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    "title": "Congressional Leadership Meetings with the President - 11/4/75: Republican",
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        "New York City financial crisis",
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    "ocrText": "The original documents are located in Box 9, folder \"Congressional Leadership Meetings\nwith the President - 11/4/75: Republican\" of the John Marsh Files at the Gerald R. Ford\nPresidential Library.\nCopyright Notice\nThe copyright law of the United States (Title 17, United States Code) governs the making of\nphotocopies or other reproductions of copyrighted material. Gerald R. Ford donated to the United\nStates of America his copyrights in all of his unpublished writings in National Archives collections.\nWorks prepared by U.S. Government employees as part of their official duties are in the public\ndomain. The copyrights to materials written by other individuals or organizations are presumed to\nremain with them. If you think any of the information displayed in the PDF is subject to a valid\ncopyright claim, please contact the Gerald R. Ford Presidential Library.\nDigitized from Box 9 of The John Marsh Files at the Gerald R. Ford Presidential Library\nGOP LEADERSHIP MEETING\nCabinet Room - November 4, 1975 - 8 A.M.\nPresident\nWe have a heavy schedule this morning. New York City,\nthe tax cut, energy, foreign assistance and Consumer\nProtection Agency.\nMy views are well known on New York City. I would\nlike to get your up to date appraisal and recommendations.\nWhat is the status? Is floor action this week or next, Al?\nCongressman\nWe reported it out of committee 23-16. Bob Stephens voted\nJohnson\nto report it, but will oppose it on the floor. John Rousselot\nwill also oppose it. There is not a ground swell of support.\nThere will be fairly tough sledding on the floor.\nPresident\nJohn, when is it scheduled?\nRhodes\nAl, when do you expect to go to Rules?\nHutchinson\nIt may go sequentially to Judiciary.\nRhodes\nThey may try to marry the two in Rules.\nMcKinney\nI expect it will go to Rules on Monday and be added there.\nRhodes\nTiming is up in the air. We are not aware of when or what.\nWe also have another vacation coming up.\nPresident\nBill, isn't there a deadline coming up?\nSecretary Simon\nYes, November 10 or 15. New York may be able to meet\nthese obligations. The absolute deadline is December 1.\nPresident\nWhat about the Senate?\nTower\nIn the Banking Committee all votes on New York were 7-6.\nPackwood voted to report but he may be opposed on the floor.\nThe Senate bill has loan guarantee provisionsin it. This\npaper is non-taxable. There is no way it can get through\nthe Senate. A filibuster is certain and we can sustain a veto.\nPresident\nIt has a default provision?\nTower\nIt does. It covers essential services. There is no section\nin our bill on Federal Bankruptcy. The bankruptcy legislation\nwill pass. The loan guarantees will fail.\nFORD\n-2-\nPresident\nThe Vice President has pointed out something. The\nDemocrats didn't know or they ignored the fact that Beame and\nCarey had default legislation when they came down here and\nJudge Rifkin sat right there next to the Vice President's\nchair with the legislation. Don't let them get away with it.\nVice President\nIt also cost them $300, 000 to get the bill drafted.\nPresident\nCaldwell Butler has introduced it in the Judiciary Committee.\nHruska\nSenator Burdick and I have introduced it in the Senate. We\nmay have one day of hearings. There are two roads open to us.\nWe can amend Chapter 9 or add a new one for municipalities\nlarger than one million. Tendancy seems to be the new\nchapter route. We are zeroing in on specific points hoping\nto develop a plan with some character. We could report some- -\ntime next week.\nHutchinson\nIn the House the Democrats may act on Chapter 9. The\nAdministration bill was co-sponsored by Congressman Butler\nand myself. The bill got to Banking by an historical accident.\nThere is nothing final in the sub-committee. Clearly the\nDemocrats can act on Chapter 9 if they choose. They have\n5 votes to our two.\nPresident\nAny comments?\nRhodes\nNew York has authority to carry on essential services.\nVice President\nThere may be chaos.\nPresident\nI saw some press reports on a suit by a bank to protect its\ninterests.\nRhodes\nOur posture should be to amend the bankruptcy law.\nTower\nRhodes is right. Our course is Judiciary and not mess\naround with Banking.\nVice President\nThe State could vote a temporary tax and appropriate to\nthe city based on this tax.\nPresident\nWhen is that legislative session? They keep putting it off.\n-3-\nHruska\nWithout the new law they may come under Chapter 9.\nVice President\nThe State has $7 billion in obligations and the city has\n$5 billion and that is a tough road.\nPresident\nFloor situation seems to indicate there is no time for a\nbailout. Keep the pressure on to get the proper default\nprocedure.\nHruska\nThose hoping for reversal by the President may tangle it\nup so much that default may result.\nPresident\nI have no inclination to change.\nMcKinney\nThe House leadership will try to force the President's hand.\nThey will claim anarchy if we don't get legislation. The\nDemocratic solution is chaos.\nHorton\nThere are some strange things going on in Judiciary. Badillo\nand Rodino are saying no movement on legislation without\nrequest from Beame, but there has been no request from\nBeame.\nVice President\nThey have no courage to ask.\nPresident\nThey had legislation drafted and wanted us to take it.\nVice President\nDid they leave the Rifkin bill?\nSeidman\nNo they didn't.\nEdwards\nOn the debt ceiling bill 18 New York members voted no.\nJohnson\nThey could work out a solution with their pension system.\nThe only way is through orderly court procedures.\nPresident\nLet me point out. I'm not going to change my position. I\nwill not be locked in a corner to buy a married bill that is\nunacceptable. The other way is clear, quick and sound.\nNow let's move to the tax cut. Herm.\nSchneebeli\nWe have met with Secretary Simon and we are sticking to\nthe balanced approach. We have no delusion about winning\nbut we will fight hard. They may add to debt ceiling. The\ntax bill is 668 pages and the Chairman may try to consider it\nin one day. We have 3-4 Democrats with us. Landrum,\nWaggonner and Burleson. Al Ullman is gun shy of losing his\nthird bill. It is still iffy. We may finish today.\nPresident\nWhat is the schedule on the tax bill?\nSchneebeli\nWe hope to finish by Thanksgiving and do the debt ceiling\nby the 15th. The Senate will hand the tax bill on the debt\nceiling. I asked Wilbur if he will be in Conference and he\nsaid yes and he will be with the Republicans.\nPresident\nCarl.\nCurtis\nSenate Finance meets today. We won't really know until\nthe House bill passes. People really understand the\nargument of no tax cut without a spending cut. This may\nprevent a bad bill. We always know when Christmas is\ncoming. The Senate Finance Committee starts working\non a tax bill.\nSecretary Simon\nWe are on 6 different tracks. They may attach tax bill\nto debt ceiling and if that occurs I recommend you veto\nthe debt ceiling bill.\nPresident\nTalk about the perils of Pauline.\nAny other comments, John. Will it be a closed rule?\nSchneebeli\nDemocrats and Jim Corman want a closed rule.\nMichel\nCurrent law expires December 31. In the absence of your\nproposal what do we do?\nPresident\nThe previous law before this tax cut goes back into effect.\nMichel\nAre we willing to go that far?\nPresident\nI am.\nLynn\nCome January, 1976, we see a deficit of $60 billion without\na spending reduction matched with the tax cut. No one wants\na tax bill in July of 1976. This is a strange bill.\nPresident\nSomewhere between $63-70 billion is the deficit for FY 1976.\nThe Budget Committee figure is between $70-73 billion.\nIt will be somewhere in that range. A tax cut without spending\ncut will be a minimum deficit of $60 billion next year.\n5\nCurtis\nThe spending cuts are not necessarily fatal politically.\nThere is greater responsibility on part of the electorate.\nWe may be just as well off politically.\nMichel\nI can't agree, but we should run it by our people. I\nhave a feeling that is not the sentiment on our side.\nCederberg\nWe talk much about reducing spending, but there is not much\nchance for that. Mr. President, your State of the Union and\nBudget messages should list the specific reductions and\nchanges in the basic legislation that will be required. The\nChairman of the Education and Labor Committee will not\nconsider reductions without Presidential recommendations on\nwhere we really bite the bullet.\nLynn\nThere is no way to get a $395 figure without changing the law.\nNinety percent of our spending is mandatory law and entitle-\nment programs plus Federal employees. If we pass a ceiling\nit gives us a better chance next year. A Presidential ceiling\nwill cut the rhetoric from the Departments and agencies.\nIf the President has spoken it will be easier for Congressional\nbudget committees. We should put a ceiling on this year\nbecause next Spring it will be impossible.\nCederberg\nThat's fine Jim, but it won't happen.\nRhodes\nThe only way is to suspend operation of the anti-impoundment\nact.\nLynn\nOn the big bucks you need some limitation.\nRhodes\nWe need a legislative agenda -- ABCD. It's the only way to\nmake it credible.\nLynn\nHow do you do that?\nPresident\nGet a rule. Del.\nLatta\nThe old Frank Bow approach is available. You need 5% off -\nsend it back.\nCederberg\nThat 5% won't come off. Take it off from Social Security --\nnever will that happen. The only place it will come off is\nfrom Defense.\nYoung\nI agree with Al Cederberg. It can't be done in this Congress.\nThe laws must be changed.\nPresident\nWe must recognize the practical parliamentary problems.\nWe must make a determined fight or we'll never get it\nunder control. If we don't change the law we will be over-\nwhelmed. The same as New York City.\nCase\nWhat are your ideas for cuts and what laws do you recommend\nbe changed. This will have to be a joint process. We need\nto know what to do.\nPresident\nI have given guidelines to every agency and department\ncovering the $28 billion cut. I expect they will cooperate\nwith some pain and anguish. There is a tendency to recommend\nchanges only for most popular programs. I have gone over\ntwo major departments and will go over every one.\nCase\nIs it possible to make these changes without substantive\nchanges in the law?\nPresident\nChanges in substance are required. There is a recognition\nthat uncontrolled items must be controlled. I am going\nthrough every department.\nLynn\nA one percent break on Federal retirement and food stamps\nare substantive changes required. Social Security Insurance\nis another. Every county has a different formula for cal-\nculating the level of assistance. This change alone could\nsave $500 million yearly. Can't change any of these without\nchanges in the law. Someone will always scream but we must\nhandle it now. Looking at the out years, we always have a\nbalanced five years down the line, but something always\nhappens to destroy that estimate.\nBellmon\nI am not as pessimistic, but we do need some guidance.\nWe may have a majority on the Budget Committee. Three\nDemocrats, Chiles, Nunn and Hollings usually vote with us.\nI don't see a spending ceiling before April 15, 1976.\nPresident\nWe will work with you.\nBellmon\nIf you refuse to sign the tax extension, you have Congress in\na tough position.\n-7-\nPresident\nThat's in the back of my mind. Let's turn now to energy.\nFannin\nThe conference is working hard, but I am disturbed about\nthe GAO and mileage provisions. The Democrats have us\nover the barrell and are now concentrating on price. We\nmeet on Friday. There are 25 conferees from the Senate\nand 7 from the House. The Chairman has ruled that one\nSenator can conduct business and vote for the Senate with\n12 proxies. It's a difficult time but I'm hopeful we can get\na bill. They may add the allocation provision to the debt\nlimitation in the Senate.\nPresident\nReturning from Florida on Sunday evening, I had a very\ninteresting discussion with Dick Stone who is working to\nget an acceptable bill.\nFannin\nHe is cooperative.\nBrown\nThere is substance in the pricing section of the bill. Zarb\nhas met with House Democrats on pricing.\nZarb\nThey are not anywhere close among themselves and there\nis a considerable distance from us. The Democrats have\ncaucused on the Senate side and have some agreement.\nJackson is in a position to do it. Stone and Johnston can\nhelp, but Jackson is playing games. If we get no agreement\nour position should be one of increased vulnerability and\nhigher imports. The price mechanism has some merit,\nbut if the number is too low, we'll just have to see where we go.\nBrown\nJackson spoke optimistically yesterday and said they would\ncontinue to work.\nPresident\nWhen does conference meet again?\nFannin\n10 A.M. It may be postponed.\nStevens\nKeep the Administration position clear so there is no confusion.\nZarb\nWe will staff those positions, including natural gas.\n-8- -\nBrown\nThe Dingell solution is only a short term one. Pearson-\nBentsen is proscribed in a Parliamentary sense. We\nwill try to get around the parliamentary hurdle. We may\nloose in the subcommittee or the full committee. We'll\ntry in Rules for an open rule to allow consideration of\nPearson-Bentsen on the House floor.\nMcKinney\nI am the only member from New England who supports\nderegulation, but on radio this morning I heard a report\nfrom FPC that there is no gas shortage. If this is true, our\ncase is hurt badly.\nPresident\nIn Baltimore they have announced cutbacks in natural gas\navailability. It will be especially acute in 10-15 states.\nZarb\nNumbers are up in the cutbacks occurring in 12 states where\nit is especially serious.\nMcKinney\nWhen cutbacks begin then we can sell the program in\nNew England.\nBrown\nThe press is saying that long range decontrol is frustrating\na short term solution. We should keep trying to bring them\naround by blaming the Democratic leadership.\nPresident\nThis is November 4 and controls expire November 15.\nWe are going into winter and curtailments of natural gas.\nTen states are severely affected and five less SO. Fifteen\nof the 50 states have deadlines. Do all you can in the\ncommittees. I talked to the Speaker and Mansfield and\nasked them to pressure Scoop and Staggers. I also called\nStaggers, but I don't know if that will do any good.\nThere are two more items - Foreign Assistance and CPA.\nThe foreign assistance figures are less than the January\nbudget, but larger than a year ago. 70% of it relates to the\nMiddle East. Israel would get $2.3 billion and Egypt $750.\nMy recommendations for the Middle East are very impor tant.\nThis will help substantially to maintain peace. It's a big\nchunk of money. In the case of Israel we have recommended\nless than 76 Senators requested in their letter and we still got\nthe Sinai agreement. Your support in committee and on the\nfloor are very important.\n-9-\nKissinger\nI'm so busy counting the jobs I have lost that.\nRhodes\nHow high did you count.\nKissinger\nI'm going to think of a good answer. On economic and\nmilitary assistance, Congress on the latter wants to\nincrease MAP and reduce grant assistance. There is\nsome debate on the level of U.S. assistance. There are\nfour things to remember.\n1. The threat to the assisted countries.\n2. Interest of preserving U.S. security.\n3. Diplomatic reasons.\n4. Consequences of not doing it.\nThe bulk of the $2.3 billion for military sales goes to\nIsrael. She receives $1.5 billion and any cut would have\nserious affect on security of Israel.\nMany are reluctant to see the U.S. in the arms business,\nbut if they don't buy from us, they buy from the Soviet\nUnion or Western Europe. Also if we don't sell, we lose\nsales and political influence.\nThe Middle East is part of the package. Most is for Egypt\nand Israel. $2.3 million for Israel and $700 million for\nEgypt.\nSome people think the Sinai Agreement produced these figures,\nbut our relations with Israel are independent of these figures.\nIsrael was so confident of them she included them in her\nprinted budget prior to the Sinai Agreement. In fact for\nIsrael, no sum can be charged to Sinai Agreement. The\n$2.3 billion for Israel would have been necessary with or\nwithout the Sinai Agreement.\nEgypt is $150 million higher due to the Sinai Agreement.\nEgypt has broken with the radical Arabs and the Soviets. It\nis our long term interest to keep this arrangement. The\n1973 war cost $15 billion. I urge you not to look at this\nassistance as payment for the Sinai agreement, but for\nstability and to prevent Soviet domination and to keep Jordan\non a moderate course. There is $90 million for Syria which\nwe may reconsider.\n-10-\nKissinger\nOther items of support include funds for Greece - to\nstrengthen the Caramanlis Government. Funds for Portugal\nand its relatively moderate government which no one obeys.\nWe do want to see Portugal move back to a pluralistic\nsociety. We have also included some money for Cyprus\nto be used primarily for refugees.\nPresident\nCliff.\nCase\nI don't anticipate many difficult problems. You may end\nup with some cuts. I don't think we should worry too\nmuch about these countries going elsewhere. Aren't we\nthe only source of high quality weapons?\nPresident\nCliff, I can answer part of that. Today the Germans make\nthe best tank in the world. The French have a good fighter\nand the Soviet Union has some good equipment. They are\nalways probing and are making some inroads with Syria.\nWe must continue our efforts.\nKissinger\nThe French F-1 is better than our F-4, but not as good as\nour F-16. The things the Saudis want they can get from\nBritain and France.\nBroomfield\nWe started hearings Thursday. Some concern about figures\nnot high enough for Israel. There may be a move to cut Egypt.\nI hope the nuclear proposal for Egypt will go. It will be tough.\nRhodes\nIs the package for bigger grants and lower credits for Israel?\nKissinger\nThere was a bureaucratic mixup on message from the\nPresident. The mix was set at 2/3 credit and 1/3 grant.\nThe President decided on a 50-50 mix and we sent up\n2/3 and 1/3. It is now straightened out and will be 50-50.\nRhodes\n$1.5 billion is part of each?\nKissinger\n50-50. Supporting assistance is all grant.\nEdwards\nHow much for Portugal?\nKissinger\n$55 million.\nPresident\n$65 million.\nKissinger\n$55 million for support and the additional for refugees.\n-11-\nHorton\nWho pays for Sinai technicians?\nKissinger\n$50 million and we pay.\nStevens\nWhat is the total dollar figure?\nKissinger\n$4.7 billion\nEdwards\nThere will be increased pressure. Our own subcommittee\nis trying to increase sales over grant.\nMichel\nThe defeat on the debt bill seems to indicate there will\nbe deep cuts on this bill if my ears are tuned right.\nEdwards\nWe may loose our national constituency if New York goes.\nPresident\nSome members are on the horns of a dilemma. We are\ngoing to fight hard in the Passman subcommittee. Otto\nhas been a good team player and he understands the problem.\nHe does an honest job.\nLet's move now to the CPA. I had a 10:30 meeting today\nwith Virginia Knauer and some representatives from\nthe Federal agencies on our in house program. We need\na stronger program to protect the consumer interest. I\nhave two plans and I will squeeze each one. Once finalized\nthe plan will be published in the Federal Register. I think\nit is an adequate way to protect the legitimate interests of\nthe consumer. We don't need an extra agency. The\nlegislation is on the floor this week. Frank, do you want\nto make a pitch for it.\nHorton\nI won't make my pitch again. I'm glad you are doing what\nyou are. The consumer will be better off and this will help\nRepublicans to show interest in the consumer. I also urge\nyou to keep your program on regulatory agencies. You must\ncontinue to talk about these programs. The CPA is a way\nto curtail regulatory problems. We are setting up a paper\nwork commission.\nPresident\nJohn, you are on the other side.\n-12-\nErlenborn\nI am flat out against the bill. Head counts look good\nenough to sustain and maybe to defeat the bill on the floor.\nRhodes\nI agree with John. Michel says Republicans will vote over-\nwhelmingly against the bill. We will need some support\nfrom the Democrats.\nPresident\nCan you finish in one day. We should cover labor and if\nthey know it the bill may not pass. Jim, what is the status\nof the regulatory reform legislation?\nLynn\nCon Rail and airline proposals are on the Hill and trucking\ngoes today. Competition is the best protection for consumer.\nOur action has been therapeutic for regulatory agencies.\nThey seem to be cutting down on red tape and are doing a\na better job.\nPresident\nThat completes our scheduled topics. Are there any others?\nMichel\nMaybe sometime soon we should have a session to talk\npolitics. We must stick together. We should also get\ntogether and find out where we are going and get some\nencouragement.\nPresident\nWe could have a report from Ted and Guy. We could do it\nnext time.\nMichel\nWe have some members who are retiring and we should\nassess where we are.\nStevens\nWe need to resolve some conflicts between the RNC, the\nSenate and House committees and your own committee.\nPresident\nWe will schedule it next time.\nTHE WHITE HOUSE\nWASHINGTON\nNovember 3, 1975\nMEETING WITH REPUBLICAN CONGRESSIONAL LEADERS\nTuesday, November 4, 1975\n8:00-9:30 a.m. (90 minutes)\nThe Cabinet Room\nFrom: Max L. Friedersdorf\nm.f.\nI. PURPOSE\nTo discuss with the Republican Congressional leaders\nthe subjects of New York City, tax and spending cuts,\nenergy, Middle East military assistance package and\nconsumer protection legislation.\nII. BACKGROUND, PARTICIPANTS AND PRESS PLAN\nA. Background:\n1. Guaranteed loan legislation to bail out New York City\nis moving in both Houses and may be on the Senate Floor\nthis week. In the House the guaranteed loan proposal\nis likely to be joined with the President's Bankruptcy\nAct amendment.\n2. Representative Caldwell Butler and Senator Roman Hruska,\nboth of whom accepted for today's meeting, introduced\nthe President's bankruptcy legislation.\n3. House Ways and Means Committee is in it's final review\nand mark-up of tax cut legislation. Final Committee\nvote could come on Wednesday. Bill Simon has been work-\ning closely with the Minority and Joe Waggonner to have\nthe President's tax cut and spending reduction proposals\nconsidered.\n4. House and Senate conferees could conclude work this week\non the energy bill (S.622/H.R. 7014). The conference\nis at a critical stage with the pricing provision to be\nresolved.\n5. The President's request for military assistance for\nIsrael and Egypt was submitted last week. Secretary\nKissinger will testify on Friday, November 7, before the\nFORD\nHouse International Relations Committee, and mark-up is\nARVUSIT\nscheduled to start next week. In the Senate, Sparkman\nis starting hearings on the security assistance bill.\n-2-\n6. H.R. 7575, a bill creating a Consumer Protection Agency,\nwill be on the House Floor this week. The Republican\nleadership, led by John Erlenborn, is mounting a strong\nfight against the bill. The Republican whip check is\nencouraging and enough votes seem assured to sustain a\nveto, and possibly defeat the bill outright on the Floor.\nB. Participants: See TAB A\nC. Press Plan:\nThe Press Office has announced the meeting. Press and\nWhite House photographers.\nIII. AGENDA - See TAB B\nIV. TALKING POINTS - See TAB C\n1. We have a heavy agenda today, gentlemen, on five issues\nof great importance.\n2. Those five subjects which I would like to address today\ninclude the New York City financial situation, my tax\ncut and spending reduction requests, energy, our Middle\nEast security assistance request, and consumer protection.\n3. In addition to our regular leadership, we have here\ntoday the appropriate Minority Members from the juris-\ndictional Committees, as well as our own Administration\npeople with responsibilities in these areas.\n4. Let us first discuss the subject of New York City.\nPARTICIPANTS\nThe President\nThe Vice President\nThe Secretary of State\nThe Secretary of the Treasury\nThe Administrator of FEA\nHOUSE\nSENATE\nJohn Rhodes\nBob Griffin\nBob Michel\nBob Stafford\nSam Devine\nTed Stevens\nJack Edwards\nCarl Curtis\nLou Frey\nJohn Tower\nBarber Conable\nRoman Hruska\nJimmy Quillen\nPaul Fannin\nGuy Vander Jagt\nCliff Case\nEd Hutchinson\nHenry Bellmon\nCaldwell Butler\nMilt Young\nAl Johnson\nStew McKinney\nHerm Schneebeli\nBud Brown\nBill Broomfield\nFrank Horton\nJohn Erlenborn\nDel Latta\nAl Cederberg\nSTAFF\nDon Rumsfeld\nBob Hartmann\nJack Marsh\nPhil Buchen\nRon Nessen\nMax Friedersdorf\nJim Cannon\nJim Lynn\nREGRETS\nBill Seidman\nAlan Greenspan\nSen. Hugh Scott - out of town\nBill Baroody\nRep. John Anderson - out of town\nDick Cheney\nBrent Scowcroft\nDoug Bennett\nVern Loen\nBill Kendall\nPat O'Donnell\nCharles Leppert\nVORD\nTom Loeffler\nBob Wolthuis\nLIBRARY\nAGENDA\n8:00-8:05 a.m.\nThe President opens the meeting, announces the\n(5 minutes)\nagenda, and introduces the subject of New York\nCity's financial problems.\n8:05-8:15 a.m.\nThe President requests Bill Seidman and Bill\n(10 minutes)\nSimon to comment on New York City.\n8:15-8:20 a.m.\nThe President requests the leaders to comment on\n(5 minutes)\nNew York City. (Senator Hruska and Rep. Caldwell\nButler will attend. They are the ranking Minor-\nity Members on the Judiciary Subcommittee for\nthe bankruptcy bill.)\n8:20-8:25 a.m.\nThe President introduces the subject of his tax\n(5 minutes)\ncut, spending reduction proposals.\n8:25-8:30 a.m.\nThe President calls on Alan Greenspan and Bill\n(5 minutes)\nSimon for comments on the Tax bill. (Simon has\nbeen meeting regularly with Ways and Means Minor-\nity Members on Committee strategy.)\n8:30-8:35 a.m.\nThe President calls on the leaders for comments\n(5 minutes)\non the tax bill. (Herm Schneebeli, Barber Conable\nand Carl Curtis will be in attendance.)\n8:35-8:40 a.m.\nThe President introduces the subject of energy\n(5 minutes)\nand calls upon Frank Zarb for comment.\n8:40-8:45 a.m.\nThe President requests comments from the leaders\n(5 minutes)\non the energy conference, and natural gas. (Paul\nFannin and Bud Brown will be in attendance.)\n8:45-8:50 a.m.\nThe President introduces the subject of military\n(5 minutes)\nassistance to the Middle East and calls upon\nSecretary Kissinger for comment.\n8:50-9:00 a.m.\nThe President requests comments from the leaders\n(10 minutes)\non Middle East security assistance. (Senator\nCase and Rep. Bill Broomfield will be in\nattendance.)\n9:00-9:05 a.m.\nThe President introduces the subject of consumer\n(5 minutes)\nprotection. (Bob Michel will have a good whip\ncheck report; John Erlenborn, who is the chief\nopponent will be in attendance, as will Frank\nHorton, a proponent of the objectionable bill.)\n9:15-9:30 a.m.\nThe President suggest the leaders may wish to\n(15 minutes)\ndiscuss other subjects in the brief time remain-\nLUVERIT\ning. (Other subjects which may be raised include\nthe Schlesinger change, Rockefeller statement,\nsitus picketing which is on the Senate Floor this\nweek, 200 Mile Limit which is in Senate mark-up\n-2-\nthis week, No Fault Insurance which is ready\nfor full Committee mark-up in the House with\nall Republicans opposed, and busing.\n9:30 a.m.\nThe President concludes the meeting.\n1\nLIBRARY\nTALKING POINTS\nON ENERGY\nFOR REPUBLICAN\nLEADERSHIP MEETING\n1. I am pleased that S. 2310, providing for both emergency\nnatural gas legislation and long range deregulation,\npassed the Senate. It is my hope that the House Commerce\nCommittee will begin early deliberation on a companion\nbill which would also provide for emergency measures as\nwell as a long range solution -- new natural gas deregulation.\n2. The Conference Committee on S.622/H.R.7014 is continuing\ndeliberations this week. I have been pleased with the\nattitude of the Committee so far in addressing the concerns\nof the Administration. However, we still have some\nserious problems with the non-price provisions. The oil\npricing provisions, however, have not yet been resolved\nand I cannot consider the bill acceptable until these pro-\nvisions are addressed.\n3. As you know, the bill extending oil price controls until\nNovember 15 did not allow the submission of the Administra-\ntion decontrol plan before November 1. While the\nAdministration could now submit a plan of its own to\nCongress, I think we must wait until we see how the\nConference is proceeding. I would appreciate your views\non this matter as well as your thoughts on strategy with\nregard to natural gas legislation and the Conference\nCommittee.\n4.\nFrank, do you have anything to add before we begin our\ndiscussions?\nLIBRARY\nTALKING POINTS\n1. I continue to be concerned about the citizens of New York City in the\nevent of default. As I've said in the past, I think it imperative that\nessential services be maintained. I still believe that the City and\nState have it within their power to avoid a default, and I am con-\ntinuing to keep abreast of the New York situation through my\neconomic advisors.\n2. I understand that the Senate and House Banking Committees have\nreported legislation which would provide financial assistance prior to\ndefault and also contain provisions authorizing essential services\nafter default. Neither of these bills requires the Executive Branch\nto provide funds to pr event a default.\n3. I would like to have your views on these bills with the understanding\nthat in the event I decided to sign a bill into law, I would in no way\nconsider ex ercising the options which would provide the federal funds\nto avert a default.\nLIBRARY 2)\nNovember 3. 1975\nWm. Sendman\nTalking Points\nMy program is directed at one of the most important\nlong-term economic problems confronting this country: an\naccelerating and increasingly uncontrollable rate of\nincrease in federal outlays.\nThe rate of increase in nondefense budget outlays,\nin real terms, has been exceeding the real growth of the\neconomy. Payments to individuals in real terms for\nexample, rose at a 11 percent annual rate between fiscal\n1965 and fiscal 1975. Real outlays for all nondefense\nprograms, excluding NASA and interest payments; rose at\nan annual rate of more than 8 percent. (Real GNP rose at\na 3-1/2 percent rate.)\nThe size of the developing problem has been obscured\nfor years by the decline in real defense outlays following\nthe Vietnam War peak. Between fiscal years 1968 and 1975\nsuch outlays declined by an average of 6.4 percent per year.\nThese trends obviously cannot continue if we wish to avoid\nthe fate of New York City. We have three choices -- to\nsharply curb the growth of domestic programs, to continue\nthe gradual dismantling of our defense establishment, or\nto raise taxes. Even should we, as a nation, short-sightedly\nopt for either of the latter two courses of action, we\nwould be only postponing again, the inevitable confronting\nof the unsustainable real rise in domestic programs.\nThe full significance of this acceleration in outlays\nbecame particularly evident during the spring and summer of\nthis year as the fiscal 1977 budget began to take shape.\nAccordingly I directed Jim Lynn to devise measures and ways\nby which the expenditure growth could be slowed. I further\ndirected that any savings be refunded to the American tax-\npayer in order to maintain private purchasing power and job\ncreation.\nOne problem that I had in formulating my program was\nthat the temporary tax cut for calendar year 1975 expires\non December 31st. Unless the new permanent tax structure\nwere put in place as of January, income tax rates would have\nrisen automatically. In order to reduce the uncertainty with\nrespect to taxes, I decided to recommend my tax legislation\nto be effective as of January 1, 1976.\nThis timing problem could produce a small increase in\nthe deficit for the first 9 months of 1976. But as I\nindicated previously, I would support further curbs in fiscal\n1976 expenditures to eliminate this increased deficit.\nFORD VIBRARY\n-2-\nIn any event, the deficit increases are certainly not\nlarge when compared with a program of an extension of the\ncurrent tax withholding rates and prospective outlays. Hence\nthe impact of my program on the path of economic recovery\nwould not be significant.\nWhat would be significant are the effects on the levels\nof federal outlays during the fiscal years 1978, 1979 and\nbeyond. The $28 billion cut in the fiscal 1977 rate of\nincrease in outlays, which I have proposed, would help insure\nthat the dangerous acceleration in federal spending would be\ndramatically slowed and budget balance achieved in FY 1979.\nThis would be a major first step toward defusing the very\nstrong inflationary bias that has gripped our economy.\nFREE is LIBRARY OF\nTalking Polats\nGeneral Position. I have publicly stated that I will veto\nlegislation to create an Agency for Consumer Protection (ACP)\nThe proposed ACP would have broad powers and discretion to\nparticipate in any Federal agency actions affecting consumers.\nIts authority would include:\n-- an extensive right to intervene in proposed Federal\nactions which \"substantially\" affect consumer interests\nby injecting itself into agency proceedings and court\nactions;\n-- sweeping independent authority to issue interrogatories\nto private parties; and\n-- access to trade secrets and financial information.\nACP would not, however, have authority to review labor-\nrelated and other matters which also have a great\nimpact on consumer interests.\nObjections to Legislation. I am opposed to H.R. 7575 because:\n--- There is no such thing as a single consumer interest\nthat the agency could fairly represent. An ACP would\nhave to pick and choose among competing consumer views\nin selecting its stand, thereby leaving other consumer\nviews to fend for themselves.\nFORD is LIBRARY GERALD\n2\n-- ACP would add a new Federal agency and layer to the\nFederal bureaucracy at a time when both the Congress\nand Administration should be trying to cut down on\nthe size and cost of government. ACP could cost $60\nmillion over three years, and could require an\nadditional 1,000 new Federal employees.\n- This $60 million in direct costs does not include the\nsubstantial costs to other Federal agencies and to the\ngeneral economy caused by the inevitable delays, back-\nlogs, and confusion which ACP could create.\n-- The laws authorizing most Federal agencies' activities\nspecify that they are responsible for protecting the\npublic intercst, which includes consumer interests.\nA separate agency would further encourage existing\nagencies to be lax in this responsibility. The Admin-\nistration and Congress should make sure that existing\nagencies respond to legitimate consumer interests. If\nCongress and the Administration fully exercised their\noversight responsibilities, an ACP would not be necessary.\n- I have recently launched a number of steps to make\nExecutive Branch agencies more responsive. In April,\nI instructed Virginia Knauer to head an effort to\nexamine the means by which Federal agencies consider\nconsumer viewpoints in their decisions and activities.\n3\nThis month all major Executive Branch agencies\nwill publish a consumer representation plan for\npublic comment and hearings. I am also anxious to\nsee that existing laws are reviewed to make sure\nthat outdated or burdensome government requirements\ndo not work against consumers. I have supported\nrepeal of the Retail Price Maintenance laws, for\nexample, because I feel they tend to reduce\ncompetition, which is the means for insuring that\nconsumers' wishes are met.\nFORD & LIBRARY QERAL"
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