost the Ameri-
substantial reductions may be made.
centrating now on escaping blame for
can taxpayer $2.8 billion a year for every
During the 85th Congress, President Ei-
the distress he expects to afflict the econ-
year it remains unpaid.
senhower responded to a similar resolu-
omy because Congress refuses to raise
The second and third installments on
tion by recommending reductions of
taxes."
the grandiose Great Society program are
$1.342 billion in a budget of $73.3 billion.
One of the underlying reasons that
now due. In 1965 and again in 1966, when
The Democratic-controlled Congress has
this Congress is unwilling to grant a tax
the Republicans were outnumbered two
refused to grant this resolution any con-
increase is the well founded doubt that
to one, President Johnson and his rub-
sideration whatsoever.
the additional revenue would be used to
berstamp Democratic majority in Con-
As the economic indicators have be-
reduce the deficit. If the President is
gress hastily enacted a flood of new and
come more and more alarming, the Re-
really sincere about wanting a tax in-
extremely costly programs. This was at
publican call for economy in Govern-
crease, he must take the first step toward
ment and a reduction in expenditures
a time when the cost of the Vietnam war
reestablishing his fiscal credibility. He
was continuing to escalate and it was
has been echoed and reaffirmed in al-
must at least cooperate in making a sig-
completely foreseeable that it would soon
most every quarter.
reach its present rate of $2 billion a
The Joint Economic Committee has
nificant cut in the expenditure level of
month. The combination of Great So-
called for a reduction or deferral of low
this Government.
priority and nonessential spending. This
There must be restraint in Federal
ciety spending and increased defense ex-
penditures has resulted in an inflationary
would, according to the committee, re-
spending and an immediate implementa-
duce the anticipated deficit and the Gov-
tion of expenditure priorities if we are to
spiral that has now reached an annual
ernment's demand on the financial mar-
avoid a runaway economy that may lead
rate of 4.4 percent. Moreover, the cost of
living has risen 12.6 percent since the
kets and leave more funds to private
to governmental control of wages, prices
Democrats took office in January of 1961.
borrowers and would lower interest
and credit, as well as further increases
costs.
in taxes. This can be achieved through
Since 1961 the Democratic administra-
Almost without exception, those testi-
the Republican proposed limitation on
tions have embraced the philosophy of
fying before the House Ways and Means
governmental expenditures. We urge its
unlimited Government spending and
budget deficits. Despite repeated and
Committee regarding the President's re-
adoption.
ever more urgent danger signals, the
quest for a 10-percent surtax stated that
Johnson-Humphrey administration has
governmental expenditures must be re-
refused to put its fiscal house in order.
duced. It also was noted that a reduc-
It has consistently underestimated the
tion in expenditures has a far greater
cost of the war in Vietnam and the size
dampening effect on the inflationary fires
of the budget deficit.
than an increase in taxes.
In January 1966, the Johnson-Hum-
The distinguished chairman of the
phrey administration submitted a $112.8
House Ways and Means Committee, Rep-
billion expenditure estimate that pro-
resentative WILBUR MILLS, Democrat,
posed defense expenditures of $60.5 bil-
of Arkansas, stated in an October 9, 1967,
lion. This was a totally unrealistic figure
U.S. News & World Report interview:
in view of the massive Federal spending.
I think the first order of business; even
However, the administration continued
though action on Appropriations bills hasn't
to adhere to its original estimate. In fact,
been completed, is to relay to the Govern-
ment departments instructions that they
on September 8, 1966, the President not
must reduce spending by a fixed amount.
only reaffirmed the earlier estimate but
Now, I would feel much better about it
assured the American people that total
if we could have some advice from down-
expenditures would be cut back by at
town-from the Budget Bureau and the
least $3 billion. It was not until after the
White House-with respect to where each
November elections that the American
individual program might be trimmed.
people finally learned the truth. In Jan-
The executive branch, in my opinion, has
uary 1967, the administration disclosed
a lot better idea of where there may be ex-
that fiscal 1967 expenditures would
cesses in the budget-excesses over what is
really needed, or what somebody thinks is
amount to $126.7 billion and not the
needed-than does Congress. If any of these
$112.8 billion previously forecast.
excesses can be eliminated, we should be told.
Just last January the Johnson-Hum-
phrey administration forecast a deficit
Even President Johnson has joined
of $8.7 billion for fiscal 1968. In June this
those who are concerned by the present
figure was completely discredited when
inflation. In a recent statement he
the administration was forced to obtain
acknowledged that:
from Congress a borrowing authority
All taxes are burdensome but the cruelest
that would accommodate a deficit of $29
tax of all is the inflation tax.
billion. However, it was not until August
Most prophetically it was just 15
3, 1967, that the administration finally
months ago that President Johnson also
acknowledged the precarious state of the
stated:
economy. On that date, the President
When these folks start talking to you about
forwarded a message to Congress where-
inflation, you tell them that is something
in he urged the immediate enactment of
you only have to worry about in Democratic
a 10-percent surtax. In this message, it
Administrations.
was stated that unless expenditures were
Real expenditure control must be
tightly controlled and the tax increase
achieved by examining and making basic
imposed, the deficit for 1968 could be
changes in the mushrooming Great So-
more than $28 billion.
ciety programs. To date, the Johnson-
The Republican Members of Congress
Humphrey administration has refused to
have consistently called for a reduction
consider this approach. It demands its
in governmental expenditures and the
tax increase in return for dubious
immediate establishment of spending
promises of future frugality even though
priorities. In March of this year, the
it is a fact that whatever funds àre made
House Republican policy committee
available to this administration are al-
urged the enactment of a resolution that
ways spent. According to the October 15,
(Not Printed at Government Expense)
would return the budget to the Presi-
1967, edition of the Washington Sunday
dent and request that he indicate the
Star, the President opposes the drive to
Congressional Record
United States
of America
PROCEEDINGS AND DEBATES OF THE
90ᵗʰ
CONGRESS, FIRST SESSION
Vol. 113
WASHINGTON, THURSDAY, OCTOBER 19, 1967
No. 168
House of Representatives
"RESOUNDING VICTORY FOR THE TAXPAYERS"
Achieved through the Republican-proposed Limitation on Expenditures
Mr. BOW. Mr. Speaker, this summary
civilian payroll expenses to 95 percent of
is second ranking Republican on the Ap-
of the economy debate of the past 4
the budget estimate, by limiting research
propriations Committee, cut participa-
weeks might well be called an "open let-
to 90 percent of the budget estimate, and
tion certificate sales by nearly $2.5 bil-
ter to taxpayers." Our work in the House
by requiring that agencies absorb all of
lion.
during that period has given American
the cost of the civilian pay increase.
The Bow limitation on the Whitten
taxpayers the first real reason to hope
In this action the majority embraced
amendment would hold spending to
that spending can be checked and tax in-
the Bow expenditure limitation which
$131.5 billion.
creases may be avoided and inflation can
had been offered on six of the regular
These are solid accomplishments, but
be brought under control.
appropriations bills. Bitterly opposed by
I should like to point out that savings
The action of the House yesterday, if
the majority last spring, it was adopted
of an additional $2 billion might have
sustained by the other body, must save
on only two of the bills. This Bow
been made if over 40 other individual
American taxpayers at least $5 billion.
amendment limited all the expenses of
Republican amendments to appropria-
It may save $10 billion. This saving is
an agency to 95 percent of its estimated
tions bills had been accepted by the
guaranteed by the Bow expenditure
expenditures and it would have saved
House.
limitation which says that the President
$778 million had it been accepted on
Members of the House can expect to
may not spend more than $131.5 billion
these bills.
be subjected to heavy pressure in the
in the fiscal year, except for essential and
Although the Mahon resolution was a
next days and weeks from all of those
unforeseen expenses of the war in Viet-
great step forward, Republicans insisted
who have a special interest in Federal
nam. Inasmuch as he has estimated his
that it did not go far enough. I offered,
spending. The White House can be ex-
spending at $136.5 billion, we are assured
and the House accepted, the Bow ex-
pected to lead the attack on our economy
the $5-billion saving. And, since his agen-
penditure limitation of $131.5 billion.
drive. Taxpayers will be threatened with
cies were spending in July and August
The House then substituted the Whit-
reductions in Government services, towns
at an annual rate of $145 billion, we may
ten amendment, with the Bow limitation.
and cities will be threatened with cur-
be saving twice that amount.
The resulting bill provides that spending
tailment of various programs, and every
The first intimation that the House
may not exceed the level of the previous
effort will be made by the bureaucracy,
was ready to cut expenditures came Sep-
year except for the necessary military
with its vested interest in spending, to
tember 27 when we sent back to the Ap-
expenses in Vietnam, the Post Office and
bring pressure on us to restore spend-
propriations Committee its 30-day
Internal Revenue services, veterans' and
ing cuts and reverse our position. I hope
"spending as usual" resolution. We did
social security payments, and a few other
Members will stand firm, for the vast
so on a rollcall vote of 202 to 181. The
items.
majority of Americans, struggling under
Bow expenditure limitation had been
The final rollcall vote was 253 for and
the heaviest burden of taxation in his-
ruled out of order, but the debate that
143 against.
tory and fighting the most vicious infla-
day was centered on that amendment
This is a resounding victory for the
tionary spiral in many, many years, are
and many people, including the Asso-
taxpayers.
supporting us and they need our help.
ciated Press, interpreted the action of
It is a gratifying vindication for the
the House as a "mandate" to the Ap-
Republican leaders who have been urg-
Mr. RHODES of Arizona. Mr. Chair-
propriations Committee to cut spending.
ing economy since the first days of this
man, the House Republican policy com-
session.
mittee supports a reduction of at least $5
Then followed the debate of October 3
In the early days of the session, Re-
billion in governmental expenditures.
when, once again, the Bow amendment
publicans had little support for these
Immmediate action must be taken to re-
was ruled out of order. But, progress had
efforts and our victories were few and
duce the anticipated administrative
been made. The chairman of the Appro-
far between.
budget expenditures for fiscal year 1968
priations Committee, the gentleman from
Yesterday that situation was changed,
from $136,500,000,000 to $131,500,000,000.
Texas [Mr. MAHON] told the House that
and the welcome support of many Mem-
The President's adamant refusal to rec-
our committee would make every effort
bers from the majority party gave us the
ommend or to institute meaningful cuts
to find means of cutting back appropria-
margin of victory that we have lacked
in spending has made it imperative that
tions already recommended. The House
throughout the year.
Congress impose a ceiling on expendi-
voted to allow until October 10, for that
Summing up our activities to date, we
tures. The disaster laden cycle of tax and
effort. The Senate extended the date
have cut the appropriations bills con-
spend, inflation, and ballooning deficits
until October 23. Yesterday's debate was
sidered in the House by about $4 billion.
must be broken.
occasioned by that approaching deadline.
We may be able to raise that figure to
In fiscal year 1960 the nondefense
The resolution presented yesterday by
$6 billion before the session ends. Since
spending by the Federal Government
the Democrat majority illustrated a re-
not all of the money authorized in these
was $48.6 billion. The estimated nonde-
markable and commendable change of
bills is to be spent this year, the savings
fense spending for fiscal year 1968 is $95.6
direction, as a result of the previous de-
cannot be estimated precisely. They
billion. This is an increase of 97 percent.
bates. It would have saved at least $1.5
should reach $3 billion to $4 billion.
In the 5-year period of the Johnson-
billion by placing a 30-day moratorium
Two amendments by the gentleman
Humphrey administration, the Federal
on new hiring and contracts, by limiting
from North Carolina [Mr. JONAS], who
Government has spent $60.487 billion
(over)
more than it has taken in. The interest
places and amounts where he believes
force him to cut spending and is "con-
alone on this deficit will cost the Ameri-
substantial reductions may be made.
centrating now on escaping blame for
can taxpayer $2.8 billion a year for every
During the 85th Congress, President Ei-
the distress he expects to afflict the econ-
year it remains unpaid.
senhower responded to a similar resolu-
omy because Congress refuses to raise
The second and third installments on
tion by recommending reductions of
taxes."
the grandiose Great Society program are
$1.342 billion in a budget of $73.3 billion.
One of the underlying reasons that
now due. In 1965 and again in 1966, when
The Democratic-controlled Congress has
this Congress is unwilling to grant a tax
the Republicans were outnumbered two
refused to grant this resolution any con-
increase is the well founded doubt that
to one, President Johnson and his rub-
sideration whatsoever.
the additional revenue would be used to
berstamp Democratic majority in Con-
As the economic indicators have be-
reduce the deficit. If the President is
gress hastily enacted a flood of new and
come more and more alarming, the Re-
really sincere about wanting a tax in-
extremely costly programs. This was at
publican call for economy in Govern-
crease, he must take the first step toward
ment and a reduction in expenditures
a time when the cost of the Vietnam war
reestablishing his fiscal credibility. He
was continuing to escalate and it was
has been echoed and reaffirmed in al-
must at least cooperate in making a sig-
completely foreseeable that it would soon
most every quarter.
reach its present rate of $2 billion a
The Joint Economic Committee has
nificant cut in the expenditure level of
month. The combination of Great So-
called for a reduction or deferral of low
this Government.
priority and nonessential spending. This
There must be restraint in Federal
ciety spending and increased defense ex-
penditures has resulted in an inflationary
would, according to the committee, re-
spending and an immediate implementa-
duce the anticipated deficit and the Gov-
tion of expenditure priorities if we are to
spiral that has now reached an annual
ernment's demand on the financial mar-
avoid a runaway economy that may lead
rate of 4.4 percent. Moreover, the cost of
living has risen 12.6 percent since the
kets and leave more funds to private
to governmental control of wages, prices
Democrats took office in January of 1961.
borrowers and would lower interest
and credit, as well as further increases
costs.
in taxes. This can be achieved through
Since 1961 the Democratic administra-
Almost without exception, those testi-
the Republican proposed limitation on
tions have embraced the philosophy of
fying before the House Ways and Means
governmental expenditures. We urge its
unlimited Government spending and
budget deficits. Despite repeated and
Committee regarding the President's re-
adoption.
ever more urgent danger signals, the
quest for a 10-percent surtax stated that
Johnson-Humphrey administration has
governmental expenditures must be re-
refused to put its fiscal house in order.
duced. It also was noted that a reduc-
It has consistently underestimated the
tion in expenditures has a far greater
cost of the war in Vietnam and the size
dampening effect on the inflationary fires
of the budget deficit.
than an increase in taxes.
In January 1966, the Johnson-Hum-
The distinguished chairman of the
phrey administration submitted a $112.8
House Ways and Means Committee, Rep-
billion expenditure estimate that pro-
resentative WILBUR MILLS, Democrat,
posed defense expenditures of $60.5 bil-
of Arkansas, stated in an October 9, 1967,
lion. This was a totally unrealistic figure
U.S. News & World Report interview:
in view of the massive Federal spending.
I think the first order of business; even
However, the administration continued
though action on Appropriations bills hasn't
to adhere to its original estimate. In fact,
been completed, is to relay to the Govern-
on September 8, 1966, the President not
ment departments instructions that they
must reduce spending by a fixed amount.
only reaffirmed the earlier estimate but
Now, I would feel much better about it
assured the American people that total
if we could have some advice from down-
expenditures would be cut back by at
town-from the Budget Bureau and the
least $3 billion. It was not until after the
White House-with respect to where each
November elections that the American
individual program might be trimmed.
people finally learned the truth. In Jan-
The executive branch, in my opinion, has
uary 1967, the administration disclosed
a lot better idea of where there may be ex-
that fiscal 1967 expenditures would
cesses in the budget-excesses over what is
really needed, or what somebody thinks is
amount to $126.7 billion and not the
needed-than does Congress. If any of these
$112.8 billion previously forecast.
excesses can be eliminated, we should be told.
Just last January the Johnson-Hum-
phrey administration forecast a deficit
Even President Johnson has joined
of $8.7 billion for fiscal 1968. In June this
those who are concerned by the present
figure was completely discredited when
inflation. In a recent statement he
the administration was forced to obtain
acknowledged that:
from Congress a borrowing authority
All taxes are burdensome but the cruelest
that would accommodate a deficit of $29
tax of all is the inflation tax.
billion. However, it was not until August
Most prophetically it was just 15
3, 1967, that the administration finally
months ago that President Johnson also
acknowledged the precarious state of the
stated:
economy. On that date, the President
When these folks start talking to you about
forwarded a message to Congress where-
inflation, you tell them that is something
in he urged the immediate enactment of
you only have to worry about in Democratic
a 10-percent surtax. In this message, it
Administrations.
was stated that unless expenditures were
Real expenditure control must be
tightly controlled and the tax increase
achieved by examining and making basic
imposed, the deficit for 1968 could be
changes in the mushrooming Great So-
more than $28 billion.
ciety programs. To date, the Johnson-
The Republican Members of Congress
Humphrey administration has refused to
have consistently called for a reduction
consider this approach. It demands its
in governmental expenditures and the
tax increase in return for dubious
immediate establishment of spending
promises of future frugality even though
priorities. In March of this year, the
it is a fact that whatever funds àre made
House Republican policy committee
available to this administration are al-
urged the enactment of a resolution that
ways spent. According to the October 15,
(Not Printed at Government Expense)
would return the budget to the Presi-
1967, edition of the Washington Sunday
dent and request that he indicate the
Star, the President opposes the drive to
It's YOUR TAX MONEY !$$$$
Is It Being Wasted?
$3.5 million to build housing for Rio de Janeiro's slum dwellers. Nobody wants the
NON-DEFENSE
houses; they're too deep in the boondocks. IT WAS YOUR MONEY!
SPENDING UP
97% SINCE 1960
Locomotives built for Thailand were the wrong gauge and couldn't run on Thai
railroad tracks. Cost: $1 million of YOUR MONEY!
FEDERAL PAYROLL
WAVE barracks built in Maryland to house WAVES who'd already been transferred
UP 276,000
to Florida. Cost: $1.5 million of YOUR MONEY!
IN 1966 ALONE
$45,000 of the taxpayer's money-YOUR MONEY-for a flagpole-about $500 a foot.
The Pentagon spent $33,398.95 for 130 knobs which had a retail value of $210.60.
LBJ's '68 DEFICIT
ESTIMATED AT
Thirty insulated couplings were purchased by the Pentagon for $2,025, compared to
OVER $25 BILLION
the retail price of $82.50.
What Causes Inflation?
Nine construction gears retailing at a total of
$30.87 actually cost the Pentagon $1,748.70.
"Inflation can be generated only by the Government.
Business firms, labor unions, or consumers with exces-
The Pentagon paid $511 for 20 small rods which
sive market power can do many objectionable things
normally retail for a total of $10.
that are contrary to the public interest; but one objec-
tionable thing that they cannot do is to cause inflation-
The total retail value of the knobs, small rods,
or, for that matter, prevent it."-
insulated couplings, and construction gears was
$333.97. Yet the Pentagon paid $37,683.65 OF
W. Allen Wallis, President
YOUR MONEY!
University of Rochester
27,000 TONS of free American food have been lost overseas since 1962. Estimated
COST OF LIVING
loss: $4.3 million of YOUR MONEY! That loss alone would consume the entire
federal income taxes of 3,859 families paying $1,114 each on $10,000 income for one
UP 8.3%
year. Those families would make up a city of about 10,000.
SINCE 1963
And in the face of this, the National Debt-$335.9 billion-has been increased 14
times since 1961. Since 1964, the U.S. has accrued more debt than in the entire
10-year Depression period of 1931-1941. INTEREST ALONE on the total National
debt is $14.2 billion per year; $38.9 million per day; $1.6 million per hour; $26,666
per minute; or $444 per second.
RESTORE
COMMON SENSE TO YOUR
FEDERAL SPENDING
AND TAXING PROGRAMS-VOTE REPUBLICAN!
Be sure you and your friends are registered to vote!
Prepared under the direction of the Republican
National Committee, 1625 Eye Street, N.W.
Washington, D. C. 20006,
It's YOUR TAX MONEY !$$$$
Is It Being Wasted?
$3.5 million to build housing for Rio de Janeiro's slum dwellers. Nobody wants the
NON-DEFENSE
houses; they're too deep in the boondocks. IT WAS YOUR MONEY!
SPENDING UP
97% SINCE 1960
Locomotives built for Thailand were the wrong gauge and couldn't run on Thai
railroad tracks. Cost: $1 million of YOUR MONEY!
FEDERAL PAYROLL
WAVE barracks built in Maryland to house WAVES who'd already been transferred
UP 276,000
to Florida. Cost: $1.5 million of YOUR MONEY!
IN 1966 ALONE
$45,000 of the taxpayer's money-YOUR MONEY for a flagpole-about $500 a foot.
The Pentagon spent $33,300.95 for 130 knobs which had a retail value of $210.60.
LBJ's '68 DEFICIT
ESTIMATED AT
Thirty insulated couplings were purchased by the Pentagon for $2,025, compared to
OVER $25 BILLION
the retail price of $82.50.
What Causes Inflation?
Nine construction gears retailing at a total of
$30.87 actually cost the Pentagon $1,748.70.
"Inflation can be generated only by the Government.
Business firms, labor unions, or consumers with exces-
The Pentagon paid $511 for 20 small rods which
sive market power can do many objectionable things
normally retail for a total of $10.
that are contrary to the public interest; but one objec-
tionable thing that they cannot do is to cause inflation-
The total retail value of the knobs, small rods,
or, for that matter, prevent it."-
insulated couplings, and construction gears was
$333.97. Yet the Pentagon paid $37,683.65 OF
W. Allen Wallis, President
YOUR MONEY!
University of Rochester
27,000 TONS of free American food have been lost overseas since 1962. Estimated
COST OF LIVING
loss: $4.3 million of YOUR MONEY! That loss alone would consume the entire
federal income taxes of 3,859 families paying $1,114 each on $10,000 income for one
UP 8.3%
year. Those families would make up a city of about 10,000.
SINCE 1963
And in the face of this, the National Debt-$335.9 billion-has been increased 14
times since 1961. Since 1964, the U.S. has accrued more debt than in the entire
10-year Depression period of 1931-1941. INTEREST ALONE on the total National
debt is $14.2 billion per year; $38.9 million per day; $1.6 million per hour; $26,666
per minute; or $444 per second.
RESTORE
COMMON SENSE TO YOUR
FEDERAL SPENDING
AND TAXING PROGRAMS-VOTE REPUBLICAN!
Be sure you and your friends are registered to vote!
Prepared under the direction of the Republican
National Committee, 1625 Eye Street, N.W.
Washington, D. C. 20006,
CONGRESSMAN
NEWS
GERALD R. FORD
HOUSE REPUBLICAN LEADER
RELEASE
--FOR IMMEDIATE RELEASE--
November 21, 1967
Statement by Rep. Gerald R. Ford, R-Mich.
Federal spending reductions amounting to at least $4 billion this fiscal
year must and will be written into the income tax increase bill to be considered
by the House Ways and Means Committee.
This means that President Johnson finally has conceded House Republicans
were right in demanding a spending limitation with the force of law before
any action is taken on his 10 per cent income tax surcharge. Because of
Republican insistence the American people will be given this assurance of
$4 billion in spending reductions.
The fiscal crisis facing this Nation is deepening in the light of recent
developments--President Johnson's revised estimate that the fiscal 1968 deficit
could run as high as $35 billion without corrective action, the British decision
to devaluate the pound, and the Federal Reserve Board action raising the basic
U.S. interest rate.
The chickens are coming home to roost. The crisis now confronting us
could have been avoided had the President listened to Republican pleas for a
setting of spending priorities in 1965 and 1966 instead of plunging headlong
down the road toward a $9.7 billion fiscal 1967 deficit and a $35 billion fiscal
1968 red ink figure.
In meeting next Tuesday, the Ways and Means Committee should examine our
overall fiscal situation to see whether the dollar is as safe from the threat of
devaluation as President Johnson would have the American people believe. After
all, there are disturbing similarities between the British situation and our
own. The health of the economy and the impact a tax increase would have on it
should be the main focus of the committee hearings.
It should be pointed out that if President Johnson had agreed earlier to
accept a spending limitation, the tax bill could have received earlier con-
sideration. It now is questionable whether there is time enough left to act on
it in this session.
The Federal Reserve Board raised the basic interest rate to help keep short-
term money from flowing out of this country to England. But the action also will
dampen the American economy. This breather provides time for thoughtful
reconsideration of the President's proposed income tax increase.
#### FORD LIBRARY
CONGRESSMAN
NEWS
GERALD R. FORD
HOUSE REPUBLICAN LEADER
RELEASE
--FOR IMMEDIATE RELEASE--
November 21, 1967
Statement by Rep. Gerald R. Ford, R-Mich.
Federal spending reductions amounting to at least $4 billion this fiscal
year must and will be written into the income tax increase bill to be considered
by the House Ways and Means Committee.
This means that President Johnson finally has conceded House Republicans
were right in demanding a spending limitation with the force of law before
any action is taken on his 10 per cent income tax surcharge. Because of
Republican insistence the American people will be given this assurance of
$4 billion in spending reductions.
The fiscal crisis facing this Nation is deepening in the light of recent
developments--President Johnson's revised estimate that the fiscal 1968 deficit
could run as high as $35 billion without corrective action, the British decision
to devaluate the pound, and the Federal Reserve Board action raising the basic
U.S. interest rate.
The chickens are coming home to roost. The crisis now confronting us
could have been avoided had the President listened to Republican pleas for a
setting of spending priorities in 1965 and 1966 instead of plunging headlong
down the road toward a $9.7 billion fiscal 1967 deficit and a $35 billion fiscal
1968 red ink figure.
In meeting next Tuesday, the Ways and Means Committee should examine our
overall fiscal situation to see whether the dollar is as safe from the threat of
devaluation as President Johnson would have the American people believe. After
all, there are disturbing similarities between the British situation and our
own. The health of the economy and the impact a tax increase would have on it
should be the main focus of the committee hearings.
It should be pointed out that if President Johnson had agreed earlier to
accept a spending limitation, the tax bill could have received earlier con-
sideration. It now is questionable whether there is time enough left to act on
it in this session.
The Federal Reserve Board raised the basic interest rate to help keep short-
term money from flowing out of this country to England. But the action also will
dampen the American economy. This breather provides time for thoughtful
reconsideration of the President's proposed income tax increase.
####
FOR THE SENATE:
FOR THE HOUSE
OF REPRESENTATIVES:
Everett M. Dirksen
THE REPUBLICAN LEADERSHIP
of Illinois
Gerald R. Ford
OF THE CONGRESS
of Michigan
Thomas H. Kuchel
of California
Leslie C. Arends
of Illinois
Bourke B. Hickenlooper
of Iowa
Melvin R. Laird
Margaret Chase Smith
Press Release
of Wisconsin
of Maine
John J. Rhodes
of Arizona
George Murphy
of California
H. Allen Smith
of California
Milton R. Young
of North Dakota
Issued following a
Bob Wilson
Leadership Meeting
of California
Hugh Scott
of Pennsylvania
Charles E. Goodell
of New York
PRESIDING:
February 21, 1968
Richard H. Poff
of Virginia
The National Chairman
OfficeCapy Release on Delivery
William C. Cramer
Ray C. Bliss
of Florida
MR FORD:
Let there be no mistake about it! The House of Representatives will
not -- I repeat, not -- consider the tax surcharge proposal that has been
made by the Johnson-Humphrey Administration without an equal, or greater,
immediate reduction in non-essential Federal expenditures.
The overwhelming deficit with which we are faced, certain to be far
larger than the $8 billions estimated by the Administration, makes a sharp
and prompt and massive reduction in these non-essential expenditures
imperative. The American people will not stand for anything less!
In addition to the proposed tax surcharge, the Administration has
now presented its proposed tax on travel. On this, Senator Dirksen will
comment. I share his views completely.
The Johnson-Humphrey Administration's philosophy, practices and
policies seem to have a single theme -- tax and tax, spend and spend. We
think there is a far better solution to these now overwhelming economic
problems which have plagued us for so many months.
The President himself repeatedly places emphasis, with great pride,
on the spending record of his Administration. He claimed, most recently,
that in 1960 the Administration spent $3 billion for Government training
programs, that in 1964 this rose to $4 billion, that this year it will
be $12 billion.
In 1960, he boasts, Federal programs for the poor totaled only $9
billion, whereas in 1964, his first year as President, it rose to $12
billion and now totals $28 billion.
In 1960 he points out that Federal spending for health, education
and welfare totaled $19 billion, then in 1964 rose to $23 billion and
(con't)
Room S-124 U.S. Capitol-(202) 225-3700
Consultant to the Leadership-John B. Fisher
LIBRAR
Mr. Ford
- 2 -
this year will reach $47 billion.
If these massive expenditures had produced -- or were now producing --
real results for our people no one would question them. But, the fact
is, they have not and there is no indication whatever that they will.
In each of these areas Republicans have proposed alternatives --
with private enterprise directing them -- that would produce far better
results for far less money.
Tax and tax, spend and spend -- with no apparent interest in
competent management of these programs, many of which have proved
disastrous. Tax and tax, spend and spend -- with no evident concern about
the enormous squandering of the people's dollars which every day, more
and more, are strewn along this Administration's reckless course.
Therefore, Mr. President, our Question-of-the-Week:
Tax and Tax?
Spend and Spend?
MR. DIRKSEN
FEBRUARY 21, 1968
Let there be no mistake about it! The Senate and, I suspect, the
House, will not approve the travel tax proposal as presented by this
Administration.
That proposal, conceived in error and haste, contains so many weaknesses
and loopholes as to be both unacceptable and unworkable.
The road to utter confusion, like that to a better known place, is
often paved with good intentions. This appears painfully true of this
proposal.
In the first place, the alleged statistics on travel and travel expen-
ditures, on which the proposal is based, can be and have been, seriously
questioned. The President's own Industry-Government Special Task Force on
Travel report reveals, in the opinion of expert observers, a shocking
degree of error as to what those expenditures really are. Indeed, it
concludes that, in several important categories, the actual travel balance
results favorably for the United States.
Second, this travel tax is quite unlikely to achieve the purposes
intended. The well-to-do will not be affected, nor will students quietly
subsidized by their parents.
Those seriously affected by this proposal are -- as always -- the
middle-income taxpayers, to whom this travel tax would represent a minimum
of 15% increase in the cost of travel, a mountain of paper work and a
severe restriction on personal freedom.
Third, it is very doubtful that this travel taxation will reduce our
balance of payments deficit in any significant way. If the Administration
really wants to save millions, if not billions, of dollars now flowing over-
seas so liberally it can (1) reduce selectively our heavy troop-and-dependent
commitments in areas where not needed (2) cancel all unnecessary Government
travel, (3) practice old-fashioned American thrift at home by cutting back
by hundreds of millions of dollars the many non-essential Federal expenditures
that so plague and weaken us.
Finally, our present and rather pallid program for attracting foreign
tourists funds into this country could well be given a vigorous and imagina-
tive shot in the arm.
Taxing good and honest Americans in yet another painful and pointless
way, while restricting their freedom of movement at the very same time, is
not -- I repeat, not -- the way to bring our overseas deficit into proper
balance.
Therefore, Mr. President, our Question-of-the-Week:
Tax and Tax?
Spend and Spend?
Office copy
CONGRESSMAN
NEWS
GERALD R. FORD
HOUSE REPUBLICAN LEADER
RELEASE
--FOR IMMEDIATE RELEASE--
May 3, 1968
Hanoi-Paris Comment
I am delighted that initial Vietnam peace talks now can get under way.
Paris is a good site from the standpoint that conditions will be favorable for
complete press coverage. It is important that the American people be kept
informed as to the progress--or lack of it--made during the talks. I hope
that later we can move quickly from preliminary talks into genuine peace
negotiations.
***
Taxes and Spending
Republicans are dismayed that the President is apparently unwilling to
agree to responsible compromise on spending and taxes. His adamant attitude
is hardly the way to meet the fiscal crisis which confronts the Nation. There
must be a solution that will be joined in by members of both parties who realize
the gravity of the situation.
# # #
FORD LIBRARY 0798 to
Office Copy
CONGRESSMAN
NEWS
GERALD R. FORD
HOUSE REPUBLICAN LEADER
RELEASE
--FOR IMMEDIATE RELEASE--
May 6, 1968
Statement by Rep. Gerald R. Ford, R-Mich., House Republican Leader
The country must have action to deal with the financial mess created by the
Johnson-Humphrey Administration. The best way to meet the fiscal crisis we
face is to cut the President's proposed fiscal 1969 spending by $6 billion.
There will be a tax increase if the President exerts real leadership on
behalf of fiscal responsibility and agrees to a greater reduction in federal
spending than that approved by the House Appropriations and Ways and Means
Committees.
# # #
CONGRESSMAN
NEWS
GERALD R. FORD
HOUSE REPUBLICAN LEADER
RELEASE
--FOR IMMEDIATE RELEASE-
May 6, 1968
Statement by Rep. Gerald R. Ford, R-Mich., House Republican Leader
The country must have action to deal with the financial mess created by the
Johnson-Humphrey Administration. The best way to meet the fiscal crisis we
face is to cut the President's proposed fiscal 1969 spending by $6 billion.
There will be a tax increase if the President exerts real leadership on
behalf of fiscal responsibility and agrees to a greater reduction in federal
spending than that approved by the House Appropriations and Ways and Means
Committees.
# # #
20 June 1968
HIME
U. S. HOUSE
OF REPRESENTATIVES
REPUBLICAN POLICY COMMITTEE
REP. JOHN J. RHODES, (R.-ARIZ.) CHAIRMAN
1616 LONGWORTH HOUSE OFFICE BUILDING
TELEPHONE 225-6168
10
STATEMENT OF JOHN J. RHODES (R.- ARIZ.) CHAIRMAN, HOUSE REPUBLICAN POLICY COMMITTEE
ON THE REVENUE AND EXPENDITURE CONTROL ACT OF 1968 - H.R. 15414
In 1961 at the close of the Eisenhower Administration, this Country enjoyed
cost-price stability, a federal budget surplus and a strong international economic
position. The phrase "Sound as a Dollar" was a compliment and not a punch line for
a comedy routine.
Seven years of wild spending by the Kennedy-Johnson Administrations have pushed
this Country to the brink of fiscal chaos. Skyrocketing inflation, soaring interest
rates, mounting balance of payments devicits, a serious gold drain and a dollar in
jeopardy are ugly reminders of the failure of the Democratic Administrations' economic
and fiscal policies.
ROAD TO DISASTER
The projected Federal non-defense spending in fiscal 1969 is 129 percent greater
than the non-defense spending in fiscal 1960.
In fiscal 1965 the Administrative budget expenditures totaled $96.5 billion.
Defense costs were $50.2 billion. In fiscal 1969, administrative budget expenditures
are estimated to total $147.3 billion. Of this amount, $76.9 billion will be for
defense. On a percentage basis, both defense and nondefense spending have increased
by 52 percent from 1965 to 1969.
In 4 years, full-time permanent employment in the executive branch has increased
by 454,747 to a total of 2,687,500 civilian employees - an increase of more than 20
percent.
The budget deficit in fiscal 1968 will total about $25 billion for an astending
total of more than $65 billion in just eight years.
The balance of payments problem was permitted to deteriorate until in the
(over)
fourth quarter of 1967 the deficit was at a catastrophic annual rate of about $7.5
billion. In March of this year, our historic trade surplus vanished so that we actually
imported more goods than we exported.
In February 1961 our gold reserve stood at $17.5 billion. Today, it is below
$11 billion. Foreign dollar holdings now total more than $33 billion. The world's
confidence in the dollar has been shaken. A monetary collapse was narrowly averted
through the establishment of a makeshift two-price structure for gold and the planned
creation of a new form of international money.
Since 1959 the consumer price index has increased 18.2%. Prices are now advan-
cing at a rate of 4% a year and may go even higher.
Interest rates have reached their highest point since the Civil War and re-
cently the President warned of the possibility of 10 percent mortgage rates. So un-
precedented is the rate of increase, the standard books of tables for estimating mort-
gage payments must be rewritten. Three years ago a home could have been purchased with
a government backed mortgage of 5 1/4 percent. Today, the rate of interest is 6 3/4
percent. This means that a homeowner with a 20-year $20,000 loan will have to pay
$4,154.40 more in interest charges.
MYTHS, FALACIES AND FANTASIES
"So it is my personal view, the President's view, the the $186 billion
expenditure is a very lean budget." (President Johnson, May 3, 1968)
Under the proposed 1969 Budget, new obligational authority would increase by
nearly $18 billion compared to an increase of $7.4 billion in the current year. Total
budget authority would increase by over $15 billion compared to less than $4 billion in
the current year. Net obligations incurred would increase by $15.7 billion compared
to $10.8 billion in the current year. The budget also anticipates an increase in 1969
over 1968 of 45,600 full-time permanent employees in the Executive Branch.
Moreover, the overall expenditure estimates of the past three budgets have
been incredibly wide of the mark. In 1966, the first administration estimate was
a full $10.4 billion less than actual spending. In 1967, the spread between the
original and final estimate of spending was $10 billion. The original estimate for
-2-
(more)
the deficit in fiscal 1968 was $8 billion. Six months later, the President estimated
that the deficit may be $19.8 billion with a tax increase and $22.8 billion without.
"Actually, in my judgment, if Congress is left alone, it probably will
not reduce appropriations the $10 billion planned, will not rescind the
$8 billion and will not reduce expenditures more than $1.5 or $2 billion."
(President Johnson, May 3, 1968)
In the First Session of the 90th Congress, Republicans were instrumental in
saving the American taxpayers $4.1 billion in proposed spending and in cutting $5.8
billion from the President's new appropriation requests. A Republican expenditure
limitation of $131.5 billion was adopted by the House of Representatives. In a series
of 23 roll call votes on specific reductions, Republican Members of the House of Re-
presentatives averaged 85 percent support. (The Democrats averaged only 17 percent
support).
There is today available to the President $222.3 billion in unspent Authori-
zations. In the 1969 Budget, the President is asking for $201.7 billion in new
Obligational Authority. A $10 billion reduction in the new Obligational Authority
and an $8 billion reduction in the unspent Authorizations is a cut of only 4 1/4 per-
cent from the total of $424 billion which the President would have available to spend
if his spending requests were approved.
"The President can propose but the Congress must dispose. I proposed
a budget. If they don't like that budget, then stand up like men and
answer the roll call and cut what they think ought to be cut. Then
the President will exercise his responsibility of approving it or rejecting
it and vetoing it." (President Johnson, May 3, 1968)
The facts and essential information regarding reductions are best known to
the Bureau of the Budget and the various Executive Departments. A Resolution was
adopted by the House of Representatives in 1957 that returned the budget to President
Eisenhower and requested that he indicate the places and amounts where he believed
substantial reductions could be made. In response to this Resolution, President
Eisenhower recommended reductions of $1.342 billion in a budget of $73.3 billion.
"For nearly two years I have urged the Congress to pass a tax bill."
(President Johnson - May 31, 1968).
In January 1967 the Johnson-Humphrey Administration forecast a deficit of
$8.7 billion for fiscal 1968. In June of 1967 this figure was completely discredited
-3-
(over)
when the Administration was forced to obtain from Congress a borrowing authority that
would accommodate a deficit of $29 billion. It was not until August 3, 1967 that the
Administration finally acknowledged the precarious state of the economy. On that date,
the President forwarded a message to Congress wherein he urged the immediate enactment
of a 10% surtax. In this message, it was stated that unless expenditures were tightly
controlled and the tax increase imposed, the deficit for 1968 could be more than $28
billion.
RETURN TO THE FACTS
The calamitous consequences of unrestrained spending policies and the harsh
realities of the present economic situation cannot be buried or ignored any longer.
We are a Nation prodded by disaster.
William McChesney Martin, Chairman of the Federal Reserve System, has warned
that the United States is "in the midst of the worst financial crisis that we've had
since 1931.
Undersecretary of the Treasury Barr has testified that the United States now
anticipates a "back to back" deficit of $20 billion for the current fiscal year and
another $20 billion for the fiscal year beginning July 1 unless there is a tax in-
crease. This, Barr stated is "intolerable." "We can't do it unless we eliminate the
(veterans) life insurance and your (Government employee) pensions. There is going to
be a severe erosion in the purchasing power of the dollar and the value of these life
insurance policies there is going to be severe erosion of the international value
of the dollar."
From the outset of the present fiscal crisis, Republicans in Congress have
demanded the establishment of priorities, a reduction in spending and the revision and
reform of existing programs. Our insistence upon expenditure control has been shared
by the Republican Coordinating Committee and the overwhelming majority of fiscal
experts in this Country and abroad. The Republican Members of the Appropriations
Committee and the Ways and Means Committee led the fignt to make budget cuts, recisions
and limitations on budgetary authority an integral part of any tax increase. Largely
-4-
(more)
at the insistence of Republicans, the bill reported by the House-Senate Conferees
imposes a $6 billion cut in spending during fiscal 1969 rather than the $4 billion
reduction recommended by President Johnson.
On May 29, 1968 a motion by a Democratic Member of the House of Representatives
to insist on an expenditure reduction of $4 billion for fiscal year 1969 rather than
the $6 billion approved by the House-Senate Conferees was defeated by a vote of 137
to 259. Of the 137 who voted for the $4 billion figure, only six were Republicans.
TIME FOR ACTION
The facts are painfully clear. The financial structure of this Country has
been placed in jeopardy. We have been following the same road to disaster that the
British followed - a road that finally led to the devaluation of the pound, wage and
price controls and the crash abandonment of domestic programs and defense commitments
throughout the world.
Revenue and Expenditure Control Act of 1968, H.R. 15414, couples a 10 percent
income tax surcharge with an order to cut $6 billion in 1969 budget expenditures, $10
billion in new obligational authority and $8 billion in unspent authorizations. It
is the price that must be paid for the disastrous fiscal policies of the Johnson-
Humphrey Administration. It is the minimum that can be done if we are to move in the
direction of fiscal and economic stability.
-5-
20 June 1968
11111
U. S. HOUSE
REPUBLICAN POLICY
COMMITTEE
OF REPRESENTATIVES
REP. JOHN J. RHODES, (R.-ARIZ.) CHAIRMAN
140 CANNON HOUSE OFFICE BUILDING
TELEPHONE 225-6168
10
STATEMENT OF JOHN J. RHODES (R.- ARIZ.) CHAIRMAN, HOUSE REPUBLICAN POLICY COMMITTEE
ON THE REVENUE AND EXPENDITURE CONTROL ACT OF 1968 - H.R. 15414
In 1961 at the close of the Eisenhower Administration, this Country enjoyed
cost-price stability, a federal budget surplus and a strong international economic
position. The phrase "Sound as a Dollar" was a compliment and not a punch line for
a comedy routine.
Seven years of wild spending by the Kennedy-Johnson Administrations have pushed
this Country to the brink of fiscal chaos. Skyrocketing inflation, soaring interest
rates, mounting balance of payments devicits, a serious gold drain and a dollar in
jeopardy are ugly reminders of the failure of the Democratic Administrations' economic
and fiscal policies.
ROAD TO DISASTER
The projected Federal non-defense spending in fiscal 1969 is 129 percent greater
than the non-defense spending in fiscal 1960.
In fiscal 1965 the Administrative budget expenditures totaled $96.5 billion.
Defense costs were $50.2 billion. In fiscal 1969, administrative budget expenditures
are estimated to total $147.3 billion. Of this amount, $76.9 billion will be for
defense. On a percentage basis, both defense and nondefense spending have increased
by 52 percent from 1965 to 1969.
In 4 years, full-time permanent employment in the executive branch has increased
by 454,747 to a total of 2,687,500 civilian employees - an increase of more than 20
percent.
The budget deficit in fiscal 1968 will total about $25 billion for an astounding
total of more than $65 billion in just eight years.
The balance of payments problem was permitted to deteriorate until in the
(over)
fourth quarter of 1967 the deficit was at a catastrophic annual rate of about $7.5
billion. In March of this year, our historic trade surplus vanished so that we actually
imported more goods than we exported.
In February 1961 our gold reserve stood at $17.5 billion. Today, it is below
$11 billion. Foreign dollar holdings now total more than $33 billion. The world's
confidence in the dollar has been shaken. A monetary collapse was narrowly averted
through the establishment of a makeshift two-price structure for gold and the planned
creation of a new form of international money.
Since 1959 the consumer price index has increased 18.2%. Prices are now advan-
cing at a rate of 4% a year and may go even higher.
Interest rates have reached their highest point since the Civil War and re-
cently the President warned of the possibility of 10 percent mortgage rates. So un-
precedented is the rate of increase, the standard books of tables for estimating mort-
gage payments must be rewritten. Three years ago a home could have been purchased with
a government backed mortgage of 5 1/4 percent. Today, the rate of interest is 6 3/4
percent. This means that a homeowner with a 20-year $20,000 loan will have to pay
$4,154.40 more in interest charges.
MYTHS, FALACIES AND FANTASIES
"So it is my personal view, the President's view, the the $186 billion
expenditure is a very lean budget." (President Johnson, May 3, 1968)
Under the proposed 1969 Budget, new obligational authority would increase by
nearly $18 billion compared to an increase of $7.4 billion in the current year. Total
budget authority would increase by over $15 billion compared to less than $4 billion in
the current year. Net obligations incurred would increase by $15.7 billion compared
to $10.8 billion in the current year. The budget also anticipates an increase in 1969
over 1968 of 45,600 full-time permanent employees in the Executive Branch.
Moreover, the overall expenditure estimates of the past three budgets have
been incredibly wide of the mark. In 1966, the first administration estimate was
a full $10.4 billion less than actual spending. In 1967, the spread between the
original and final estimate of spending was $10 billion. The original estimate for
-2-
(more)
the deficit in fiscal 1968 was $8 billion. Six months later, the President estimated
that the deficit may be $19.8 billion with a tax increase and $22.8 billion without.
"Actually, in my judgment, if Congress is left alone, it probably will
not reduce appropriations the $10 billion planned, will not rescind the
$8 billion and will not reduce expenditures more than $1.5 or $2 billion."
(President Johnson, May 3, 1968)
In the First Session of the 90th Congress, Republicans were instrumental in
saving the American taxpayers $4.1 billion in proposed spending and in cutting $5.8
billion from the President's new appropriation requests. A Republican expenditure
limitation of $131.5 billion was adopted by the House of Representatives. In a series
of 23 roll call votes on specific reductions, Republican Members of the House of Re-
presentatives averaged 85 percent support. (The Democrats averaged only 17 percent
support).
There is today available to the President $222.3 billion in unspent Authori-
zations. In the 1969 Budget, the President is asking for $201.7 billion in new
Obligational Authority. A $10 billion reduction in the new Obligational Authority
and an $8 billion reduction in the unspent Authorizations is a cut of only 4 1/4 per-
cent from the total of $424 billion which the President would have available to spend
if his spending requests were approved.
"The President can propose but the Congress must dispose. I proposed
a budget. If they don't like that budget, then stand up like men and
answer the roll call and cut what they think ought to be cut. Then
the President will exercise his responsibility of approving it or rejecting
it and vetoing it." (President Johnson, May 3, 1968)
The facts and essential information regarding reductions are best known to
the Bureau of the Budget and the various Executive Departments. A Resolution was
adopted by the House of Representatives in 1957 that returned the budget to President
Eisenhower and requested that he indicate the places and amounts where he believed
substantial reductions could be made. In response to this Resolution, President
Eisenhower recommended reductions of $1.342 billion in a budget of $73.3 billion.
"For nearly two years I have urged the Congress to pass a tax bill."
(President Johnson - May 31, 1968).
In January 1967 the Johnson-Humphrey Administration forecast a deficit of
$8.7 billion for fiscal 1968. In June of 1967 this figure was completely discredited
-3-
(over)
hen the Administration was forced to obtain from Congress a borrowing authority that
ould accommodate a deficit of $29 billion. It was not until August 3, 1967 that the
Administration finally acknowledged the precarious state of the economy. On that date,
che President forwarded a message to Congress wherein he urged the immediate enactment
of a 10% surtax. In this message, it was stated that unless expenditures were tightly
controlled and the tax increase imposed, the deficit for 1968 could be more than $28
illion.
RETURN TO THE FACTS
The calamitous consequences of unrestrained spending policies and the harsh
realities of the present economic situation cannot be buried or ignored any longer.
Je are a Nation prodded by disaster.
William McChesney Martin, Chairman of the Federal Reserve System, has warned
that the United States is 'in the midst of the worst financial crisis that we've had
since 1931. "
Undersecretary of the Treasury Barr has testified that the United States now
anticipates a "back to back" deficit of $20 billion for the current fiscal year and
another $20 billion for the fiscal year beginning July 1 unless there is a tax in-
crease. This, Barr stated is "intolerable." "We can't do it unless we eliminate the
(veterans) life insurance and your (Government employee) pensions. There is going to
be a severe erosion in the purchasing power of the dollar and the value of these life
insurance policies there is going to be severe erosion of the international value
of the dollar."
From the outset of the present fiscal crisis, Republicans in Congress have
demanded the establishment of priorities, a reduction in spending and the revision and
reform of existing programs. Our insistence upon expenditure control has been shared
by the Republican Coordinating Committee and the overwhelming majority of fiscal
experts in this Country and abroad. The Republican Members of the Appropriations
Committee and the Ways and Means Committee led the fignt to make budget cuts, recisions
and limitations on budgetary authority an integral part of any tax increase. Largely
-4-
(more)
at the insistence of Republicans, the bill reported by the House-Senate Conferees
imposes a $6 billion cut in spending during fiscal 1969 rather than the $4 billion
reduction recommended by President Johnson.
On May 29, 1968 a motion by a Democratic Member of the House of Representatives
to insist on an expenditure reduction of $4 billion for fiscal year 1969 rather than
the $6 billion approved by the House-Senate Conferees was defeated by a vote of 137
to 259. Of the 137 who voted for the $4 billion figure, only six were Republicans.
TIME FOR ACTION
The facts are painfully clear. The financial structure of this Country has
been placed in jeopardy. We have been following the same road to disaster that the
British followed - a road that finally led to the devaluation of the pound, wage and
price controls and the crash abandonment of domestic programs and defense commitments
throughout the world.
Revenue and Expenditure Control Act of 1968, H.R. 15414, couples a 10 percent
income tax surcharge with an order to cut $6 billion in 1969 budget expenditures, $10
billion in new obligational authority and $8 billion in unspent authorizations. It
is the price that must be paid for the disastrous fiscal policies of the Johnson-
Humphrey Administration. It is the minimum that can be done if we are to move in the
direction of fiscal and economic stability.
-5-
Galleries: mail 11:50 a.m 1:30a.m. 3/26/M Capy
CONGRESSMAN
NEWS
GERALD R. FORD
HOUSE REPUBLICAN LEADER
RELEASE
--FOR RELEASE AT 12 NOON--
March 26, 1969
Statement by Rep. Gerald R. Ford, R-Mich., Republican Leader, U.S. House of Reps.
I feel certain the Congress will approve President Nixon's proposals to
meet the very serious problem of inflation head-on by extending the 10 per cent
surtax for a year and by achieving a substantial budget surplus in fiscal 1970.
I urge that the American people likewise enlist in the fight against
inflation by making those spending and saving decisions which will help bring
inflation under control.
This is not a problem that the President alone can solve. He needs the
help of the Congress and he needs the help of the people. Business, labor and
consumers -- all must make a commitment to the goal that President Nixon has set,
that of erasing the current inflationary psychology and halting the steady
erosion of the dollar's purchasing power. If America whips inflation now our
people can have a strong, growing economy with low unemployment in the future.
President Nixon has accepted the challenge. He has made the politically
unpopular decision to recommend extension of the surtax for a full year at the
existing level.
This took courage. Let's all of us now have the courage to back the
President in this painful course, for the longterm good of the Nation and
especially the poor and the pensioners.
###
CONGRESSMAN
NEWS
GERALD R. FORD
HOUSE REPUBLICAN LEADER
RELEASE
--FOR RELEASE AT 12 NOON--
March 26, 1969
Statement by Rep. Gerald R. Ford, R-Mich., Republican Leader, U.S. House of Reps.
I feel certain the Congress will approve President Nixon's proposals to
meet the very serious problem of inflation head-on by extending the 10 per cent
surtax for a year and by achieving a substantial budget surplus in fiscal 1970.
I urge that the American people likewise enlist in the fight against
inflation by making those spending and saving decisions which will help bring
inflation under control.
This is not a problem that the President alone can solve. He needs the
help of the Congress and he needs the help of the people. Business, labor and
consumers -- all must make a commitment to the goal that President Nixon has set,
that of erasing the current inflationary psychology and halting the steady
erosion of the dollar's purchasing power. If America whips inflation now our
people can have a strong, growing economy with low unemployment in the future.
President Nixon has accepted the challenge. He has made the politically
unpopular decision to recommend extension of the surtax for a full year at the
existing level.
This took courage. Let's all of us now have the courage to back the
President in this painful course, for the longterm good of the Nation and
especially the poor and the pensioners.
###
CONGRESSMAN
NEWS
GERALD R. FORD
HOUSE REPUBLICAN LEADER
RELEASE
--FOR RELEASE AT 12 NOON MONDAY--
April 21, 1969
A statement by Rep. Gerald R. Ford, R-Mich., Republican Leader, U.S. House of Reps.
President Nixon is proposing bold steps in response to urgent needs -- the
need to give the American people income tax relief at the earliest possible moment
consonant with sound policy and to eliminate the 7 per cent investment tax credit
as a fuel currently too rich for the American economic engine.
The President's proposal to extend the surtax at 10 per cent only until
Jan. 1, 1970, and then to reduce it to 5 per cent is clear recognition that income
taxes are too high. We all recognize that. We know the burden should be reduced
as soon as circumstances permit.
The proposal to reduce the surtax to 5 per cent as of Jan. 1, 1970, is --
as the President stated -- tied tightly to the proposal to eliminate the 7 per cent
investment tax credit.
The revenue loss from the surtax reduction must be largely offset by
revenue gain from elimination of the tax credit.
Elimination of the normal 7 per cent investment tax credit will serve
several purposes.
It will tend to slow down the overheated American economy and thus help
curb inflation.
It will bring an estimated $3 billion additional revenue into the U.S.
Treasury.
It will create conditions under which business and industry will have
greater incentive to use the special tax credits Mr. Nixon is proposing for
investment in poverty areas in fiscal 1971.
The need for elimination of the normal 7 per cent investment tax credit
became apparent when all of the other fiscal and monetary tightening actions taken
by the Nixon Administration and the Federal Reserve Board failed to slow down the
economy sufficiently to assure success in the fight against inflation.
The "big news" in the President's tax reform message should not obscure
other highly meaningful proposals -- elimination of income taxes for Americans at
poverty level, the imposition of what in effect is a minimum income tax for a
small group of high-income individuals, and the closing of a number of income tax
loopholes.
The President's proposals will move America toward a common sense and fair
tax structure.
# # #
Office Capy
FOR IMMEDIATE RELEASE
JULY 8, 1969
OFFICE OF THE WHITE HOUSE PRESS SECRETARY
THE WHITE HOUSE
PRESS CONFERENCE
OF
CONGRESSMAN GERALD R. FORD
THE ROOSEVELT ROOM
AT 9:55 A.M. EDT
MR. ZIEGLER: Senator Dirksen had to go to the
Hill, to the Senate Finance Committee, where Secretary
Kennedy is testifying this morning on the surtax bill,
so Congressman Ford will give you a report on the meeting.
CONGRESSMAN FORD: Thank you very much, Ron.
Good morning. As Mr. Ziegler has indicated,
Senator Dirksen was here but had to go up to the hearing
in the Senate Finance Committee, where Secretary of the
Treasury Kennedy is testifying.
Before the Senator left there was a fairly broad
discussion of the urgency of the enactment of the surtax
legislation as it passed the House with the two very important
tax reform provisions in it, one, the repeal of the invest-
ment tax credit, and secondly, the recommendation of the
White House for the low income allowance provision.
It was pointed out that there may be an effort
on the part of some to delay the consideration of the surtax
package that was passed by the House and it is the strong
feeling of the President and the Administration that those who
for one reason or another delay the consideration and the
enactment of the surtax are responsible for any of the ill
effects that take place in the economy, such as the
increase in prices, the problems of inflation and high
interest rate.
It seems to the Administration that time is of the
essence, that we must act affirmatively as quickly as
possible on the surtax, the tax package, if we are to
really win the battle against inflation and if we are to
do something affirmatively in the area of high interest
rates and to furthermore prevent some economic difficulties
down the road.
I think all economists agree, from the left to the
right, that this legislation is vitally important and the
sooner the Congress acts, the more certain we will be in
winning the battle against inflation.
We have heard, all of us, some comments about the
need and necessity for tax reform. The President sent a
message several months ago incorporating some 16 very
important proposals for tax reform.
MORE
- 2 -
The President, in a letter to me last Monday,
reiterated this Administration's dedication to bona fide
tax reform. The Chairman of the Committee on Ways and
Means and the ranking Pepublican member have promised that
there would be tax reform legislation out of the Committee
on Ways and Means.
I hasten to add that this is the first Administration
in some 20 years I have been here, that the White House has
openly and specifically endorsed real tax reform. So the
prospects of tax reform are bright, but they should not
be mixed with the surtax proposal that is needed and necessary
for our battle against inflation.
The meeting also included a discussion of the
message which is already distributed, I understand, on
unemployment insurance proposals of the White House.
Furthermore, the Attorney General is now discussing
with the Leadership the message and the recommendations of
the Administration in reference to drugs and narcotics. The
need and necessity for this legislation is, I think, evident.
We read almost daily of serious consequences resulting from
the increase in drug traffic, increase in drug use.
The Administration is making specific recommendations.
We all know that organized crime ----
?
When will that come?
CONGRESSMAN FORD: Sometime this week, as I under-
stand it.
Is that correct, the message and recommendations
on drugs?
MR. ZIEGLER: Not necessarily this week. There is
a possibility it will be this week, but within the coming
weeks.
CONGRESSMAN FORD: Frankly, I had to leave the
meeting before the Attorney General finished, so I did not
get that detail, but I assume sometime this week or in the
near future.
Organized crime really thrives on the drug and
narcotics traffic. The Federal Government has a major
interest. The President himself passed a note to me as
the Attorney General was talking with the Members of the
Leadership, and the President's note indicates that 58 percent
of all crimes in the New York and New Jersey area last year
were committed by people somehow connected with drugs and
narcotics.
I think this is ample evidence that something
has to be done on a much vaster scale than we have been doing
in the past.
Those were the major items that were discussed. I
will be glad to answer any questions.
MOPE
- 3 -
Q
What program is he proposing for curbing
narcotics, generally?
CONGRESSMAN FORD: Again, I had to leave before
all the details were developed by the Attorney General.
Before I left the Attorney General was talking about a
change in the control of distribution. There was to be a
proposal involving import controls. There was a proposal
that would give some greater flexibility in penalties. There
apparently is a tendency on the part of courts and juries
where there is this hard, mandatory, tough sentence to not
have as many convictions as you might have if there was a
lesser penalty and more flexibility given to the courts.
0
Are you speaking there of easing up on the
penalties on marijuana?
CONGRESSMAN FORD: Again, we did not get into the
details, or at least I was not there when those details
were discussed. But there has been a tendency on the part
of juries and the courts themselves where the penalty is
hard and inflexible, to not have as many convictions.
What we need, I think, is more flexibility in the sentencing
where there has been a conviction, and one of the proposals
incorporated in this area would involve that area.
O
Earlier you mentioned the need to do something
about the high interest rates. At the meeting this morning
did you get into Mr. Kennedy's meeting with those bankers,
and Mr. Patman's charges with regard to that meeting?
CONGRESSMAN FORD: We did not get into that
specific, but we related high interest rates to the
surtax proposal. I think it is recognized by everybody
if we don't pass the surtax, the probability of higher interest
rates is a foregone conclusion. If we pass the surtax proposal,
then the probability on the other hand is that interest rates
will ease and will go down rather than up.
0
Is the Administration prepared to compromise
if necessary to get the surtax through the Senate?
CONGRESSMAN FORD: The Administration feels that we
must pass the surtax now, and that as long as the Administration
is categorically on record by a message and by a letter for
tax reform, there is no need and necessity to combine the two.
Q
Mr. Ford, will you accept the additional tax
reform proposals tied to the surtax?
CONGRESSMAN FORD: The Administration is against
additional tax reform proposals at the present time. They
are committed for tax reform at a later date during this
Session of the Congress. It seems that the House bill is
the best vehicle.
Q
Suppose somebody in the Senate comes up with enough
strength to insist on some additional tax reform?
CONGRESSMAN FORD: Well, of course, the Senate will
work its will, and the conference between the House and Senate
will try to compromise whatever is included in the Senate
version in the House version, but the Administration feels very
MORE
- 4 -
strongly that the closer the bill can be to the House version
the better, and time is of the essence.
0
Was there any discussion about the increasing
cost of medical expenses in the country and the anticipated
announcement on Thursday in regard to that?
CONGRESSMAN FORD: Indirectly there was a discussion
of it with regard to the increases in the cost of living
in the last year. I think Secretary Shultz said that 60
percent of the increase in the cost of living in the last
year related to two principal factors; one, that which you
mentioned, and secondly, construction costs. But it was only
in reference to the overall, not on a specific point.
2
Was there any discussion about Mr. Nixon's
Asian trip or the trip to Romania?
CONGRESSMAN FORD: None whatsoever.
2
Mr. Ford, why should there be opposition to
accepting some tax reform now with the surcharge?
CONGRESSMAN FORD: It is a matter of delay. If the
Senate gets into a long debate, a prolonged discussion of a
multitude of reforms at this time, it will inevitably delay
the war we are waging against inflation, and as long as there
is this firm commitment by the Administration for tax reform
during this Session, it doesn't seem necessary to have tax
reform attached to the surtax bill.
O
Congressman, is it true that the House will not
vote this year on the President's draft proposal?
CONGRESSMAN FORD: The House Committee on Armed
Services, I hope, will consider the President's draft changes,
recommendations for revision in the selective service, as
soon as they get through the necessary military procurement
authorization bill. I would hope that the House would have
such a chance in 1969.
O
Was anything said about revenue sharing?
CONGRESSMAN FORD: Not this morning, no.
Q
Was anything said about the lull in military
activity in Vietnam?
CONGRESSMAN FORD: There was no discussion of that
this morning.
THE PRESS: Thank you.
END
(AT 10:10 AM EDT.)
91sT CONGRESS
HOUSE OF REPRESENTATIVES
DOCUMENT
1st Session
No. 91-148
FEDERAL-STATE REVENUES
MESSAGE
FROM
THE PRESIDENT OF THE UNITED STATES
RELATIVE TO
FEDERAL REVENUE SHARING WITH THE STATES
AUGUST 13, 1969.-Referred to the Committee on Ways and Means and ordered
to be printed
To the Congress of the United States:
If there is a single phenomenon that has marked the recent history
of nations, large and small, democratic and dictatorial, it has been
rise of the central government.
In the United States, revenues of the Federal government have
increased ninety-fold in thirty-six years. The areas of our national
life where the Federal government has become a dominant force have
multiplied.
The flow of power from the cities and States to Washington accel-
erated in the Depression years, when economic life in America stag-
nated, and an energetic national government seemed the sole instru-
ment of national revival. World War II brought another and neces-
sary expansion of the Federal government to marshal the nation's
energies to wage war on two sides of the world.
When the war ended, it appeared as though the tide would be
reversed. But the onset of the cold war, the needs of a defeated and
prostrate Europe, the growing danger and then the reality of conflict
in Asia, and later, the great social demands made upon the Federal
government by millions of citizens, guaranteed the continued rapid
growth and expansion of Federal power.
Today, however, a majority of Americans no longer supports the
continued extension of federal services. The momentum for federal
expansion has passed its peak; a process of deceleration is setting in.
The cause can be found in the record of the last half decade. In the
37-011
2
3
last five years the Federal government enacted scores of new Federal
This week, I am sending to Congress for its approval for Fiscal
programs; it added tens of thousands of new employees to the Federal
Year 1971, legislation asking that a set amount of Federal revenues be
payrolls; it spent tens of billions of dollars in new funds to heal the
returned annually to the States to be used as the States and their
grave social ills of rural and urban America. No previous half decade
local governments see fit-without Federal strings.
had witnessed domestic Federal spending on such a scale. Yet, despite
Because of budget stringencies, the initial fund set aside to start the
the enormous Federal commitment in new men, new ideas and new
program will not be great-$500 million. The role of the Federal
dollars from Washington, it was during this very period in our history
government will be re-defined and re-directed. But it is my intention
that the problems of the cities deepened rapidly into crises.
to augment this fund annually in the coming years SO that in the Fiscal
The problems of the cities and the countryside stubbornly resisted
Year beginning in mid-1975, $5 billion in Federal revenues will be
the solutions of Washington; and the stature of the Federal govern-
returned to the states without Federal strings. Ultimately, it is our
ment as America's great instrument of social progress has suffered
hope to use this mechanism to SO strengthen State and local govern-
accordingly-all the more SO because the Federal government prom-
ment that by the end of the coming decade, the political landscape
ised so much and delivered SO little. This loss of faith in the power and
of America will be visibly altered, and States and cities will have a far
efficacy of the Federal government has had at least one positive impact
greater share of power and responsibility for solving their own prob-
upon the American people. More and more, they are turning away
lems. The role of the Federal Government will be re-defined and re-
from the central government to their local and State governments to
directed toward those functions where it proves itself the only or
deal with their local and State problems.
the most suitable instrument.
As the Federal government grew in size and power, it became
The fiscal case for Federal assistance to States and localities is a
increasingly remote not only from the problems it was supposed to
strong one. Under our current budget structure, Federal revenues are
solve, but from the people it was supposed to serve. For more than
likely to increase faster than the national economy. At the local level,
three decades, whenever a great social change was needed, a new
the reverse is true. State and local revenues, based heavily on sales
national program was the automatic and inevitable response. Power
and property taxes, do not keep pace with economic growth, while
and responsibility flowed in greater and greater measure from the
expenditures at the local level tend to exceed such growth. The
state capitals to the national capital.
result is a "fiscal mismatch," with potential Federal surpluses and
Furthermore, we have hampered the effectiveness of local govern-
local deficits.
ment by constructing a Federal grant-in-aid system of staggering com-
The details of this revenue sharing program were developed after
plexity and diversity. Many of us question the efficiency of this
close consultation with Members of the Congress, governors, mayors,
intergovernmental financial system which is based on the Federal
and county officials. It represents a successful effort to combine the
categorical grant. Its growth since the end of 1962 has been near
desirable features of simplicity and equity with a need to channel
explosive. Then there were 53 formula grant and 107 project grant
funds where they are most urgently needed and efficiently employable.
authorizations-a total of 160. Four years later on January 1, 1967,
The program can best be described by reviewing its four major
there were 379 such grant authorizations.
elements.
While effective in many instances, this rapid growth in Federal
First, the size of the total fund to be shared will be a stated percentage
grants has been accompanied by:
of personal taxable income-the base on which Federal individual
-Overlapping programs at the State and local level.
income taxes are levied. For the second half of Fiscal Year 1971, this
--Distortion of State and local budgets.
will be one-third of one percent of personal taxable income; for sub-
-Increased administrative costs.
sequent fiscal years this percentage will rise to a regular constant
-Program delay and uncertainty.
figure. In order to provide for the assured flow of Federal funds, a
-A decline in the authority and responsibility of chief executives,
permanent appropriation will be authorized and established for the
as grants have become tied to funtional bureaucracies.
Treasury Department, from which will be automatically disbursed
-Creation of new and frequently competitive State and local
each year an amount corresponding to the stipulated percentage.
governmental institutions.
Second, the allocation of the total annual fund among the 50 States and
Another inevitable result of this proliferation of Federal programs
the District of Columbia will be made on the basis of each State's share
has been a gathering of the reins of power in Washington. Experience
of national population, adjusted for the State's revenue effort.
has taught us that this is neither the most efficient nor effective way to
The revenue effort adjustment is designed to provide the States
govern; certainly it represents a radical departure from the vision of
with some incentive to maintain (and even expand) their efforts to
Federal-State relations the nation's founders had in mind.
use their own tax resources to meet their needs. A simple adjustment
This Administration brought into office both a commitment and a
along these lines would provide a state whose revenue effort is above
mandate to reverse the trend of the last three decades-a determina-
the national average with a bonus above its basic per capita portion
tion to test new engines of social progress. We are committed to enlist
of revenue sharing.
the full potential of the private sector, the full potential of the vol-
Third, the allocation of a State's share among its general units of local
untary sector and the full potential of the levels of government closer
government will be established by prescribed formula. The total amount
to the people.
a State will share with all its general political subdivisions is based on
H. Doc. 91-148
H. Doc. 91-148
4
the relative roles of State and local financing in each State. The amount
which an individual unit of general local government will receive is
based on its share of total local government revenue raised in the State.
Several points should be noted about these provisions for distribution
of a State's portion of revenue sharing.
-The distribution will be made by the State.
-The provisions make allowance for State-by-State variations
and would tend to be neutral with respect to the current relative
fiscal importance of State and local governments in each State.
-In order to provide local flexibility, each State is authorized to
develop an alternative distribution plan, working with its local
governments.
Fourth, administrative requirements are kept at a minimum. Each
State will meet simple reporting and accounting requirements.
While it is not possible to specify for what functions these Federally
shared funds will provide-the purpose of this program being to leave
such allocation decisions up to the recipient units of government-an
analysis of existing State and local budgets can provide substantial
clues. Thus, one can reasonably expect that education, which consist-
ently takes over two-fifths of all state and local general revenues, will
be the major beneficiary of these new funds. Another possible area for
employment of shared funds, one most consistent with the spirit of
this program, would be for intergovernmental cooperation efforts.
This proposal marks a turning point in Federal-State relations, the
beginning of decentralization of governmental power, the restoration
of a rightful balance between the State capitals and the national
capital.
Our ultimate purposes are many: To restore to the States their
proper rights and roles in the Federal system with a new emphasis on
and help for local responsiveness; to provide both the encouragement
and the necessary resources for local and State officials to exercise
leadership in solving their own problems; to narrow the distance be-
tween people and the government agencies dealing with their prob-
lems; to restore strength and vigor to local and State governments; to
shift the balance of political power away from Washington and back
to the country and the people.
This tax-sharing proposal was pledged in the campaign; it has long
been a part of the platform of many men in my own political party-
and men in the other party as well. It is integrally related to the na-
tional welfare reform. Through these twin approaches we hope to
relieve the fiscal crisis of the hard-pressed State and local governments
and to assist millions of Americans out of poverty and into produc-
tivity.
RICHARD NIXON.
THE WHITE HOUSE, August 13, 1969.
H. Doc. 91-148
Office Copy
CONGRESSMAN
NEWS
GERALD R. FORD
HOUSE REPUBLICAN LEADER
RELEASE
FOR RELEASE AT 2 P.M. EDT--
August 13, 1969
Statement by Rep. Gerald R. Ford, R-Mich., to be placed in the Congressional Record
of August 13, 1969, immediately following the President's Message on Revenue Sharing.
Mr. Speaker:
Incentive and extra effort have always been essential elements of success.
It is just those elements that would be generated by Federal revenue sharing,
as proposed today by President Nixon.
Throughout the President's proposal for diversion of an assured portion of
Federal income tax revenue to the states and local units of government is woven
the idea of greater responsibility for those units of government, for governing
bodies closer to the people than is the Federal Legislature.
As a supplement to other Federal aid, revenue sharing can be the catalyst
for problem-solving on a scale we have never yet witnessed in America, problem-
solving at the local level on the basis of priorities viewed as local people see
them in their own communities.
The House Republican Leadership has long urged the adoption of Federal
revenue sharing. Together with the President's new Family Assistance Program and
his Comprehensive Manpower Training Act, revenue sharing would supply the cement
for the building of a better America.
This is the New Federalism the President spoke of last Friday night--a
channeling of new funds and new responsibilities to states and local communities,
a movement which will return government to the people.
Mr. Speaker, any proposal as bold as Federal revenue sharing will require
deep study and concentration within the Congress. I am hopeful that hearings on
the President's revenue sharing plan will begin very soon in the House and move
steadily to a favorable conclusion.
President Nixon's revenue-sharing plan is a proposal which speaks to the
future of America, a program which is needed to revitalize the American political
system and the people it serves.
###
NEWS
CONGRESSMAN
GERALD R. FORD
HOUSE REPUBLICAN LEADER
RELEASE
--FOR IMMEDIATE RELEASE--
September 23, 1969
Remarks by Rep. Gerald R. Ford, R-Mich., Republican Leader, U. S. House of
Representatives, on the floor of the House, September 23, 1969.
Mr. Speaker:
One of the underlying causes of youthful unrest in our nation is
uncertainty about the future. One of the great reasons for that uncertainty is
the present draft system that makes a man eligible for the draft for seven years.
We all know that no man can plan his future if he never knows when the long arm
of government is going to reach out and take him.
The resulting uncertainty can only breed resentment among our youth,
regardless of their race or socio-economic background.
Knowing this, we have gone along with such a system far too long a time.
Finally, the time has come for us to change that system, for it will be
done either by Congressional action or -- if we refuse -- by Executive decision.
President Nixon asked this Congress in May to provide a random selection
system that would limit the draft to 19 year olds. To date we have not acted.
As an alternative, the President will take Executive action after the first of
the year that will accomplish much the same objective although, in his own words,
"not as clearly and as fairly" as legislation would.
Mr. Speaker, Congress has three months to act on this very important
matter before the first of the year. I hope we will get on with the job.
# # #
Office Copy
NEWS
CONGRESSMAN
GERALD R. FORD
HOUSE REPUBLICAN LEADER
RELEASE
-FOR IMMEDIATE RELEASE-
September 23, 1969
Remarks by Rep. Gerald R. Ford, R-Mich., Republican Leader, U. S. House of
Representatives, on the floor of the House, September 23, 1969.
Mr. Speaker:
One of the underlying causes of youthful unrest in our nation is
uncertainty about the future. One of the great reasons for that uncertainty is
the present draft system that makes a man eligible for the draft for seven years.
We all know that no man can plan his future if he never knows when the long arm
of government is going to reach out and take him.
The resulting uncertainty can only breed resentment among our youth,
regardless of their race or socio-economic background.
Knowing this, we have gone along with such a system far too long a time.
Finally, the time has come for us to change that system, for it will be
done either by Congressional action or --- if we refuse -- by Executive decision.
President Nixon asked this Congress in May to provide a random selection
system that would limit the draft to 19 year olds. To date we have not acted.
As an alternative, the President will take Executive action after the first of
the year that will accomplish much the same objective although, in his own words,
"not as clearly and as fairly" as legislation would.
Mr. Speaker, Congress has three months to act on this very important
matter before the first of the year. I hope we will get on with the job.
###
NEWS
CONGRESSMAN
GERALD R. FORD
HOUSE REPUBLICAN LEADER
RELEASE
--FOR IMMEDIATE RELEASE-
September 24, 1969
Remarks by Rep. Gerald R. Ford, R-Mich., Republican Leader, U.S. House of
Representatives, on the floor of the House, September 24, 1969.
Mr. Speaker:
Today more than 75 Members of the House, including 7 from the Ways and
Means Committee, have joined to introduce legislation that will make federally-
collected revenues available for percentage sharing with the states and cities.
When passed, this legislation will effectively carry out the proposal made
by President Nixon last August 13 that federal revenues should be made available
for use by the states and cities on a no-strings-attached basis.
Mr. Speaker, introduction of this legislation today marks the first time
in recent history that a concerted effort has been begun to give states and local
governments the funds that will allow them effectively to live up to their
committments and their responsibilities to their citizens.
I think it is generally agreed that the central government until now has
increasingly pre-empted the sources of revenue available to states and local
governments, thus leaving no alternative except for the federal govenrment also
to pre-empt their responsibilities.
Until now, money flowing from the federal government to the states has been
sent in the form of categorical grants, with the federal government determining
how and where the funds will be spent. Often, in doing so, we have put such
grants on matching bases. This forced the recipients to increase their own taxes
to take advantage of projects and programs they need less than some for which we
have provided no grants.
The legislation we are seeking today will provide additional funds that
states and counties and cities can spend as they see fit.
Mr. Speaker, there are those who lack confidence in the ability of states
and local governments to spend money effectively or properly. I would agree
there will be cases where money is badly spent.
But we have no farther to look than the federal government to see great
sums badly spent on poorly devised programs devised for questionable reasons.
(more)
-2-
Mr. Speaker, we are a self-governing people. The Constitution ordains
our system as such, and the vast majority of Americans want it that way.
Self-governing begins with the government closest to the people -- local,
county and state government.
Revenue sharing will make it possible to make that government more
effective and more able to meet the needs of those it governs.
Mr. Speaker, remembering that big government is not necessarily the best
government, I urge the members of this House to give this legislation not only
their careful study but also their votes of approval.
Our nation will be the stronger for it.
###
NEWS
CONGRESSMAN
GERALD R. FORD
HOUSE REPUBLICAN LEADER
RELEASE
FOR FRIDAY PM's RELEASE--
September 26, 1969
Statement by Rep. Gerald R. Ford, R-Mich.
I think all members of Congress would agree that social security benefits
today are terribly inadequate. The questions facing the Congress, then, are how
much benefits will be increased, when that increase will take effect, and how the
increase will be financed.
In his message sent to the Congress Thursday, President Nixon has gone beyond
these questions by proposing that future increases in social security benefits
be made automatic, in line with the cost of living. I not only fully endorse
that proposition at the present time but point out that I joined with the Republican
National Coordinating Committee in calling for cost-of-living social security in
1966, and thereafter. Cost-of-living social security also became part of the
Republican platform adopted at the 1968 Republican National Convention.
This is the only way that we can make sure the social security system will
fill its role in helping to provide our elderly and other beneficiaries with an
adequate income -- by tying it to the cost of living.
I also endorse without hesitation the President's proposal that future
increases in social security benefits be financed by automatically increasing the
base on which social security taxes are levied.
It seems to me eminently fair that we finance future benefit increases in
this way. Not only have social security tax rates reached extremely high levels,
but to increase them further would impose an unreasonable burden on our young
people when they are just starting their careers and families. To increase the
taxable base would be to act in accordance with the principle we have employed in
the past in the field of income taxation -- taxing most heavily those most able
to pay.
The President's social security proposals not only point toward an adequate
income for our elderly and other social security beneficiaries but also toward an
end to political opportunism in the social security field.
(more)
-2-
It is long past time when the Congress should remove social security from
the political arena -- eliminate it as a biennial political exercise aimed at
winning the votes of senior citizens through an auction-type bidding up of benefits.
Let neither major political party seek political profit out of the plight
of our elderly.
Let us aid our elderly and improve our social security structure simply
because it is right -- and let us provide for automatic adjustments in the name
of equity for the future.
# # #
Officially
NEWS
CONGRESSMAN
GERALD R. FORD
HOUSE REPUBLICAN LEADER
RELEASE
FOR FRIDAY PM's RELEASE-
September 26, 1969
Statement by Rep. Gerald R. Ford, R-Mich.
I think all members of Congress would agree that social security benefits
today are terribly inadequate. The questions facing the Congress, then, are how
much benefits will be increased, when that increase will take effect, and how the
increase will be financed.
In his message sent to the Congress Thursday, President Nixon has gone beyond
these questions by proposing that future increases in social security benefits
be made automatic, in line with the cost of living. I not only fully endorse
that proposition at the present time but point out that I joined with the Republican
National Coordinating Committee in calling for cost-of-living social security in
1966, and thereafter. Cost-of-living social security also became part of the
Republican platform adopted at the 1968 Republican National Convention.
This is the only way that we can make sure the social security system will
fill its role in helping to provide our elderly and other beneficiaries with an
adequate income -- by tying it to the cost of living.
I also endorse without hesitation the President's proposal that future
increases in social security benefits be financed by automatically increasing the
base on which social security taxes are levied.
It seems to me eminently fair that we finance future benefit increases in
this way. Not only have social security tax rates reached extremely high levels,
but to increase them further would impose an unreasonable burden on our young
people when they are just starting their careers and families. To increase the
taxable base would be to act in accordance with the principle we have employed in
the past in the field of income taxation -- taxing most heavily those most able
to pay.
The President's social security proposals not only point toward an adequate
income for our elderly and other social security beneficiaries but also toward an
end to political opportunism in the social security field.
(more)
-2-
It is long past time when the Congress should remove social security from
the political arena -- eliminate it as a biennial political exercise aimed at
winning the votes of senior citizens through an auction-type bidding up of benefits.
Let neither major political party seek political profit out of the plight
of our elderly.
Let us aid our elderly and improve our social security structure simply
because it is right -- and let us provide for automatic adjustments in the name
of equity for the future.
###
office Capy
NEWS
CONGRESSMAN
GERALD R. FORD
HOUSE REPUBLICAN LEADER
RELEASE
FOR IMMEDIATE RELEASE--
December 20, 1960
Statement by Rep. Gerald R. Ford, Republican Leader, U.S. House of Representatives
The House and Senate Republican leaders with Representative John Byrnes and
Senator Wallace Bennett met with the President at breakfast to discuss the tax bill.
Because it more nearly conforms to the House version, the tax bill is non-
inflationary in its effect in 1970 and 1971. Compared to the Senate version the
tax conference report saves approximately $10 billion in federal revenue in an 18-
month period. Enactment into law could help to ease the tight money policy and have
a beneficial impact on the housing industry in 1970.
The President's strong leadership in insisting on a non-inflationary tax bill
contributed materially to the great improvements in the final version compared to
the Senate's high cost of living tax bill.
In some important respects the tax bill conference report follows the
President's tax reform message of April 22 in that the federal tax burden on the
lowest income taxpayers will be removed or lessened and many loopholes will be closed
The bad features of the bill--the revenue losses after 1972-- make the final
veto decision by the President a very close question. The revenue losses down the
road will make it very difficult for the President and the Congress to fund some of
the environmental improvement and education programs that badly need attention.
########
NEWS
CONGRESSMAN
GERALD R. FORD
HOUSE REPUBLICAN LEADER
RELEASE
FOR IMMEDIATE RELEASE--
December 20, 1960 [1969?]
Statement by Rep. Gerald R. Ford, Republican Leader, U.S. House of Representatives
The House and Senate Republican leaders with Representative John Byrnes and
Senator Wallace Bennett met with the President at breakfast to discuss the tax bill.
Because it more nearly conforms to the House version, the tax bill is non-
inflationary in its effect in 1970 and 1971. Compared to the Senate version the
tax conference report saves approximately $10 billion in federal revenue in an 18-
month period. Enactment into law could help to ease the tight money policy and have
a beneficial impact on the housing industry in 1970.
The President's strong leadership in insisting on a non-inflationary tax bill
contributed materially to the great improvements in the final version compared to
the Senate's high cost of living tax bill.
In some important respects the tax bill conference report follows the
President's tax reform message of April 22 in that the federal tax burden on the
lowest income taxpayers will be removed or lessened and many loopholes will be closed
The bad features of the bill--the revenue losses after 1972- make the final
veto decision by the President a very close question. The revenue losses down the
road will make it very difficult for the President and the Congress to fund some of
the environmental improvement and education programs that badly need attention.
########
willing
U. S. HOUSE
OF REPRESENTATIVES
REPUBLICAN POLICY COMMITTEE
REP. JOHN J. RHODES, (R.-ARIZ.) CHAIRMAN
1616 LONGWORTH HOUSE OFFICE BUILDING
TELEPHONE 225-6168
10
93rd Congress
March 13, 1973
First Session
Statement Number 1
HOUSE REPUBLICAN POLICY STATEMENT ON
SPECIAL REVENUE SHARING
To restore fiscal balance to the federal system and to strengthen state
and local governments, President Nixon, in February, 1971 proposed the sharing
of a portion of federal revenue with states and communities. Although the Ninety-
second Congress did initiate a general revenue sharing program, the special revenue
sharing proposals, consolidating a myriad of categorical grant programs into
largely unrestricted grants for broadly defined purposes, received inadequate
consideration under the Democrat leadership of the House.
In his January, 1973 budget message President Nixon renewed his special
revenue sharing proposal, requesting that in four areas: 1) education, 2) law
enforcement and criminal justice, 3) manpower training and 4) urban community
development, the outmoded and narrow categorical grants be replaced by more
broad-purpose awards.
The program would authorize spending of shared funds at the discretion
of local and state officials if the purpose of an expenditure lies within one
of the above categories. Matching fund requirements would be eliminated, and
distribution would be made according to "formulas appropriate to each broad
subject area." Existing programs currently financed through restricted
(OVER)
- 2 -
categorical grants could continue through the use of shared funds at the
discretion of the recipients. A substantial share of federal revenues will
thus return to state and local governments, to the "scene of the action",
where needs are most understood and priorities are best established.
If state and local governments are ever to regain their full share of
power and responsibility--as equal partners in federalism--the present
inequality of fund availability must be overcome. Passage of President
Nixon's total fiscal re-sorting package is essential.
The House Republican Policy Committee urges the immediate consideration
and passage of President Nixon's special revenue sharing proposals.
11111
IIIIIII
U. S. HOUSE
REPUBLICAN POLICY
COMMITTEE
REPRESENTATIVES
REP. JOHN J. RHODES, (R.-ARIZ.) CHAIRMAN
1616 LONGWORTH HOUSE OFFICE BUILDING
TELEPHONE 225-6168
10
93rd Congress
March 13, 1973
First Session
Statement Number 1
HOUSE REPUBLICAN POLICY STATEMENT ON
SPECIAL REVENUE SHARING
To restore fiscal balance to the federal system and to strengthen state
and local governments, President Nixon, in February, 1971 proposed the sharing
of a portion of federal revenue with states and communities. Although the Ninety-
second Congress did initiate a general revenue sharing program, the special revenue
sharing proposals, consolidating a myriad of categorical grant programs into
largely unrestricted grants for broadly defined purposes, received inadequate
consideration under the Democrat leadership of the House.
In his January, 1973 budget message President Nixon renewed his special
revenue sharing proposal, requesting that in four areas: 1) education, 2) law
enforcement and criminal justice, 3) manpower training and 4) urban community
development, the outmoded and narrow categorical grants be replaced by more
broad-purpose awards.
The program would authorize spending of shared funds at the discretion
of local and state officials if the purpose of an expenditure lies within one
of the above categories. Matching fund requirements would be eliminated, and
distribution would be made according to "formulas appropriate to each broad
subject area." Existing programs currently financed through restricted
(OVER)
- 2 -
categorical grants could continue through the use of shared funds at the
discretion of the recipients. A substantial share of federal revenues will
thus return to state and local governments, to the "scene of the action",
where needs are most understood and priorities are best established.
If state and local governments are ever to regain their full share of
power and responsibility--as equal partners in federalism--the present
inequality of fund availability must be overcome. Passage of President
Nixon's total fiscal re-sorting package is essential.
The House Republican Policy Committee urges the immediate consideration
and passage of President Nixon's special revenue sharing proposals.