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Ronald Reagan Presidential Library
Digital Library Collections
This is a PDF of a folder from our textual collections.
Collection: Roberts, John G.: Files
Folder Title: [JGR/Presidential Talking Points]
Box: 42
To see more digitized collections visit:
https://reaganlibrary.gov/archives/digital-library
To see all Ronald Reagan Presidential Library inventories visit:
https://reaganlibrary.gov/document-collection
Contact a reference archivist at: [email protected]
Citation Guidelines: https://reaganlibrary.gov/citing
National Archives Catalogue: https://catalog.archives.gov/
THE WHITE HOUSE
WASHINGTON
March 13, 1985
MEMORANDUM FOR MICHAEL E. BAROODY
DEPUTY ASSISTANT TO THE PRESIDENT
DIRECTOR, PUBLIC AFFAIRS
FROM:
ASSOCIATE COUNSEL QSR TO THE PRESIDENT
JOHN G. ROBERTS
SUBJECT:
Talking Points on Budget Provisions
Counsel's Office has reviewed the above-referenced talking
points, and finds no objection to them from a legal
perspective.
CC: David L. Chew
ID #.
CU
WHITE HOUSE
CORRESPONDENCE TRACKING WORKSHEET
0 # OUTGOING
H INTERNAL
1. INCOMING
Date Correspondence
Received (YY/MM/DD)
/
/
Name of Correspondent: Daul chew
MI Mail Report
User Codes: (A)
(B)
(C)
Subject: Talking points on Budget procusions
ROUTE TO:
ACTION
DISPOSITION
Tracking
Type
Completion
Action
Date
of
Date
Office/Agency
(Staff Name)
Code
YY/MM/DD
Response
Code
YY/MM/DD
CUHOLL
ORIGINATOR 85/03/12
/
/
Referral Note:
CUAT 18
R 85,03,13
5 5 85,03,13
Referral Note:
/ /
/
/
Referral Note:
/
/
/
Referral Note:
/
/
/
/
Referral Note:
ACTION CODES:
DISPOSITION CODES:
A Appropriate Action
Info Copy Only/No Action Necessary
A Answered
C Completed
C - Comment/Recommendation
R Direct Reply w/Copy
B - Non-Special Referral
S Suspended
D Draft Response
S For Signature
F
Furnish Fact Sheet
X Interim Reply
to be used as Enclosure
FOR OUTGOING CORRESPONDENCE:
Type of Response = Initials of Signer
Code = "A"
Completion Date = Date of Outgoing
Comments:
Keep this worksheet attached to the original incoming letter.
Send all routing updates to Central Reference (Room 75, OEOB).
Always return completed correspondence record to Central Files.
Refer questions about the correspondence tracking system to Central Reference, ext. 2590.
5/81
Document No.
WHITE HOUSE STAFFING MEMORANDUM
DATE:
3/12/85
ACTION/CONCURRENCE/COMMENT DUE BY: c.o.b. Wednesday-3/13/85
SUBJECT: TALKING POINTS ON BUDGET PROVISIONS
ACTION FYI
ACTION FYI
VICE PRESIDENT
McMANUS
REGAN
MURPHY
DEAVER
OGLESBY
STOCKMAN
ROLLINS
BUCHANAN
SPEAKES
CHEW
P
SVAHN
FIELDING
TUTTLE
FRIEDERSDORF
VERSTANDIG
FULLER
WHITTLESEY
HICKEY
CEA
HICKS
BAROODY
KINGON
McFARLANE
REMARKS:
Please provide any comments/edits directly to Mike Baroody,
with an information copy to my office.
Thanks.
RESPONSE:
1985 MAR 12 Fil 5: 00
David L. Chew
Staff Secretary
Ext. 2702
THE WHITE HOUSE
WASHINGTON
March 12, 1985
MEMORANDUM FOR DAVID CHEW
FROM:
MIKE BAROODY
SMB
SUBJECT:
TALKING POINTS ON BUDGET PROVISIONS
I told you last week we would have a series of
talking points on specific budget provisions.
Here they are.
Believe they should be circulated routinely,
certainly to OMB and to anyone else you feel
appropriate.
Once they are approved we will put them on our
electronic guidance system and -- at the agreed
time we can distribute in hard copy to spokesmen.
RURAL ELECTRIC AND TELEPHONE PROGRAMS
Fifty years ago, before rural America was wired for
telephone and electricity, these programs were justifi-
able. (REA began electrification programs in 1935; the
telephone program was added in 1949.)
$61 billion of federal assistance later, 99% of U.S.
farms have central station electric service and 95%
have phone service. The job's virtually done.
So the program will be phased-out in the next 5 years.
Phase-out will save $176 million next year, and a total
of $5.1 billion through 1990.
Now, the federal program provides 5% loans (2% in some
cases) for operation and expansion of these systems,
costing taxpayers about $2.5 billion a year.
By 1990, all local systems will be expected to get
needed financing through private loans at market rates,
as other small utilities do. (Over one-third of their
borrowing needs are already financed privately.)
In the phase-out period, priority for REA subisidized
and guaranteed loans will go to those in weakest finan-
cial condition.
Keep in mind that most of the electric systems and many
of the telephone companies have other financial advan-
tages; for example, they are tax-exempt because they
are self-owned rural cooperatives.
MEDICAL EDUCATION -- HEALTH PROFESSIONS TRAINING SUBSIDIES
Now, the federal government is spending about one-
quarter of a billion dollars a year on subsidies for
medical training.
In the mid-1960s, there was a shortage of doctors,
nurses and other health specialists. That's why these
subsidies were established.
Now the shortage is over; continuing the subsidies will
create an oversupply of specialists.
We have almost twice as many doctors, dentists, RNs and
other trained professionals now as in the mid-60s. All
major studies show we have at least enough to meet our
needs in virtually every category of health specialty.
Continuing these subsidies for medical education now
isn't necessary, fair, or fiscally responsible:
-- we not only have enough professionals, but studies
show the supply will continue to grow at least
through the balance of the 1980s;
--
continuing the subsidy would mean reverse income
distribution, taxing lower and middle-income work-
ers to prepare others for high-income jobs;
-- terminating the subsidies will save a half billion
dollars by 1988 and over $1 billion by 1990.
END FUNDING FOR APPALACHIAN REGIONAL COMMISSION
ARC was set-up as a temporary program 20 years ago.
Since then, poverty rates in the 13 state region have
been cut more than in half and the trend to out-
migration has turned around (1.1 million left in 1960s;
in 1970s 1.1 million moved in).
The region is now experiencing growth in jobs, income
and population -- not because of ARC spending, but
because of general trends affecting the economy.
Half the states in the region, for example, are so-
called "sun-belt" states -- a term that didn't exist
when ARC was created -- where the economy is growing at
a healthy pace and creating jobs.
Termination of ARC project funding is part of a general
policy effort to end localized economic development
subsidies. (Much of the money went for development of
ski resorts, swimming pools and skating rinks, anyway.)
The program also funds highway construction -- but
money is available from other sources.
In fact, not including ARC funding, Appalachian states
will receive $2.1 billion more in highway funds this
year than in 1982 because of increases made available
under Surface Transportation Assistance Act of 1982.
END FUNDING FOR ECONOMIC DEVELOPMENT ADMINISTRATION
The Commerce Department's EDA program of grants and
loans has added $9.4 billion to the national debt in
the last 8 years.
Its grants go to local development projects that are
either unneeded, or can be financed privately.
Many of its loans have ended in default. Of the $900
million in current loans outstanding, over half are
delinquent -- and half of these are in bankruptcy.
Its programs often fall short:
--
In 1983, for example Congress called for creation
of jobs for the unemployed and underemployed
through EDA funding of 12 projects.
--
Only 207 jobs were created; only 94 of these went
to target group members and the jobs created cost
about $20,000 per person per month.
Terminating EDA will save over $850 million through
1990.
MEDICAID
Cost of Medicaid program (health aid to the poor) has
been rising much faster than the growth of federal
revenues which support it.
For most of 1970s and early 80s, Medicaid costs rose
almost 15 percent a year. Left unchecked, they will
add $170 billion to the national debt by 1990.
Budget would save $1 billion next year, then allow Med-
icaid spending to rise at same rate as medical costs do.
States administer Medicaid, and proposal would give
them more flexibility to control costs by using their
Medicaid grants in the most efficient way possible.
Would still spend $22.5 billion in FY86, up from $22
billion this year.
MEDICARE
Unless changes are made, Medicare will be endangered by
runaway costs, as Social Security was in 1982.
At current pace, spending will top $100 billion by
1990 -- and actuaries say Medicare's Hospital Insurance
Trust Fund could face insolvency in the early 1990s.
The budget would freeze payments to hospitals and doc-
tors as the principal means of slowing spending growth.
Quality care would continue for the 28 million elderly
estimated to be entitled to Medicare next year.
Savings are needed to buy time, keep Medicare strong,
while we work out compromise (as we did with SS) for
long-term solvency.
Original predictions said Medicare would cost $8.8
billion by 1990. It costs 8 times that much already.
Spending this year is $64.5 billion; will grow to
$65.5 billion in FY86 budget request.
Budget's reforms are modest compared to the huge
Medicare spending. The budget will keep Medicare costs
to $65.5 billion next year instead of $69 billion
(current services), saving about $4 billion.
90 percent of these Medicare savings come in lower pay-
ments to providers -- hospitals, doctors, etc. Less.
than 10 percent comes from higher payments by bene-
ficiaries.
--
A beneficiary's Part B (hospital) premium would go
up a modest $5.40 a month by 1988.
--
For elderly who can't afford that, Medicaid is
available to pay cost of care.
VETERANS' HEALTH CARE
Veterans' health care spending has exploded -- up by
12% a year since 1970 -- due to heavy use of free care
by vets neither poor nor with service-connected disability.
All vets should be able to get care. But those who are
not needy, and whose illness is not service-connected,
should contribute a fair share.
If changes aren't made, by year 2000, cost will go up
four times -- to $37 billion.
Budget proposals would put emphasis back where it
belongs -- on free care for needy vets and those whose
disabilities were caused by military service.
Others, covered by Medicare (WWII vets aged 65+ will
almost triple by century's end) and by private insurance,
could still get care, but would pay portion of it.
-- The higher a vet's income (above a certain mini-
mum), the more he would be expected to contribute
(usually from insurance) toward his VA care.
-- And, for the first time, insurance companies would
have to reimburse the VA (i.e., taxpayers) for
health care given to an insured veteran.
This year's $8.8 billion in spending will rise to $9.1
billion in FY86. The VA will serve a million and a
half hospital patients and handle 19 million outpatient
visits.
Reforms will save $2.5 billion over 2 years. The alter-
native, a funding cap, would pinch everyone, not just
those who can afford to contribute toward their care.
AMTRAK
Amtrak was supposed to be a temporary, two-year measure
to profitably revitalize passenger rail service. That
was 14 years ago, and it hasn't worked out.
Instead of making money, Amtrak has cost taxpayers --
most of whom never ride Amtrak trains -- $9 billion.
--
Nationwide, only 2 percent of intercity passengers
use Amtrak.
--
Most of them are from relatively high income
levels (over $30,000).
It costs the taxpayers an average of $35 every time a
passenger takes a trip on an Amtrak train.
In fact, it would actually be cheaper for government to
buy plane tickets for N.Y. to Chicago travellers than
to subsidize their Amtrak trips.
On routes where passenger rail service is profitable,
private ownership can take over after Amtrak.
Where service is unprofitable but states and localities
want it, those who benefit -- not taxpayers at large --
can provide subsidies to keep trains running.
Spending $692 million this year, would cut to $200
million in FY86, to $0 in FY87 and beyond.
FEDERAL PAY AND PENSIONS
Federal retirement costs are going through the roof --
they're up to $25 billion this year, nine times higher
than just 15 years ago.
Not fair for taxpayers to finance federal retiree benefits
that are almost 40% more generous than private sector
benefits (as numerous studies have shown they are).
Federal workers put in about $1 for every $5 they get
back in benefits. Taxpayers pay the rest.
Without reform, taxpayers will spend another $80 bil-
lion in the next three years alone.
Almost $1 out of every $3 federal payroll dollars goes
out in the form of pension checks.
Budget would not break faith with federal retirees, but -
simply slow runaway costs and bring federal pensions
more into line with private ones.
:
Benefits for early retirement would be reduced by
5% for each year before 65;
:
Cost of living raise would be frozen next year
(during 1970s, retirees got COLAs above cost of
living);
---
Thereafter, COLA would be based on CPI or federal
pay raise, whichever is lower.
Budget also asks federal non-military workers to take a
5 percent cut in pay starting January 1, 1986, as their
contribution to reducing the deficit.
THE JOB CORPS
Job Corps is the highest cost training program in the
budget, yet one of the least successful.
Program costs $15,200 per slot, about the same as
Harvard for a year.
Yet only 1 of 3 Job Corps trainees get jobs within a
year after leaving. Almost half simply leave, most
without even completing a course of study.
This failed program costs taxpayers $600 million this
year. Budget would cut it to $79 million by FY87 and
to $0 thereafter.
Job Corps has 40,000 slots; compare alternatives:
--
Youth Employment Opportunity Wage (temporary
summer wage for teens below minimum wage) can
create ten times more jobs, at no taxpayer cost.
:
Highly successful Joint Training Partnership Act,
(passed in '82) trains a million a year, with a
better than 60 percent job placement rate.
CHILD NUTRITION
The Federal government's responsibility for child
nutrition aid is to ensure nutritious lunches to the
needy -- not to provide cheap meals for the non-needy
at taxpayers' expense.
The FY86 budget one-year COLA freeze on child nutrition
will save taxpayers
$
billion, while ensuring
free meals remain available to the needy.
Nutritious lunches would still be available to children
of upper-income families for about $1 -- that's about
the cheapest they could eat for at a neighborhood
McDonald's.
Critics are quick to charge that schools will drop out
of the program because of increased operation costs if
these additional subsidies are withdrawn.
We've heard that argument before -- when we presented
similar cuts in our 1981 budget.
Yet, between FY81 and FY85 less than 2% of schools now
participating dropped out of the school lunch program
(for reasons other than declining enrollments and
exclusion of certain private schools).
These "dropouts" tended to be from more affluent and
suburban school districts an USDA survey reports.
The fact is,
more poor children are expected
to receive free meals in 1985 than in 1981.
EXPORT-IMPORT BANK
The demand for direct government loans to exporters is
down.
As the dollar has grown stronger, and U.S. exports have
held their own on the world market, there has become an
increased preference for guarantees.
Termination of the loan program, which benefits only 2%
of total U.S. exports, will save taxpayers almost $4
billion.
At the same time, we're proposing an increase in the
guarantee program by $2 billion -- to $12 billion.
In addition, we've proposed the establishment of a
temporary interest rate subsidy program of up to $100
million to meet official foreign competition.
This will ensure that U.S. exporters can meet foreign
subsidized competition while the OECD continues to
negotiate the elimination of official export credit
subsidies.
HOUSING ASSISTANCE
The Federal government has spent over $86 billion on
housing assistance over the past 12 years.
Any budget program which spends at this rate warrants
scrutiny.
The budget proposes a 2-year moratorium -- during which
there would be no new Federally-assisted housing con-
struction. This would save the American taxpayer $
billion.
During this period -- despite the moratorium -- nearly
1.2 million new needy families will begin receiving
assistance.
Also, 167,000 new units already started or committed
would be completed, even while the moratorium is on.
Termination of FmHA housing assistance -- which
currently provides only 12% of the housing for the
needy -- will centralize housing assistance at HUD.
This will help ensure that assistance is targeted to
helping the most needy, not pleasing the industry.
Rural America's needs will continue to be met since
most of the funding comes from private lenders, with
the FHA and VA playing a much larger role than FmHA in
providing the balance of funding.
POSTAL SERVICE SUBSIDIES
In 1970, when the Postal Service was being reorganized
as an independent operation, Congress decided to
subsidize certain types of mailers --- mainly chari-
table, social and educational.
What Congress did not intend to do was assist in
offering cheaper rates for profit-makers like People
and Playboy, nor inefficient, expensive junk mail.
Under our reforms, profit-making mailers, now costing
taxpayers $40 million a year, will pay full rate.
Termination of postal subsidies would save taxpayers $1
billion a year, which the Postal Service would accrue
if subsidized mailers paid full cost.
Legitimate nonprofit charitable, educational and social
mailers should incur only a small rate increase.
Because subsidies represent less than 3% of the Postal
Service's total cost of operation, postal rates should
not increase much, if at all.
AGENCY ADMINISTRATIVE COSTS
President Reagan directed agency heads to cut their
FY86 budget requests to 90% of their FY85 budgets, as
part of his effort to ensure government-wide cost
reduction.
They did just that. This FY86 budget request reflects
the paring of agency requests to that level.
Savings of almost $1.6 billion are reflected here.
These savings are figured in addition to the proposed
5% Federal pay cut, and therefore, should be incurred
regardless of how Congress votes on the pay cut issue.
REVENUE SHARING
Revenue sharing was initiated in 19 when Federal
surpluses were forecast on the horizon.
Today, in light of our current Federal deficit and
state surpluses, this is no longer justifiable.
Elimination of this program will save $
billion
next year.
In the first two years of our present recovery, the
states had surpluses totalling over $11 billion.
In the face of these large deficits, we can't maintain
the fiction that we have revenues to share.
It makes no sense for the Federal government to borrow
funds to give to states and localities, which have a
surplus.
SMALL BUSINESS ADMINISTRATION
Less than 1/4 of 1% of small businesses in America use
SBA credit -- only about 20,000 out of over 14 million.
Economic growth and the tripling of venture capital for
investment made 600,000 business starts a year possible
since recovery began.
New businesses are able to start-up without SBA assist-
ance -- less than 2% were SBA aided in 1983.
Most SBA loan subsidies go to repeat customers -- 77%
of SBA borrowers in the first half of 1983 were
repeaters.
Spending almost 3/4 of a billion on this program, this
year alone, cannot be justified to the taxpayer.
The FY86 budget proposes elimination of this program
while maintaining an effective small business presence
in the Federal government in the Commerce Department.
STUDENT AID
The question on student aid is, "How much is enough?"
Since 1969, Education Department student aid have risen
almost 1,300 percent.
The FY86 budget proposal attempts to rein-in this
unrestrained 20-year spending binge, while providing
assistance to keep a quality education in reach of the
average American child.
The budget provides over $20 billion in loans, grants
and other aid to college students over the next 3
years.
It sets a cap of $4,000 a year to any one student.
That equals the cost of tuition, fees, room and board,
and books at an average public college.
In addition, Federally guaranteed "PLUS" loans (unsub-
sidized) up to $4,000 are available to all students.
It limits the eligibility for aid to low and middle-
income students:
:
Family income under $25,000for grants, job
subsidies (work-study) and direct loans;
:
Income under $32,500 for subsidized loans.
The median income is around $25,000 so students from
about half of all families remain eligible for grants
(more than half for subsidized loans).
Strategic Petroleum Reserve
--
Spending $1.9 billion this year, would put an
indefinite moratorium on further filling of the SPR
after 1985, saving $8 billion by 1990.
--
Created after 1979 oil import disruption, SPR has
accumulated 450 million barrels of oil -- 90 days worth
of total imports, 225 days worth of OPEC imports and
900 days of Persian Gulf imports.
:
Larger SPR unnecessary because U.S. energy position has
improved drastically since SPR created -- world oil
glut, oil prices dropping, U.S. uses only half as much
imported oil as in 1977.
:
If world oil market should change for the worst, U.S.
could resume adding to SPR.
Air Carrier Subsidies
--
Spending $48 million this year, would be terminated in
FY 86, three years ahead of schedule.
:
Program was created as temporary measure, to smooth
transition in communities affected by airline
deregulation.
--
Every time a passenger gets on a plane at a subsidized
airport, it costs taxpayers an average of $50.
:
Result is often wasteful. Passengers living just a few
miles from other airports are paid taxpayer dollars via
subsidy not to use them, but instead to fly from
subsidized airports.
O
For example, Clinton, Iowa is just 37 miles from a
hub airport, but cummuters there are paid $200 in
subsidy to leave their cars at home and use local
airport instead.
--
Subsidies make it hard for alternative carriers to
compete -- like bus or limosine service to other
airports.
EPA Sewage Treatment Grants
--
Spending $2.4 billion this year, would be phased out by
1990.
--
Intent of program was to help local governments cope
with backlog of sewage treatment needs that existed in
1972. Since then, over 4,000 systems have been funded.
--
By 1990, 85 percent of Americans will be served by
treatment systems funded by the grants. The one time
"catchup" job of the EPA grants has been accomplished.
--
Sewage treatment needs caused by new population growth
should be funded -- as is traditional -- by state and
local governments.
User Fees
--
Every day, Army Corps of Engineers spends an average of
$3.5 million taxpayer dollars to operate and maintain
waterways, dams, locks and harbors.
--
But the businesses who benefit pay just $100,000 daily.
(Prior to 1981, they paid nothing at all).
--
Budget proposes charging user fees to those who benefit
from the navigation work done by government, saving
taxpayers almost $2 billion in next 2 years.
:
Instead of 3 cents of every dollar in costs now paid by
users, budget would raise that to 65 cents on the
dollar by 1990.
-- User fees would be modest: for example, a barge
shipping wheat down the Mississippi River would pay
less than 2 percent of the wheat's value in user fees.
--
Budget proposes similar user fees in other areas:
O
Raise entrance fees to national parks and forests.
Yellowstone entrance fee of $2 a carload has
remained same for 12 years, while upkeep costs
have almost tripled. Saving of $1/2 billion by
1990.
Charge fees for commercial shippers and
recreational boaters who use such Coast Guard
services as navigation aids, towing and boat
inspection. 3-year saving of $1.2 billion.
Welfare
Spending $9 billion this year on Aid to Families with
Dependent Children. Reforms will save $472 million
over next 2 years.
AFDC will still give cash assistance to 3.7 million
needy families next year, compared to
this year.
Proposed reform requires AFDC recipients who are able
to work to do so -- or at least look for a job -- as a
condition of getting AFDC benefits.
This ensures that AFDC remains what it was intended to
be -- a last resort for families in trouble, not a
substitute for work.
Another reform states when an AFDC family's youngest
child reaches age 16, the parent able to work would no
longer be eligible for AFDC.
:
Since such parents no longer have a young child at
home, they are freer to work.
- Benefits to children are not affected.
A third reform would prohibit unmarried minor mothers
from qualifying for AFDC benefits if they leave home.
-- Currently, unwed minor parents have incentive to
leave home and use taxpayer dollars to pay their
living expenses.
- This reform, besides saving tax dollars, will keep
more families together.
THE WHITE HOUSE
WASHINGTON
April 24, 1985
MEMORANDUM FOR MICHAEL E. BAROODY
DEPUTY ASSISTANT TO THE PRESIDENT
DIRECTOR, PUBLIC AFFAIRS
FROM:
JOHN G. ROBERTS DDR
ASSOCIATE COUNSEL TO THE PRESIDENT
SUBJECT:
Fact Sheet and Talking Points on
the President's Budget Address
Counsel's Office has reviewed the above-referenced fact
sheet and talking points. We recommend changing the last
word in the penultimate sentence on page 3 from "bill" to
"appropriations package." Under the Constitution, the
President can exercise his veto power only with respect to
an entire bill. The Mattingly proposal is constitutional
because under it each item in an appropriations package
would be enrolled as a separate bill. Thus, when the
President rejects a specific spending item under the
Mattingly proposal, he would be vetoing "an entire bill," as
he must under the Constitution.
CC: David L. Chew
ID #
CU
WHITE HOUSE
CORRESPONDENCE TRACKING WORKSHEET
0 . OUTGOING
H . INTERNAL
I . INCOMING
Date Correspondence
Received (YY/MM/DD)
/
/
Name of Correspondent: Dave chew
MI Mail Report
User Codes: (A)
(B)
(C)
Subject: Fact sheet and Jacking paints an the
Presidents Budget address.
ROUTE TO:
ACTION
DISPOSITION
Tracking
Type
Completion
Action
Date
of
Date
Office/Agency
(Staff Name)
Code
YY/MM/DD
Response
Code
YY/MM/DD
CUHOLL
ORIGINATOR 85,04,24
/
/
Referral Note:
CUAT 18
R 85,04,24
5 85,04,24
Referral Note:
ASAP
/ /
/
/
-
Referral Note:
/ /
/
/
Referral Note:
/ /
/
/
I
Referral Note:
ACTION CODES:
DISPOSITION CODES:
A * Appropriate Action
1. I - Info Copy Only/No Action Necessary
A Answered
C Completed
C - Comment/Recommendation
R - Direct Reply w/Copy
B - - Non-Special Referral
S Suspended
D Draft Response
S - For Signature
F - Furnish Fact Sheet
X Interim Reply
to be used as Enclosure
FOR OUTGOING CORRESPONDENCE:
Type of Response = Initials of Signer
Code = "A"
Completion Date = Date of Outgoing
Comments:
Keep this worksheet attached to the original incoming letter.
Send all routing updates to Central Reference (Room 75, OEOB).
Always return completed correspondence record to Central Files.
Refer questions about the correspondence tracking system to Central Reference, ext. 2590.
Document No.
WHITE HOUSE STAFFING MEMORANDUM
DATE: 4/25/85
ACTION/CONCURRENCE/COMMENT DUE BY:
ASAP
SUBJECT: Fact Sheet and Talking Points on the President's Budget Address
ACTION FYI
ACTION FYI
VICE PRESIDENT
OGLESBY
A
REGAN
>
ROLLINS
)
DEAVER
SPEAKES
R
STOCKMAN
SVAHN
BUCHANAN
TUTTLE
CHEW
P
SS
VERSTANDIG
FIELDING
WHITTLESEY
FRIEDERSDORF
RYAN
HICKEY
DANIELS
BAROODY
HICKS
KINGON
McFARLANE
REMARKS:
Please provide. any comments or changes to Mike Baroody, with an
info copy to my office ASAP. Thanks.
RESPONSE:
David L. Chew
1985 APR 24 AM 11: 43
Staff Secretary
Ext. 2702
DRAFT
Address by the President
on His Compromise Budget Request for Fiscal 1986
The President delivered a televised address from the
Oval Office beginning at 8:00 p.m., on Wednesday, April 24,
1985.
In his remarks, the President discussed the compromise
budget proposal for fiscal year 1986 agreed to on April 4th
by the President and the Senate Republican leadership. He
urged public support for the compromise, which he termed the
Taxpayers' Protection Plan.
I.
General Themes of the Address:
The President said the plan "will reduce deficits by
$300 billion over 3 years, bringing us within reach of a
balanced budget by 1990" and stressed this would be done
without higher taxes.
He said that Congress faces "an historic challenge" to
make Government "end its spend-thrift ways, live within its
means and assure a strong and prosperous future." He urged
Americans to make "your voices heard in the Senate this
week, and later in the House."
On the compromise budget plan itself, the President
said that it meets these important tests:
O
it reduces the deficit without increasing taxes in a
way that "will not hinder growth but encourage it";
it is fair and balanced, and "attacks excessive spend-
ing across the board";
it protects the neediest among us, preserving the safe-
ty net of programs as "one area we will not touch";
it sets clear national priorities; contrary to a freeze
which would make no distinctions between "worthy and
wasteful" spending, the plan "keeps what should be kept
and cuts what should be cut."
II. Elaboration of Specific Points About the Taxpayers'
Protection Plan:
a.) Enhancing Economic Growth -- Cutting Deficits without
Higher Taxes:
The President said that bringing spending into line
with revenues was "the heart of our deficit reduction plan." "
In fact, the compromise will cut substantially from spending
planned in current law and save:
--- $52 billion in fiscal 1986;
-- $296.8 billion through fiscal 1988;
-- close to a half trillion dollars through 1990,
when the deficit will be less than 1% of GNP and
virtually in balance.
The deficit reduction effects of the plan will fulfill
the President's original goal of a deficit at 2% of GNP or
less in 3 years -- easing substantially the burden of
federal borrowing on financial markets. In contrast to this
year, when Federal borrowing absorbs 78% of net private
savings, by 1988 the Treasury will be taking only 30% of
such available credit.
In the same year, if this deficit reduction package is
enacted, we can expect by Administration estimates:
- another 7 million American jobs, bringing total employ-
ment to nearly 115 million;
-- continued moderate inflation;
- - economic growth in the range of 4% annually for the 6th
straight year.
As the President said in his address, "the task is
large, and the stakes are momentous."
The President pointed to the progress made since pass-
age four years ago of his program for economic recovery:
--
inflation of 4% or less for three years in a row;
--
29 straight months of growth in the GNP;
-- highest employment rate in history at 60.3%;
-- record number working, at over 108 million and 8
million more Americans working than 29 months ago;
-- interest rates down from post Civil War records.
Giving much of the credit for the economy's turnaround
to his 1981 tax rate cuts, the President renewed his commit-
ment to a "veto of any tax increase Congress sends me" and
to seek further reductions instead. "In taxes, the
3
President said, "we've seen that lowering rates ... is a
good idea that worked," and pledged to unveil in May his tax
simplification plan for "changing it from a source of
confusion and contempt, to a model of fairness and
simplicity."
The President received a tax simplification plan from
the Treasury Department in December of 1984. Discussions
since then between Treasury officials and Members of Con-
gress will yield a final Administration plan next month.
b.) Attacking Spending Across the Board:
The President said "no part of the budget is spared" in
the compromise plan. In fact, the plan saves $97.5 billion
from defense over the next 3 years and $175.8 billion from
domestic programs. There's an additional 3 year saving of
$23.6 billion in lowered debt service (interest payments).
Overall, the plan:
-- terminates or phases out 20 programs;
-- substantially reforms 40 others;
-- freezes most of the rest;
-- reduces the defense spending request to 3% real
annual growth -- the bare essential to meet
security needs (and about 1/3 the growth rate of
the last 5 years).
In calling for elimination of some programs, like
taxpayer subsidies for Amtrak, for small business through
SBA loans and for big business through Export-Import Bank
loans, the President said that "if programs like these can't
be cut, we might as well give up all hope of getting
Government spending under control."
The President renewed his call for the line-item veto
saying, if Congress won't do it, then I'll make the cuts
I'll take the heat. He has asked for this authority con-
sistently, and called in his 1985 State of the Union Address
for passage of the Mattingly bill that would legislate a
two-year test, in which the President would have temporary
authority to reject specific spending items without vetoing
an entire bill. Governors in 44 states have line-item veto
power and it has been sought for the President periodically
since 1876.
4
c.) Preserving the Safety-Net:
The President pointed out that safety-net programs
providing income assistance, food, housing and medical aid
were reformed in 1981 and "are now targeted to genuine
need." " These programs, he added, make up only 8% of the
budget.
Programs affecting needy and non-needy alike, such as
Medicare, for example, will be reformed in ways that speci-
fically protect the needy. In the case of Medicare, provi-
sion is made in the budget compromise for adequate Medicaid
funding to assure continued full health care coverage for
needy. The elderly poor can be protected from any adverse
impact of higher premiums through Medicaid coverage, already
automatically provided in 48 states.
Similarly, needy Social Security recipients will be
guaranteed real growth in their income through additional
SSI benefits. (Supplemental Security Income benefits will
be fully indexed for inflation and, in 1986, the nearly 2
million elderly poor receiving them will get an additional
$10 a month, $15 for needy couples.)
d.) Setting Clear Spending Priorities:
"Our plan recognizes," the President said, "that all
spending is not created equal. Some programs are vital to
our national security and domestic welfare and must be given
first priority. Others are no longer affordable, or were
not proper Federal responsibilities to begin with."
The plan brings excessive federal spending growth to an
abrupt halt. The rate of spending growth, over 17% just
five years ago, shrinks to a negative rate next year.
Fiscal 1986 spending will down 2.2% in real terms under the
plan and there would be virtually no growth in 1987-88.
By 1988, total spending will be down from this year's
level of 25% of GNP to 21% -- and will be trending lower.
The plan emerged from months of work and program review
culminating in agreement between the Administration and
Senate leaders on three basic questions:
:
should the federal government do it?
--
does the current federal approach work?
--
can we afford it now?
The President cited several examples of inappropriate
federal spending. He condemned these and others on grounds
of equity and asserted "it isn't fair and you know it. But
that's the law of the land right now, just part of the
legacy of trying to do good things for all by treating your
earnings like Government property."
Identifying national security as our first priority,
the President said the 3% real annual growth which the plan
provides is the "rock bottom level we must maintain."
That represents a savings of $18.3 billion next year
and $97.5 billion by 1988 from the "Rose Garden compromise"
agreed to on March 15, 1984. It brings nominal defense
spend- ing to a level $25 billion less than projected in
President Carter's last budget which assumed higher
inflation. While 3% growth is acceptable, a freeze on
defense spending is not; and would likely require real cuts
in manpower and program delays that would jeopardize some
vital systems.
The defense share total spending will be less in fiscal
1986 under this plan than it was 20 years ago.
III. Conclusion
The President said that the "hour was late" and "stakes
momentous.' The future health of the economy hangs in the
balance. In the President's words, the healthy economy this
plan can ensure "means jobs, opportunities and rising
incomes for our younger citizens, and a steady flow of tax
payments into the funds that support our retired citizens."
DRANT
April 24, 1985
TALKING POINTS ON THE PRESIDENT'S BUDGET ADDRESS
The President put the case precisely: Congress faces
an historic challenge.
This plan is our best (if not our last) chance for
years to get spending under control and move toward a
balanced budget.
What's at stake is the economy's future and as
President Reagan put it, enactment of this budget can
mean "jobs, opportunities and rising incomes for our
younger citizens, and a steady flow of tax payments
into the funds that support our retired citizens."
Failure to control spending can mean an end to the
recovery that began with such strength -- and hope --
29 months ago.
Skeptics back in 1981. said the President's program
couldn't work but:
-- it's yielded the lowest inflation in 20 years;
-- the strongest growth in over 30 years;
-- set employment records and put 300,000 a month to
work for 29 straight months;
-- cut the prime rate in half, to 10.5%;
-- did all of the above at same time taxes were cut.
The same skeptics now say we can't cut the deficit
without raising taxes.
They were wrong then about recovery; they're wrong now
about deficits.
The President's compromise with Senate GOP leaders does
just that -- cuts deficits without raising taxes and:
--
leads to a balanced budget by early 1990s;
-- saves $52 billion next year;
-- saves almost $300 billion by 1988;
-- saves almost a half trillion by 1990;
The compromise plan meets four essential criteria:
-- cuts the deficit without stifling growth;
-- preserves safety-net protections for the needy;
--
fairly spares no part of the budget, cutting
almost $100 billion from defense, about $200
billion from domestic (plus interest) spending;
--
clearly sets priorities, eliminating or reforming
programs that are not needed, not efficient or not
affordable.
THE WHITE HOUSE
WASHINGTON
June 14, 1985
MEMORANDUM FOR BEN ELLIOTT
DEPUTY ASSISTANT TO THE PRESIDENT
DIRECTOR, PRESIDENTIAL SPEECHWRITING
FROM:
JOHN G. ROBERTS
ASSOCIATE COUNSEL TO THE PRESIDENT
SUBJECT:
Talking Points: Drop-by Mooresville Chamber
of Commerce Meeting at Mac's Restaurant,
Mooresville, Indiana
Counsel's Office has reviewed the above-referenced talking
points, and finds no objection to them from a legal
perspective.
CC: David L. Chew
ID #
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Subject: Jacking Points: Drop by mooresuille Chamber ap
commerce meeting macs Restaurant, marresville,
Indiana
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5/81
Document No.
WHITE HOUSE STAFFING MEMORANDUM
DATE: 6/14/85
ACTION/CONCURRENCE/COMMENT DUE BY: 2:00 p.m. TODAY
SUBJECT: TALKING POINTS: Dropby Mooresville Chamber of Commerce Meeting
Mac's Restaurant, Mooresville, Indiana
(6/14/85 9:30 a.m. - draft)
ACTION FYI
ACTION FYI
VICE PRESIDENT
LACY
REGAN
McFARLANE
X
STOCKMAN
OGLESBY
BUCHANAN
ROLLINS
CHAVEZ
RYAN
CHEW
P
65 SPEAKES
DANIELS
SPRINKEL
FIELDING
SVAHN
FRIEDERSDORF
TUTTLE
HENKEL
ELLIOTT
HICKEY
HICKS
KINGON
REMARKS:
Please provide any comments/recommendations directly to Ben Elliott,
with an info copy to my office by 2:00 p.m. today. Thanks.
RESPONSE:
David L. Chew
Staff Secretary
Ext. 2702
(Gilder/BE)
June 14, 1985
9:30 a.m.
PRESIDENTIAL TALKING POINTS: DROPBY MOORESVILLE CHAMBER
OF COMMERCE MEETING
91
MAC's RESTAURANT
THE
MOORESVILLE, INDIANA
WEDNESDAY, JUNE 19, 1985
-- Just stopped by for burger and fries; since you're all here,
think I'll stay a while.
-- You may have heard about our proposal to overhaul tax
code -- make it fairer, simpler, more compassionate. Wanted
to bring message directly to you -- in America's heartland.
Sometimes communicating through the media, there seems to be
a lot of static in the way.
-- We call proposal America's Tax Plan -- it will take load off
back of long-suffering American taxpayer, take low-income
wage earner and retired elderly off tax rolls, and remove
tax distortions that are holding American economy back from
reaching full potential. Mac's restaurant sums up our
message up in two words, when they say: "treat yourself."
-- Some people call towns like this "Middle America." When I
look around, it seems to me it could be called, "up and
coming America."
-- One of the best things about our tax proposal is the boost
it will give to Main Street America. We're cutting tax
rates for small and entrepreneurial businesses -- we're
cutting top rate on personal income to 35 percent, on
corporations from 46 to 32 percent (while keeping the
graduated scale for small corporations), and lowering
capital gains again, to 17-1/2 percent. Objective is to
Page 2
create small business renaissance in America, make this
decade the Age of the Entrepreneur.
-- I read in The News that Bill Seashols said, one of strengths
of Mooresville is: people still believe in work ethic here
and they emphasize importance of family.
-- That's what America's Tax Plan is all about, too. Will set
our economy humming, will be the best jobs creation bill
we've ever had. Second, it's will give families and wage
earners some long-overdue relief by increasing the standard
deduction and practically doubling personal exemption to
$2,000.
- By lowering marginal rates, will allow people to keep more
of each extra dollar they earn. If you work overtime, get a
raise, save some money and invest it, more of that extra
income will end up where it belongs -- in your pocket, not
Uncle Sam's wallet.
-- By removing low-income earners from tax rolls, the climb up
the ladder of success will be easier for everyone.
-- Don't be shy: let Congressmen and Senators know how you
feel about America's Tax Plan. Congress wants to do what's
right, it's just that sometimes they need a little
encouragement.
-- Now, I'd be glad to answer any questions.
THE WHITE HOUSE
WASHINGTON
June 18, 1985
MEMORANDUM FOR FRED F. FIELDING
FROM:
JOHN G. ROBERTS, JR. JJR
SUBJECT:
Talking Points
David Chew has asked for comments on the attached talking points as
soon as possible. The points cover two areas: agriculture and
affirmative action. The agriculture points emphasize that we are
providing subsidies and loans to farmers now but that the long-term
solution is more open markets. The affirmative action points focus
on the City of Indianapolis police and fire quota system, and the
Justice Department's efforts to reopen that consent decree on the
basis of the Stotts decision. The points emphasize the President's
disapproval of quotas, and look to the Stotts decision to support
Justice's efforts.
I would change the last bullet item to read: "Despite the fact that
the Memphis decision (Firefighters Local Union 1984 VS. Stotts)
directly involved only lay-offs, we believe the reasoning of the
opinion applies to all employment actions." This is clearer than
saying, as the current draft does, "despite the fact that the
decision refers only to lay-offs, we believe it refers to all
employment decisions."
THE WHITE HOUSE
WASHINGTON
June 18, 1985
MEMORANDUM FOR DAVID L. CHEW
STAFF SECRETARY
FROM:
FRED F. FIELDING Orig. signed by FFF
COUNSEL TO THE PRESIDENT
SUBJECT:
Talking Points
I have reviewed the proposed talking points on agriculture and
affirmative action. I would change the last bullet item on
affirmative action to read as follows: "Despite the fact that the
Memphis decision (Firefighters Local Union 1984 VS. Stotts)
directly involved only lay-offs, we believe the reasoning of the
opinion applies to all employment actions."
FFF/JGR: jmk
CC: FFFielding
GRoberts
subject
chron.
THE WHITE HOUSE
WASHINGTON
June 18, 1985
MEMORANDUM FOR DAVID L. CHEW
STAFF SECRETARY
FROM:
FRED F. FIELDING
COUNSEL TO THE PRESIDENT
SUBJECT:
Talking Points
I have reviewed the proposed talking points on agriculture and
affirmative action. I would change the last bullet item on
affirmative action to read as follows: "Despite the fact that the
Memphis decision (Firefighters Local Union 1984 VS. Stotts)
directly involved only lay-offs, we believe the reasoning of the
opinion applies to all employment actions."
FFF/JGR: jmk
CC: FFFielding
JGRoberts
subject
chron.
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WHITE HOUSE
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0 - OUTGOING
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Dave chew
MI Mail Report
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(B)
(C)
Subject: Julking paints
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CUHOLL
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/ /
Referral Note:
CUAT 18
D 85,06,18
585,04,18
Referral Note:
ASAP
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@
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D Draft Response
S. For Signature
F Furnish Fact Sheet
X Interim Reply
to be used as Enclosure
FOR OUTGOING CORRESPONDENCE:
Type of Response = Initials of Signer
Code = "A"
Completion Date = Date of Outgoing
Comments:
Keep this worksheet attached to the original incoming letter.
Send all routing updates to Central Reference (Room 75, OEOB).
Always return completed correspondence record to Central Files.
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5/81
Document No.
WHITE HOUSE STAFFING MEMORANDUM
DATE: 6/18/85
ACTION/CONCURRENCE/COMMENT DUE BY: IMMEDIATE
SUBJECT: Talking Points
ACTION FYI
ACTION FYI
VICE PRESIDENT
LACY
REGAN
McFARLANE
STOCKMAN
OGLESBY
BUCHANAN
ROLLINS
CHAVEZ
RYAN
CHEW
P
SS SPEAKES
DANIELS
SPRINKEL
FIELDING
&
X
SVAHN
FRIEDERSDORF
TUTTLE
HENKEL
HICKEY
HICKS
KINGON
REMARKS:
Please provide comments on the attached talking points
ASAP. Thanks.
RESPONSE:
David L. Chew
1985 JUN 18 Pil 4: 27
Staff Secretary
Ext. 2702
AGRICULTURE
The Indiana farm economy is in shambles. What can your Adminis-
tration do to alleviate the crisis?
#
Billions more in federal funds won't solve problem. Have
already spent billions to help farmers.
*
$53 billion in price supports by end of last year.
*
Made available $650 million program for short-term
help for farmers with credit crunch.
*
Provided loan guarantees for farmers whose local
banks failed, and who couldn't find a new private
lender without such a guarantee.
*
In terms of government loans, Farmers Home Adminis-
tration has loaned more money to farmers this year
than any other in its history.
#
Long term solution is more open markets.
*
Our Export Incentive Program will allow exporters to
sell agricultural products to foreign countries at a
lower price by using USDA surplus commodities to
make up the difference. This will allow American
farmers to make sales that otherwise would have been
made by other countries whose agricultural economies
are government subsidized.
*
Your programs will move agriculture toward freer
market so American farmers will be able to sell
their way out of trouble.
AFFIRMATIVE ACTION
Under the Carter Administration, the City of Indianapolis was
forced to adopt an affirmative action program for its police and
fire departments. Now, your Administration is telling them to
dismantle that program, even though the City apparently likes its
affirmative action plan. Will you persist in your efforts?
# We are just following the 1984 Supreme Court decision
that told the Memphis fire department they could not lay off
or fire employees on the basis of race.
# It's true that I don't believe in quotas. As I said in
my radio address this past Saturday, "The truth is, quotas
deny jobs to many who would have gotten them otherwise, but
who weren't born a specified race or sex. That is
discrimination pure and simple and is exactly what the civil
rights laws were designed to stop."
# Despite the fact that the Memphis decision (Firefighters
Local Union 1984 VS. Stotts) referred only to who could be
layed off, we believe the decision refers to all employment
actions.
THE WHITE HOUSE
WASHINGTON
December 10, 1985
MEMORANDUM FOR TOM GIBSON
SPECIAL ASSISTANT TO THE PRESIDENT
DIRECTOR, PUBLIC AFFAIRS
FROM:
ASSOCIATE COUNSEL 27 TO THE PRESIDENT
JOHN G. ROBERTS
SUBJECT:
Talking Points on Job Creation
Counsel's Office has reviewed the above-referenced talking
points, and finds no objection to them from a legal
perspective.
CC: David L. Chew
ID #
CU
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CORRESPONDENCE TRACKING WORKSHEET
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Subject: Jolhing paints an Job creation
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cuat 18
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D Draft Response
S For Signature
F Furnish Fact Sheet
X Interim Reply
to be used as Enclosure
FOR OUTGOING CORRESPONDENCE:
Type of Response = Initials of Signer
Code = "A"
Completion Date = Date of Outgoing
Comments:
Keep this worksheet attached to the original incoming letter.
Send all routing updates to Central Reference (Room 75, OEOB).
Always return completed correspondence record to Central Files.
Refer questions about the correspondence tracking system to Central Reference, ext. 2590.
5/81
Document No.
WHITE HOUSE STAFFING MEMORANDUM
DATE: 12/10/85
ACTION/CONCURRENCE/COMMENT DUE BY: 4:00 P.M. TODAY
SUBJECT: TALKING POINTS ON JOB CREATION
ACTION FYI
ACTION FYI
VICE PRESIDENT
McFARLANE
REGAN
OGLESBY
MILLER
RYAN
BUCHANAN
SPEAKES
CHAVEZ
SPRINKEL
CHEW
P
SS SVAHN
DANIELS
THOMAS
FIELDING
TUTTLE
HENKEL
GIBSON
HICKS
KINGON
LACY
REMARKS:
Please provide any comments/recommendations directly to
Tom Gibson by 4:00 p.m. today, with an info copy to my
office. Thank you.
RESPONSE:
David L. Chew
Staff Secretary
Ext. 2702
THE WHITE HOUSE
WASHINGTON
December 10, 1985
MEMORANDUM FOR DAVID CHEW
FROM:
TOM GIBSON
SUBJECT:
Draft Talking Points on Job Creation
Attached, for staffing, are draft talking points on the recent
employment situation report by the Bureau of Labor Statistics.
These materials are for Administration spokesmen.
I'd like to put these out as soon as possible. Thanks very much.
attachment
JOB CREATION MILESTONE
10 Million New Jobs
Using a survey of business establishments, the Department of
Labor's Bureau of Labor Statistics reports that 10.1 million new
payroll jobs have been created in the 36 months since the economic
recovery began. This job-creation record is better than any -
previous 3-year rebound from a recession low.
Using the household survey, BLS reports that 8.8 million Americans
have found jobs in the past 36 months.
The 6.9 percent overall unemployment rate in November equals the
lowest rate in the Reagan Administration and amounts to a 35
percent drop in unemployment levels since November 1982 -- the
greatest decline in unemployment in 33 years.
Labor Survey Details
O
The Labor Department uses two different surveys to measure job
growth:
- Current Population Survey -- measures people in
households who are working, including self-employed,
non-salaried household workers; farm employees;
military personnel. This is the survey upon which the
unemployment rate is based.
Using the Current Population Survey, there were nearly
108 million people employed in November 1985, 8.8
million more than when the recover began 36 months ago.
--
Current Employment Statistics Survey -- counts wage and
salary employees whose names appear on nonfarm payrolls.
According to this survey, there were 98.8 million people
employed in November 1985, 10.1 million more than when the
recovery began.
Help Wanted
O
The College Board measures classified advertising in 51 major
newspapers across the country to develop its monthly "Help-Wanted
Advertising Index."
O
The help-wanted advertising index has nearly doubled since 1982
and now stands at 140 (October 1985).
O
In New England, the help-wanted index stood at 164 in October --
an all-time high.