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The original documents are located in Box 28, folder "Question and Answer Briefing
Sheets - Presidential Briefing Book" of the John Marsh Files at the Gerald R. Ford
Presidential Library.
Copyright Notice
The copyright law of the United States (Title 17, United States Code) governs the making of
photocopies or other reproductions of copyrighted material. Gerald R. Ford donated to the United
States of America his copyrights in all of his unpublished writings in National Archives collections.
Works prepared by U.S. Government employees as part of their official duties are in the public
domain. The copyrights to materials written by other individuals or organizations are presumed to
remain with them. If you think any of the information displayed in the PDF is subject to a valid
copyright claim, please contact the Gerald R. Ford Presidential Library.
Digitized from Box 28 of the John Marsh Files at the Gerald R. Ford Presidential Library
THE WHITE HOUSE
WASHINGTON
THE PRESIDENT'S BRIEFING BOOK
(Key Questions)
For May 6, 1975
TAB A
ECONOMY
TAB B
BUDGET
TAB C
ENERGY
TAB D
GENERAL DOMESTIC
TAB E
FOREIGN POLICY
TAB F
CIA
TAB G
MISCELLANEOUS
THE PRESIDENT'S BRIEFING BOOK
(Key Questions)
For May 6, 1975
(Copy for: John O. Marsh, Jr.)
GERALD FORD VIRRARY
TAB A
CONSUMER PRICES
QUESTION: The consumer price index rose by only 0.3 percent in March.
Are you encouraged by this development? Does it signal victory
in the battle against inflation and does it mean that additional
measures to reduce unemployment can now be considered?
ANSWER:
There has been a very significant reduction in inflation since
last autumn. During the past three months, consumer prices have
risen at a seasonally adjusted rate of 6.6 percent, about half
the 12.2 percent rate of increase during the last six months
of 1974.
The deceleration in consumer prices in March has been widespread.
On a seasonally adjusted basis food prices fell by 0.5 percent
last month, the first decline since last July. It reflects the
very sharp decline which has been taken place in farm product
prices since last autumn.
Although March figures are extremely encouraging, the inflation
problem has not disappeared. In fact, the basic underlying
inflation pressure which remains in the economy is stronger
than indicated by the March figures. Inflation has declined
but the reduction is not yet permanent, enduring, or as complete
as is required by a healthy economy.
An increase in wholesale prices during April is likely to be
reported in a couple of weeks. This and several other factors
suggest that the pace of consumer price increases in the months
ahead is likely to exceed the 3.8 percent annual rate reported
for March, and perhaps by a considerable margin.
The inflation problem was created over a ten year period and it
is not going to disappear quickly. Our problem is to support a
recovery in the economy, but without going SO far as to worsen
the inflation problem next year and in 1977.
FORD CIBRARY
May 2, 1975
FOOD PRICES
QUESTION - What is your expectation for food prices for
the next year?
ANSWER
- Recently, USDA released a forecast of food
prices through 1975. USDA expects retail
grocery store prices to rise 7-8 percent
in 1975. Increases in the prices of food
eaten away from home will rise at a
somewhat faster rate.
FURTHER - Food prices rose 12.2 percent during 1974,
INFO
somewhat slower than the 20.1 percent of
1973 but still a drastic departure from
historical norms. Prices for food at home
rose slightly faster than food consumed
away from home 12.4 percent compared to
11.2 percent. Of all the major food
categories only red meats (down 3.5 percent)
and eggs (off 5.5 percent) declined in 1974.
Biggest gainers were sugar and sweets (up
101.6 percent) and salad or cooking oil
(up 50.0 percent).
Retail food prices declined 0.9 percent in
March following a 0.1 percent drop in
February. The March prices were 7.7
percent above the same month last year.
Farm prices of food commodities were down
6.6 percent from last year while marketing
costs were 13.1 percent higher.
TREASURY DEPARTMENT
GERALD FORD LIBRANT
ADD 2
5/2/75
MONETARY POLICY AND INTEREST RATES
&
Interest rates have risen in the past two or three
weeks. If this development were to continue wouldn't
it jeopardize the recovery which you expect later in
the year?
A:
The rise in both short and long term interest rates
is partly due to the heavy volume of Treasury financing
and partly due to the expectation that the Federal
deficit will expand much beyond the $60 billion limit
which I have set.
Monetary policy has become distinctly more expansive.
The various measures of the money supply have continued
to expand vigorously, continuing the trend that began
about two months ago. M. 2 which includes demand de-
posits, currency and most bank time deposits has risen
at a 13 percent annual rate during the past two months.
So it is not a shortage of money and credit which we
are facing.
A sharp rise in interest rates would jeopardize the
recovery. But we do not expect a large upward move in
interest rates. If this occurs it will be because the
Congress has plunged ahead and added programs and
additional Federal spending to my budget. Such actions
would pose dangerous risks of reigniting inflation and
if people expect more inflation in the future interest
rates will be driven upward. It is just that simple
and that is why I have insisted that the Congress place
a curb on their spending actions.
FORD
RALD
LIBRAR
5/2/75
THE FIRST QUARTER GNP
Q: The decline in the economy during the first quarter
was very sharp. The real gross national product
declined at an annual rate of 10.4 percent. Is the
decline going to bottom out soon or has it become
too steep to be arrested soon?
A: The gross national product numbers for the first
quarter really do not tell us anything new. They
confirm and total up the monthly figures we already
have seen. We expect the decline to end around mid
year and there is now a good deal of evidence to support
that view.
The substantial decline in inventories in February (as
now estimated for the first quarter as a whole) is
a very favorable sign. Although real GNP or production
declined at 10.4 percent rate in the first quarter
final sales actually held even. The result of low
production and fairly good sales has been an economic
reduction in inventory accumulation. when inventories
are reduced production and employment have to rise.
This has already started to happen in the automobile
industry and other sectors also seem to be approaching
the point of turnaround.
Although housing has not begun to improve the basic
factors determining the trend of housing have improved
greatly and we expect these to soon be reflected in a
housing recovery.
ERALD R. FORD
H-48
QUESTION: REP. DERWINSKI SAYS REDUCED GASOLINE CONSUMPTION
AS A. RESULT OF PREVIOUS FEDERAL ACTION AND PEND-
ING LEGISLATION BEFORE WAYS AND MEANS WILL CAUSE
STATES THE LOSS OF GASOLINE TAX REVENUES OF $1.5
BILLION IN 1976 AND $3.8 BILLION BY 1980, ASSUM-
ING TAX RATES CONTINUE AT 1973 LEVELS, Do YOU
AGREE WITH HIS ANALYSIS? WHAT WILL BE THE EFFECT
OF THE ENERGY BILL ON STATES' REVENUES?
ANSWER:
CONGRESSMAN DERWINSKI ASSUMED A REDUCTION IN
GASOLINE CONSUMPTION OF 18% IN 1976 AND 30% IN
1980. IF THAT REDUCTION OCCURRED, AND IF THE
STATES DID NOT RAISE THEIR TAX RATES, THE LOST
REVENUE COULD BE ON THE ORDER ASSUMED. HOWEVER,
AS I UNDERSTAND THE PRESENT WAYS AND MEANS BILL,
IT IS NOT INTENDED TO REDUCE GASOLINE CONSUMPTION
BELOW 1973 LEVELS. IF GASOLINE CONSUMPTION WERE
NOT REDUCED, OF COURSE, THE STATES GASOLINE TAX
REVENUES WOULD NOT BE AFFECTED. WHAT THE TOTAL
EFFECT OF THE ENERGY BILL WILL BE ON STATES
REVENUES NO ONE WILL KNOW UNTIL WE KNOW WHAT WILL
BE IN THE BILL.
FURTHER
THE CALCULATIONS WE MADE USING THEIR ASSUMPTIONS
INFO:
WOULD INDICATE REVENUE LOSSES OF $1.7 BILLION AND
$3.5 BILLION.
MMI 4 1975
TREASURY DEPARTMENT
GERALD FORD
5/2/75
ECONOMIC OUTLOOK
Q: There is a growing amount of commentary that the recession
is bottoming out and the economy will soon turn up. Do
you agree?
A: It is true that a number of early indicators that normally
appear prior to the bottoming of a recession have begun to
emerge in recent weeks. Although we expect the economy to
stabilize and to begin to recover in the months ahead it is
still declining--more slowly than earlier but the trend is
still downward. Consequently, we must expect to see several
months of unfavorable economic indicators. Among these we
should expect another increase in the unemployment rate to
be reported for the month of April--perhaps to nine percent
or even more.
The evidence that is gradually appearing is consistent with
and supportive of our view that the economy will bottom
out around mid year. This was our forecast in January in
the Economic Report and the Budget and we see as yet no
evidence to suggest that the expected mid year bottoming
oui has been advanced or delayed.
Memo: A number of key indicators have continued to do better
than we expected: retail sales, a stabilization in new orders
and, most importantly, the growing evidence that the reces-
sion is to a very large extent an inventory recession, and
this will limit both the depth and the duration of the
recession.
LIBRARY DERALD FORD
INFLATIONARY PRESSURES
QUESTION: Do you feel there is any danger that increases in Government
spending will rekindle inflationary pressures?
ANSWER:
Yes, there is a real danger that unless we are careful about
Government spending inflationary pressures will reappear. Past
experience has shown that spending programs initiated to combat
recession have very often had perverse effects. There are long
delays in starting spending programs and when they do finally
become effective the need for spending has passed.
Furthermore, temporary spending programs have a way of becoming
permanent so that the spending itself adds to demand at a time
when the growth in demand should be moderated. Once programs
are locked into the budget they become difficult to eliminate
and thus constitute a continuing source of demand pressure long
after the original need has passed. Because of these dangers,
it makes much more sense to combat the recession via the tax
cut route.
There have already been increases above the spending totals
initially proposed in the budget in February and unless these
are kept limited, the progress against inflation we have seen
thus far will be largely lost. Each committee of the Congress
cannot attempt to conquer the recession with its own program.
In addition to the dangers of increased Federal spending we must
also avoid concentrating all our attention on short term problems.
Too much spending on programs such as public service jobs at this
time may mean lower investment to increase production capacity
for the future. Thus we must exercise some restraint now in order
to assure that a recovery is not prematurely terminated because
of a lack of adequate investment to sustain it.
LOCRALO FORD LIBRARY
May 2, 1975
INCREASED UNEMPLOYMENT
QUESTION: Another increase was announced in the unemployment rate
this time to 8.9 percent. How much higher do you expect
unemployment to go and how long will it be before unemployment
begins to decline?
ANSWER:
The rate of unemployment rose in April by 0.2 percentage points
to 8.9 percent. As I have indicated on earlier occasions, I do
not want to get involved in attempting to guess the precise peak
level of unemployment. We are encouraged, however, by several
recent indications that the decline in the economy is beginning
to bottom out. Retail sales have held up well, the large excess
of inventories is being rapidly worked off, and the rate of decline
in production and employment has already begun to slow.
It is too early to expect a sustained and rapid rise in employment,
but we are encouraged that the economy appears to be bottoming
out and that the decline in employment has slowed. As the recovery
gets underway and gains momentum during the second half of the
year we will then begin to see more substantial increases in total
employment.
BACKGROUND:
Although the unemployment rate rose last month, the total number
of people employed rose slightly as did the average number of
hours worked. In comparison, during the six month period from
September 1974 to February 1975, both employment and the average
work week declined sharply. Total employment during that period
fell by 2.4 million or by an average of 480,000 per month.
BERAL FORD LIBRARY
May 3, 1975
WHY ARE YOU AGAINST EMERGENCY AID FOR MIDDLE INCOME HOUSING?
QUESTION:
It has been said that you are opposed to the House-passed
emergency middle-income housing assistance measure (H.R. 4485)
which would provide $12 billion of home mortgage loans under new
assistance programs subsidizing mortgages at 6 percent or 7 percent?
ANSWER:
I am against this bill because it deals with the wrong problem.
The supply of new mortgage funds is likely to be very substantial
this year. For the first quarter of 1975, savings and loan
associations had massive inflows of funds.
A good deal of the reluctance of individuals to buy new homes
relates to their uncertainty about the economic situation, but
there are already indications of some pickup in home demand.
The longer-range problem is the basic cost of a new home. Unless
inflation and housing costs come under control, very few people
are going to be able to afford new homes, whatever the mortgage
interest rate may be.
My Financial Institutions Act of 1975 will help moderate the
upward spiral in housing costs by providing a stable supply of
housing credit. This will reduce sharp price increases by
evening out the boom and bust pattern of housing construction.
In contrast, the House measure provides only a temporary, ad-hoc
means of dealing with this problem.
BACKGROUND:
Net inflows of funds to Federal savings and loan associations
in the first quarter this year were $9.9 billion compared to
$5.5 billion in the first quarter of 1974.
BERALD FORD LIBRART
TREASURY DEPARTMENT
May 2, 1975
THE BOND MARKET
QUESTION: What is your assessment of the bond market? Do you expect
it to settle down?
ANSWER:
While long-term borrowings by business corporations and by
State and local governments are still heavy, there have been
some postponements of bond issues, and some observers believe
that conditions in the bond market are improving.
The Treasury's long-term borrowings are relatively small,
since the great bulk of Treasury financing is done through
short-term bills or notes. Also, many of the other Federal
agencies which until a year ago were financing their programs
with large amounts of long-term securities are now being
financed through the Federal Financing Bank, and the Financing
Bank finances these securities through short-term Treasury
borrowings.
Thus, I don't think that the Federal Government's long-term
borrowings have had much effect on the bond market, and the
Treasury plans to continue to issue relatively small amounts
of long-term securities.
GERALO FORD LIBRARY
TREASURY DEPARTMENT
May 2, 1975
CROWDING OUT PRIVATE BORROWERS
QUESTION: Are you concerned that Treasury borrowing at proposed levels
to finance the expected federal deficit will crowd out private
borrowers?
ANSWER:
I would like to clarify the position which has been taken by
the Department of the Treasury.
Contrary to some reports, the Treasury has not been saying that
financing difficulties are a sure thing at the proposed level
of the deficit, only that the level is near the danger area.
The Treasury is saying that a larger deficit resulting from the
possible enactment by the Congress of further spending programs
and congressional failure to act on the deferrals, recessions,
and budget cuts I have already proposed presents a serious danger
of undesirable crowding out of the private borrower--and that this
is likely to develop just when economic recovery gets into full
swing in late 1975 or 1976. Under conditions of a larger deficit,
if "crowding out" is to be prevented it would require a highly
expansionary monetary policy which would result in a return to
double digit inflation.
The basic point is that there is a limit to how large a deficit
our financial system can absorb without serious damage to the
private sector, either by crowding out or inflation. And as we
push the deficit up beyond that which I had planned, we seriously
increase the risks of reaching that limit.
GERALD FORD
May 2, 1975
VA LOAN RATE INCREASE
QUESTION: Why did you allow the Veterans Administration to increase its
interest rate on loans to 81%?
ANSWER:
The interest rate on VA and FHA loans must be maintained at a
level consistent with the demands of the loan market. If the
interest rate is allowed to fall behind the market, the avail-
ability of money for loans becomes seriously impaired. Several
weeks ago, all indicators pointed to a need to increase the rate
above the 8% then in effect.
BACKGROUND:
The increase to 81% was made on April 28, narrowing the gap in
relation to the loan market. In addition to improving the yield
for such loans, the increase in the interest rate also effected
a reduction in discounts. Both increased willingness of lenders
to make VA guaranteed loans and of sellers to absorb the lesser
discounts should contribute to an improving housing outlook for
veterans.
FORD : LIBRARY
May 2, 1975
R. D. Semerad
DROP IN UNEMPLOYMENT BENEFIT CLAIMS
QUESTION: What do you feel is the significance of the drop in new claims
for regular state unemployment benefits?
ANSWER:
Unfortunately, I cannot attach too much significance to the small
drop in March. I am relieved that new claims are no longer rising
rapidly as they were late last year. But they are continuing to
run at a high level.
BACKGROUND:
Initial Claims for Unemployment Insurance (seasonally adjusted
in thousands)
1974
1975
Mar.
Oct.
Nov.
Dec.
Jan. Feb. Mar.
312
410
458
504
548
550
545 p
GERALD R. FORD
TREASURY DEPARTMENT
May 2, 1975
SOCIAL IMPLICATIONS OF HIGH UNEMPLOYMENT
QUESTION: What if unemployment persists at 7-8-9 million over the next
five years, as forecast by your Council of Economic Advisers?
What will be the social and political implications of such a
massive group of the economically excluded? What do you believe
should be done to solve this problem? What concrete plans are
you formulating to deal with it?
ANSWER:
By April 1975 the civilian labor force totaled 92.2 million workers,
or 61.2 percent of the work-age population. Employment totaled
84.1 million, or 91.1 percent of the labor force. Unfortunately,
8.2 million workers were unemployed, or 8.9 percent. This level
of unemployment is unacceptably high and I am committed to reducing
it as part of a general economic recovery. However, the policy
actions for reducing unemployment should not create more problems'
than they solve. We must focus on what kind of economic results
we want 1 and 5 years from now as we cirect current policies.
1. My first priority is to put the economy back on track--until
the rate of real output gains (real GNP) are back to the 3-3/4
to 4 percent zone, the growing labor force will continue to
create unemployment. The amount of fiscal and monetary stimu-
lus now being added to the economy and the prospects for
economic recovery are, as I have said, encouraging.
2. In the interim, we have put the automatic stabilizers to
work. Unemployment compensation claims for eligible workers
have been increased from a maximum of 39 to 65 weeks. In
dollar terms, unemployment insurance benefits are programmed
to increase from $6.1 billion in FY 1974 to $18.2 billion in
FY 1976. We have increased outlays for public service jobs,
unemployment compensation benefits, income security payments
and long-term manpower training and services. These efforts
will help moderate the transitional pains for unemployment.
But the only real answer is to return the U.S. economy to a
sustained economic growth track. This requires responsible
fiscal and monetary policies and specific attention to the
basic factors of productivity in our system.
FORD
TREASURY DEPARTMENT
May 2, 1975
INTERPRETATION OF DECLINE IN LEADING INDICATORS
QUESTION: What is your interpretation of the March decline in the
leading indicators index? Was the rise in February a fluke?
ANSWER:
I am not inclined to put too much weight on the movement of
that index for any single month. Taken together, the results
for February and March show a flat pattern for the leading
indicators. This should not be taken as evidence that an
economic upturn has taken place -- although it is of course
a much better picture than the declines of 2 to 3 percent
registered in t he index each month late last year and in
January.
BACKGROUND:
Percent change in Composite Index of Leading Indicators
1974
1975
Sept.
-3.4
Jan.
-3.1
Oct.
-1.7
Feb.
+0.6
Nov.
-3.6
Mar.
-0.5
Dec.
-2.1
BERALD FORD
TREASURY DEPARTMENT
May 2, 1975
SHOULD FEDERAL RESERVE BE LESS INDEPENDENT?
QUESTION: Should the Federal Reserve be less independent of the
Congress and the Administration?
ANSWER:
The Federal Reserve has a vital role as the primary factor
in determining the level of credit in the economy, an area
which is best left outside the immediate day-to-day political
control of Congress. The Administration, which normally can
and does take a longer view of the economy and national policy
generally than does the legislative branch, should be given
greater power over monetary policy in order to design and
maintain a consistent and integrated economic program.
FORD
SERALD
TREASURY DEPARTMENT
May 2, 1975
MONETARY GROWTH
QUESTION: Do you endorse the Federal Reserve's target of 5 to 7½
percent monetary growth for the next year? Many eçonomists
think that is too low. For example, former CEA Chairman
Herb Stein has proposed monetary growth of between 8 and 9.5
percent.
ANSWER:
My feeling is that the Federal Reserve is on the right track.
It is important that monetary policy support vigorous recovery
from this recession but, at the same time, not be so unconstrained
that it lays the groundwork for a new explosion of inflation.
Yes, it is true that some economists recommend higher monetary
growth rates, but you failed to mention that others recommend
lower numbers. The Congress heard the other day recommendations
as low as 2/1/2 percent. All that tells us is that there are many
different views of correct policy among economists.
&
FORD
GERALD
May 2, 1975
TAB B
PROPOSE HIGHWAY FUND DEFERRAL?
QUESTION: Will you propose a deferral of Federal-aid Highway funds for
fiscal year 1976 in July?
ANSWER:
No decisions have been made concerning adjustments in the
1976 level of Federal-aid Highway funds or the appropriate
mechanism for controlling these obligations. We are currently
reviewing the impact of recent Congressional action and court
decisions as well as current economic conditions and the effects
of the additional highway fund releases this year. The Adminis-
tration will discuss various alternatives under consideration
with the appropriate Congressional Committees.
FORD is LIBRARY 038830
OMB/Wally Scott/5/2/75
POSITION ON RELEASE OF HIGHWAY FUNDS
QUESTION: What is your position on recent Congressional action releasing
$9.1 billion of deferred Federal-aid Highway funds?
ANSWER:
On February 11, I ordered the release of an additional $2
billion of Federal-aid Highway funds in order to stimulate
employment, particularly in the construction industry. This
was the maximum amount of additional funds that the States
could absorb for new projects on which actual construction could
be quickly initiated. At the time of this release, I indicated
that the Governors had assured me that these funds could be put
to immediate use in highway projects that could be underway by
June 30, 1975. The Congressional release of $9.1 billion in
additional funds will not provide any meaningful short-term employ-
ment stimulation. In fact, the full economic impact of most of
these additional projects will not be felt for many months--
long after the economy has begun to recover from the present
downturn. This additional demand may then again fuel the infla-
tionary fires that plagued the highway industry last year.
In addition, the Congressional action, which makes over $15
billion of Federal-aid Highway funds available for obligation
in fiscal year 1975, further hinders Administration efforts to
develop a balanced national transportation program.
All deferred Federal-aid Highway funds have been released as
required by statute.
FORD & LIBRARY CERRED
OMB/Wally Scott/5/2/75
REVENUE SHARING
QUESTION: What evidence do you have that the general revenue sharing
program is worth renewal when the Federal budgets are running
such deficits?
ANSWER:
I feel that renewing general revenue sharing is an important
part of winning the battle against the combined inflation and
recession that are major contributors to our Federal deficits.
Without it, states, cities, counties and small communities
would have either to cut back essential services causing
increased public or private unemployment, or tax or borrow
more. That would defeat our objectives to reduce the total
tax load and revive the economy.
FORD & LIGRARY
TREASURY DEPARTMENT
May 2, 1975
SIZE OF BUDGET DEFICIT
QUESTION: A number of actions have been taken that raise the budget
deficit over the amount in your budget. What is your current
estimate of the deficit?
ANSWER:
The current estimate of the fiscal year 1976 deficit is about
$60 billion compared with $52 billion in the budget. The increase
is largely because of the need to meet the growing problem of
unemployment.
CERALD FORD CIDRAST
OMB/Walker/4/30/75
Table 1
BUDGET REVISIONS AS OF APRIL 30, 1975
(in billions of dollars)
1975
1976
February 4 outlay estimate
313.4
349.4
Congressional action:
Tax bill -- outlay changes (social security
and unemployment benefits)
1.9
*
Freeze on food stamp increases
.2
.6
Inaction on rescissions and overturn of de-
ferrals
.5
.7
Foreign assistance appropriation, 1975
-.2
-.2
Inaction on legislative reduction proposals
.7
.1
Overturn of highway deferral
.4
Other changes:
Court actions
*
.1
Release of highway funds
*
1.0
Public service jobs and summer youth employment
.1
1.8
Higher use of food stamps
.6
.8
Increases in veterans benefits
.5
.6
Loss of offshore oillands receipts
2.5
---
DOD and HEW
3.6
---
Vietnam supplemental
.1
.4
Extension of unemployment benefits
.8
Other
.3
-.8
Revised total
324.2
355.7
Receipts
282.0
296.8
Deficit
-42.2
-58.9
* Less than $50 million.
&
FORD
CERALD
LIBRARY
OMB/Walker/Revised/5/2/75
ELIMINATING FEDERAL DEFICITS
QUESTION: Do you see any real hope of eliminating Federal budget deficits
once we're out of this recession? Congress is cutting taxes and
pressing for more government spending- but isn't the tax structure
already pitched at too low a level in relation to foreseeable outlays,
even if we can return to high economic activity? What do you believe
can be done to achieve a balanced budget once more?
ANSWER:
A productive U.S. economy is entirely capable of generating
adequate tax revenues to support a proper level of public services.
The major challenge is to regain control of the rate of spending.
In the period FY 1966-68 and again in the 1970's, the rate of
increases in Federal spending have gone beyond what the economy
is capable of absorbing given the total of public and private
claims. Therefore, the outlook is certainly not hopeless, but
as I have stated time and again, we have to exercise a fiscal
discipline and not finance expensive new Federal programs.
&
FORD
GERALD
LIBRARY
TREASURY DEPARTMENT
May 2, 1975
TAB C
IS THE OIL CRISIS REALLY OVER?
QUESTION: Present information indicates that there is an excess of oil
on the market, i.e., an oil glut. In view of this, why does
your Administration continue to harp upon the severity of the
"energy crisis"?
ANSWER:
The energy crisis still exists. While its form may have
changed since the days of the embargo, it is no less dangerous.
The present surplus capacity in oil production results from
the fact that major consumers, particularly, the U.S., Western
Europe and Japan, have reduced their consumption of oil by 5-10%,
much of this reduction in consumption stems from current recession.
If economic recovery occurs more-or-less simultaneously throughout
the industrialized free world, there will be a sharp rise in demand
for world-traded oil. This demand will be met by those OAPEC
producers who have a combination of production slack and low
recovery costs. At that time, market conditions may emerge which
would make another increase in world oil prices possible, and once
again playing havoc with the American economy.
GERALD FORD LIBRADY
May 2, 1975
TAB D
WHY VETO FARM BILL?
QUESTION: Why did you veto the emergency farm bill when farmers are
experiencing financial difficulties?
ANSWER:
I recognize that some farmers have experienced financial
difficulties due to a cost-price squeeze. The aim of the bill
I vetoed is laudable. However, its results would be costly not
only to consumers and taxpayers but to American farmers in the
long run.
Approval of that bill would undermine the successful market-
oriented farm policy adopted by this Administration and the
Congress. It is a step backward toward previously discredited
policies. If used as a point of departure for longer-term
legislation, it could lead an escalation of farm program subsidies
in succeeding years.
The Administration has taken a number of positive steps to assist
farmers. In addition, if unforeseen price deterioration requires
action on my part, I will direct the Secretary of Agriculture to
make ad ijustments in price support loan rates for wheat, corn,
soybeans, and other feed grains. But it is our expectation that
market prices for grains will remain well above loan rates and
target prices in the coming year.
BACKGROUND:
On May 1, 1975, you vetoed H.R. 4296, referred to as the
Emergency Agricultural Act of 1975. In your veto message
you state that the Administration has taken a number of
positive steps to assist farmers.
The 1976 wheat acreage allotment was recently increased by 8
million acres to 61.6 million acres. This action provides wheat
producers with additional target price and disaster protection.
We have also increased the 1975 crop cotton price support loan
rate by 9 cents a pound. And we recently announced an increase
in the price support level for milk, which, combined with easing
feed prices, should be helpful to dairy producers.
GERALD FORD LIBRART
-2-
Within the past several days, we have completed
negotiations with the European Community to remove the
export subsidies on industrial cheese coming here -- a
step that ensures that surplus dairy products will not
be sold in the U.S. market at cut-rate prices. At the
same time, we have worked out arrangements which enable
the Europeans to continue selling us high-quality
table cheese. This solution has enabled us to keep on
mutually agreeable trading terms with our best customers
for American farm exports.
The Administration has also taken action to protect
our cattle producers against a potential flood of beef
imports from abroad. The Department of State is
completing agreements with 12 countries limiting their
1975 exports of beef to this country. These voluntary
export restraint agreements are intended to keep imports
subject to the Meat Import Law to less than 1,182 million
pounds.
GERiHLA FORD LIBRANY
NER
5/2/75
CONSUMER PROTECTION
Question:
Congress is once again discussing the issue of a
Consumer Protection Agency. You say you oppose such an
agency. What do you propose instead?
Answer:
I propose that we reform our existing institutions of Govern-
ment rather than set up new ones. Bigger Government is not
better Government.
In the Executive branch I have told each of the Cabinet mem-
bers to work with Mrs. Knauer in seeing that consumer repre-
sentation in decision making is improved.
And with respect to the independent regulatory agencies, I
More will be coming soon.
have submitted several reform measures to Congress already.
Also, I will be meeting with the members of these agencies
and relevant members of Congress to discuss with them ways
decisions. they can improve consideration of consumer views in their
PGN
5/2/75
FORD & LIBRARY GERALD
RAILROAD CRISIS
QUESTION: Do you have a plan or program to deal with the crises of the
railroads? Will your new regulatory reform program abolish
the ICC?
ANSWER:
We are now formulating a broad scale program for rail revitali-
zation, and I expect to submit it to the Congress very soon.
The problems of railroads in the United States are very complex,
and this proposal will try to attack some of the long-standing
causes of those problems, including access to funds for
rehabilitation, discriminatory taxation, better control of
equipment, and regulatory reform.
I do not propose to abolish the ICC, but, as I said last week
to the U.S. Chamber of Commerce, I do view regulatory reform as
absolutely necessary to the success of a private-enterprise
transportation system in this country. The right kind of reform
can provide the consumer with efficient service at a fair price.
Without reform the taxpayer will be forced to finance our
transportation system.
FURTHER INFO:
DOT has drafted a Rail Revitalization Act, which will include
some streamlining or by-pass of ICC procedures, a prohibition
against discriminatory taxation of railroads, and a $2 billion
loan guarantee program for rail rehabilitation. The proposal
would not abolish the ICC. Certain options as to interest
payments, additional funding, and the degree of regulatory
reform are being presently considered.
FORD
GERALD
LIBRARY
TREASURY DEPARTMENT
May 2, 1975
TRADE BILL MODIFICATION PLANS
QUESTION: When do you plan to send modifications to the Trade Bill to
Congress and what sort of modifications will you make?
ANSWER:
My Administration has been discussing this with Congressional
leaders with the objective of developing some mutually agreed
proposals for Congressional consideration around the middle of
the year.
My objective is to find a way to reconcile the desire to encour-
age more liberal emigration policies on the part of the Soviet
Union with Soviet insistence on non-discrimination and noninter-
ference by the U.S. in what they regard as their internal affairs.
I recognize that it will not be easy to work out a formula which
will be satisfactory to both sides. But I think the further im-
provement of U.S. -Soviet relations is so important that a major
effort must be made to reconcile these differences. I do not
think I should be more precise at this time.
GERALD P. FORD
May 2, 1975
TRANSFERS OF GOLD FROM SOUTH VIETNAM
QUESTION: Recently there have been reports of a substantial amount
of gold transferred out of South Vietnam. Are these reports
true? If so, what do you plan to do about it?
ANSWER:
There are two categories of gold and many of the press stories
have not distinguished between them. The first category is the
official gold reserves of the Government of South Vietnam and
its Central Bank. This official gold was not shipped out of
South Vietnam.
The second category of gold is that held by private citizens;
gold ownership was legal in South Vietnam. At some periods in
the past such private gold moved in and out of Vietnam in
response to market forces. Some of this private gold may have
been transported out of South Vietnam in the past few weeks.
I would have no way of estimating how much. It belongs to the
private citizen owners. The U.S. Government is not holding any
gold from South Vietnam.
FORD i GERALD LIBRARY
TREASURY DEPARTMENT
May 2, 1975
DID EVACUATION OF VIETNAM INCREASE RISK TO AMERICANS?
Question: Is it not true that the number of Vietnamese
evacuated by helicopter in the end contributed
substantially to lengthening the operation and
to increasing the risk to American forces?
Answer:
The fact that the operation succeeded so success-
fully indicates that no greater risks were
incurred at the end of the operation than at the
beginning. Although operations at the Embassy,
as distinguished from the airport, took longer
than expected, the entire evacuation was
accomplished through a single operation and with-
out any increase in the numbers of U. S. military
personnel or aircraft. I highly commend our
Armed Forces, and I believe all Americans will
agree that the operation was fully justified in
its entirety. We can all be proud of the manner
in which it was conducted without loss of any
American lives from hostilities.
(PB) May 3, 1975
GERALD R. FORD LIBRAST
SURPRISED BY OPPOSITION TO EVACUATION?
Question: Are you surprised by the amount of opposition
in the country and in Congress to the admission
of Vietnamese refugees?
Answer:
I do not believe the people of this country
are opposed to bringing Vietnamese refugees
to this country who have no where else to go.
No one would seriously suggest that we should
have turned the South Viegnamese boats away
from Guam back into the Pacific Ocean or that
our navel ships should have refused to pick
up refugees from the sea.
As a signatory to the United Nations Convention
on the status of refugees) once we authorize
entry of a refugee to U. S. territory such
as Guam, that refugee is generally entitled to
asylum.
FORD & 07V839 LIBRARY
(PB) May 3, 1975
HOW TREAT REFUGEES NOW IN THIRD COUNTRIES
Question: How are you going to treat refugees from Cambodia
or South Vietnam who are now in a third country?
Answer:
First, they must seek asylum in that country or
apply through various international organizations
for resettlement assistance. Only if they are
turned down everywhere else, will we consider a
limited number for admission here on a case-by-
case basis.
(PB) May 3, 1975
FORD & GERALD LIBRARY
HOW TO JUSTIFY VIETNAM EVACUATION
Question:
How do you justify the military operations
to evacuate Americans and South Vietnamese
from Saigon when Congress had passed no law
authorizing the operation?
Answer:
The operation, although larger in scale, was
no different from the final evacuation opera-
tion involving Americans and Cambodians in
Phnom Penh. That was done under my executive
powers and authority as Commander in Chief
and required no legislation by Congress.
Prior to each of the operations there were
notifications to, and consultations with,
key members of Congress; and subsequent
reports have gone to the President for
Pro Tempore of the Senate and the Speaker --
all without having any objections from those
contacted.
(PB) May 2, 1975
LIBRARY GERALD B. FORD
WHY ASK FOR EVACUATION LEGISLATION
Question: Why then, had you asked in your address to
the Congress for legislation to include both
South Vietnamese and Americans in the evacu-
ations involving U. S. Armed Forces?
Answer:
At the time, it appeared desirable to clarify
the extent which operations could involve a
rescue of South Vietnamese from positions of
grave danger if the North Vietnamese were to
overrun all of South Vietnam.
When Congress failed to act in time, an emergency
situation was created which prevented continued
use of fixed-wing aircraft at the Tan Son Nhut
airfield. At that time, I acted out of
consideration for the safety of U. S. citizens
to order the use of helicopters for landings both
at the Defense Attache Office Compound and at the
Embassy. At both of these locations, there were
Americans and Vietnamese congregated. In the
process of moving out Americans it was possible
to continue the humanitarian evacuation of the
intermingled Vietnamese, although the operation
also required allowing time for all Americans
left elsewhere in Saigon to reach the landing
zones and permitted additional South Vietnamese
to do the same. If we had had legislation of
the type originally passed in the House of
Representatives, we probably could have done
a more complete job of evacuating those South
Vietnamese who were in serious danger of
losing their lives because of their relations
to the U. S. Government and American firms.
&
FORU
DERALD
LISTARY
(PB) May 3, 1975
TAB F
IS WHITE HOUSE A BOTTLENECK TO CIA INVESTIGATION
Question: Mr. President, there have been reports of a
"White House lag" and a "CIA stall" with
respect to documents requested by Senator
Church's Select Committee to investigate
intelligence operations. Is the White House
being a bottleneck? Will you direct the
agencies in the Executive Branch to speed up
their responses?
Answer:
Senator Church indicated a few weeks ago that
the White House has furnished the Committee
with all but three or four of the several
hundred White House documents the Committee
requested. Two of those documents were
provided to the Committee last week under
special security arrangements, and we have an
understanding, I believe, about how the last
document or documents should be handled. The
CIA and other agencies in the Intelligence
Community have not been stalling or dragging
their feet in responding to requests from the
Senate Select Committee. The CIA alone has
provided several thousand pages of materials
requested by the Senate Committee. The
Select Committee's requests have been
extremely voluminous. We should keep in mind
that what we are talking about here are very,
very sensitive materials, and that it is
important that we work together to ensure
that the proper security safeguards are in
effect with respect to these sensitive
materials.
FORD & LIBRARY VERALD
(PB)
May 3, 1975
EXPECT A CONFRONTATION OVER INTELLIGENCE ACTIVITY
INVESTIGATIONS?
Question: Mr. President, do you expect a confrontation
over Executive Privilege in connection with the
Congressional investigations of intelligence
activities?
Answer:
We are responding to the Senate Select Committee's
request in a spirit of cooperation and good faith.
We are aware of the Select Committee's responsi-
bility to conduct a full, thorough, and impartial
review. They are aware of my responsibilities
under the law and within our Constitutional frame-
work with respect to intelligence activities. It
is my hope and expectation that if we all continue
to approach this matter with a spirit of cooperation,
good faith and sensitivity to our Constitutional
system, we will not reach the point of irreconcil-
able disagreements.
FORD of GERMLD LIBRARY