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March 1984 Incoming (6)
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March 1984 Incoming (6)
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Records of the White House Office of the Deputy Chief of Staff (Reagan Administration)
Michael K. Deaver's Correspondence Files
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THE WHITE HOUSE
WASHINGTON
Mr. Deaver:
This is scheduled for this
Thursday at 4:00 p.m. in
JAB's Office.
DB
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Hold
3/22
4:00 p.m.
FAB'S
THE WHITE HOUSE
WASHINGTON
March 15, 1984
TAB go sometime to do
MEMORANDUM FOR JAMES A. BAKER, III
MICHAEL DEAVER
you quited
THRU:
M. B. OGLESBY, JR.
DENNIS THOMAS JENAS
gass
FROM:
Congressman Newt Gingrich (R-Georgia) has requested a meeting to
discuss plans for the Republican Convention and activities
relating to the President's call for tax simplification.
Gingrich and Congressman Vin Weber (R-Minnesota) are leaders in
the House of an ad hoc group that has authored the "opportunity
society" theme. They have been the catalyst for the recent
school prayer initiatives, including the all-night vigil kicking
off our efforts to secure passage of a Constitutional amendment.
If we are to be successful in securing House Republican support
for our budget deficit reduction efforts, we will need to mute
the opposition of Gingrich, Weber, and the other younger and
more active House Republicans. In short, how helpful they will
be will be directly determined by how much input they feel they
will have in such activities as the Convention and tax simpli-
fication.
I would urge that we respond positively and quickly to their
request for a meeting. In addition to yourselves, it would be
helpful if the group could include Secretary Regan, Dave
Stockman, and Dick Darman. The session would provide Gingrich
and Weber an opportunity to outline their thoughts and recommen-
dations.
Congressman Trent Lott (R-Mississippi), House Republican Whip,
called this afternoon and strongly urged that we meet and
reinforced the pivotal role they will play in the upcoming
debate on the budget initiative.
THE WHITE HOUSE
WASHINGTON
March 20, 1984
MEMORANDUM FOR JAMES BAKER
MICHAEL DEAVER
THRU:
M. B. OGLESBY
FROM:
W. DENNIS THOMAS
SUBJECT:
Meeting with Congressman Newt Gingrich (R-Georgia)
and Vin Weber (R-Minnesota), March 22, 1984
Congressman Newt Gingrich (R-Georgia) requested a meeting with
you to discuss his work on the Conservative Opportunity Society
themes including recommendations for activities at the
Republican Convention and tax simplification initiatives.
Congressman Gingrich and Congressman Vin Weber (R-Minnesota) are
leaders of an ad hoc group formed to establish a positive
conservative agenda. This group, known as the Conservative
Opportunity Society (COS) has endeavored to further conservative
goals through a series of issues and activities. In addition to
their recent leadership in the school prayer issue, hearings
with black athletes and the all night House session, they have
developed a four point agenda:
1.
A fairer and simpler tax system which further lowers
marginal tax rates to increase incentives for labor
and capital, while broadening the tax base and shrink-
ing the underground economy.
2.
Urban enterprise zones to help revitalize the nation's
most economically depressed areas, creating jobs and
entrepreneurial opportunities for minorities and the
disadvantaged.
3.
Spending strategy:
a.
Executive line-item veto to help get spending
under control in a prudent manner.
b.
Limited executive authority to impound funds over
the next two fiscal years, at least 25% from the
defense budget.
- 2 -
4.
Monetary policy reform. Long overdue reform of
monetary policy to consolidate our progress in reduc-
ing inflation, and to help ensure long-term price
stability, so interest rates can fall to their histor-
ical levels.
The attached outlines their proposal in more detail.
This meeting is to allow Gingrich and Weber an opportunity to
discuss their legislative program and offer their thoughts on
Republican Convention activities.
To: Republicans
F::
Recs.
Lott,
HeTp,
Gingraph,
Coats
Webez,
Mack,
Lungren,
Walket, Vucanovich, Grego, Hiler
Re: Working Diaft of E Proposed Legislative Strategy
for 1984 -- and Sevond
:-. REPUBLICAN AGENDA FOR FULL EMPLOYMENT WITHOUT INFLATION:
THE AMERICAN OPPORTUNITY SOCIETY
In 1984, we Republicans have both ED unparalleled opportunity
and an unparalleled challenge. OUI opportunity is to build upon
the Reagan "DEW beginning" WE helped make just four years 200,
and win = mandate from the American people =0 become once again
the dominant political party in America, as we weze from Lincoln
to Coolidge. The challenge is to provide and implement the ideas
which CED come to grips with the social and economic problems
which still must be conçuered on behalf of Americans.
Becoming a governing majority doesn't mean just beating
Democrats; it means providing superior leadership and ideas. Yet
politics is a democratic and honorable means for seeking a better
life for Americans. And the full fruition of DUI American renaissa
can only be realized if there is a continued Republican Renaissand
-- especially among House Republicans -- of ideas, energy, integri
and bold leadership.
It is not enough for OUI Party to Iest on the laurels of its
accomplishments of the past four years o: of Ronald Reagan's
leadership: The control of inflation, the halving of interest
Iates, the beginning of sound recovery and the dramatic ¿IOP in
unemployment: Continued progress requires constant effort and
attention. And besides, the American people are by nature forward
looking. They are more interested in hearing OUI vision for the
nation's future than in hearing what we have done for them in the
past. BY trying to fun on DEST successes, the Republicans, incred
are in danger of being thrown on the defensive on issues like the
deficit -- a Dew concern among Democrats -- in the midst of their
patent success. The only way to remedy this is to put forward a
positive, forward-looking vision of where the country should be
headed, and 2n agenda for getting there.
FOI more than 200 years, Americans have shared in a unique
effort to achieve within OUI midst a society of opportunity. In
its broadest sense, this means a nation in which human beings are
empowered to live life in its fullness at every level and in
every aspect: a nation of free people under God, continuously
pursuing liberty and justice for all. America still is, in OUI
cherished phrase, " = city on a bill," which cannot be hidden: a
beacon of hope to all the woild if we succeed, and = warning and
source of discouragement should we fail. Thus OUI nation, like
OLI party, finds that its privilege is inseparable from its
responsibility: to show that the dignity of human beings is ED
everyday reality, and not just an attractive philosophy. Yet the
fact that in E still fall short of the dream should only reinforce
our determination to try harder.
- fundamental aspect of realizing such a society is achieving
a socially responsible free-enterprise economy. This is not the onl_
part, nor even the most important part, because man does not live
=Y bread alone. But man does live by bread, and material prosperity
can help free mankind from servitude to external circumstances, and
turn his attention to the higher things. so economic and material
well-being is fundamental to achieving the abundance of life to
which Americans aspire.
At the heart of the American opportunity society has always
been the hope of new possibilities for ourselves and our children.
America has been the one place on earth where you could climb as
high or as far as your efforts and God-given talent could take
you. Fulfillment in America is not reserved only to the winners.
There is a kind of victory in good work, no matter how humble.
And opportunity means more than individual self-fulfillment:
it means not only good work, but also good works. Wages and the
saving of wages are not merely a means of amassing comforts for
oneself. They mean being able to meet your obligations to your
family, providing your children with greater hope for a better life,
and passing on the fullness of life to others. They mean better
homes -- and better family life; better schools -- and better
education; loving your neighborhood -- and loving your neighbor.
Yet for many years now, economic opportunity in America has
been caught up in a political dilemma. The Democratic and Republican
parties found themselves impaled on the Phillips Curve, that
false tradeoff between inflation and unemployment. Democrats have
promoted spending schemes for stimulating the economy and redistribut
income, but the result was higher inflation. Republicans too
often replied with tax increases to match the Democratic spending
increases, but the result was to push many Americans off the
ladder of employment opportunity entirely.
Americans were often told to choose between inflated growth
or no growth at all, and this Phillips-Curve economic tradeoff
dominated the economic and political agenda. The central problem
reached its crisis in the late 1970s when we began to suffer the
logical outcome of this destructive political environment: a
combination of rising prcies and stagnant economic growth, called
"stagflation."
In 1980, our revolution began when we heeded Teddy Roosevelt's
dictum that Democrats are the conservative party, but Republicans
are the revolutionary party. In our platform and through Ronald
Reagan's candidacy we Republicans adopted a new position, which
even now seems radical to some. We said that non-inflationary
economic growth is not only desirable; it is possible. We know it
3
is possible because we have done it before in this country. We
Republicans demolished the Keynesian demand-management consensus
which drove most major economic decisions in both parties since
the Second World War. While mistakes have been made, sometimes by
erring on the side of timidity, our economic policies are leading
the nation and the world to noninflationary recovery. It is
critically important that this year the Republicans put forward
an agenda which will consolidate our ultimate goal, an American
society of equal opportunity and employment for all.
If we put forward such an agenda, and make it an integral
part of the party's 1984 national platform, the 1984 elections
will provide the Republican Party with a mandate for achieving
that goal. Full employment without inflation was identified in
our 1980 platform, but it cannot come to fruition without further
effort. It not only remains our major economic goal; it is the
way we can once and forever demolish the myth that our party
believes that the well-being of some Americans must be sacrificed
for that of others, through the inflation/unemployment tradeoff.
We must propose a bold agenda for the rest of the decade to
implement our goal of full employment without inflation; a four
part legislative initiative on tax, budget and monetary reform.
This initiative should be the core of a 1984 legislative and
political strategy. The four parts are integrally tied together.
They are not separable, but rather simultaneous and mutually
supporting. Taken together, they make up a comprehensive economic
proposal of universal scope.
The components are:
1. A fairer and simpler tax system which further lowers marginal
tax rates to increase incentives for labor and capital, while
broadening the tax base and shrinking the underground economy.
2. Urban enterprise zones to help revitalize the nation's
most economically depressed areas, creating jobs and entrepreneurial
opportunities for minorities and the disadvantaged.
3. Budget strategy:
A. Executive line-item veto to help get spending under
control in a prudent manner.
B. Limited executive authority to impound funds over the
next two fiscal years, at least 25% from the defense budget.
4. Long overdue reform of monetary policy to consolidate our
progress in reducing inflation, and to help ensure long-term price
stability, so interest rates can fall to their historical levels.
PART ONE: TAX REFORM
We offer comprehensive tax reform to meet the aim, expressed
by President Reagan, of a fairer, simpler, more efficient tax
system with greater economic incentives.
Politically, the Democrats have conceded the tax-incentive
issue to President Reagan. or rather, after having opposed his
25% across-the-board cut in marginal tax rates and other tax
incentives, they are now trying to out-Reagan Reagan in broadening
the tax base and lowering marginal tax rates.
For example, the Bradley-Gephardt plan is in many ways a
vast improvement over former Democratic ideas on taxes of the
past twenty years. In some ways, it is also a great improvement
over current law. Where Democrats bitterly denounced President
Reagan for cutting the top tax rate from 70% to 50%, the Bradley-
Gephardt plan lowers that rate to 30%. Where Democrats complained
that it was unfair to cut everyone's tax rates by the same percentage,
Bradley-Gephardt is specifically designed to retain the post-Reagan
distribution of the tax burden.
On the other hand, Bradley-Gephardt is still far too complex.
There is one personal exemption for adults, and a different (smaller)
one for families with children. While claiming to retain deductions
for items like mortgage interest, property taxes, and charitable
contributions, Bradley-Gephardt actually allows only partial
deductions. Sometimes deductions depend on gross income, and at
other times on taxable income -- effectively forcing people to
figure out their taxes twice.
Bradley-Gephardt also repeals inflation-indexing of the tax
code, which is unfair and hits lower- and middle-income taxpayers
the hardest. This is especially a problem because, by retaining
three progressive tax rates, Bradley-Gephardt would have considerable
"bracket creep" under inflation.
In their effort to find new revenue, the authors have also
worsened or introduced curious distortions to the tax code.
Someone who invests for income can deduct interest costs, but
someone who invests for capital gains effectively cannot. Moreover,
the capital gains tax rate is raised by 50%, which would be a
devastating blow to the stock market. Business investment is
returned to a system which is even worse than the one replaced in
1981. And the double taxation of dividends is worsened by the
changes in the tax base.
Our proposal for tax reform -- it is still a draft -- should
appeal to families, to working men and women, to savers and
investors, and to all who seek the American ladder of opportunity.
It is provisionally called the "Fair and Simple Tax" (FAST). It
is fairer, simpler, more incentive-oriented -- in a word, better
-- than Bradley-Gephardt. The key elements are a flat tax rate, a
broader and simpler tax base, generous allowances for families
with children, and a special incentive for wage-earners.
1. A single flat tax rate, after allowances, of 25% for both
individuals and businesses. (With the special provision for
wage-earners, the rate would amount to 20% below $40,000.)
2. A broader and fairer tax base. The personal exemption is
doubled to $2,000, and the standard deductions are increased. so a
family of four would not pay tax on the first $11,500 of income
-- compared with $7,400 today. For single taxpayers, the tax-exempt
level would be increased by more than $1,000.
Most of the existing tax loopholes are eliminated. The major
exceptions are:
Charitable contributions
Interest, including mortgage interest
Real property taxes
General-obligation tax-exempt bonds
O
Current law on IRAS, pensions, and fringe benefits
0 Indexing
Capital gains tax rates would be somewhat lower than today's
20% top rate, whereas Bradley-Gephardt would raise the capital
gains tax rates by 50% and more.
3. A special incentive for wage-earners.
Unlike income from securities or physical capital (which
receives special allowances for depreciation), wage and salary
income is subject to the risks of the earner's health and age. A
bond can't get sick, and a human being doesn't receive allowances
for wear and tear.
Our system remedies this by permitting workers to exclude
for tax purposes 20% of their wages and salaries on the first
$40,000 of income. (This effectively lowers the marginal tax
rate to 20%). The exclusion is phased out above $40,000, so that
wages and salaries over $100,000 receive no exclusion. All income
below $10,000 will be considered earned income.
This feature has two additional, unique advantages.
First, it removes an inequity from current law. Since Social
Security taxes apply to approximately the first $40,000 of income,
the combined Social Security and income tax rate can be up to 7
percentage points higher at lower incomes than at higher incomes.
Because our earned income deduction is phased out at about $40,000,
this plan would remove the problem. (However, because the connection
between benefits and contributions is unchanged, this in no way
constitutes "back door" general revenue financing of Social Security.
Second, without such a provision, any flat-rate income tax --
even with generous allowances at the bottom -- would redistribute
the tax burden from higher- to middle- or lower-income taxpayers
if it raised the same revenue as current law. With our earned
income exclusion and a flat tax rate, the distribution of the tax
burden by income class remains very close to current law.
On the corporate side, a tax rate of about 30% is applied to
a tax base from which most of the existing tax loopholes --
credits, exemptions, exclusions, deductions, etc. -- are removed.
The major exceptions (in addition to those listed above, if applicable)
are:
0 Ordinary business expenses
0 1981-law ACRS
0 Current-law treatment of foreign income
This plan is a considerable improvement over Bradley-Gephardt's
horse-and-buggy depreciation schedules. Our top capital gains rate,
at 20%, is one-third lower than Bradley-Gephardt's. Under our
plan, American employees and businesses are at a considerable
advantage in doing business abroad compared with Bradley-
Gephardt, which puts them at a disadvantage.
In summary, then, our Fair and Simple Tax further increases
incentives by cutting the top tax rate to 25%. But because of the
way in which the tax base is broadened, the distribution of the
tax burden does not shift, as with any other flat rate tax. Above
all, families with children and wage-earners receive special
protection. This is a tax plan which blue-collar working families
across the country can embrace.
PART TWO: URBAN ENTERPRISE ZONES
Even with national economic recovery, we need special efforts
to make sure that no-one, particularly minorities and the urban
poor, is left behind. The chronically depressed areas of our
nation need special compensatory incentives, and measures to
encourage entrepreneurs who will create businesses, hire workers,
and reduce the tragically high levels of poverty and unemployment.
On few other issues has a wider, more devoted and broad-
based consensus emerged than on urban enterprise zones. Black,
white, Hispanics, liberals, conservatives, Democrats and Republicans,
big city mayors as well as suburban and rural areas, all support
this constructive and progressive plan to help the economically
disadvantaged. The legislation has already passed the Senate, is
supported by the Administration, has 245 House co-sponsors including
18 Ways and Means Committee members, and has the endorsement of
the Black Caucus.
For all its high intentions and great cost, the War on
Poverty declared twenty years ago by President Johnson has in the
cities resulted in a truce with poverty. Our inner city residents,
many of them women and minorities, continue to be trapped in a
cycle of poverty. They are desperate for the chance to make a
better life for themselves and their children. They deserve
better than to have their dreams thwarted because a handful of
Democratic leaders in the House are bottling up the measure.
Current urban enterprise zones legislation provides a number
of incentives for our economically depressed areas:
1. Establishes 25 zones a year for three years, upon competitive
application by state and local governments. The process is designed
to join the efforts of local governments and community organizations
with the federal incentives.
The zones must be officially defined "pockets of poverty,"
with unemployment at least 1.5 times the national average, and
poverty rates of at least 20% in each census tract. The zones
must have a continuous boundary.
2. The bill provides a number of tax incentives for working,
hiring, investing, and starting new businesses within the zones:
0 An income tax credit of 5% on the first $10,500 of wages
for all employees who work in the zones.
O An income tax credit for employers, equal to 10% of the
wages of new employees hired, capped at wages of $17,500 per
employee.
O A special credit for disadvantaged workers, defined as
those earning no more than the combined AFDC/food stamps income
level. The credit would equal 50% of wages, without cap, for the
first three years, phased out in the next four years to 40%, 30%,
20%, and 10%. Qualifying workers would consist overwhelmingly of
women and minority teenagers.
O Capital gains taxes are abolished on investment within
the zones.
O Investment tax credits of 3%, 5%, and 10% on various
kinds of property within the zones. The 10% credit is for new
construction.
Further developments which are being considered are 1)
increasing the number of zones from the currently proposed 75,
and 2) permitting expensing of equity investments made in the
zone.
The civil rights revolution opened doors that had been closed
by law. It will not be complete, however, until America's doors
of economic opportunity are fully opened and our minorities
brought into the mainstream of the American economy with new
jobs, higher incomes, and new enterprise.
The time has long since arrived to provide the inner city
residents and minorities of this nation with the incentives they
need to overcome the obstacles of poverty and urban decay. We
Republicans should see to it that this program is passed. The
party of Lincoln should take the lead in extending opportunities
to those who are without them.
PART THREE: BUDGET STRATEGY
The best way to reduce the burden of government on the
economy is to restrain the growth of government spending while
increasing the size of the economy. As President Reagan has
correctly pointed out, a tax increase serves neither purpose: it
neither reduces the size of government nor increases the size of
the economy. In fact, it works in the opposite direction, slowing
down the economy and reducing the pressure for spending restraint.
Raising taxes cannot reduce the government's crowding out of the
private sector; it can only change the nature of the crowding
out.
Moreover, it is easy to show that deficits are not caused by
the undertaxation of the American people. Despite President
Reagan's tax cuts, offsetting tax increases have meant that the
tax burden on the economy has not declined; taxes still take 19%
of GNP, which is almost exactly the postwar average. But spending
has risen from 19% to 24% of GNP. That's where the deficit came
from.
For all of these reasons, it is on spending that we must
focus our efforts if we are truly concerned about Federal deficits
or Federal pre-emption of private resources. This is the general
thrust of President Reagan's economic program, and it is an effort
that we Republicans and the majority of Americans join in
supporting.
(A) LINE-ITEM VETO
Despite the clear mandate for spending restraint, Federal
spending continues to rise, because Congress has not found itself
capable, on its own, of slowing it. The problem is deep-seated
and institutional in nature; it needs an institutional remedy.
We propose giving the Chief Executive a line-item veto over
appropriations. The line-item veto is an indispensable tool for
restraining unnecessary spending in a prudent, responsible way.
Forty-three states have such a provision in their constitutions,
giving their governors the power to reduce or veto individual
spending items of appropriation. And it works. In fact, the very
9
decisions existence of in the the authority results in more prudent
will be first place, when it is clear legislative power
used if responsible decisions are not forthcoming. that the
Federal spending without senselessly taking a meat-axe to the
The line-item veto permits us to lighten the heavy burden of
methodically scale back Federal outlays in those areas where they
budget. If the President has this authority, he can prudently and
are unnecessary, while leaving spending unchanged, or permitting
Congress to increase it, where desirable. This means not only
overall spending restraint, but also more efficient use of available
resources, becuase appropriations would no longer have to be
considered on a take-it-or-leave-it basis.
The mechanism would be relatively simple. The President
would receive authority from Congress to veto or reduce specific
items of appropriation sent for his approval, returning the
measure to the House in which it originated. If both Houses
nevertheless uphold the original measure by two-thirds majorities,
it shall become law over the President's veto. Otherwise, the
items will stand as the President decided.
(B) LIMITED IMPOUNDMENT AUTHORITY
The second part of our budget strategy is to restore,
on a limited basis, the President's authority to impound funds
which have been appropriated but the expenditure of which is
not needed because of economic conditions which require
further Federal deficit reductions.
This legislation would specifically provide for the following:
`Presidential authority to "permanently reserve from obligation
and expenditure" any budget authority for Fiscal Years
1984 or 1985.
No reduction of any appropriation account by more than
ten percent.
'At least 25 percent of the total amount of the reservation
shall be under the National Defense functional category.
No Presidential reservation shall effect the elimination
of any specifically authorized program.
""To the extent feasible," the President shall reserve funding
proportionately and reasonably among the major functional
categories.
No more than 20 billion dollars may be reserved for any
fiscal year.
No entitlement funding may be reserved.
A message outlining amounts, percentages, and other
considerations involved in proposed reservations must
transmitted to Congress by the President.
Congress may disapprove any reservation package within
60 days by adoption of a joint resolution under an expedited
procedural mechanism.
The Comptroller General is required to review all reservations
to insure that they are in compliance with the Act.
PART FOUR: MONETARY REFORM
Reforming monetary policy can sound technical or philosophical,
but our historical experience, from 1792 to the Civil War to 1896
to the 1930s to the 1970s, assures us that it translates into
hard political reality. Honest money is a populist, blue-collar,
middle-class, bread-and-butter concern.
If you are wealthy, you can protect yourself against the
risk of bad money by speculating in bonds or real assets, or by
hiring lawyers, accountants and brokers to figure out complicated
schemes involving the tax laws and the futures markets. But the
less savings you have, the more certain it is to be tied up in
money which earns little interest because it must be turned over
so often. You are more subject to the real loss caused by rising
prices. Since only those poor enough to receive public aid are
even partly protected against inflation by the government, the
brunt of every major inflation falls on the working middle class
-- the backbone of the American opportunity society.
None of our economic tasks is grater than to restore sound
and honest money. The American people must have money which is
dependable, since they entrust to it their jobs, their businesses,
their lifetime savings, and their investment in the future of
their families. Restoring honest money must be considered the
centerpiece of an American opportunity society.
Republican platforms of the past have always recognized this
fact. During the height of its dominance, the Republican Party
was both the party of "the full dinner-pail" and of "honest
money. The Republican Party platform of 1980 once again gave
full recognition to the historical dimensions of the problem:
Ultimately, inflation is a decline in the value of the
dollar, the monetary standard, in terms of the goods it can
buy. Until the decade of the 1970s, monetary policy was
automatically linked to the overriding objective of maintainin
a stable dollar value. The severing of the dollar's link
11
with real commodities in the 1960s and 1970s, in order to
pursue economic goals other than dollar stability, has
unleashed hyperinflationary forces at home and monetary
disorder abroad, without bringing any of the desired economic
benefits. One of the most urgent tasks in the period ahead
will be the restoration of a dependable monetary standard --
that is, an end to inflation.
Without doubt, the Reagan budget and tax reforms have laid
the foundation for the strong recovery of the U.S. economy which
has already occurred. But proper fiscal policy alone is not
sufficient to maintain a strong, noninflationary period of growth,
or to return interest rates to their historical levels of 5 or 6
percent. This is true for two reasons. First, if inflation is a
decline in the value of money, it can only be cured by monetary
policy. Second, improper monetary policy can offset the good
effects of proper fiscal policy, as we have seen in recent years.
Strangely enough, nowhere in the legislation authorizing the
Federal Reserve is there any direction that the integrity of the.
currency is the central bank's primary goal. The original act
speaks of accommodating the needs of business, while the 1946
Employment Act speaks of "maximum employment production, and
purchasing power."
Moreover, price stability means preventing price swings in
both directions -- inflationary as well as deflationary. Just as
inflation unfairly benefits borrowers at the expense of lenders,
deflation unfairly benefits lenders at the expense of borrowers.
The goal of monetary policy must be a dollar which neither rises
nor falls against the things money can buy. We need neither a
rising nor a falling dollar, but a stable dollar.
This has not been the case in the past dozen years. Major
falls in the dollar and rising inflation have been interspersed
with equally staggering rises of the dollar and deflation. In
effect, the supposed Phillips Curve tradeoff between inflation
and unemployment has been compounded by a continual tradeoff between
commodity-price inflation and deflation. Part of the problem is
institutional in nature, but the other part is caused by misguided
Federal Reserve policy.
Article 1 Section 8 of the Constitution gives Congress the
power to "coin money and regulate the value thereof.' The independence
of the Federal Reserve, a creature of Congress, was established
under this authority. It is a valuable heritage, designed precisely
to protect the value of our monetary standard. That independence
was in no way designed, however, to prevent any change in misguided
policy which threatens our monetary stability.
There are several steps which can and must be taken right
now to minimize the disruption of the American and world economy
by our misguided, uncertain and changing Federal Reserve policy,
12
while substantielly preserving the independence of the central
bank. These we now propose.
1. For the first time, Congress must clearly state that the
overriding goal of Federal Reserve policy shall be the integrity
of the dollar, which necessarily means long-term price stability.
2. As its intermediate target for conducting this policy, the
Treasury Secretary and Chairman of the Federal Reserve Board
shall devise an index of prices for. use as its intermediate monetary
target. The commodity or commodities contained in the index shall
be chosen for their sensitivity to long-term trends rather than
transitory or cylical price movements. Once established, a
falling of the index below its target range shall signal the
central bank to ease policy, and a rise in the index above its
target range shall signal a need to tighten policy.
3. It shall be the policy of the Federal Reserve to keep
interest rates as low and exchange rates as stable, and to encourage
encourage economic growth, as far as such policy is consistent
with long-term price stability.
4. To increase the accountability of the Federal Reserve
Board, and to improve co-ordination of monetary and fiscal policies,
the Secretary of the Treasury shall once again be made an ex
officio member of the Board of Governors of the Federal Reserve
System, as under the original law.
5. To reduce uncertainty and speculation about Federal
Reserve policy, the Federal Open Market Committee shall publish
policy decisions on the day the decisions are adopted.
6. In order to lay the groundwork for later domestic and
international monetary reform, the Secretary of the Treasury is
directed to seek the establishment of a permanent advisory task
force, and ultimately an international monetary conference, made
up of representatives of the major industrial nations. The purpose
of both is to explore reforms which would improve world-wide
price stability, stability of currency exchange rates, and the
conditions for strong, noninflationary economic growth and liberal
international trade.
Such a combination of policies would have prevented the wild
swings in prices, interest rates, world monetary reserves, and
economic growth from which Americans and our trading partners
have suffered over the past dozen years. It would have checked
the wild fall of the dollar of the Carter years and the debilitating
rise since 1980 which has hurt U.S. industries relying on exports
or competing with foreign imports. And such a policy will lay the
foundation for making honest money a permanent feature of the
domestic and international monetary system.
13
III. CONCLUSION
The proposed program is ambitious -- but no more ambitious
than our remaining economic problems call for. Many of the problems
were created by 50 years of ill-conceived Democratic policies. If
we succeed in implementing a legislative program of the kind we
have outlined, the society of equal opportunity, long awaited by
generations of Americans, will be close to fruition, and the
Republican vision of the nation's future can be achieved.
When Thomas Jefferson wrote in our nation's founding document
that the self-evident truth that God's gift to all human beings
includes the natural rights to life, liberty and the pursuit of
happiness, America embarked on a venture which was unique in
history. The seeds of the American opportunity society were sown.
Not coincidentally, Jefferson's party dominated American politics
for decades.
When Abraham Lincoln concluded from Jefferson that legitimate
government is of the people, by the people, and for the people --
all the people -- the idea of equal opportunity began to flower.
Not coincidentally, Lincoln's party -- the party of equal rights,
the full dinner-pail, and honest money -- dominated American
politics for decades.
Now, as we end the twentieth century, we have a comprehensive
conservative vision of economic growth, full employment, long-
term price stability, and the fulfillment of human potential.
These are lofty, universal goals. But they will not happen on
their own. Their realization right now requires the re-election
of Ronald Reagan and a majority of Republicans in both the House
and the Senate.
In fact, if our program can be enacted, and the American
opportunity society reaches a new maturity, we conservative
Republicans will reassume our place as the majority party long
into the twenty-first century.
THE white HOUSE
washington
MRD
per 6 Fuller affice
attached is the list
for women Lunch next Fri
-
BS
me
Jim Sanders
( Bechy Nortan Dunlop) (T)
(Corolyn Gay)(T) (T)
PRESIDENT'S ADVISORY COMMITTEE ON WOMEN'S BUSINESS OWNERSHIP
Ms. Angela Buchanan Jackson, Chairperson
Reagan-Bush '84
440 First Street, N. W.
Washington, D. C. 20001
Ms. Corlene Hobbs Cathcart
Majo Ranch
Cody, Wyoming 82414
Mrs. Evelyn Echols
President
International Travel Training
Courses, Inc.
303 East Ohio Street. Time-Life Building
Suite 2718
Chicago, Illinios 60611-3390
Ms. Clara Giordano
1145 12th Street
Wyandotte, Michigan 48192
Ms. Jean Hails
Hails Contruction of Georgia
100 Norcross Street
P. O. Box 885
Rosewell, Georgia 30077
Mr. Malcolm A. MacKillop
Senior Vice President/Corporate Relations
Pacific Gas and Electric Company
77 Beale Street
San Francisco, California 94106
Mr. Robert R. McMillan
Vice President, Public Affairs
Avon Products, Inc.
9 West 57th Street
New York, New York 10019
Ms. Patricia Nettleship
President
North Pacific Construction Co.
2665 Main Street, Suite 220
Santa Monica, California 90405
Mrs. Beth Davis Rogers
President
Davis Pacific Corporation
1641 18th Street
Santa Monica, California 90404
Ms. Helen Sanchez-Usitalo
Financial Consultant
Sanchez-Usitalo Associates
10720 Stemmons Freeway
Dallas, Texas 75220
Ms. Susan Sarvis
President
LTS, Inc.
102 Maple Street
Manchester, NH 03103
Mrs. Maeley Tom
Chief Administrative Office
of the Assembly
Room 3016
State Capitol
Sacramento, California 95814
Mrs. Ruth Trotter
President
The Stork Shop, Inc.
3381 Walnut Grove Road
Memphis, Tennessee 38111
IFA
®
INTERNATIONAL FRANCHISE ASSOCIATION
March 26, 1984
Mr. Michael K. Deaver
Deputy Chief of Staff
The White House
Washington, D.C.
20500
Dear Mr. Deaver:
I noted in a recent edition of The Washington Post a story regarding
the many contributions Mrs. Faith Ryan Whittlesey is making to the
President and the entire administration. Let me say straight away
that the 480 members of the International Franchise Association consider
her a personal friend and support those efforts. She is a champion
for free enterprise and has made franchising a priority topic in the
public liaison office and the White House.
Prior to Mrs. Whittlesey's appointment, franchising was given little
or no attention by the White House staff, although it employs five
million people and is responsible for 32 percent of our nation's total
sales and services.
She took a leadership position and initiated informal meetings with
franchise executives to learn and share ideas. This initiative has
proved to be highly beneficial not only to franchising but also the
administration. Franchising continues to support the President's
recovery program. We are employing new people at the rate of nearly
300,000 per year.
Our commitment is to assist the office of public liaison, Mrs. Whittlesey
and the President because through her constant concern and consideration
for franchising we are no longer simply beating at the door of the White
House, we are inside and allowed to provide viable support at a time
when such support is critical to our nation's future.
DEPARTMENT IFA FRANCHISE
1025 CONNECTICUT AVENUE, N.W.
SUITE 707
WASHINGTON, D.C. 20036
ASSOCIATION
202-659-0790
TELECOPIER 202-457-6573
TWX 710-8229772
CABLE ADDRESS CAVEAT-WSH.
Mr. Michael K. Deaver
March 26, 1984
Page 2
If a portion of her responsibilities is to communicate with key
constituent groups, rest assured she is doing just that and we applaud
her efforts in such regard. Franchising much appreciates her support
and in turn supports her. After all, the important thing is getting
the job done. For franchising, she is doing just that and the President
can be very proud of her actions on his behalf.
Sincerely,
& Jerry C. Wilkerson
Grewil Director of Public Affairs
JCW/1k
COUNCIL OF
Ble
100
AN ORGANIZATION OF BLACK REPUBLICANS
1523 L Street, NW, Seventh Floor
Washington, D.C. 20005
Telephone: (202) 628-2216
FOUNDER
The Late
March 26, 1984
SAMUEL C. JACKSON, Esq.
Fll
OFFICERS
ELAINE B. JENKINS
Chairperson
Honorable William Bradford Reynolds
THEODORE A. ADAMS, Jr.
Assistant Attorney General
Vice Chairman
Civil Rights Division
EDWARD HAYES, Jr., Esq.
U.S. Department of Justice
Secretary
Room 5643
ROBERT JEFFERS, Jr.
Washington, D. C. 20530
Treasurer
FLOYD B. McKISSICK, Esq.
Dear Brad:
General Counsel
ALBERTA THOMPSON
The ad hoc committee of the Council of 100 appreciated
Assistant Secretary
the opportunity to have a dialogue with you concerning
CLARA SMITH
the Dade County matter. There will be coming to you
Assistant Treasurer
a review of what we think we heard and the most recent
SYLVESTER E. WILLIAMS, III
reaction generally to the matter.
Chairman of Advisory Committee
MILTON BINS
We propose that we keep the door open to talk with you
Communications Director
frequently SO that issues within a Civil Rights con-
text have a chance to be shared with you. Some do not
think that we can turn around the exceedingly negative
way in which you or your office is viewed. Some of
us think that if there is a very conscious effort on
your part to understand the concerns of black Americans
we might help to turn the views at least away from a
hue and cry to replace you.
There is certainly a strong feeling that President
Reagan not be blamed for positions that are not his
view nor actions that he has not known about and was
therefore not given an opportunity to look at the
total picture. He is, after all, President of all the
people.
In addition, some of the observations about the Justice
Department include:
(1) Lack of black professionals appointed
to the agency (attorneys) or consultants.
March 26, 1984
page 2
Honorable William Bradford Reynolds
Assistant Attorney General
Civil Rights Division
U.S. Department of Justice
(2) No black assistant to you who has a Civil
Rights background or expertise.
We will be interested in your views on how best to correct
these voids.
Please let us keep our dialogue going with your office.
Frequently, much can be accomplished with friendly but
opposing stances in place working together for a common
purpose.
Sincerely,
Uaine
Elaine B. Jenkins
Chairperson
EBJ/cdd
CC: Steve Rhodes
Melvin Bradley
Trudi Morrison
LeGree Daniels
THE WHITE HOUSE
WASHINGTon
Mr. Deaver:
Do you want me to schedule this
for you?
1
YES
NO
go
this Thill ou
DB
To
3/22
B
JAMES S. DWIGHT, JR.
METROPOLITAN SQUARE
SUITE 700
655 FIFTEENTH STREET, N.W.
WASHINGTON, D.C. 20005
March 15, 1984
Dear Mike:
As you know from our discussion the week before last
regarding the reception for Ed Meese, we tried to
anticipate the demands of your calendar. Ed & Ursula
particularly wanted you to be with us, therefore, we
have scheduled the reception for the evening of March
26 in order to accommodate your calendar.
I hope it is already on your calendar as a result of
our phone call earlier this week. As of this writing,
Ed and Ursula are spending the week in R & R. The
vote, together with reopening the hearing, remains
very fluid. At least we can be comfortable with the
proposition that only his friends will be with him the
evening of the 26th.
The reception will be held in Deloitte Haskins &
Sells' National Conference Center at Metropolitan
Square, 7th floor, 15th and G Streets (enter on G
Street) from 5:30 to 7:30 P.M.
Please let either myself (626-1980) or Jack Svahn
(456-6515) know that you can attend. Jack has assumed
the responsibility of keeping tabs on the California
Alumni Group for the White House.
Yours very truly,
Oir
Mo
THE MADISON
FIFTEENTH & M STREETS NORTHWEST WASHINGTON. D.C. 20005 (202) 862-1600
March 20, 1984
Office of the Proprietor
Marshall B. Coyne
fill
Dear Mike:
It is always a thrill going to the
White House, and I enjoyed lunch with you
today very much.
I know your trip to China will
be successful.
The next lunch will be at the Madi-
son as well as a Chinese dinner at my
home I hope soon.
Best regards,
M
Michael K. Deaver
Assistant to the President
Deputy Chief of Staff
The White House
Washington, D. C. 20500
Leslie C. Dutton & Associates
2210 Wilshire Boulevard 4
Suite 174
Santa Monica, California 90403
213 / 395-0244
Governmental/Industrial Affairs
March 23, 1984
Mr. Michael K. Deaver
Deputy Chief of Staff
The White House
1600 Pennsylvania Ave. N.W.
Washington, D.C. 20500
Dear Mike,
A few weeks ago I met with the President and Craig Fuller in the
Oval office and at that time we discussed the possibility of my serving
on a Presidential Board or Commission. Since then I have met with members
of the staff and identified the President's Commission for Executive
Exchange as an ideal area where my talents and background can be put to
work. The Commission is comprised of primarily male executives and with
the departure of Helene von Damm, would be better balanced with the
addition of a woman executive to the membership. Two of the last appoint-
ments were blacks and one was a woman.
Now that I am more familiar with the work of the Executive Exchange
program, I am very enthusiastic about the prospect of serving in this area.
I assume that Craig Fuller is moving this along. But in the meantime I
have prepared a one-page resume and have taken the liberty of listing your
name as a reference, since you more than most, know of my political back-
ground as a supporter of the President.
It is my understanding that June Walker, Executive Director of the
Commission will also need to approve the appointment and since I do not
know her, your recommendation will be very much appreciated.
I hope that this letter finds you in good health and spirits, ready
for spring. The temperature here in Santa Monica today is 80°. I should
be on the beach.
Warm regards,
Leslie
Leslie C. Dutton
enc: (1)
LESLIE CAROL DUTTON
2210 Wilshire Blvd.
Telephone:
Suite #174
(213) 395-0244
Santa Monica, CA 90403
PRESIDENT and Chief Executive Officer of Leslie C. Dutton and Associates
Governmental/Industrial Affairs, specializing in corporate projects of a
national and international nature. The firm was formed in September 1983.
VICE PRESIDENT and Senior Account Executive with The Hannaford Company,
Public Relations/Public Affairs, Los Angeles. Specializing in national and
international corporate and political projects. Client responsibility included
New York Stock Exchange President, John J. Phelan, Jr., American Medical
International (Governmenal Affairs), Citicorp, U.S.A. (Western Division),
Committee for Fair Insurance Rates (Washington D.C.), Tosco Oil Corporation
(Governmental Affairs), Baltic American Freedom League (Washington, D.C. and
Los Angeles)
CAMPAIGN MANAGEMENT As an independent contractor and community leader managed
campaigns for candidates and issues. among them; 1977-179 Santa Monica City
Council races, 1978 Statewide Initiative for Judicial Reform (Southern Calif.)
1973 Ronald Reagan's Proposition One (Los Angeles-Westside Co-ordinator),
1974 Brian Van Camp (Secretary of State-California) 1978 Southern California
Initiative Co-ordinator to Ban Public Employee Strikes, 1972 Re-elect the
President, Santa Monica)
POLITICAL Elected member of Los Angeles County Republican Central Committee,
Appointed member State Republican Party, 1976 Regular Delegate to GOP National
Convention for Ronald Reagan), Founder, past President and Chief Operating
Officer of the Westside Republican Council. 1972-1975 GOP Precinct Chairman,
West Los Angeles Assembly Districts., 1975 Grassroots Tribute to Ronald Reagan-
Chairman, Campaign-community co-ordinator for L.A. County Supervisor James Hayes
(1972-74), U.S. Congressman Alphonzo Bell (1972-74), Senator S. I. Hayakawa 1976,
Dr. Earl Brian for U.S. Senate 1974.
MEMBERSHIPS California Yacht Club, since 1966 active in Pacific Handicapped
Racing Fleet and Women's Auxiliary program. Co-ordinated media relations for
California Cup Race-1975. Children's Home Society of California, Los Angeles
County Membership Chairman 1981, World Affairs Council, since 1974 active in
State Department visitors program.
ADMINISTRATION AND PERSONAL REFERENCES President Ronald Reagan, Nancy Reagan,
Edwin Meese III, Michael K. Deaver, Helene von Damm, Craig Fuller, Lyn Nofziger,
Jack Courtemanche, Elaine Crispen, Rose Marie Monk, Bay Buchanan Jackson, Lynn
Ross Wood, Dodie Livingston.
Invitations
THE WHITE HOUSE
WASHINGTON
Mr. Deaver:
Do you want to take any further
action on this request?
ToTal
no
full
CAMBRIAN ENERGY SYSTEMS, INC.
One Wilshire Building
Suite
2920
624 South Grand Avenue N Los Angeles, California 90017
(213)628-8312
July 29, 1983
Mr. Frederick J. Ryan, Jr.
Director, Presidential
Appointments and Scheduling
The White House
Washington, DC 20500
Dear Mr. Ryan:
Following up your letter to me dated July 11, I tried calling you, but
evidently my messages did not reach you. We were not looking to have the
President at a dedication in August, rather at the end of the year or even
in the first quarter of 1984.
We would appreciate your reconsidering our request in my letter of April 19.
Our facility in Oxnard, California, is minutes south of Highway 101 at the
Santa Clara offramp. It is about 45 minutes from the President's ranch in
Santa Barbara.
The executives at Pacific Lighting Corporation who have been friends and
supporters of the President for a long time would be pleased to host the
President at the event. Our project would be a good time for the President
to make a statement about his concern for the environment and about the
positive role private enterprise is taking to help the cities, the environ-
ment, and the energy supply situation in the United States.
We would appreciate your efforts to reconsider our request.
Sincerely,
CAMBRIAN ENERGY SYSTEMS, INC.
By R. F. Hatch nhabh
Executive Vice President
RFH:hap
CC Mr. Michael Deaver
Deputy Chief of Staff
The White House
thenks Jor your support f
interest in this Meke
..
Be
THE WHITE HOUSE
WASHINGTON
July 11, 1983
Dear Mr. Hatch:
Mike Deaver forwarded your April 19 letter
inviting the President's participation at the
dedication of the Oxnard project in August.
Although the President is most appreciative of
your interest and thoughtful suggestion, re-
grettably the developments in his August
schedule are such that it will not be possible
for him to join you on this very special oc-
casion.
In sending his regrets, the President has asked
me to convey his warmest wishes.
Sincerely,
Fuderick J. Ryan, Jr.
FREDERICK J. RYAN, JR.
Director, Presidential
Appointments and Scheduling
Mr. Robert F. Hatch
Executive Vice President
Cambrian Energy Systems, Inc.
Suite 2920
One Wilshire Building
624 South Grand Avenue
Los Angeles, CA 90017