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First Debate, 9/23/76: Issues - Social Programs/Quality of Life
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First Debate, 9/23/76: Issues - Social Programs/Quality of Life
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Michael Raoul-Duval Papers
Gerald Ford and Jimmy Carter Debates Files
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The original documents are located in Box 26, folder "First Debate, 9/23/76: Issues - Social
Programs/Quality of Life" of the Michael Raoul-Duval Papers 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. Michael Raoul-Duval 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United States of America his copyrights in all of his unpublished writings in National Archives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 WHITE HOUSE
WASHINGTON
September 16, 1976
TO: MIKE DUVAL
FROM: JIM JONNO CONNOR
Mike, would you like to take a look
at this, or would you prefer to
have Gergen see it?
encl.
material from Carla Hills
LIBRARY GERALD R. FORD
U.S. DEPARTMENT UNBRAN OF HOUSING AND
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
THE SECRETARY
9/16/76
TO : Dr. James E. Connor
FROM: Carla A. Hills
If I were debating on the 23rd on
domestic (housing and urban) issues,
I would find the attached helpful.
Would you arrange for the President
to see this?
Attachment
FORD is LIBRARY GERALD
U.S. DEPARTMENT UNBAN OF HOUSING AND
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
THE SECRETARY
9/21/76
TO : Dr. James E. Connor
Secretary to the Cabinet
FROM: Carla A. Hills
Attached is another question
which may be of use to The President
in the upcoming debate. The data
in the answer make a very powerful
argument that more Americans than
ever own their own homes.
make Dural
FY'
FORD & GERALD LIBRARY
Q.
Mr. President, there is increasing public concern about
the ability of Americans, especially young Americans,
to afford their own home. Is the "American dream" of
homeownership dying, and what can you do about it?
A.
The American dream of homeownership is not dying.
In fact, more and more Americans own their homes
each year. The data make this very clear:
Percent of Americans Who Own Their Own Homes
1950
1960
1970
Today
55%
61%
62%
65%
Percent of Young American Families (Under 35)
Who Own Their Own Homes
1950
1960
1970
Today
38%
48%
49%
56%
And first-time home buyers are becoming younger.
Percent of First-Time Home Buyers Under 35
1950
1960
1970
Today
No Data
49%
54%
62%
PROBLEM
FORD PROGRAMS
CARTER PROPOSALS AS OF SEPTEMBER 15
(Statements to date are very sketchy)
HOUSING THE POOR --
Rental Subsidy ($8) -- pays difference between 25%
of family income and fair market rental of a new
Direct subsidies to support high levels of constr
9 million renter households pay more than 25%
or an existing modest unit.
of low income housing
of income for housing
Achievements by Sept. 30, 1976
Expansion of elderly housing program ($202)
6 million poor households live in substandard
Fund reservations -- 400,000 units
Starts
-- 20,000 units
housing
Occupancy
-- 80,000 units
Reduction in quantity of "substandard" units
from 35% in 1950 to under 10% in 1975
Revised Homeownership Subsidy Program ($235)
government subsidizes to 5% mortgage for family
earning less than 95% of median income --
100,000 units planned for FY 1977
Direct federal loans for construction of elderly
housing combined with rental subsidies ($202/8)
-- 25,000 units funded for FY 1976; 25,000 added
units for FY 1977
ACHIEVING AN APPROPRIATE LEVEL OF HOUSING PRODUCTION --
"Tandem plan" to stimulate production --
Expand housing construction to 2.5 million housing
To assist construction industry and reduce 17%
per year
unemployment in building trades
Single-family - $15 billion in 1974-75 to purchase
mortgages carrying lower than market interest
by providing steady source of credit at low-i
Total Housing Starts in August at an annual rate
rates (recently 7-1/2%) -- aided 500,000 homebuyers
of 1.542 million (22% over 1 year ago and 35%
-- 7-1/2% mortgage, instead of market 9% mortgage
by providing federal mortgage guarantees, and
below 1972, record year)
saves $9,500 over $35,000 mortgage life or $20 per
month for family.2/
by restoring federal construction subsidy pro
Single-family starts in August 76 at an annual rate of 1.195 million
Multifamily - $5 billion ($3 billion in January and
(22% over 1 year ago and 9% below 1972, record year)
$2 billion in September, 1976) to purchase mortgages
at 7-1/2%.
Multifamily starts in August 76 at an annual rate of 284,000
Construction for the poor -- $$8/235 -- will produce
(30% over 1 year ago and 69% below 1972, record year)
substantial numbers of units in both FY 76 and FY 77.
ENCOURAGING MIDDLE-INCOME HOMEOWNERSHIP --
Tandem Plan for single-family (see above)
Same as above
50% of households owned homes in 1950; 62% in 1960; 65% in 1975
See Revised Homeownership Subsidy Program ($235) above --
down payment lowered 9/17/76 to conform to ordinary FHA
Interest and property tax deductions "would be amor
25 million households owned homes in 1950; 50 million in 1975
programs
that I would like to do away with." (Boston, Mas
Suggested that this should be in the context of
OL
Ratio of income/purchase price roughly 2.8 since 1954
FHA Insurance-Federal private mortgage and expands
tax reform.
availability of mortgage credit to middle America;
Single-family mortgage interest rates increased from 5% in 1956
255,000 guarantees FY 76
to 6% in 1966 to 9% in 1976
Graduated Payment Mortgage -- (announced by President
on September 15, 1976) expands ownership for young
families who anticipate increase in income (implemented
in October).
REVITALIZING OUR CITIES AND THEIR NEIGHBORHOODS --
General Revenue Sharing -- $6.4 billion FY 1976; $1.6 billion TQ
Community Development Block Grant -- $3.2 billion FY 76
Supported public works "jobs" bill ($3.95 billion)
Urban Reinvestment Task Force -- $4.5 million, 46 cities
Of late would expand General Revenue Sharing.
Urban Homesteading -- $5 million, 23 cities
Encourage tax increment financing.
Innovative Neighborhood Revitalization Projects --
Joint public/private development mechanism.
$4 million, 26 cities
Urban CCC
Rental Subsidy in existing and rehabilitated housing (§8)
projected occupancy 75,000 by September 30, 1976
Rehabilitation Loans ($312)
FOOTNOTES
Program was enacted barely two years ago. For comparison
turnkey public housing starts two years after enacted
in 1965 were only 4,800 and occupancy only 2,300.
2/ Only an estimated 18% of starts were incremental.
Expanded 9/14/76 by $6.5 million to fund additional
neighborhoods in original 23 cities or 10 more cities.
Administration opposed as a categorical program.
CARTER PROPOSALS AS OF SEPTEMBER 15
(Statements to date are very sketchy)
Installment II
POSSIBLE FORD INITIATIVES
(September 17)
ifference between 25%
arket rental of a new
Direct subsidies to support high levels of construction
Housing Block Grant --
of low income housing
1976
to respond better to differing local housing needs.
00,000 units
Expansion of elderly housing program ($202)
20,000 units
to reduce federal role and enhance means of local
30,000 units
officials to coordinate localities physical
development needs.
Program ($235)
mortgage for family
to replace current housing subsidy programs and link
dian income --
with Community Development Block Grant.
( 1977
truction of elderly
L subsidies ($202/8)
FY 1976; 25,000 added
oduction --
Expand housing construction to 2.5 million housing starts
Single-family -- not needed at this time -- higher level
in 1974-75 to purchase
per year
of production would cause abandonment of existing housing
than market interest
in our cities
aided 500,000 homebuyers
by providing steady source of credit at low-interest rates,
ad of market 9% mortgage
Multifamily -- released $2 billion in September 1976 under
mortgage life or $20 per
by providing federal mortgage guarantees, and
"tandem plan" to purchase 7-1/28 mortgages
by restoring federal construction subsidy programs.
3 billion in January and
1976) to purchase mortgages
$$8/235 -- will produce
in both FY 76 and FY 77.
(see above)
Same as above
President announced on September 15 proposal to reduce
Program ($235) above --
FHA downpayment and increase FHA mortgage limit to
to conform to ordinary FHA
Interest and property tax deductions "would be among those
$60,000 (need legislation).
that I would like to do away with." (Boston, Mass. 2/23/76)
Suggested that this should be in the context of all-inclusive
See also Graduated Payment Mortgage in "Ford Programs" column.
mortgage and expands
tax reform.
edit to middle America;
(announced by President
ownership for young
GERALD R.FORD LIBRARY
rease in income (implemented
billion FY 1976; $1.6 billion TQ
President's Committee for Urban Development
-- $3.2 billion FY 76
Supported public works "jobs" bill ($3.95 billion).
and Neighborhood Revitalization
-- $4.5 million, 46 cities
Of late would expand General Revenue Sharing.
Possible initiatives
23 cities
Encourage tax increment financing.
Preference for block grants, including possible
Housing Block Grant.
lization Projects --
Joint public/private development mechanism.
Brown-Griffin Countercyclical.
Rehabilitation tax incentives to encourage full
Urban CCC
utilization of nation's existing housing and
rehabilitated housing (§8)
community resources.
September 30, 1976
Proposal to expand Urban Homesteading to $15 million per year.
two years ago. For comparison
starts two years after enacted
Report due to the President October 1, 1976.
and occupancy only 2,300.
See memorandum of September 13, 1976.
starts were incremental.
million to fund additional
23 cities or 10 more cities.
a categorical program.
CARTER PROPROALS AS OF SEPTEMBER 15
PROBLEM
FORD PROGRAMS
(Statements to date are very sketchy)
HOUSING THE POOR --
Rental Subsidy ($8) -- pays difference between 25%
Direct subsidies to support high levels of construction
of family income and fair market rental of a new
of low income housing
9 million renter households pay more than 25%
or an existing modest unit.
of income for housing
Expansion of elderly housing program (§202)
Achievements by Sept. 30, 1976
6 million poor households live in substandard
Fund reservations -- 400,000 units
housing
Starts
-- 20,000 units
Occupancy
-- 80,000 units
Reduction in quantity of "substandard" units
from 35% in 1950 to under 10% in 1975
Revised Homeownership Subsidy Program ($235)
government subsidizes to 5% mortgage for family
earning less than 95% of median income
--
100,000 units planned for FY 1977
Direct federal loans for construction of elderly
housing combined with rental subsidies ($202/8)
-- 25,000 units funded for FY 1976
ACHIEVING AN APPROPRIATE LEVEL OF
"Tandem plan" to stimulate production --
Expand housing construction to 2.5 million housing starts
HOUSING PRODUCTION --
per year
Single-family - $15 billion in 1974-75 to purchase
To assist construction industry and reduce 17%
mortgages carrying lower than market interest
by providing steady source of credit at low-interest rates,
rates (recently 7-1/2%) -- aided 500,000 homebuyers
unemployment in building trades
-- 7-1/2% mortgage, instead of market 9% mortgage
by providing federal mortgage guarantees, and
saves $9,500 over $35,000 mortgage life or $20 per
Single-family starts in July 76 at an annual rate of 1.128 million
month for family.2/
by restoring federal construction subsidy programs.
(23% over 1 year ago and 14% below 1972, record year)
Multifamily - $5 billion ($3 billion in January and
$2 billion in September, 1976) to purchase mortgages
at 7-1/2%.
Multifamily starts in July 76 at an annual rate of 194,000
See also programs that cause construction for the poor
described above.
(10% below 1 year ago and 79% below 1972, record year)
ENCOURAGING MIDDLE-INCOME HOMEOWNERSHIP --
Tandem Plan for single-family (see above)
Same as above
55% of households owned homes in 1950; 62% in 1960; 65% in 1975
See Revised Homeownership Subsidy Program ($235) above
At one point suggested elimination of tax deductions for
home mortgage interest payments, but later suggested he
25 million households owned homes in 1950; 50 million in 1975
FHA Insurance-Federal private mortgage and expands
would give low and middle income families more than compensating
availability of mortgage credit to middle America;
(but unspecified) benefits.
Ratio of income/purchase price roughly 2.8 since 1954
255,000 guarantees FY 76
Single-family mortgage interest rates increased from 5% in 1956
Graduated Payment Mortgage -- (announced by President
to 6% in 1966 to 9% in 1976
on September 15, 1976) expands ownership for young
families who anticipate increase in income (implemented
in October).
General Revenue Sharing -- $6.4 billion FY 1976; $1.6 billion TQ
REVITALIZING OUR CITIES AND THEIR NEIGHBORHOODS --
Supported public works "jobs" bill ($3.95 billion).
Community Development Block Grant -- $3.2 billion FY 76
Of late would expand General Revenue Sharing.
Urban Reinvestment Task Force -- $4.5 million, 46 cities
Encourage tax increment financing.
Urban Homesteading -- $5 million, 23 cities
Joint public/private development mechanism.
Innovative Neighborhood Revitalization Projects --
$4 million, 26 cities
Urban CCC
Rental Subsidy in existing and rehabilitated housing ($8)
projected occupancy 75,000 by September 30, 1976
Rehabilitation Loans ($312)
FOOTNOTES
Program was enacted barely two years ago. For comparison
turnkey public housing starts two years after enacted
in 1965 were only 4,800 and occupancy only 2,300.
Only an estimated 18% of starts were incremental.
Expanded 9/14/76 by $6.5 million to fund additional
neighborhoods in original 23 cities or 10 more cities.
Administration opposed as a categorical program.
INSTALLMENT I
CARTER PROPROALS AS OF SEPTEMBER 15
(September 16)
ROGRAMS
(Statements to date are very sketchy)
POSSIBLE FORD INITIATIVES
§8) -- pays difference between 25%
Direct subsidies to support high levels of construction
Housing Block Grant --
and fair market rental of a new
of low income housing
modest unit.
to respond better to differing local housing needs.
Expansion of elderly housing program ($202)
by Sept. 30, 1976
to reduce federal role and enhance means of local
rvations -- 400,000 units
officials to coordinate localities physical
-- 20,000 units
development needs.
-- 80,000 units
to replace current housing subsidy programs and link
rship Subsidy Program ($235)
with Community Development Block Grant.
sidizes to 5% mortgage for family
95% of median income --
olanned for FY 1977
bans for construction of elderly
with rental subsidies ($202/8)
funded for FY 1976
stimulate production --
Expand housing construction to 2.5 million housing starts
Single-family -- not needed at this time -- higher level
per year
of production would cause abandonment of existing housing
$15 billion in 1974-75 to purchase
in our cities
rying lower than market interest
by providing steady source of credit at low-interest rates,
7-1/2%) -- aided 500,000 homebuyers
Multifamily -- released $2 billion in September 1976 under
tgage, instead of market 9% mortgage
by providing federal mortgage guarantees, and
"tandem plan" to purchase 7-1/2% mortgages
over $35,000 mortgage life or $20 per
ily.2/
by restoring federal construction subsidy programs.
5 billion ($3 billion in January and
September, 1976) to purchase mortgages
that cause construction for the poor
ingle-family (see above)
Same as above
President announced on September 15 proposal to reduce
FHA downpayment and increase FHA mortgage limit to
wnership Subsidy Program ($235) above
At one point suggested elimination of tax deductions for
$60,000 (need legislation).
home mortgage interest payments, but later suggested he
eral private mortgage and expands
would give low and middle income families more than compensating
See also Graduated Payment Mortgage in "Ford Programs" column.
mortgage credit to middle America;
(but unspecified) benefits.
ees FY 76
Mortgage -- (announced by President
1976) expands ownership for young
:icipate increase in income (implemented
aring -- $6.4 billion FY 1976; $1.6 billion TQ
President's Committee for Urban Development
Supported public works "jobs" bill ($3.95 billion).
and Neighborhood Revitalization
ent Block Grant -- $3.2 billion FY 76
Of late would expand General Revenue Sharing.
Possible initiatives
Task Force -- $4.5 million, 46 cities
Encourage tax increment financing.
Preference for block grants, including possible
-- $5 million, 23 cities
Housing Block Grant.
Joint public/private development mechanism.
Brown-Griffin Countercyclical.
rhood Revitalization Projects --
Rehabilitation tax incentives to encourage full
ities
Urban CCC
utilization of nation's existing housing and
community resources.
existing and rehabilitated housing ($8)
ncy 75,000 by September 30, 1976
Proposal to expand Urban Homesteading to $15 million per year.
is ($312)
acted barely two years ago. For comparison
Report due to the President October 1, 1976.
.ic housing starts two years after enacted
e only 4,800 and occupancy only 2,300.
See memorandum of September 13, 1976.
ted 18% of starts were incremental.
76 by $6.5 million to fund additional
S in original 23 cities or 10 more cities.
opposed as a categorical program.
CARTER PROPOSALS AS OF SEPTEMBER 15
PROBLEM
FORD PROGRAMS
(Statements to date are very sketchy)
HOUSING THE POOR --
Rental Subsidy (§8) -- pays difference between 25%
of family income and fair market rental of a new
Direct subsidies to support high levels of constry
9 million renter households pay more than 25%
or an existing modest unit.
of low income housing
of income for housing
Achievements by Sept. 30, 1976
Expansion of elderly housing program ($202)
6 million poor households live in substandard
Fund reservations -- 400,000 units
Starts
-- 20,000 units
housing
Occupancy
-- 80,000 units
Reduction in quantity of "substandard" units
from 35% in 1950 to under 10% in 1975
Revised Homeownership Subsidy Program ($235)
government subsidizes to 5% mortgage for family
earning less than 95% of median income --
100,000 units planned for FY 1977
Direct federal loans for construction of elderly
housing combined with rental subsidies ($202/8)
-- 25,000 units funded for FY 1976; 25,000 added
units for FY 1977
ACHIEVING AN APPROPRIATE LEVEL OF HOUSING PRODUCTION --
"Tandem plan" to stimulate production --
Expand housing construction to 2.5 million housing
To assist construction industry and reduce 17%
per year
unemployment in building trades
Single-family - $15 billion in 1974-75 to purchase
mortgages carrying lower than market interest
by providing steady source of credit at low-i
Total Housing Starts in August at an annual rate
rates (recently 7-1/2%) -- aided 500,000 homebuyers
of 1.542 million (22% over 1 year ago and 35%
-- 7-1/2% mortgage, instead of market 9% mortgage
by providing federal mortgage guarantees, and
below 1972, record year)
saves $9,500 over $35,000 mortgage life or $20 per
month for family.2/
by restoring federal construction subsidy pro
Single-family starts in August 76 at an annual rate of 1.195 million
Multifamily - $5 billion ($3 billion in January and
(22% over 1 year ago and 9% below 1972, record year)
$2 billion in September, 1976) to purchase mortgages
at 7-1/2%.
Multifamily starts in August 76 at an annual rate of 284,000
Construction for the poor -- $$8/235 -- will produce
(30% over 1 year ago and 69% below 1972, record year)
substantial numbers of units in both FY 76 and FY 77.
ENCOURAGING MIDDLE-INCOME HOMEOWNERSHIP --
Tandem Plan for single-family (see above)
Same as above
50% of households owned homes in 1950; 62% in 1960; 65% in 1975
See Revised Homeownership Subsidy Program ($235) above --
down payment lowered 9/17/76 to conform to ordinary FHA
Interest and property tax deductions "would be amo
25 million households owned homes in 1950; 50 million in 1975
that I would like to do away with." (Boston, Ma
programs
Suggested that this should be in the context of
Ratio of income/purchase price roughly 2.8 since 1954
tax reform.
FHA Insurance-Federal private mortgage and expands
availability of mortgage credit to middle America;
Single-family mortgage interest rates increased from 5% in 1956
255,000 guarantees FY 76
to 6% in 1966 to 9% in 1976
Graduated Payment Mortgage -- (announced by President
on September 15, 1976) expands ownership for young
families who anticipate increase in income (implemented
in October).
REVITALIZING OUR CITIES AND THEIR NEIGHBORHOODS --
General Revenue Sharing -- $6.4 billion FY 1976; $1.6 billion TQ
Supported public works "jobs" bill ($3.95 billion)
Community Development Block Grant -- $3.2 billion FY 76
Urban Reinvestment Task Force -- $4.5 million, 46 cities
Of late would expand General Revenue Sharing.
Urban Homesteading -- $5 million, 23 cities
Encourage tax increment financing.
Innovative Neighborhood Revitalization Projects --
Joint public/private development mechanism.
$4 million, 26 cities
Urban CCC
Rental Subsidy in existing and rehabilitated housing ($8)
projected occupancy 75,000 by September 30, 1976
Rehabilitation Loans ($312)
FOOTNOTES --
Program was enacted barely two years ago. For comparison
turnkey public housing starts two years after enacted
in 1965 were only 4,800 and occupancy only 2,300.
Only an estimated 18% of starts were incremental.
Expanded 9/14/76 by $6.5 million to fund additional
neighborhoods in original 23 cities or 10 more cities.
Administration opposed as a categorical program.
CARTER PROPOSALS AS OF SEPTEMBER 15
Installment II
(Statements to date are very sketchy)
POSSIBLE FORD INITIATIVES
(September 17)
difference between 25%
market rental of a new
t.
Direct subsidies to support high levels of construction
Housing Block Grant --
of low income housing
30, 1976
to respond better to differing local housing needs.
400,000 units
Expansion of elderly housing program ($202)
20,000 units
to reduce federal role and enhance means of local
80,000 units
officials to coordinate localities physical
development needs.
Program ($235)
mortgage for family
to replace current housing subsidy programs and link
median income --
with Community Development Block Grant.
FY 1977
nstruction of elderly
subsidies ($202/8)
FY 1976; 25,000 added
production --
Expand housing construction to 2.5 million housing starts
Single-family -- not needed at this time -- higher level
in 1974-75 to purchase
per year
of production would cause abandonment of existing housing
than market interest
in our cities
-- aided 500,000 homebuyers
by providing steady source of credit at low-interest rates,
tead of market 9% mortgage
Multifamily -- released $2 billion in September 1976 under
mortgage life or $20 per
by providing federal mortgage guarantees, and
"tandem plan" to purchase 7-1/2% mortgages
by restoring federal construction subsidy programs.
($3 billion in January and
1976) to purchase mortgages
$$8/235 --- will produce
ts in both FY 76 and FY 77.
y (see above)
Same as above
President announced on September 15 proposal to reduce
bsidy Program ($235) above --
FHA downpayment and increase FHA mortgage limit to
76 to conform to ordinary FHA
Interest and property tax deductions "would be among those
$60,000 (need legislation).
that I would like to do away with." (Boston, Mass. 2/23/76)
Suggested that this should be in the context of all-inclusive
See also Graduated Payment Mortgage in "Ford Programs" column.
mortgage and expands
tax reform.
redit to middle America;
(announced by President
ands ownership for young
crease in income (implemented
.4 billion FY 1976; $1.6 billion TQ
President's Committee for Urban Development
Grant -- $3.2 billion FY 76
Supported public works "jobs" bill ($3.95 billion).
and Neighborhood Revitalization
-- $4.5 million, 46 cities
Of late would expand General Revenue Sharing.
Possible initiatives
ion, 23 cities
Encourage tax increment financing.
Preference for block grants, including possible
Housing Block Grant.
alization Projects --
Joint public/private development mechanism.
Brown-Griffin Countercyclical.
Rehabilitation tax incentives to encourage full
Urban CCC
utilization of nation's existing housing and
a rehabilitated housing ($8)
community resources.
by September 30, 1976
2/
Proposal to expand Urban Homesteading to $15 million per year.
ly two years ago. For comparison
starts two years after enacted
Report due to the President October 1, 1976.
) and occupancy only 2,300.
See memorandum of September 13, 1976.
starts were incremental.
million to fund additional
al 23 cities or 10 more cities.
a categorical program.
HOMEOWNERSHIP
President Ford aims to bring homeownership within the
reach of the great majority of American families. This can
be done through sticking to the administration's anti-
inflationary economic policies, and through enactment of the
cut in the personal income tax proposed by the President.
Holding down inflation will cut mortgage interest rates by
about three percent in the next two years, and slow the rise
in construction costs. Cutting the income tax would put an
additional $200 annually in the pocket of the average American
taxpayer, which he could use to help make a down payment on
a home or pay mortgage interest.
Sound economic policies are the basic answer to a growth
in homeownership. But the President has taken further
steps to aid families setting out to own their own homes.
The Ford administration has increased mortgage limits for
single family homes by sums that range from $10,000 to
$20,000, depending on the type of insurance program.
In 1974, the President extended Government National
Mortgage Insurance to conventional mortgages.
Under the administration's home ownership subsidy program,
subsidies will be granted for 175,000 single family units.
The Ford administration has provided $11 billion for use in
reducing interest rates on Federally insured home loans.
The President is now considering means for offering direct
aid to homeowners in meeting mortgage costs. (MUST BE
CLEARED WITH OMB)
Under no circumstances would President Ford approve
elimination of the income tax credit for mortgage interest
payments, as was proposed by Jimmy Carter in Boston on
February 3, 1976.
ISSUE: Elementary and Secondary Education
I want to return the education of American children to their
parents, to their teachers and to their communities.
We must guard against Federal control over our schools. The
education of our children should be determined not in Washington,
but in the community where they live and where their families
pay taxes.
Every American school child is entitled to an education that
matches his efforts, his ability and his hopes. We must
assure Federal dollars toward this end while minimizing inter-
ference by the Federal government.
Teachers should not be spending their time filling out forms;
they should be enlightening young and receptive minds.
I have therefore put forward a $3.5 billion program to return
authority to local schools and to provide continued Federal
support for elementary and secondary education.
Our classrooms are for children to learn and not for bureaucrats
to experiment in.
ISSUE: CRIME
Protecting the life and property of the citizen at home is
the responsibility of all public officials but is primarily
the job of local and State law enforcement authorities.
Americans have always found the very thought of a Federal
police force repugnant and so do I. But there are proper
ways in which we can help to ensure domestic tranquility
as the Constitution charges us.
My recommendations on how to control violent crime were
submitted to the Congress in 1975 with strong emphasis on
protecting the innocent victims of crime.
To keep a convicted criminal from committing more crimes we
must put him in prison so he cannot harm more law-abiding
citizens. To be effective, this punishment must be swift
and certain.
Too often criminals are not sent to prison after conviction
but are allowed to return to the streets.
Some judges are reluctant to send convicted criminals to
prison because of inadequate facilities. To alleviate this
problem at the Federal level, my 1977 budget proposes the
construction of four new Federal facilities.
To speed Federal justice, I propose an increase this year in
U.S. Attorneys prosecuting Federal crimes and reinforcement
of the number of U.S. Marshals.
Additional Federal judges are needed, as recommended by me
and the Judicial Conference.
It is unrealistic and misleading to hold out the hope that
the Federal Government can move in to every neighborhood and
clean up crime. Under the Constitution, the greatest
responsibility for curbing crime lies with State and local
authorities. They are the frontline fighters in the war
against crime.
There are definite ways in which the Federal Government can
help them. I propose in that the Congress authorize almost
$7 billion over the next five years to assist State and local
governments to protect the safety and property of all
citizens.
- 2 -
As President I pledge the strict enforcement of Federal
laws and -- by example, support, and leadership -- to help
State and local authorities enforce their laws. Together
we must protect the victims of crime and ensure domestic
tranquility.
DEBATE
PROTECTION AGAINST CRIME
The federal role in the war against crime falls basically
into three areas:
-- Federal leadership through development of a
model Federal system of justice
GERALD, 1013
- Enactment and vigorous enforcement of laws dealing
with criminal conduct in the Federal domain
-- Financial and technical assistance to state and local
law enforcement authorities
President Ford has taken the following major steps in carrying
out these Federal responsibilities:
-- Proposed enactment of a comprehensive Federal criminal
code to replace the scattered set of overlapping and
confusing laws now on the books
-- Called for enactment of an anti-drug law, which would
provide for mandatory sentencing of persons convicted
of high-level trafficking in drugs, and enable judges
to deny bail to drug-pushers with a record of past
offenses.
-- Proposed mandatory and automatic sentencing of criminals
convicted of kidnapping, hijacking, or Federal crimes
involving the use of a handgun.
Set up a program for diversion of some first-offenders
into rehabilitation programs before trial, in an
effort to give young people who have committed a single
offense a chance to keep their records clean.
Called for enactment of a program to provide compensation
to victims of Federal crimes who have suffered personal
injuries.
Requested a five year extension of the program through
which the Federal government gives financial aid to
state and local law enforcement agencies.
-- Provided funds to major city law enforcement agencies
for a "career criminal" program, through which habitual
criminals charged with new crimes are identified and
quickly prosecuted.
-- Stepped up prosecution of "white collar" crime -- the
law must be collar-blind as well as color-blind.
Social Programs/Goals Block
My personal goal is to expand the freedom of every
citizen.
I want every American to have a good job and be free of dependence.
The number one cure for our social problems is a good job with a
paycheck. Every American should feel physically secure, free
from the horror of-war and the threat of crime. Every American
should have a home in a decent neighborhood with schools where
our children can get a good education. Every American should
have the best medical care at costs which will not wipe out our
savings. Every American wants to work and relax in a clean,
healthy environment. These are my goals for our social programs.
Now let me show you how we get there.
It's logical that local people are best equipped to cope with local
problems. Our policies are aimed at giving them more power to
do this in the local areas where the action is. We don't need to
create more agencies or hire more bureaucrats in Washington.
We need to free the local people to solve their problems. For
example, Propose reforming
programs into bloc grants
to make your tax dollars work more efficiently where it counts;
in your community, etc.
GERALD R. FORD
ISSUE: Recreation
If I might say, with our Bicentennial Celebration which was
very meaningful, on the Fourth of July, we did find new
meaning for the words freedom, equality and unity. Somehow,
despite our difficulties and our differences -- perhaps
because of them -- Americans recaptured the essential spirit
and greatness that makes us a very special kind of people.
We realized again what a wonderful thing it is just to be an
American.
As I thought about the changes that have taken place in this
great country -- not only in the last two years, but during
the last two centuries -- I also thought about those things
that must never change. Those unchanging things really make
us Americans.
They are the things we must pass on to future generations.
Some are intangible, invisible -- our deep religious and
moral convictions, our bonds of family and community, our
political values embodied in the Declaration of Independence
and the Constitution.
But we have other common treasures that are material and
visible, that can be damaged and destroyed by man. We must
be equally committed to conserve and to cherish our incom-
parable natural heritage -- our wildlife, our air, our waters
and our land, itself.
More than a century ago, we began to save our natural heritage
for the enjoyment of future Americans, with the national park
system, which Yellowstone is the oldest and the largest.
This year alone, we expect 260 million Americans to visit and
enjoy our 287 national parks that spread from the Virgin
Islands to Maine to Alaska and to Hawaii.
I found myself saying can't we do something special, as our
Bicentennial birthday present to future generations, a gift
that will be gratefully remembered 100 years from now.
I, therefore, decided upon a ten-year national commitment to
double America's heritage of national parks, recreation areas,
wildlife sanctuaries, urban parks and historic sites.
I have proposed a Bicentennial Land Heritage Act, which calls
for a pledge of $1 billion 500 million during the next ten years.
It will more than double our present acreage of land for national
2
parks, recreation areas and wildlife sanctuaries; development
of these new lands to make them accessible and enjoyable;
improving facilities and increasing dedicated personnel at
existing national parks; making available $200 million for
urban parks, bringing the benefits of nature to those who
live in our cities; and accelerating the development of
parklands and sanctuaries now delayed for lack of manpower
and of money.
This national commitment means we may have to tighten our
belts elsewhere a bit, but it is the soundest investment in
the future of America that I can envision. We must act now
to prevent the loss of treasures that can never be replaced
for ourselves, our children and for future generations of
Americans.
fill#s!
IMPROVING THE QUALITY OF LIFE
statebate
Q. What have you done to improve the quality of
life in America?
FORD & GERALD LIBRARY
A. When I walked into the Oval Office, this country
was in a state of physical and mental pain:
-- The economy was sick.
-- Our national pride was completely affected.
-- The people were furious and disgusted, because
their faith in their leaders was gone.
Mr. Carter has very honestly and kindly attested
to the change that has been brought about, and I thank
him for it.
The first and most important quality of a President
is leadership. The most important quality of leadership
is judgment. It was my judgment that the American people
should calmly assess the extent of the damage of what has
always been a solid structure and begin to rebuild the
damaged areas. There was no room for more hysteria, decep-
tion, or empty promises. Most of all, there was no need
for fast answers and quick fixes.
I believe that there is no magic in the solution. Like
everything else, it's simple, hard work. One step after
another, over the last 25 months, we have made a successful
journey:
-- reducing infation;
--- putting four million people back to work;
-2-
-- and giving the American citizen the knowledge
that his government is solid, and honest.
Now that we have laid a solid foundation, the
country during the next four years has an ideal opport-
unity to move ahead in many areas that have come to be
associated with the quality of life. We can work toward
a day:
-- When every American who wants a job can find
one;
-- When every American who wants a home and is
willing to work for it can afford good housing;
-- When every American who wants to enjoy the
great American outdoors can have access to a national
park; and,
-- When every American can count upon this nation
being at peace.
These are my goals for the next four years.
FORD & LIBRARY GERALD
Reichley 9/16
is
FORD
ISSUE: Elementary and Secondary Education
GERALD
LIBRARY
I want the education of American children to reflect the
values and needs of the local community in which the children
are growing up. Of course there is a national interest in
education -- we need preparation for good citizenship,
and training that fits the opportunities available in our
economy. But I think that these determinations can be
made to a great extent at the local level, rather than on the
distant pinnacles of the education bureaucracy.
This means that we need more local control of education, and
less bureaucratic interference with the role of the class
room teacher.
To achieve this goal I have proposed a $3.5 billion program
to return authority to local schools while continuing federal
aid to education.
Here are the highlights of my proposal:
-- We will consolidate 24 federal grant programs for
elementary and high school education into a single
grant program -- leaving most decisions to local
officials so that direction of education will be
restored to local school boards and to the
parents and taxpayers that elect them.
-- Three-fourths of federal funds in the program will be
used to educate handicapped and disadvantaged children.
-- Vocational education will be targeted for special
federal support -- we still are not doing enough to
provide vocational training that fits young people
for jobs actually available in American industry.
-- States will be required to pass through federal funds
to local school districts.
Non-public schools make an essential contribution to our
nation's total education effort. My administration is now
providing aid to students at non-public schools for such
services as compensatory education in reading and
mathematics, child nutrition programs, and training of
children with learning disabilities -- all services that go
directly to students rather than to institutions.
-2-
We are now seeking ways through the tax system to ease the
financial burden on families who choose to send their
children to non-public schools.
To deal with the busing problem, which has caused
unnecessary confusion and disruption in some school
districts, I have called on Congress to enact legislation
which will limit the courts to using busing only where racial
segregation of school children is the result of unlawful
discrimination, and will limit the use of busing to the time
that is needed to overcome unlawful discrimination. This
legislation will also set up a multi-racial National
Community and Education Committee to help any school
community requesting assistance in solving its desegregation
problem.
One of our basic needs in education at the present time is to
take a hard look at the techniques and methods now being
used by classroom teachers. We must find out why instruction
in some of the fundamental subjects, such as reading and
mathematics, is not producing the results we require.
I have therefore asked Congress for a 28 percent increase in
federal support for the National Institute of Education,
to support intensified research on educational achievement
and performance.
9/16/76
BIG GOVERNMENT QUESTION (OSHA, FEA, EPA)
The larger issue you are raising, Mr. Duval
is whether this Administration is serious about
GERALD FORD LIBRARY
wanting to reduce the burden of Big Government in
the United States. We are dead serious, and here's
what we've done in 25 months:
--- We've cut back Federal paperwork and the forms
that people fill out by over 10%.
- - We've reduced the size of the Federal bureau-
cracy by 11,000 employees and we've cut the size of
the White House staff,
-- We've asked the Congress to cut the growth rate
of Federal spending by 50%.
- Most importantly, we've cut taxes. And if I'm
elected, we're going to cut taxes again.
The only way to hold down the cost of living in the
United States is to hold down the cost of government.
As to the specific agencies you questioned, let me
say this:
-- The Environmental Protection Agency and the
Occupational Health and Safety Administration were both
created in the last Administration. The environment must
be protected, and I intend to keep EPA in business. On
the other hand, OSHA has issued far too many burdensome
regulations in my opinion and I intend to rein it in; by
contrast, my opponent wants to expand the powers of OSHA.
- 2 -
-- As to the Federal Energy Administration, it
was created to solve a specific problem: the short-
term energy crisis. We are solving that problem,
and over the next four years, FEA is going to be phased
out.
My policy is to phase out as many useless program
and agencies as possible. Some will be replaced by
new agencies as new problems arise. But the for the
rest, let's save the money and give it back to the
American taxpayer. That's why I want a $10 billion
tax cut for the American people.
ISSUE: Welfare Reform
An essential virtue of the American character is helping those
in need. Ours is a tradition of compassion for those who
cannot help themselves. This tradition of assisting the
needy, however, has spawned a gigantic and confusing bureaucracy
with programs that invite abuse and are terribly wasteful.
There are plenty of improvements that can be made. Take Food
Stamps for instance. I have suggested a major overhaul to
end abuse and to remove many of the inequities such as college FORD
going children of the well to do receiving Food Stamps.
RALD
And in doing this we can give more to those who truly deserve
LIBRARY
the assistance and at the same time reduce overall costs. My
proposal would have:
-- increased benefits for nearly 1 out of every
4 recipients.
-- set up a special deduction for senior citizens.
-- eliminate the 17% of those receiving the benefits
whose income is actually well above the poverty
level.
-- and saved the taxpayer more than $1 billion.
ISSUE: Recreation
If I might say, with our Bicentennial Celebration which was
very meaningful, on the Fourth of July, we did find new
meaning for the words freedom, equality and unity. Somehow,
despite our difficulties and our differences -- perhaps
because of them -- Americans recaptured the essential spirit
and greatness that makes us a very special kind of people.
We realized again what a wonderful thing it is just to be an
American.
As I thought about the changes that have taken place in this
great country -- not only in the last two years, but during
the last two centuries -- I also thought about those things
that must never change. Those unchanging things really make
us Americans.
They are the things we must pass on to future generations.
Some are intangible, invisible -- our deep religious and
moral convictions, our bonds of family and community, our
political values embodied in the Declaration of Independence
and the Constitution.
But we have other common treasures that are material and
visible, that can be damaged and destroyed by man. We must
be equally committed to conserve and to cherish our incom-
parable natural heritage -- our wildlife, our air, our waters
and our land, itself.
More than a century ago, we began to save our natural heritage
for the enjoyment of future Americans, with the national park
system, which Yellowstone is the oldest and the largest.
This year alone, we expect 260 million Americans to visit and
enjoy our 287 national parks that spread from the Virgin
Islands to Maine to Alaska and to Hawaii.
I found myself saying can't we do something special, as our
Bicentennial birthday present to future generations, a gift
that will be gratefully remembered 100 years from now.
I, therefore, decided upon a ten-year national commitment to
double America's heritage of national parks, recreation areas,
wildlife sanctuaries, urban parks and historic sites.
I have proposed a Bicentennial Land Heritage Act, which calls
for a pledge of $1 billion 500 million during the next ten years.
It will more than double our present acreage of land for national
2
parks, recreation areas and wildlife sanctuaries; development
of these new lands to make them accessible and enjoyable;
improving facilities and increasing dedicated personnel at
existing national parks; making available $200 million for
urban parks, bringing the benefits of nature to those who
live in our cities; and accelerating the development of
parklands and sanctuaries now delayed for lack of manpower
and of money.
This national commitment means we may have to tighten our
belts elsewhere a bit, but it is the soundest investment in
the future of America that I can envision. We must act now
to prevent the loss of treasures that can never be replaced
for ourselves, our children and for future generations of
Americans.
ISSUE: Welfare Reform
An essential virtue of the American character is helping those
in need. Ours is a tradition of compassion for those who
cannot help themselves. This tradition of assisting the
needy, however, has spawned a gigantic and confusing bureaucracy
with programs that invite abuse and are terribly wasteful.
There are plenty of improvements that can be made. Take Food
Stamps for instance. I have suggested a major overhaul to
end abuse and to remove many of the inequities such as college
going children of the well to do receiving Food Stamps.
&
FORD
And in doing this we can give more to those who truly deserve
the assistance and at the same time reduce overall costs.
My
LIBRARY
proposal would have:
|
increased benefits for nearly 1 out of every
4 recipients.
-- set up a special deduction for senior citizens.
-- eliminate the 17% of those receiving the benefits
whose income is actually well above the poverty
level.
-- and saved the taxpayer more than $1 billion.
U.S. DEPARTMENT OF * MOUSING AND
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
THE SECRETARY
September 21, 1976
TO : Dr. James E. Connor
Secretary to the Cabinet
FROM: Carla A. Hills
Attached are two additional questions
and answers which concern allegations
recently made by Mr. Carter.
They may be useful to the President
in preparing for the upcoming debate.
FORD & LIBRARY GERALD
8/21
Q.
Isn't the home ownership proposal you made at Ann Arbor,
Michigan, similar to the bill you vetoed last year to provide
subsidies for homeowners?
Background. Carter has charged the proposal offered by "Candidate"
Ford is like the one vetoed earlier by "President" Ford. The
lead editorial in the Sunday New York Times picked up the charge
as follows:
The President's most specific proposal was for legislation
to aid "every American family that wants to own a home and
is willing to work and save for it." To that end, Mr. Ford
called for subsidies that would substantially reduce the
required down payments on homes. But as was the case with
his earlier promise to expand the nation's public parkland,
the new proposal by candidate Ford seemed to ignore President
Ford's negative action in the very area in which he now
promised positive movement. Specifically, the President last
year vetoed a measure to reduce home-buyers' mortgage rates,
subsequently giving his approval only after Congress came
back with a less generous subsidy.
1.
My homeownership proposal does not call for new subsidies.
It lowers the FHA downpayment and permits graduated mortgage
payments which would allow lower monthly payments in the
early mortgage years when the earnings of homebuyers,
particularly the young, are not as great as can be expected
later. When statutory changes are obtained, these proposals
should expand opportunities for home ownership.
2.
The Emergency Housing bill which I vetoed in 1975 would have
required taxpayers to subsidize mortgage interest payments
above 6%.
3.
That bill, which Mr. Carter now says I should have signed,
was labeled "a turkey that won't fly" by Lud Ashley, the
Democratic Congressman who subsequently was named by his
colleagues as Chairman of the Housing Subcommittee of the
House Committee on Banking, Currency and Housing. He voted
to sustain the veto. That veto was also supported by the
most distinguished member of the Subcommittee, Bob Stephens,
from Mr. Carter's home State of Georgia, and it was supported
by many other Democrats including Congressman Tom Rees of
California, another member of the Housing Subcommittee.
4. If the bill which Mr. Carter now says I should have signed,
had become law, families who bought a home prior to its
enactment of that bill at a higher interest rate, say 9%,
would now be subsidizing their neighbor's montly payment
even though their neighbor's income was identical or even
higher.
5.
What happened after that veto was sustained? Within 24 hours
a new bill incorporating my suggestions for expanding the
Ginnie Mae Tandem program was introduced and passed before
the week was over. It had the added benefit of avoiding the
certain delays inherent in developing and implementing new
regulations, and adding yet another layer of bureaucracy.
6. What has happened since? The rate of inflation has been
halved for which at least some credit must be given to
vetoing that "turkey that wouldn't fly," and the rate of
new home starts has risen dramatically.
Q.
Carter, both in his Housing Issues Paper and in a prepared
speech given in Brooklyn in early September, charged that
more than 200 officials of HUD have been convicted for
bribing or corruption. Is this true?
A.
There have been a total of 57 convictions of HUD employees
since HUD's formation ten years ago, and only one was for
an infraction that occurred after August 9, 1974, the date
I took office.
I am not happy with one conviction, and I have demanded
integrity of our Federal employees.
I believe that the vast majority have responded with earnest
hard work.
It is unfair to them to use false statistics and gross
exaggerations.
THE WHITE HOUSE
WASHINGTON
September 21, 1976
MEMORANDUM FOR:
MIKE DUVAL
FROM:
ART QUERN
SUBJECT:
Medicaid
Attached are background materials and Q & A's regarding
Medicaid abuses. The materials include references to the
record in Georgia which, if you have not seen, you may find
helpful.
HOOK
Attachments
CC: Jim Cavanaugh
FORD is LIBRARY 938870
HIGHLIGHT SUMMARY POINTS - PUBLIC DEBATE ON MEDICAID
0 The statutes establish Medicaid as a State administered program; the
Federal role is one of financier and writer of guidelines prescribed
by Federal statute. The fact that the roles were increasingly unclear
and complicated was one reason the President recommended the Federal
Assistance for Health Care Act last February which would have con-
solidated and clarified both responsibility and authority at the
State level. The Congress ignored the proposal.
0 Some states (e.g. Michigan and Texas) have sound management of the
program and do a good job in preventing or curbing fraud and abuse;
other states (e.g. New York) have poor records. Almos tall states
have been calling for reform.
-- On behalf of the National Governors' Conference before a
Subcommittee of the Senate Finance Committee, Governor
Busbee of Georgia said: = it is equally clear to me,
after 18 months as Governor of Georgia, that the present
Medicaid program is the most complex, confusing, duplicative
and administratively wasteful system ever conceived by man --
one that will surely bankrupt the States and the Federal
Treasury unless substantial reforms are undertaken, both
at the State and Federal levels."
FORD & 938839 LIBRARY
-- He also stated: "One of the first acts I took after being
elected Governor and prior to taking the oath of office
was to request
the resources necessary for an analysis
of Medicaid provider payments in order to detect any potential
program abuses. This initial analysis prompted subsequent
audits by the Department of Human Resources in Georgia and
revealed over $183,000 in payments for invalid services.
In addition, the Department's audit identified an even larger
amount in inadequate services and expensive treatment in cases
which could have been handled at significantly less cost to
the State and to the Federal Government."
-- An HEW financed review by Elmer Fox and Company in 1973
revealed that more than $4 million had been erroneously
expended in 1972 and 1973 in the Georgia Medicaid program.
An HEW disallowance of about $1.5 million is still being
contested by the State.
0 There is, indeed, fraud and abuse in the Medicaid program. There are
no precise numbers available; estimates of fraud are in the 5 - 10%
range ($750 million to $1.5 billion). In addition, Medicaid funds
are spent for invalid services, overutilization of services and in-
eligible recipients. Estimates suggest that this waste could account
for another 10 - 15% ($1.5 to $2.2 billion). The combined total would
thus be 15 - 25% ($2.2 to $3.0 billion).
-- The Carter charge that $4 to $7 billion are lost to fraud,
abuse and waste exceeds most of the estimates at a minimum
and are up to 50% of the program at the upper end of the
range. There is no valid study to confirm such charges.
Such charges are clearly not helpful in correcting valid
problems or maintaining public confidence in a program
which is designed to and does assist low-income persons.
-- There are no specific figures for fraud, abuse and "waste"
for Georgia. We do know that in the related AFDC welfare
program, Georgia does not have a distinguished record in
keeping eligibility errors to a minimum (also a State
responsibility). Georgia's AFDC case error rate in AFDC has
exceeded 30% since 1971.
0 The Executive Branch has long since recognized the Medicaid management
problem and has taken positive steps, particularly since 1974, to correct
it, consistent with Federal responsibilities.
-- Management systems to detect potential fraud, abuse and
other wasteful expenditures have been made available, and
the States have been urged to adopt them for several years.
Ten States have done so, and 20 more are underway.
-- Starting in 1974, HEW has added manpower resources to over-
see fraud and abuse control activities (from 1 to 145).
-- Recently, HEW centralized and strengthened its criminal
investigation activities,
-- In March, the Secretary of HEW called public attention to
a growing concern for fraud and abuse problems and initiated
special review teams to work the States in ferreting out
fraud and abuse. The first team started in Massachusetts
in June, a second team is now working in Ohio, and a third
team will begin in Georgia in October -- all at the request
of the Governors.
-- With Federal assistance, States have increased their Medicaid
investigations from 2,700 in FY75 to 7,200 in FY76. Convictions
of providers are up from 15 to almost 50 in the period. More
than 400 providers have been terminated or suspended from the
program in 1976.
Q. Governor Carter has charged that $4 to $7 billion in Medicaid
funds are lost annually to fraud, abuse and waste. Is that
true and what are you doing about it?
A. The Governor has no basis for those numbers, and they are
not right. $7 billion would be half the total program. Even
the severest critics do not estimate more than 15 - 25%. Such
wild charges by the Governor do not help face up to a serious
problem.
He should be clear to begin with that whatever mismanagement
has occurred lies not only with the Federal Government but also
with the States who are responsible for day-to-day management
of the program.
In order to make better sense out of Medicaid and other Federally
funded health programs, I proposed to consolidate those programs
and vest full responsibility at the State level. The Congress
failed to act.
In addition, my Administration has taken concrete steps within
our proper role to prod and assist the States to attack fraud
and abuse.
Q. What has the Federal Government done about fraud and abuse?
A. Developed management information systems to assist states in
detecting potential fraud, abuse and other wasteful expendi-
tures. Ten States have adopted these systems and 20% more are
underway. These systems have 90% Federal funding.
Since 1974, increased HEW manpower devoted to overseeing fraud
and abuse control activities from 1 position to 145 positions;
HEW centralized and strengthened its criminal investigation
activities;
Secretary of HEW announced in March 1976 the invitation of
special review teams to work with the States in ferreting
out fraud and abuse;
With Federal assistance, States have increased their Medicaid
investigations from 2,700 in FY75 to 7,200 in FY76. Con-
victions of providers are up from 15 to almost 50 in the
period. More than 400 providers have been suspended or
terminated from the program in 1976.
Q. How well have the States done in managing the Medicaid
program?
A. Certainly there is a great deal of improvement that needs to
take place in State management of the program. Some States
(e.g. Michigan and Texas) have sound management while other
States (e.g. New York) have poor records. Almost all States
recognize the need to improve management and are calling for
program reform.
The crucial point is that the States must manage the program.
The Federal Government must provide the tools and the tech-
nical assistance to help the States, but unless States are
willing to take the necessary steps to gain control of the
program, there will not be improved management. For example,
several years ago, HEW had a major initiative to lower erroneous
payments in the AFDC program. This resulted in a reduction of
errors on a nationwide basis. However, in the State of Georgia
the error rate went from 30% in 1971 to 46% in 1974: Again,
improved program management must take place at the State
level where the responsibility for day-to-day administration
rests. I firmly believe that the vast majority of the States
are willing to take the necessary actions to improve the manage-
ment of the Medicaid program.
Q. What can be done to control the "waste" in the Medicaid
program which may be more costly than fraud and abuse?
A. There have been a number of initiatives by the Executive
Branch to help the States in this area. There has been a
rapid implementation of the Professional Standards Review
Organizations (PSROs) to assure that medical services pro-
vided are actually required by Medicaid patients. Im-
proved claims processing systems have been developed to
ensure that appropriate controls of claims reimbursement
are incorporated into the State payment process. In addi-
tion, a major effort is underway to recover the $200-$400
million per year currently expended for services to Medicaid
eligibles who have other forms of health insurance.
State and local officials have recognized the need to improve
the management of Medicaid and other social programs they
administer HEW and these officials are working together
in a cooperative partnership to develop and implement im-
proved management systems. It is through these cooperative
efforts that major improvements will take place.
THE WHITE HOUSE
WASHINGTON
September 20, 1976
MEMORANDUM FOR:
MIKE DUVAL
FROM:
ART QUERN
SUBJECT:
Briefing Material From HUD
Attached for your use are materials from Secretary Hills on:
1.
Urban Policy
2. Housing
3. Redlining
She has asked that these be included in the President's briefing
materials. They are generally longer and more detailed than
what you have received so far but you may find them useful.
FORD i GENALD LIBRARY
HOUSING
ISSUES:
Cost of housing and impact on home ownership; failure to reach
National Housing "goal" of 2.6 million starts a year; high interest
rates; housing for the poor and the elderly; new construction
versus use of existing housing stock and rehabilitation.
CARTER/DEMOCRATIC POSITION:
Carter has blamed high interest rates as a major obstacle to
housing recovery, citing rise in interest rates since the Johnson
Administration and drop in percentage of Americans owning their
own homes. He proposes to build 2.5 million housing units per
year using direct Federal subsidies and low-interest loans for
low and middle income housing, "directing" mortgage money into
private housing and prohibiting the practice of redlining by
Federally-backed institutions. He has not spelled out specifics,
saying only that he would rely on housing "experts" to run housing
programs.
RESPONSE HIGHLIGHTS:
1.
Inflation is greatest obstacle to housing recovery, and
Democratic-led deficit spending is greatest obstacle to
lower interest rates. Had it not been for successful
vetoes (which Carter has criticized) interest rates would
be trending still higher.
2.
Keep proper perspectives
average home that sells
for $43,000 today is larger, and includes many more
amenities than its counterpart 10, 15 or 20 years ago.
3.
$20 billion in "tandem" funds have been made available
since the beginning of 1974 to stimulate housing construction,
including the most recent release of $2 billion this month,
expected to stimulate about 80,000 units of multifamily
starts. Sixty-five percent of American families own their
own homes now, as compared to only 55 percent in 1950.
4.
New Home Ownership acceleration program.
5.
A housing recovery has been taking place with single-family
starts at an annual rate of 1.2 million, only 9% below 1972,
a record year.
-2-
6.
While multifamily construction has been lagging behind,
recent figures are encouraging, and this segment of home-
building will be helped greatly by my recent release of
$2 billion for the Tandem program.
7.
To push for 2.5 million starts and at the same time to say
you care about housing rehabilitation is to try to have
it both ways. It was, in part, overbuilding under the
programs in the 1968 Democratic-sponsored Housing bill
which later led to large scale abandonment and foreclosures
in our cities. We need to focus more of our resources on
rehabilitation and this Administration is doing just that.
8.
In our efforts to make better housing for low income persons,
we have, for the first time, undertaken a concerted effort
to make existing housing available through rental subsidies
under Section 8 of the 1974 Housing and Community Act. Since
June, there have been sharp increases in both occupancy and
fund reservations under the Section 8 Rental Subsidy Program.
9.
To house the elderly this Administration has made available
$750 million for 2 fiscal years, under the Section 202
Elderly Housing Program, and these funds will make available
more elderly housing units than were built during the entire
8 years of the previous Democratic administrations. Also, a
substantial percentage of housing units under the Section 8
Low Income Housing Program are being utilized to house senior
citizens.
BACKGROUND:
Issues: Low level of housing starts. Slow recovery for housing
from recession. Not meeting nation's housing production
goals. Lack of housing for poor.
Responses:
--
Housing starts have risen 22 percent in the last year.
A healthy economy is the secret to a healthy homebuilding
industry. Great strides have been made over the last two
years to provide such a healthy economy.
-3-
Inflation is the greatest enemy of a healthy housing
industry and a sustained level of housing production.
Inflation causes home prices and mortgage interest rates
to rise to the point that average income Americans cannot
afford a home. The principal cause of inflation is a
large budget deficit leading to increased Federal borrowing.
When the government enters the capital market to borrow
funds, it pushes up interest rates and crowds out smaller
borrowers. Federal borrowing causes higher mortgage
interest rates. We have resisted the big-spending, overly-
ambitious programs foisted on the American taxpayers by
the Democratic-controlled Congress that result in a large
budget deficit.
When special stimulation has been necessary to increase
housing production, we have used the most efficient and
economical means possible, so as to avoid adding to the
Federal budget deficit. For example, the use of the program
initiated in the Emergency Housing Act of 1974 to permit
the Federal Government to buy lower interest mortgages from
lenders during times of tight money and high interest rates,
and then sell the mortgages when mortgage funds are in ample
supply so there is a minimal outlay of Federal funds. This
law was extended only after I vetoed the far more expensive
and less efficient proposal by the Democratic Congress that
would have returned to massive Federal subsidies to induce
people to buy houses.
Issues: High cost of housing. Fewer families can afford a new
house. Average new house costs $43,000.
Responses:
The principal reason for higher new home prices is inflation.
My Administration's highest priority has been the fight
against inflation.
--
House prices have not, however, risen any faster than incomes
and today's houses are bigger and have more amenities (more
bathrooms, two car garages, etc.) with larger lots. The cost
of land has gone up as well, at least in part, because of
local government regulations, including zoning restrictions,
design constraints and added environmental requirements.
-4-
---
Notwithstanding the higher home prices, 65 percent of
American families presently own their own homes, compared
to only 55 percent in 1950.
The problem of rising home prices most seriously affects
those young families that have never owned a home and, thus,
do not have the equity to invest in a new one. To help them
I have proposed a new program of homeownership assistance to
assist moderate-income families who are buying their first
home.
Issues: Not doing enough to help low income families get housing;
Section 8 is not working; low number of Section 8 starts.
Responses:
It should be pointed out that in the United States today we are
the best housed Nation in the history of world civilization.
Nevertheless, it is true that some Americans still do not have
adequate shelter.
Our policy is based on getting people housed in decent living
quarters -- not just building houses for the sake of building
houses.
We have subsidized new construction to provide decent housing for
the poor, but only where locally determined needs show that new
construction is, in fact, required.
It is no boon to the very poor who cannot pay the going rent for
a decent home, to be asked to stand by for a few years while the
Government builds a new housing project when so much existing
housing is available. Indeed, we are finding that the tenants
prefer to live in housing like their neighbors rather than in a
Government erected project.
Accordingly, where existing housing is sound and available, we
have concentrated on assisting those who could not otherwise afford
to rent a decent home by making up the difference between what the
lower income family could afford and the actual market rent. The
subsidy payment decreases as the family's income increases.
Moreover, use of existing housing provides the owner with the
means to maintain the property in decent, livable condition, and
thereby helps to prevent abandonment that has blighted so many
urban neighborhoods.
GERALD FORD LIBRARY
-5-
We should never subsidize waste in the name of progress. We
should build structures only where building is necessary, but
first use fully what we have, for surely we have learned that
the resources of our nation are not unlimited.
The linchpin to the program is our free enterprise system:
Once poor families can afford to pay a reasonable rent, the
market should determine the need for new construction and spur
the owners of deteriorating properties to bring them up to
standard through rehabilitation. The market determines what
is a fair rent for modest but decent housing.
Let's not forget that one of the most important features of the
Housing Act of 1974, is that local markets determine how much
new construction is built under Section 8 program. And local
communities get to choose how much new construction should be
built or how much existing housing should be used to house
their disadvantaged citizens. Local officials make the choice
--- not Washington bureaucrats.
In circumstances where new construction is the best means of
housing lower income families, Section 8 of the 1974 Housing
and Community Development Act can provide new as well as existing
housing. While we have been criticized for the relatively low
number of starts under the Section 8 Program, I must point out
that it has been little more than one year since the first
applications were received for Section 8 and the program began.
Yet the latest figures show that it is working very well indeed.
Most importantly, the Program has already helped provide decent
housing to more than 80,000 of our needy citizens in both new
and existing units. Starts under Section 8 are at 16,000 units.
We have already met our ambitious goal for Fiscal Year 1976 by
securing reservations of funds which represent plans to build
under the Program, 400,000 units. But Congress has now rewarded
that success by cutting my budget request for Fiscal Year 1977
for housing assistance so that we will not be able to again
assist 400,000 units next year.
REDLINING
ISSUES:
What to do about "redlining", the practice whereby mortgage
lenders refuse to make loans in certain areas or neighborhoods
of cities; redlining contributes to urban and neighborhood
deterioration; is redlining a serious problem, and, if so,
would you favor legislation prohibiting it?
CARTER/DEMOCRATIC POSITION:
Carter is quoted as favoring legislation to "outlaw" redlining.
BACKGROUND/POSSIBLE RESPONSE:
There is definitely a problem of a lack of mortgage investment
in many of our older urban neighborhoods; but it is not yet
clear to what extent this situation is caused by the practice
of "redlining". I am absolutely against lenders refusing to
make mortgage loans in designated areas of communities solely
on the basis of the characteristics of the neighborhood. Such
a practice could amount to unlawful discrimination and the
Justice Department has recently joined suit under the Civil
Rights Act against an insurance company for refusing to provide
insurance in certain neighborhoods because of the racial
composition of the area.
However, one of the most difficult aspects of redlining is how
little we know about the problem, its scope or its causes.
Accordingly, last year I signed into law the "Home Mortgage
Disclosure Act" which requires lenders to reveal where they
make their mortgage loans. The information we are beginning
to receive as a result of this law will help immeasurably in
determining the extent of redlining and in determining the
appropriate public responses to redlining where it exists.
Redlining is also one of the problems that is being investigated
by the Cabinet-level Committee on Urban Development and
Neighborhood Revitalization that I appointed. The Committee
has already visited many of our large cities for a first hand
look at the problem.
Another initiative in this area that I am especially proud of
is the Urban Reinvestment Task Force set up in 1974. The Task
Force is designed to forge a partnership between local government,
community residents and mortgage lenders aimed at revitalizing
declining city areas. The program has been so successful in its
early demonstration phase that I have recently decided to expand
it to a total of 55 cities across the Nation.
THE WHITE HOUSE
WASHINGTON
September 22, 1976
MEMORANDUM FOR:
MIKE DUVAL
FROM:
ART QUERN
SUBJECT:
Housing Issues
Attached for your use are Q & A's dealing with the President's
housing programs.
Into
Attachment
FORD LIBRARY is
ADMINISTRATION HOUSING PROGRAM
c.
What is your program to promote homeownership?
A.
My program to enable families to own their own homes is to
provide homebuyers affordable downpayments and sufficient
mortgage credit repayable at reasonable and affordable inter-
est rates. I intend to achieve this by:
-- Holding down inflation by eliminating unnecessary Federal
spending, reducing interest rates, cutting taxes and thus
providing more private savings for home mortgages.
-- Changing FHA regulations to reduce downpayments to 5% of
the cost of houses ranging from $25,000 to $60,000.
(Downpayments will remain at 3% for houses costing below
$25,000.)
-- Accelerating implementation of a new Federal guaranty
program to lower monthly payments in the early years of
homeownership and gradually increase them as a family's
income goes up.
FLM/9/17/76
ACCELERATED HOME OWNERSHIP PROGRAM
Q.
Your new home ownership program relies heavily on
FHA programs. What percent of the single family
mortgages issued per year rely on FHA insured loans.
A.
Approximately 7% in 1975.
Q.
How can you expect a downpayment reduction program
which only affects 7% of mortgages issued in one year
to dramatically accelerate home ownership?
A.
We believe that this program will facilitate home
ownership for a greater number of Americans by
reducing downpayments and by reducing monthly pay-
ments. This program will likely serve, moreover, as
FHA programs have in the past, as an example for
private mortgage lenders to follow, resulting in an
industry-wide reduction of downpayment requirements
over a period of time.
Q.
There have been many complaints by homebuyers and
builders that FHA programs involve too much red tape
and endless delays. Won't this hinder your program?
-2-
-
A.
Currently nearly 90% of all single family FHA loan
applications are processed in five days. The
Secretary of HUD, moreover, has made it one of her
main priorities to further improve FHA processing
procedures.
FLM
9/20/76
Q.
Isn't the home ownership proposal you made at Ann Arbor,
Michigan, similar to the bill you vetoed last year to provide
subsidies for homeowners?
Background. Carter has charged the proposal offered by "Candidate"
Ford is like the one vetoed earlier by "President" Ford. The
lead editorial in the Sunday New York Times picked up the charge
as follows:
The President's most specific proposal was for legislation
to aid "every American family that wants to own a home and
is willing to work and save for it." To that end, Mr. Ford
called for subsidies that would substantially reduce the
required down payments on homes. But as was the case with
his earlier promise to expand the nation's public parkland,
the new proposal by candidate Ford seemed to ignore President
Ford's negative action in the very area in which he now
promised positive movement. Specifically, the President last
year vetoed a measure to reduce home-buyers' mortgage rates,
subsequently giving his approval only after Congress came
back with a less generous subsidy.
1. My homeownership proposal does not call for new subsidies.
It lowers the FHA downpayment and permits graduated mortgage
payments which would allow lower monthly payments in the
early mortgage years when the earnings of homebuyers,
particularly the young, are not as great as can be expected
later. When statutory changes are obtained, these proposals
should expand opportunities for home ownership.
2.
The Emergency Housing bill which I vetoed in 1975 would have
required taxpayers to subsidize mortgage interest payments
above 6%.
FORD & LIBRARY GERALD
3. That bill, which Mr. Carter now says I should have signed,
was labeled "a turkey that won't fly" by Lud Ashley, the
Democratic Congressman who subsequently was named by his
colleagues as Chairman of the Housing Subcommittee of the
House Committee on Banking, Currency and Housing. He voted
to sustain the veto. That veto was also supported by the
most distinguished member of the Subcommittee, Bob Stephens,
from Mr. Carter's home State of Georgia, and it was supported
by many other Democrats including Congressman Tom Rees of
California, another member of the Housing Subcommittee.
4. If the bill which Mr. Carter now says I should have signed,
had become law, families who bought a home prior to its
enactment of that bill at a higher interest rate, say 9%,
would now be subsidizing their neighbor's montly payment
even though their neighbor's income was identical or even
higher.
5. What happened after that veto was sustained? Within 24 hours
a new bill incorporating my suggestions for expanding the
Ginnie Mae Tandem program was introduced and passed before
the week was over. It had the added benefit of avoiding the
certain delays inherent in developing and implementing new
regulations, and adding yet another layer of bureaucracy.
6. What has happened since? The rate of inflation has been
halved for which at least some credit must be given to
vetoing that "turkey that wouldn't fly," and the rate of
new home starts has risen dramatically.
Q.
Carter, both in his Housing Issues Paper and in a prepared
speech given in Brooklyn in early September, charged that
more than 200 officials of HUD have been convicted for
bribing or corruption. Is this true?
A.
There have been a total of 57 convictions of HUD employees
since HUD's formation ten years ago, and only one was for
an infraction that occurred after August 9, 1974, the date
I took office.
I am not happy with one conviction, and I have demanded
integrity of our Federal employees.
I believe that the vast majority have responded with earnest
hard work.
It is unfair to them to use false statistics and gross
exaggerations.
Q.
Mr. President, there is increasing public concern about
the ability of Americans, especially young Americans,
to afford their own home. Is the "American dream" of
homeownership dying, and what can you do about it?
A.
The American dream of homeownership is not dying.
In fact, more and more Americans own their homes
each year. The data make this very clear:
Percent of Americans Who Own Their Own Homes
1950
1960
1970
Today
55%
61%
62%
65%
Percent of Young American Families (Under 35)
Who Own Their Own Homes
1950
1960
1970
Today
38%
48%
49%
56%
And first-time home buyers are becoming younger.
Percent of First-Time Home Buyers Under 35
1950
1960
1970
Today
No Data
49%
54%
62%
Reichley 9/16
ISSUE: CRIME
Control of local crime -- the kind that is likely to
affect most directly the life of the average citizen --
has always been primarily a state and local responsibility
in the United States. We neither need nor want a national
police force.
There are, however, several ways in which the Federal
government can provide positive leadership in the war
against crime. The most important of these are:
-- Development of a model Federal system of justice.
-- Vigorous enforcement of laws dealing with crimes
that fall within the Federal domain.
-- Financial and technical assistance to state and local
law enforcement authorities.
My administration has taken strong action in all of these areas.
To develop a model system of laws dealing with Federal crimes,
we have:
-- Proposed enactment of a comprehensive Federal
criminal code to replace the scattered set of over-
lapping and confusing laws now on the books.
-- Called for enactment of an anti-drug law, which
would provide for certain and mandatory sentencing
of persons convicted of high-level trafficking in
drugs, and enable judges to deny bail to drug-pushers
with records of past offenses.
-- Proposed mandatory sentencing of criminals convicted
of kidnapping, hijacking, or Federal crimes involving
the use of a handgun.
-- Called for enactment of a program to provide
compensation to victims of Federal crimes who have
suffered personal injuries.
1080 LIBRARY is
-2-
To step up enforcement of Federal laws against crime,
I have called for:
-- More Federal judges to clear up the heavy backlog
of cases in some districts.
-- An increase in the number of U.S. Attorneys
prosecuting Federal crimes, and an increase in the
number of U.S. Marshals.
-- Construction of four new Federal prisons -- many
judges are reluctant to sentence convicted criminals
to do time in prison because of the overcrowding
and inadequacy of existing facilities.
To aid state and local law enforcement authorities, I have:
-- Recommended that Congress authorize almost $7 billion
over the next five years to aid state and local
agencies.
-- Provided funds to major city law enforcement agencies
for a "career criminal" program, through which
habitual criminals charged with new crimes are
identified and quickly prosecuted.
Of course, none of these steps will get at the roots of crime --
which are moral and economic, if not psychological. Perhaps
the most important step that a national administration or
a President can take against crime is to set a moral tone
that stresses sound values of honesty, integrity, hard work,
and personal honor. Beyond that, enactment of my entire
"quality of life" program will relieve some of the underlying
causes of crime. But we must face the fact that we have not
yet found a way to eliminate crime completely. So we are
going to need tough laws to deal with criminals, vigilant
law enforcement authorities, properly maintained prisons.
We will do what we can to cure the underlying causes of
crime. But we must deal, here and now, with the threats
posed by criminals to the safety and property of law-
abiding citizens.
9/16/76
ISSUE: URBAN PROBLEMS
Most of the serious domestic problems that are now faced
by the United States are found in magnified form in our major
urban centers -- particularly in the big cities of the
Northeast and the Middle-west. The entire nation has a
special interest in the social and economic restoration
of these cities, due to the importance of their commercial
and industrial enterprises to the health of our overall
economy. In addition, I, as President, have natural concern
for communities that together include almost one-third of
our total national population. Urban problems are no longer
limited to the big cities alone. Middle-sized
communities now have traffic-jams, deteriorating downtowns,
pollution problems, and crime problems. Residents of
suburbs, too, must deal with rising costs of education, lack
of suitable housing, and drug problems.
To a great extent these problems must be solved by the people
who live in these communities themselves. Under our federal
system of government, the state and local governments
are primarily responsible for coming to grips with local
problems of crime, education, transportation, and so forth.
There are three advantages to this system:
-- Placing responsibility at the state and local
levels makes for more flexible and efficient
response.
-- Those who derive most of the benefits pay the largest
share of the bills.
-- The federal government is prevented from becoming
so strong that it could threaten all of our freedoms.
There is, however, a federal responsibility to help deal with
the problems of big cities and other urban centers. The
cities of the Northeast and the Middle-west to some extent
suffer from having been the first settled, and therefore
now being burdened with aging housing, schools, hospitals,
and commercial and industrial establishments. Just as the
federal government helped with the winning of the West and
the rebirth of the South, we now must contribute to the
restoration of the cities. In addition, some of these
problems have sources that go beyond city, state, or even
regional boundaries, and must be dealt with on a national basis.
FORD
GERALD
LIBRARY
-2-
The first and most important way for the federal
government to help the cities is to assure the growth of a
strong national economy, which benefits cities and suburbs
as well as rural areas. This has been the first objective
of my administration.
In addition, the federal government can provide three kinds
of help to the cities:
-- Leadership in solution of national problems
that particularly affect the cities.
-- Sharing federal revenues with city and state
governments.
-- Helping state and local governments deal with urban
problems in education, housing, transportation, health,
and other problem areas.
My administration has been active in all these areas. I have,
among other things:
-- Called for five year reenactment of General
Revenue Sharing, with $6.6 billion provided for
fiscal 1977 alone.
-- Established the Housing and Community Development
Program, which gives aid for housing and community
projects directly to cities and suburban
communities.
-- Set up an administration task force to find the most
effective ways for the federal government, working
with local government and the private sector, to
promote neighborhood revitalization.
-- Called for a $3.3 billion education program, which
would give cities as well as other school districts
freedom to put funds to the uses where they are
most needed.
-- Asked Congress for a five-year extension of federal
aid to state and local law enforcement agencies,
and for enactment of an anti-drug program that would
provide new legal weapons against drug pushers.
These are only a few of the ways in which my administration
is moving to help our cities help themselves.
9/17/76
WHERE CARTER IS WRONG
ABORTION
The flaw in Carter's position on abortion is that, while
personally opposing abortion, he would take no action to
stop it -- except to cut off Federal funds to pay for
abortions for poor women. If abortion is wrong for the
poor, should it not also be wrong for the rich and the
middle class? The central question about abortion is
whether the unborn child has any rights. If it has no
rights, then of course, the mother should be free to do
as she wishes (except, perhaps, for some rights of the
father -- but surely the mother, other than the child, is the
one most deeply affected.) If the unborn child does have
rights, then these rights must be weighed against those
of the mother and any others involved. Catholics would make
the right to life of the unborn child absolute. Others
would give priority to the rights of the mother in cases of
danger to the mother's life, rape, etc. Just where the line
is drawn is a very difficult moral question -- one which
more properly should be determined through legislative
action, expressing current moral consensus, than through
judicial decision. But it is hard to see how Carter, if he
agrees that the unborn child has any sort of rights, can
be satisfied with the current legal situation. (Carter
has weaved somewhat on the issue, but has not really
contradicted himself -- except insofar as his repudiation of
the abortion plank in the Democratic platform, which his
aides tightly controlled, may be viewed as a
contradiction.)
AGRICULTURE
Embargoes -- Carter has got himself caught in the contradiction
of promising no embargoes, and then later admitting that he
would use embargoes in case of severe domestic need. But
we have done about the same.
Peanuts -- Carter benefits indirectly from the fact that
peanuts are the last food crop under price supports. He
has waffled on the issue.
-2-
BUSING
Carter's position on busing is not far from ours -- but he
has proposed no means to implement it. As on abortion, Carter
would view with regret, but take no corrective action.
I am not sufficiently familiar with Mondale's record on
busing to know whether or not his title as "Mr. Busing" is
deserved. Like many other Washington liberals who favor
busing, he sends his children to private schools because the
public schools "were just not delivering what we thought was
a minimum, decent education for our children."
CITIES
Carter would direct revenue sharing only to cities, not to
states -- undermining the states' role in coordinating action
between cities and suburbs on regional problems. This is
the argument, incidentally, that Carter used last fall
when urging that federal aid for New York City go to the
state, not directly to the city.
Carter favors "counter-cyclical" aid to cities -- viewed by
many economists as an inflationary bog.
Carter woule relieve the cities -- but not the states --
of paying part of the cost of welfare. In only seven
states, including New York, do the cities now pay part of
the cost of welfare. In these states, the remainder of the
state's aid program to the cities has been premised on the
fact that the cities pay for welfare. For the federal
government to upset this arrangement now would distort the
financial relationship between state and city
governments in these states.
EDUCATION
Carter's proposal for a separate Department of Education seems
to contradict his overall proposal for consolidation of
government departments -- I would not make too much of this,
though; it might be a good idea.
I think we are entitled to tie Carter to the NEA's demand
that the federal government finance one-third the cost of
education (in contrast with about one-tenth now), in light of
NEA's endorsement of his candidacy. Does he agree with the NEA
position, and if so where is the money coming from? I do not,
however, think we should make NEA a target for our attack.
-3-
ENERGY
Carter's opposition to deregulation of oil prices in effect
prolongs the danger of shortages.
Carter has been all over the block on oil company
divestiture -- his position is considerably more moderate
than that of the other liberal Democratic candidates, but
he still seems to favor divestiture of the retail portion
of the industry -- politically, the part most vulnerable for
a breakup.
HEALTH
We should nail Carter with the Democratic platform's apparent
endorsement of Kennedy-Corman national health insurance --
emphasizing the cost of at least $70 billion in the first year.
Carter tries to suggest that this is not quite what he has in
mind, but his broad description sounds like Kennedy-Corman;
if he favors something else, what is it? The argument that
Kennedy-Corman would cost very little, because we are now
paying almost that much in the private sector is of course
patently false -- unless Carter is prepared to raise taxes
by $70 billion to soak up the funds that are now being
used for doctors' bills.
The trouble with national health insurance is that it pays
everybody's medical expenses, rich and poor alike, rather
than targeting on areas of real need, as in the President's
proposal for catastrophic health insurance.
On Medicaid reform -- Carter's record of administration
of Medicaid in Georgia was abominable (see attached memo).
Democrats in Congress are holding up the President's proposal
that state medicaid programs be subjected to regular
independent audit. Medicaid was passed in a Democratic
administration, in a form that fosters corruption, which
Democrats in Congress now refuse to change. Carter's
recent emphasis on preventive health care is right. We
must get out in front on this.
-3A-
STATEMENT ON MEDICAID
FOR USE BY
ELLIOT RICHARDSON ET AL.
September 15, 1976
Jimmy Carter said yesterday that he plans to make
the use of Federal Medicaid funds an issue in his coming
debate with President Ford.
I am sure that the President will welcome discussion
of this topic. In fact, I suspect that the President may
raise it himself if Mr. Carter should somehow change his
mind.
The facts are, of course, that Medicaid is a program
operated and administered by the states, using Federal
funds. Where the program is run badly, it is the
respnsibility of the state administration -- specifically
of the Governor, and his Department of Human Resources,
or whatever title the department dealing with health goes
by in a given state.
Here is what Governor George Busbee, Jimmy Carter's
successor as Governor of Georgia, has to say about the
situation he found in the state's Medicaid program when
he took office in 1975: "Medicaid abuses were eye-openers.
During 18 years as a legislator, I have never encountered
such duplicity."
-3B-
Governor Busbee asked the Georgia legislature
for one year to straighten out the "organizational nightmare"
that Carter had left in the Department of Human Resources.
"We made many substantive changes, 11 Governor Busbee says,
"but encountered so many problems with Medicaid that
the job couldn't be finished."
Governor Busbee goes on to list in detail some of
the abuses that the Carter administration had permitted
to develop in the Medicaid program: "Nursing homes billing
the state for a water ski boat. Trips to Hawaii. Purchases
at a large Atlanta department store for which there was
no accounting."
The dental program carried on under Medicaid was
an area of particular abuse, according to Governor Busbee.
"In one example,' Busbee says, "the state was charged for
three root canals and two caps for one patient. We
discovered during an investigation that none of these
services were performed.' And then Governor Busbee
draws the obvious conclusion: "I call that fraud."
No one has suggested that Jimmy Carter was
personally involved in the corruption that existed in
the Medicaid program in Georgia under his administration.
But he was the man in charge. Through the laxity of his
administration, these abuses were permitted to develop.
-3C-
President Ford called last January for change in
the current Federal law, passed under a Democratic
administration, so that corruption of the kind found in the
New York case or in Georgia under Carter can be permanently
eliminated. The President's proposal would require that
the states submit to a regularly conducted independent
audit of their Medicaid expenditures.
Unfortunately, the Democratic Congress has so far
failed to act on the President's proposal.
Perhaps it would be worthwhile if Carter would
relate to his friends in Congress how corruption can
develop in state administration of the Medicaid program,
under current law. He can certainly speak with first-
hand knowledge of the subject.
#
-4-
HOUSING
Carter appears to favor a form of credit allocation for
housing -- one of the devices that allegedly has helped beat
Italy to its economic knees. (The Vice President also
favors a form of credit allocation in this area.)
LABOR
Carter has reversed himself on 14-B, which can probably be
used effectively in the Right-to-Work states, but it whould
not be made a national issue. (I suggest, incidentally,
that Dole get off his anti-union kick.)
Carter should be made to clarify his position on giving public
employees, except firemen and policemen, the right to strike --
a very unpopular position now in many areas of the country.
Does Carter favor establishing this right under federal
law, as demanded by the NEA and AFSCME?
For some reason, Humphrey-Hawkins is not in the issue book.
This, of course, is one of Carter's most vulnerable domestic
issues. The worst thing about Humphrey-Hawkins is not its
cost -- which is bad enough -- but that it would suck workers
out of the private sector and onto the public payroll,
driving up inflation and pulling down productivity.
(see attached memo) I have not yet had a chance to
analyze the new version of Humphrey-Hawkins that was
reported out yesterday, but suspect that this problem,
somewhat modified, is still in the bill.
By favoring revision of the Hatch Act to permit federal
workers to enter politics, the Democratic platform, and
therefore inferentially Carter, lays the basis for a
massive national political machine.
-4A-
STATEMENT FOR ELLIOT RICHARDSON
ON HUMPHREY-HAWKINS FOR DELIVERY IN ATLANTA
SEPTEMBER 9, 1976
The Democratic Platform, which Governor Carter has
endorsed and embraced, includes proposals which, if
enacted, would set off an inflationary cyclone in the
United States. The combined cost of the items in the
Democratic platform would be at least $200 billion in
the first year -- about half the total current Federal budget.
The Democratic platform, however, is worse than inflationary.
It includes a proposal which, if it became law, would
completely wreck the American economic system. I refer,
of course, to the infamous Humphrey-Hawkins bill.
The Humphrey-Hawkins bill, which Governor Carter has
specifically endorsed, by name, would be extremely costly - -
about $10 billion the first year it was in force. But cost
is not its most dangerous feature. The truly devastating
aspect of the Humphrey-Hawkins bill is that it would act
as a gigantic economic suction machine, sucking workers
out of the private sector and onto the public payroll.
This is how it would work: The bill promises a government
job for everyone who wants one at the prevailing wage for
government jobs in the area. As we all know, there are many
kinds of jobs for which state and local governments --
not to mention the federal government -- now pay higher wages
than the rate that prevails in private industry. So inevitably
many workers would leave their jobs in private industry and
go on to the government payroll.
-4B-
Let me remind you of the chain reaction this will set
off: Costs will rise for private companies as they try to
compete with the inflated wages being paid by government.
Production will slow down, leading to further shortages of
supply. Prices in the marketplace will have to go up to
pay for increased costs. Inflation will rage out of
control, leading to a return of recession, creating more
unemployment, which in turn will load even more workers onto
the government payroll. Investment capital, the source
of all productive jobs, will be completely unavailable.
It is not too much to say that the Humphrey-Hawkins bill
within a few years would totally bankrupt private industry
in the United States, and leave us with the entire workforce
on the public payroll.
But where would the funds come from to pay for these
government jobs? Since the nation's productive capacity
would have been destroyed, there would no longer be an
economic surplus to pay for necessary government services,
let alone for make-work jobs of the kind that Humphrey-
Hawkins is designed to provide.
There is no more important single issue in this
campaign than the Humphrey-Hawkins bill. If it were enacted,
our entire economic system -- our entire social system --
would crumble. Humphrey-Hawkins threatens every worker
who has a job -- every businessman who has invested in America's
future -- every family that depends on a healthy and growing
national economy.
-4C-
Jimmy Carter is for Humphrey-Hawkins. He has promised
not only to sign it into law, but to promote it through the
Congress. President Ford is against Humphrey-Hawkins --
he has promised that it will never become law while he is
President. Even the current Congress, heavily controlled
by Democrats, has backed down on Humphrey-Hawkins in the face
of President Ford's opposition. But if Carter were to become
President, there is every likelihood that he would be able
to push Humphrey-Hawkins through to enactment.
Even if there were no other issue dividing the candidates
in this campaign, Jimmy Carter's advocacy of Humphrey-
Hawkins provides reason enough for every thinking man and
woman to cast a resounding ballot for the election of
President Ford.
- -5-
WELFARE
Carter simply has not addressed the complexities of the
problem of welfare. The things he has said on the issue --
work requirement, etc. -- are popular, but he has not explained
how the system he has in mind would work. Unfortunately,
the subject is so complex that it can probably not be
developed effectively within the confines of a TV debate.
We should of course be against chisellers and for
help to the genuinely needy -- but so will Carter.
FORD is LIBRARY 938870
SOCIAL PROGRAMS/GOALS BLOCK
These are my personal goals:
--
I want every American who wants one to have a good job
with a paycheck -- this is the number one cure for our social problems.
--
Every American should feel physically secure, free from
the horror of war and the threat of crime.
--
Every American should have a home in a decent neighborhood with
schools where our children can get a good education.
--
Every American should have the best medical care at costs
which will not wipe out our savings.
--
Every American wants to work and relax in a clean, healthy
environment.
Let me give you an example of how to get them. Good schools require
continued federal aid but less federal interference. The block grant approach
I have proposed has not been acted on by Congress. Until it is, we'll have
federal bureaucrats continuing to reach into local school districts, rather
than letting parents and teachers run the schools. I believe my election
will be seen as a mandate for Congress to act.
FORO & LIBRARY 07V839
NIXON - FORD (PROGRAMS/POLICIES)
I am here to address six years of leadership - - my record as
President during the past two years and what I will do, if elected, over
the next four years.
I am accountable -- a responsibility I welcome -- for my record,
my policies, my decisions. My predecessor's policies are not my
responsibility.
When I became President, inflation was skyrocketing. Now it is
cut in half.
When I became President, unemployment was increasing. The trend
is now down (4,000,000 new jobs in 17 months)
.
When I became President, people distrusted the White House. I
restored trust and domestic tranquility.
When I became President, there was open conflict in the world.
Now we are at peace.
For follow-up question:
After becoming President, I sat down to decide which programs and
policies to keep, which to reject and which to change. For example:
--
I chose to keep revenue sharing which I fought for as
Minority Leader of the House.
--
I chose to reject the policy of using wage and price controls.
--
I chose to change our health insurance policy.
-2-
--
I chose to keep strong foreign and national defense
policies and to fight off efforts to undermine both.
--
And, I chose to fight inflation even in the face of an
opposition Congress determined to go the other way.
INFLATION/VETOES
We've cut inflation in half -- and we're going to keep driving
it down.
Everytime I veto spending bills out of the Congress, I do it in the
name of every American worker who wants his earnings protected; every
senior citizen on a fixed income; every housewife who does the grocery
shopping; and every taxpayer who has had it with bloated government.
And, everytime the Congress sends me a bill that endangers the people's
pocketbook, I'm going to keep right on vetoing it.
It's the only way I know to cut inflation. And it has worked at the
same time we've been creating 4,000,000 new jobs in this country in
the last 17 months alone.
Many of these vetoes have been a clean and hard message to
Congress which said:
--
remember not a few but all of the taxpayers,
--
forget the special interests who live off the federal treasury,
--
don't settle for bills that are partly good but mostly bad.
Congress got the message now and then and sent back better bills
which I then could sign into law.
All in all, my vetoes have saved the taxpayers over 9 billion dollars.
I find it interesting that Senator Mondale, who my opponent says is compatible
on all counts with him, voted to override every one of these tax-saving vetoes.
FORD is LIBRARY
UNEMPLOYMENT
Let me say first, that in the last 17 months more new jobs have
been created than in any similar period in the history of this country --
4,000,000 new jobs in 17 months, and 500,000 in the last two months.
And, if we stay on the same course, we'll keep making the same progress.
Furthermore, 2 years ago, millions of American workers were
afraid they were about to lose their jobs. I don't think many feel that
worry today. This economy is strong -- and I think the American people
feel that that is true. They can remember how bleak things seemed two
years ago. And we've done it, while cutting inflation in half.
No American President will ever be satisfied while there is one
willing worker who can't find a decent job. But in pursuing jobs, no
American President should make the mistake of backing spending programs
which, through inflation, threaten the earnings of the 88 million Americans
who are working.
Nor can a President allow the economic course he charts to be
erratic by shifting emphasis from one policy to another. Candidates can
live by the press release -- a new proposal for every problem every day.
A President needs to set a stable course and pursue it, day in and day out.
That may not be good politics, but it's what leadership is all about.
NIXON - FORD (WATERGATE/TRUST)
What I've tried to give our country is the kind of leadership they
can count on in good times and bad -- one that stands up and speaks out
for the people's rights, but a little less frantic and noisy, and a little
steadier and quieter than in recent years. I believe it has helped us
have solid and steady recovery these past two years, and I'm proud to
be part of it.
The pardon is one example of this kind of healing leadership.
When I faced that decision, our country was in one of the most
divided and rancorous periods in all our history. It was terribly important --
and urgent -- that we be brought together again.
I can remember very clearly -- better I am sure than anyone in
this theatre -- (looking into the TV camera) and probably better than
anyone watching on television -- the raw emotions of those days in
August of 1974. There was distrust and anger and a vindictive spirit --
diverting us all from great issues and poisoning the political life of our
country.
That recollection is still vivid with me, and because of it, if faced
with the same circumstances, I would make the same decision again. I am
certain in my mind that this decision contributed a great deal to the
healing and recent progress of America, and equally certain that a long delay
of that decision would have done very serious damage in many ways to the
American people.
GOVERNMENT REORGANIZATION
You don't make the government work better just by moving its
functions or agencies around. How a government agency is set up
depends on what it has to do. Unless you change what it is doing,
reorganization merely changes the letterhead on the stationery.
For example, I have been convinced for a long time that the
government does a poor job of providing medical services through
Medicaid and associated programs. That's why I proposed last January
to reorganize the whole program, consolidating the money normally
allocated to these various programs into one single payment allocated
to individual states.
This would have improved the way medical services reach the
individual and allowed a sharp tightening up of the management of these
programs. It would have cut the bureaucracy and saved money.
The Congress, though, due to special interest pressures, ignored
this and other major reorganizations.
To be honest about it, there's just no short cut to government
efficiency. Simply reshuffling bureaucrats won't do it. We must change
the existing laws.
GRAIN EMBARGO
I will directly answer the question, but first some perspective.
One thing about being President, you have to make decisions.
You just can't straddle and wobble around in the Oval Office. Like
President Truman said, "The buck stops here."
Sometimes your decision is unpopular -- not because it's
wrong -- but because critics make a big issue out of one aspect of it.
That's the case respecting my decision on the grain embargo, and I
understand how some farmers feel about it. The way I see it, freedom
for the farmer means freedom to look at circumstances of embargo. The
outcome has been grow and sell. If he is asked to achieve full production,
then the government is obliged not to interfere with his ability to sell
what he produces.
Farmers, like other Americans, have the right to have a President
they can trust. I recognize my obligation to them. I recognize their need
for trust.
I foresee no circumstances in which I would impose an embargo on
farm products.
While that answers for the future, your question raises circumstances
of the past.
One can fairly argue that the embargo lasted too long, but it's
important to look back and see why it was imposed at all. Had we not
acted, the maritime unions, or the Congress, would very likely have done
-2-
something far worse to farmers. President Meany of the AFL-CIO and
others were threatening to stop all shipments to the Soviets, including
the 10 million tons already sold. Some 70 Members of Congress were
moving to put all grain export sales under the control of a government
board. Their bill was supported by Mr. Meany and other union leaders,
and by Senator Mondale who called for strict export control licenses.
I rejected such action, having always fought against that kind of
government control, and I will continue to do so. Instead, we negotiated
a long-term grain trade agreement whereby trade with the Soviet Union
will stay in private hands and our farmers will continue to produce for a
market and not a government board.
This agreement has turned an off-and-on foreign buyer into a
long-term stable pur chaser.
The result is the circumstances that led to our problem in 1974
will not happen again because of the actions we have taken.
LEADERSHIP/TRUST
Real leadership is a lot more than just words. It is action.
Making the tough decisions, sticking to your word and doing what's
right even when it hurts are what leadership is really about. A
President has got to listen to all the people, and they've just got to
know he tells the truth.
The point is leadership, like trust, has to be proved --
not just claimed.
It is, for example, talking straight before election about
what you will do after the election.
It's honestly being the same thing to all people, not trying
to be everything to everyone.
It is not playing with words so that every audience hears
what it wants to hear, but saying exactly what you mean -- and
meaning what you say. To promise the sky one day, for example, and
then promise a balanced budget the next day is a shell game,
not leadership.
I believe I have held up to high leadership standards -- and,
being so, have brought our Nation away from the distrust and pain of
1974. With the help and trust of the people, I intend to continue that
kind of leadership on into our third century of f reedom.
FORD & LIBRARY GERALD