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"The Budget Myths or Realities, " 1962
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"The Budget Myths or Realities, " 1962
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Gerald R. Ford Congressional Papers
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The original documents are located in Box D15, folder "The Budget Myths or Realities,"
1962" 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States of America his copyrights in all of his unpublished writings in National Archives collections.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.
********
The Administration has proved itself a champion fund-raiser, both in
raising the ransom money for the Cuban prisoners and paying off the Democratic
party deficit.
I believe the American people would be a lot
happier if they would
get around to applying these talents to
the national budget.
FORD is LIBRARY GERALD
Digitized from Box D15 of The Ford Congressional Papers: Press Secretary and Speech File at the Gerald R. Ford Presidential Library
- - 4
The worst reform of all is the so-called 5% floor proposal.
I have serious doubts that it will pass; even the majority on the Ways
YOR. TO and FORD FIBRARY
Means Committee seems opposed.
*********
In case you don't think the government is spending us into the
poorhouse, just look at the new 5¢ stamp. Even George Washington has lost
his shirt.
FORD is LIBRARY 978870
*******
The point is that this one proposal would bring in $2.3 billion.
If you cut that out of the package the "reform" falls into shreds, and this
is one of the biggest problems facing the Congress today.
The President says - no Tax reduction without
reform,
The Congress reacts - no so called reform
EORD è LIBRARY 970839
that penalize the thrifty, the chartable.
This is too high a price for Tax reduction
"THE BUDGET: MYTHS OR REALITIES"
Than
INTRODUCTION:
something that great still man done by hand
It strikes me that your organization is the only one before
which I have ever spoken which could understandably favor bigger and bigger
might
government. I have never known anyone else who ^ like the idea of mountains
and mountains of paper work which is so common down in Washington.
I don't favor big government; I want it as small, understandable,
Forgettery partican political labels
and personal as possible. Freel it's fair to explain right off that I am
a Republican with a conservative approach to domestic affairs. This is my
built-in bias, and while I will try not to let my comments get too political,
it is only fair to let you know my point-of-view.
NOW LET's EXAM
KENNEDY PROPOSED
the second problem
Basic Elements of Economic Program
Ecomomic Powcy
I. Tax rate reductions over 3 years.
II. Tax reforms
III. Appropriation requests which exceed revenue,
resulting in deficit of $11.9 billion
FORDO & LIBRARY GERALD
atthongh table is "The BUDGET: Myth on Reality,
with your endulgence may 2 broaden my topic?
Since Jan the - travelled eftensionly
Public concerned with National Accurty
Involves - military & deplimatic strength
of success.
2 financial soundness +
responsibility of ner good.
These major problems which invlue
all are cityans whether in cl Centro or N.Y.
at the same time There is a greater
& greated realization that The WORLD is
Turbulent,
a calm sea Today - can be a undert sea
yes VoL CANIC
1) who would have thought that 4 mmths 1 after The
CUBAN CRISIS where the President,
our multing leaders & the american
people responded Ss admirably, that
we would be plagued with so
fronh The cont of Florida
many unversived problems -90 miles
FORD is LIBRARY 99087
2) Few americans were prepared for
the desarvey of our alleaview in Europe
a) most he were had to believe that
DC fall a stembling blah.
English would got in common
2
3) N ntal several who ago only
a handril of american realized
that our long standing good relation
with over Canadian had
determated to budly that - The Malers
of why the major political parties
labelled our State Dept. action "stupule"
Dolo this turbulance in World appins mean the
U.S. should be Timid, uncertun + vasablety ?
No - on the contony it means OUR
& execute
COUNTRY must forge, its policies
busil on strength.
WE HAVE Such STRENGTH
Sec Mac. - 4 them
FORD
2 have hand Heneral Taylor 4"
THE
This is why me as a Nation have
Spent "yo to 50 billion.
3
What is Sparl multing poly
1). Have the strength
2/. Every brows you have it
3/. " you will use it.
Recent History clearly illustrates
everytume mr, Khrushela knows
we will stand up - we win
communism boxes
M.
From mid- Oct to larly nn.
handing hand we hill- d what the ms P one will
when Presulent Kennely
took initiative an Euln.
Same was true when Escenhwar
sent U.S. tyme to Lalann
of
3
"
Same when Eisabower let
little a N The my any
Channe Communest know we
mater - Formosa.
meant Insurers at Queny of
2
1/1
do
with
six,
in
And
melling
EX
wint
There are always rishs - The states
ml
X
are high - but copensence clearly shows
Ecommumon loss)
5
y FORD LIBRARY
that with our strength we win when we
carry the ball - The american people want out
Leaders to help the initiative - mm Y in The future.
3
Tah
Still, almost all agree: (1), cuts are needed.
(2) cuts will help economy
d at The right time.
(over)
if in a proper package of other legislation.
Prospects of a tax cut: very good. There is wide sympathy for it,
among both Democrats and Republicans
8
in D ecember until
of 9) conflicting Themis
II. TAX REFORMS - bottle much
b) it was Tel t The
unprover Theory that depart,
Some which lose
would revenue artif describe bo Pump PRIMING
as such, are a good They
1
Add a new $300 exemption to all forms, favoring incomes below $5,000.
to jewi
2. Allow an added $300 tax credit for all persons over 65.
bits bas to
Some which would gain revenue
.badolf ed
1
Limit itemized deductions to these items in excess of 5% of
по 110 Joy XEJ 8 to seht and Jadd at TUE
adjusted gross income. Estimated revenue gain $2.3 billion yearly.
and of bott BBW #1 Joot grow sitt
2
Eliminate the present $50 exemption on income from dividends
boog & 6'18 tsdd
from domestic corporations.
Gain $460 million.
3.
Oil Depletion Allowance changes -
Gain $300 million.
FORD i LIBRARY GERALD
Prospects on Reforms
It is the reforms, more than the cuts, which are bothersome. Every single
one of the proposals is likely to make one group mad and others glad. One man's
"equity" is another man's "loophole."
bebsed
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Why is a tax cut good?
adosgeous
ansoliduqeR
bire
assistance
de
Not simply to produce a deficit, which it does
membership
Not to put more money in the hands of either
consumers or investors, which it does.
a short, one time
.II
4th serving
Not to gove a shot in the arm, which it does.
It is good because it lifts the cealing on seol economic growth,
DOES
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of unemployment and and plant utilization are beginning
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to be licked.
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BUT -- The trouble is that the idea of a tax reduction got off on
mobilid E.S. olsg SUBSVOT besamines seors baden(bs
the wrong foot because it was tied to the unproven theory
abnoblvib mort smoont no noliquexs 008 add
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that deficits, as such, are a good thing.
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n 5
III. KENNEDY's SPENDING PROPOSALS
These are estimates - each is subject to challenge, for if estimates are
wrong, deficit may be larger than expected, or smaller than expected.
Agriculture
Estimate cut spending by $1 billion below fiscal '63.
Last year he estimated it would drop by $1/2 billion, but instead it
rose by $1.billion.
Gold Return
activities
Estimate Ex-Im Bank A will bring in $650 million compared with input of
$225 million now.
Doubt this will occur when such great emphasis now being placed on
U. S. export activity.
HOUSING
Expect receipts of $437 million - This is far more than we've had in
any of the last ten years, and no real justification to expect a
record year.
BERRLD FORD LIBRARY
6
KENNEDY'S
SPENDING PROPOSASS
FALSE ESTIMATES
(CONCLUSION)
How valid
In Fiscal Year '62 estimated budget fell $3.5 billion below actual budget.
In Fiscal Year '63 estimated budget is $1.8 billion below actual spending.
He expected a $458 million surplus and wound up with more than $8 billion deficit.
It is reasonable to believe that in Fiscal Year '6& his estimated budget
of $98.8 billion will turn out to be well over $100Tbilliondollars.
Spending thus is planned to exceed revenues once again. Taxes are
proposed to be cut, but much of the cut will be offset by revenue recaptured
through reforms. But the plan calls for a deficit this year
next year
on into the future -
at least to 1966
No prospect or specific plan for a surplus ever.
We are proving to the world that we cannot and will not pay
our debts here at home.
Debt is glorified and thrift is penalized under the proposed tax bill.
George Washington has lot his shirt:
into the poor, just look at The new 5' stamp! Even
in case you don't think the got is spending us
but Congress will have to change the FORMAT.
I believe it can, and will be changed but to expect that it will be
designed with conser vative, responsible budget balancing in mind, is
unrealistic with Mr. Kennedy in control of the nation's lawmsking precesses.
Congrass - cut #5 believe -
Lending agencies
3) Foreign and
3). Public wrhs
Challenge Pressdent
4) Defere + space
LIBRARY
yes the presention of the Umon,
the through of one nation rests
on the partnership of The
co-copel
branches f the federal Got
Orr forefathers when they
drafted this historic document - the
Constitution - wisely said
Progress can be insured
Freedom can be protected
Have have a story eventure - Prts.
"
11 legistere - Longrass
"
" Indian - Angrame
america has gone from 13 for colmits to The Peak.
LEADERS to behimi
FORD THE LIBRARY 07V838
The Challenge fhe future is for our PEOPLE to support it
National financing can be fairly compared with highway building. And the
taxpayer can be likened to a driver who is confronted with two choices:
Drive on (1) Toll Road
(2) Freeway
TOLL ROAD
a. You always know where you are and how far you can afford to travel.
b. When you run out of cash, you have to stop.
c.
When you pay a high toll you have a right to expect a fine road, well
landscaped, plenty of service stations, and so forth. Too high a toll
will frighten away customers.
d. If the toll rates drop you can expect more traffic, and probably less
service.
FREEWAYS
A. The cost is hidden from sight -- how many of you know the cost to you
or the value to you of a drive on any given section of freeway?
b. Because the costs are hidden, the drivers have a very hard job making
an intelligent decision on whether the money is well spent.
*****
-----
Don't mean to stretch this analogy too far, but:
The Kennedy tax program is like a highway. It leads to new programs in
education, welfare, defense, employment, and all sorts of new spending
proposals.
FORD & LIBRARY GERALD
(II)
The point is: his program puts the taxpayer on the freeway approach to
expanded government, rather than the toll road.
On a freeway program, the taxpayer
1. Has only a hazy idea of the cost, and therefore the value to him,
of any given program. It's easier to fool people this way.
2. When the taxpayer is told "now we're going to cut your taxes,"
he has no right to expect that the government is going out and
landscape the highway.
(That's what Kennedy is doing - - lowering taxes and raising spending)
3. Expects a free- ride all the time.
On a tool road program, the taxpayer
1. Knows what the cost is and what he's getting for that amount.
Pay-as-you go highway bill with attached appropriation bill
versus
All-in-one education bill without companion appropriation bill
2. A well thought-out and sensibly financed plan will attract
taxpayer support when people know the costs in advance.
3. If he doesn't like it he will vote down the program - or he
turns out the sponsor of the idea.
4. Builds confidence in the future for business, the backbone of America.
FORD
(III)
SUMMARY
We should take the toll road approach by:
reducing taxes
reducing tolls
leads to
stimulating spending
attracting more drivers
by
paring the budget
building good, solid roads
down to essentials
without frills,
we can begin new valuable programs
build more readways to where we
want to go.