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Ronald Reagan Presidential Library
Digital Library Collections
This is a PDF of a folder from our textual
collections.
Collection: Reagan, Ronald: Gubernatorial Papers,
1966-74: Press Unit
Folder Title: Press Conference Transcripts -
01/19/1971, 01/28/1971, 02/04/1971, 02/16/1971
Box: P03
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
PRESS C
ERENCE OF GOVERNOR RONALD
CAGAN
HELD JANUARY 19, 1971
Reported by: Governor's Press Office (RAS)
(This rough transcript of the Governor's press conference is furnished
to the members of the Capitol Press Corps for their convenience only.
Because of the need to get it to the press as rapidly as possible
after the conference, no corrections are made and there is no guaranty
of absolute accuracy.)
-0-
GOVERNOR REAGAN:
Good morning. We have visitors. Bill Rivers has brought his
journalism class over from Stanford; this is the fourth year in
succession now. Getting like the swallow from Capistrano. But,
welcome. Hope you enjoy what's going on, so all of you mind your
manners here.
Q
Governor, your staff says that you have not taken any position on
legalizing off-track betting. Can you tell us if that means you're
willing to consider that as an alternative revenue source for the
state?
A
Well let me answer that more generally. It is true that on that
particular phase of some of the things suggested, I have never sat
down and pondered on the ramifications of that whole thing, so I have
to say that I'm willing to listen to what the proposale are, in one
context in a context let's say, for example, of general tax reform
which we will be discussing in this session. But all of the conversa-
tion that's gone on about legalizing gambling or having lotteries or
seeking some other form of revenue, I just think is out of line right
at the moment because as I said in my State of the State Message, I
don't believe we should be looking for new sources of revenue as an
answer to the problems. I believe the problems can be solved within
the budget and without going outside for additional revenue. And so
treating it in that regard, I just think this is conversation that
probably is more fitting in a program of tax reform, or discussion of
tax reform, than it is in looking for sources of revenue.
Q
In that context, you are willing to consider off-track betting as
a possible new
A
I said I'm willing to hear what proposals they have and then see
what the ramifications might be.
Q
Governor, would you like to see a separate bill, then, on withhold-
ing taxes without forgiveness?
A
I would rather see withholding included also in tax reform as it
was last year. In the matter of forgiveness, I haven't changed my
position on that. A lot depends on when withholding would go into
-1-
effect, at what time f the year it would go int effect. But I still
believe that as the state could afford to give this money back in this
form of forgiveness, it should do so.
Q
DO you support Bagley's bill for total forgiveness? Is he carry-
ing your bill?
A
Well, he must be carrying his own bill. I haven't introduced any
bills as yet. You just caught me a little by surprise there. As I
say, I would like to see withholding kept within the context of tax
reform.
Q
You're supporting the same principle, then, that you supported
last year. Last year it turned out to be 35 percent.
A
Well, that was because that was the amount of money, just about,
dependent on the time at which it would have gone into operation. As
the year went on, and tax reform did not pass, we were actually faced
with a smaller amount of forgiveness that would have been available
as the date would have had to be set back for putting into effect
withholding.
2
Right, so if it were imposed in the new bill at the same time,
then you would favor the same percentage of forgiveness?
A
Well, the same principle that I followed last year, yes.
ing
Q
Governor, would you favor a separate withhold/bill with the for-
giveness provision, or must it be a part of tax reform?
A
No, I'm not frozen into this. I've just said that I would like
to see it. I think that we should be going forward. As a matter of
fact we have had some discussions already and with some of the
Democratic leadership on tax reform. And before we start going off
on individual tax measures, I would like to see them all incorporated
in that discussion.
Q
Governor, will you cause to be introduced this year your own
proposals on tax reform as you did a year ago, and the year before
that.
A
No, I'm perfectly willing to work with the Democratic leadership
on this. I think we have to come up with a bipartisan tax reform
proposal, or there won't be one, and I don't think we can possibly
face the people again if we don't keep the promise that both parties
have made to provide real and meaningful tax reform.
Q
Well, Governor, in view of the public utterances of somebody like
Assemblyman Brown on the role of government and how you raise money
and your own philosophy on the role of government, do you really think
-2-
that there's any ce that you're going to ye along with the
Democratic leadership in this matter of tax reform and raising
revenues?
A
Well, I think as we proved last year that this particular issue
does cross party lines, and we found that Democrats in great numbers
supporting our tax reform proposal last year. As a matter of fact,
78 percent of the Legislature voted for the tax reform program, which
meant a sizeable crossing of party lines. I think that Assemblyman
Brown has given a very clear-cut exposition of the difference between
the Democratic and the Republican philosophy. His is that the govern-
ment should think of all the things it wants to do for the people and
then send them the bill. I believe that the government should take
the money provided by the people and their revenues and apportion that
money out on a priority basis among those programs that a government
can perform. And this is just a fundamental philosophical difference.
Q
In view of that philosophical difference, how do you see you're
going to get along with them, or work out any bill that is satisfactory
to both of you?
A
Well, I don't think Assemblyman Brown has ever suggested that he
is speaking as the voice of the entire Democratic legislature.
Q
Governor Reagan, by your answer a moment ago, are you saying
that you are definitely going to wait for the Democrats to come up
with their own tax reform package without presenting yours again?
A
No, we've already been in discussions with them, and we're willing
to continue those discussions, hopefully on a piece of bipartisan
legislation.
Q
Governor, in view of the forthcoming U.S. Supreme Court action
on capital punishment
A
He's switching subjects here. Is this taxes here? Wait until
we finish taxes.
Q
Governor, am I to understand you that you will not introduce
your own bill on tax reform?
A
No, well I think that this is a situation now where both sides
have expressed a desire for tax reform. And I see no reason why
we should not sit down and work out this mutually satisfactory program
instead of getting into a partisan hassle on the floor over whether it
would be one or the other.
Q
So you won't have your own bill.
A
No.
-3-
Q
Governor, I'V jot a related question. Y terday you assigned
Lieutenant Governor Reinecke to try to stimulate business in
California. Does this indicate that a lot of these rosy productions
we heard here last year about the improvement in the economy did not
come to pass?
A
No, I think the comeback out of the anti-inflation fight has
been slowed. I think everyone has agreed to that. And I think one of
the factors slowing it is, has on one side a very bright silver lining;
it is the winding down of the war, which has hit California perhaps
more than other states because of the aerospace industry. Therefore,
I think that California has always had a problem of full employment,
whether it's due to our geographic position, or the emphasis, or the
percentage of our industry that has been involved in government
business. Our unemployment has always run above the national average.
And so I think a program to stimulate the economy, to improve the
business climate, to get jobs here for the people we have in
California, is necessary.
Q
Governor, on this matter of no tax increase and balancing the
budget without a tax increase, are your feet in concrete on that issue?
A
I'm a little sensitive to using that term since last year.
I made a statement to the Legislature, I will repeat it in the Budget
Message, that we do face a choice. We can balance the budget by reforms
and economies in government, and particularly reforms in welfare and
Medi-Cal. If the, the other choice is to simply choose the easy path
of turning to the people, sending them a bill, which means raising
their taxes. I do not believe that is necessary. But the choice is
now up to all of us here in government. Obviously, this is a very
important choice for the Legislature. Obviously, they will have a
very important part to play in making that choice. But if they will
join with us in undertaking the reforms that we suggest, and we solicit
their suggestions also, in a complete audit of every state program as
to its priority, its value to the people, we can meet this particular
crisis to the benefit of the people, I think, a long range benefit,
without a tax increase.
0
If you still consider late in this session that no new taxes
are needed, would you consider off-track betting as a possible revenue
source for cities and counties?
A
Oh, that's a hypothetical one, John, and I'd rather not answer
it here. I'll take those things as they come.
-4-
α
Governor, get' g back to unemployment, i 1968 you announced
a
Project Focus which was to be/pilot project to find jobs for the
unemployed. It was tested under Carson Amos in Fresno for about a
year, and then closed its doors, and your office said you were going
to reevaluate the program. Whatever happened to Project Focus?
A
Well, it didn't live up to the hopes we had for it. And this
is one of the places where we believe that in part, not entirely, it
didn't live up because we were running counter to a tide within the
with
agencies and those who are entrusted/handling welfare programs. But
we did learn some things from it, and some of the things we did learn
are reflected now in the new Department of Human Resources Development
that is going forward on a basis of translating or transferring people
from welfare to employment in the private sector. And this program,
as you know, got under way a year or so ago and it's going going to,
is playing a major role right now. It is playing a major role in our
efforts to meet the unemployment problems, the new kind of unemployment
problem that has been dropped on us in this economic slump. We've had
long experience with the problem of the unskilled, with the typical
welfare recipient who needs either basic education or the answer to
a job skill, or something, to get a job. We now have the emergency
problem of technically skilled, highly skilled people, who through no
fault of their own can't get a job. And HRD has been working very
hard with a number of programs in that area, and with some success.
Q
In what ways did it fail?
A
Well, it didn't give us the clear-cut example that we thought
we would have of a pipeline in which welfare recipients were fed in
at one end and they came out the other end self-sustaining members of
the community with jobs in the private sector.
Q
Governor, speaking of the budget again, you said, I believe in
your State of the State Message, said it can be balanced if the
Legislature will work with you on reform. Does that mean that as
submitted, it will not be balanced?
A
Well, technically, I have to submit a budget that is balanced.
But, with that, that can be done by either proposing additional
revenues to make a budget balance, or proposing measures that must be
taken to the Legislature to bring it into balance. And the latter is
the course we'll follow.
Q
How big a deficit do you anticipate as the budget is submitted?
A
Tune in February 3. We'll have all the facts and particulars on
that in the Budget Message.
-5-
or
How much of
public work force you prt_ se for the employment
of able-bodied welfare recipients going to cost and how will it be
financed?
A
Well, this is a message that will be coming out shortly after
the Budget Message regarding our plans for welfare reform. Generally,
what I envisioned in that is that the present money in funding of
words
welfare would be the funding of such a work force. In other/we're
going to translate people who are now performing no service whatsoever
in return for this money into people who will be performing a public
service and holding a job.
Q
Who would pay the cost of administering the program, supervising
the training of workers, transporting them from their homes to the job,
furnishing them with supplies and equipment, child care for working
mothers, and so on?
A
Well, all of these are details that have to be worked out in
this program, and there would be a number of variety of ways. First
of all, some of the same money that is going for the administrative
machinery of welfare would be involved in the administering of such a
program. Secondly, some of the administration would be taken over,
for example, by governmental agencies which are presently entrusted
with performing the services in which these people would be employed.
agencies on cataloguing things to be done as yet gone into the
Task Force approach that I envisioned and that I mentioned there
about establishing a priority and laying out what would be the permanent
kinds of work.
Q
Governor, do you see any contradiction in the fact that on one
hand you're laying off employees in the State Office of Architecture
and on the other proposing adding more through your public works force
for welfare recipients?
A
No, I think we're talking about two entirely different things.
And the layoff has nothing to do with the economy; it has to do with
workload. I just don't believe that the state can ask the taxpayers
to continue in employment people for whom no job exists any longer,
a job that whether through technology or through change in policy, has
either been reduced or phased out. And in the Department of Architecture,
it is just plain that there is no workload to justify the continuation.
As you know, our policy where economies are concerned has been one of
wherever possible of avoiding any layoff and going the route of
attrition, just not replacing employees who leave the service of
-6-
government, and ther
S an annual turnover of i
etty solid
percentage.
Q
DO you plan any additional layoffs?
A
I don't know of any that are planned right now, and, but by the
same token I can't tell you that the same situation might not arise in
they would
some other department or area. But I believe that/ be minimal, and they
certainly won't be in any great numbers
form
Q
Governor, if you get federal money in some/of revenue sharing,
what would you do with that money; where would it go?
A
Well, I think that you're going to have to wait to see what
the federal government's revenue sharing, how it is going to come about,
what it's going to be aimed at. I would imagine there would be some
directions to that money, whether it would be used in welfare, educa-
tion and so forth, on a kind of a block grant basis. And then we
would use it in those areas. And I would think that such a revenue
sharing, I am optimistic that state and local government, freed of
some of the unnecessary overhead of running the money through
Washington and getting it back, with their admistrative supervision,
that would allow us some leeway, that we could do, perform the same
services and probably have a cushion which could enable us to relieve
some of the pressures, such as on the counties and local government so
that they would have more leeway with their problems.
or
Governor, in view of the fact that the U.S. Supreme Court will
^hortly be acting on the capitalpunishment question, I wonder if I
could ask you to restate your philosophy on that matter now?
A
Well, I haven't changed my mind about the, about my belief that
capital punishment does serve 2 purpose and that it is a deterrent.
I know many people argue this and figures that try to be given back
and forth; actually there is no very really valid figure on this. But
I do believe in it, and I don't think the case has been made that we
can eliminate it without suffering some consequences in crime. But I
believe that in capital punishment, we need a speeding up of our
judicial process to where justice is swift and certain.
Q
Governor Rockefeller in Arkansas, when he recently commuted the
death sentences of 15 prisoners, requested that other governors in
the United States do likewise. How did you react to that request?
A
Well, I think if you will check closely, you will find that
Governor Rockefeller in Arkansas had a problem that was a reflection
on some inequalities in the judicial system there and in sentences
that had been passed out, that there were men on Death ROW, under the
-7-
death penalty for cr es that were not the death enalty for other
malefactors in that state, and I think his situation was a little
different than we find in our state for example.
Q
What about the cost of maintaining this 90 some odd men that we
California's
now have on/Death Row, under this condition of freeze, the practical
aspect of it. How do you feel about that?
A
Well, I can tell you I've never thought about or given any
thought to the idea that you rate cost as to whether a man lives or
dies. The decision is made by our judicial process, in jury trial.
Almost every man there, other than some of those who have just
recently arrived, has had recourse to every appellate procedure, many
of them all the way through the Supreme Court, and in every instance,
their cases have been, or their verdicts have been upheld, or they
wouldn't still be there, and it has never occurred to me to rate this
on a basis of cost.
Q
On that subject, Governor, that's a good point. These men are
in limbo. They've been convicted by juries and yet the judiciary is
keeping them in limbo. They don't know where they will be next week,
next month or next year. How do you feel about that?
A
Well, this is one of the things that I think is wrong with this
long, drawn out legal process, and as you know I have spoken publicly
on this and delivered an address to the Bar Association, as a matter
of fact, a year ago on the responsibility the Bar has to do something
think
about this. If there is cruel and inhuman punishment, I don't, it
rests so much with the imposition of the death sentence as it does
with just this living in limbo over periods that stretch out into
a decade or more.
Q
If the federal government were to override your veto on CRLA,
yet make changes that would straighten out some of the problems, would
that be acceptable to you?
don
A
Well, I made that perfectly clear the other that if the federal
government could correct all its wrong and all that caused us to veto
the program, obviously we would no longer have a reason for a veto.
Frankly, I don't think that can be done and I still believe the federal
government should uphold our veto. The law prescribes that the
governor shall have the right of veto when, ontthe basis of evidence,
he being closer to the scene that the federal government, he determines
that the program is not beneficial to the people, is not fulfilling its
original purpose, and certainly our 9,000 pages of documentation and
-8-
283-page report indi
ed that the CRLA isn't fu
lling its congres-
sional intent in the legislation and is not of benefit to the people
here, and we have submitted also a proposal for a plan that we think
could meet the legal needs of the poor, which have not been met by this
program.
2
Can you outline that plan, Governor?
A
Well, basically the plan is going to, or would consist of a
combination of volunteer lawyers, such as we already have operating
in the state, it would consist of funding, a foundation funding, to
begin with, eventually to be taken over at the local level just as
other programs are funded through, for example, a United Fund program,
and it would be a kind of judicare system, with the completely indigent
being provided the legal service and with a sliding scale for those
who are a little more affluent up to a certain ceiling beyond which
they would not be eligible.
Q
Governor, in that CRLA report, in those 283-pages, there were
some incidents cited that have already been corrected according to
CRLA attorneys, such as the attorney in Marysville who was cited for
various incidences; he had been dismissed several months. DO you feel
on those, are you aware of some of the problems in that report?
A
I'm aware of some of these things. I'm aware also that there
were cases that were legitimately handled by CRLA. For four years
now, we have pointed out shortcomings in this program. And for four
years, without us vetoing the program, the OEO in Washington has
promised to correct things that have been wrong. And each year comes
around, and the things haven't been corrected. And finally it reached
a scale, all I can tell you is that our report contains the requests
from county grand juries, from county boards of supervisors, from
county bar associations, from district attorneys, from judges, from
school boards, all asking the same thing, all asking me to veto the
program and all making the request on the basis that the program does
not meet the needs of the poor. And on this basis, I vetoed it. This
was not just a single thought of mine.
0
The question was really directed towards the idea that you
stated in your report, that is the report of your appointed director,
several incidences that had been corrected. Wouldn't it have been
fair to state in the report that those incidences cited had in fact
been corrected?
A
Well now, maybe it does in the documentation or maybe there
are some things where corrections were made afterward and we weren't
-9-
aware of them. I th : that in a voluminous rep t of that kind, an
inaccuracy here and there is possible, but I will bank on that report,
and I believe that it is sound, and as I say, it is well documented
with 9,000 pages of backup documentation.
Q
Governor, I understand you plan to go to Washington. Will you
make a personal case for your CRLA veto?
A
We'tl, I have to go to Washington. I'm a recently appointed
member of: the Advisory Commission on Intergovernmental Affairs, and,
succeeding the governor of New York, and while there, yes, I have told
our people that any of these matters that we've been dealing with at
long range and by long distance and mail, wherever it's possible that
like to
we can do some good by having personal meetings, I would/have those
meetings. I would like to meet with Mr. Carlucci.
Q
DO you plan to meet with the President on this matter or other
matters?
A
I hope to have a meeting with the President on general matters.
Q
Will you be arguing more for corrections of the program or
against the program? Where do your sympathies lie? Would you like to
save CRLA, in other words?
A
Very frankly, no, I think that the proposal we have can do a
better job and for less money.
Q
Would that proposal, Governor, include, assure legal services
for the poor in the same areas as CRLA?
A
Yes, this would be exactly the purpose. One of the great com-
plaints we have, the long list provided by judges, by district attorneys
and all, of individuals who were sent to CRLA because they had a
legitimate problem and CRLA was too busy to take their case.
Q
What is the status of your plan?
A
The status of our plan?
Q
Yes.
A
Well, it has reached a certain point of planning and structuring
beyond which you can't go until you know what the outcome is going to
be in Washington.
0
Will it require legislation here OZ can you do it on your own?
A
No, no, this can be done administratively and with the coopera-
tion of the county bar associations and the California State Bar. And
we have had enthusiastic cooperation so far on working out and evolving
this plan.
-10-
Q
Governor, has here been any discussions stween your administra-
tion and Washington about a possible compromise of the CRLA veto?
A
Well, now, no, what could a compromise be? If they correct
things that are wrong, I don't call that a compromise; that's correct-
ing things that are wrong.
Q
Governor, what was your reaction to the San Francisco oil slick
and what kind of assistance can you offer?
A
Well, our people in the Resources Department are working closely
with the Coast Guard on this, and we are involved over there in that.
I think the reaction is the same as it has been for, or as it is for
all Californians, it is a tragic accident. There are some asides to
it. Fortunately, if it had to happen at all, it is crude oil and not
processed oil, and that has a very important bearing on its effect on
sea life, because crude oil doesn't have the toxicity that the processed
oil has. I can't help but notice that in this one tragic spill that
is concentrated there, and we hope can be corsalled, it still isn't
as much oil and grease as was deliberately dumped through disposal
channels in San Francisco Bay last year. Of course, it was spread out
over the year last year. But it was a greater amount than this total
spill.
Q
Governor, this is the second major accident that we had with
freighters colliding in the bay over the last four or five years. In
both occasions, it happened under heavy, heavy fog. Do you think that
perhaps there ought to be some restriction placed on the movement of
ships under certain, as there are at airports, the flights of airplanes
under certain
A
Oh, you're asking one that I'm not technically qualified to
answer. I know that there will be an investigation and a hearing on
this accident, and I think we'll all know more when we hear how this
could have happened in spite of all the modern radar that we have.
Because I know that those ships go in and out of there in the fog under
radar control, and so I'm waiting like the rest of you to find out what
did happen.
2
Governor, what was the source of the kind of information you
just described? How do you go about getting information on that oil
slick? What ways do you have to find out what happened?
A
Well, I got a purple button on my desk, a row of them, and each
one of them is for a different cabinet officer, and all I have to do
-11-
is pick that phone 1
push that button, and th e's a fellow over
there in Resources Department that tells me what I need to know,
including helping me with my homework for my son.
or
Governor, despite some tax breaks that were given the movie
industry a couple of years ago, the movie people are now saying that
unemployment in Hollywood is now at a crisis level with 50 percent
unemployment in some of the unions there, according to Don Haggerty
of the AFL-CIO, Hollywood Film Council, who is asking for con-
gressional investigation. Can you tell us if you feel that that is
the case in Hollywood and if so, if there is anything the state can
do about it?
A
Not as much as the federal government can do. I appeared
recently at a big mass meeting of motion picture workers from every
branch of the industry at the Palladium in Los Angeles. I wish I
had my notes with me because I spoke there on this problem. Down
through the years the motion picture industry in Hollywood has never
asked the government for help of any kind. And many times this meant
the motion picture company representatives sat at the bargaining table
opposite governmental representatives of foreign countries. The United
only
States is virtually the/country in the world where the pictures of all
the world are free to play with no restriction, no quota and no special
taxes assessed against them aren't assessed against our own pictures.
In every other country in the world, they restrict the amount of
pictures we can show, they restrict the playing time given to those
pictures; they have extra added taxes against American pictures, and
in many countries they still restrict the flow of our currency, our
money out, the funds are frozen even after they finally admit that
there is some profit. Now, down through the years, the motion picture
has been able to meet all of that and still capture most of the play-
ing time in the world, has still been the giant of the entertainment
industry. But now I think it is time for government to help because
these foreign governments have gone beyond that. They now, in addition
to all these other restrictions, offer outright subsidy to American
producers, up to as much as 85 percent of cost sometimes--- a producer
can go over and make his profit on the subsidy and to make the
pictures in other countries. And then they are shipped back here to
when
this country. And I think it is time, and/you stop to think that the
motion picture industry in American has been No. 1 one of the biggest
factors in the balance of trade on our side, it has sold American
-12-
product all over the orld because it's not only hat they sell their
pictures, but styles have been set, American merchandise seen on the
screen in just our ordinary stories, has stimulated international
trade in that, and I think the picture business has a right to ask
for help. It is true that the unemployment in the picture business is
easily 50 percent and even more in some of the guilds and unions.
Q
Will you ask the federal government, then, to impose restric-
tions on foreign films that are shown here?
A
They have a program, the industry has a program and Senator
Kuchel is representing the industry in that in Washington, and I am
simply offering all the support that we can for the furthering of
that program. Now I can't tell you now. I wish I had my notes with
me; I know some of the specifics that are being recommended. But I,
just off hand with memory, couldn't give you the complete program that
they are asking for.
Q
Do you have any specific programs of your own that you want to
propose.
A
No.
Q
Well, now are they requesting a direct subsidy from the federal
government?
A
I don't think SO. I think what they're offering is a kind of
a protection, well if it is a subsidy, it is one to counter this offer
tax
that takes them abroad. I think it involves/incentives and so forth
to keep them, to make it more attractive for them to produce here.
Ω
Governor, Assemblyman Priolo today is introducing a bill which
would reform California
A
What. Is this on the same subject? Well, then, wait a minute.
He's got one on the same subject. Then I'll come back.
Q
Governor, you mentioned that the motion picture industry has a
right to ask for help, and I just wonder what sort of help you have in
mind.
A
Well, this program that Senator Kuchel is representing the indus-
try on in Washington is, has some specific proposals where the govern-
ment can be of help, and as I say, I'm not familiar enough to know,
with all the details on that, to tell you what they are. They are
easily available.
Q
(Inaudible)
A
I think they include that, yes.
-13-
Q
Assemblyman P blo is introducing a bill ich would change our
California election laws, moving the primary from June to August and
also set up a Fair Practices Commission. Would you support this bill
and do you feel even further changes are needed in our election laws?
A
Well, the only change I suggest right now is I haven't seen his
bill so I can't tell you flat out, as you know I don't say whether I
will or will not. The only change I'd make is that I think it could
be set back as far as September. I think that a lot of the cost of
campaigning, a lot of the troubles in the state would be eased if we
shortened the period of campaigning, if you went into the primary
then
in the couple of summer months, and/right from September right into
the campaign for the November election. But virtually today, you have
to fund a campaign that whether we pretend it starts on Labor Day or
not, you really are funding a campaign if you're involved in the
primary that goes the better part of a year.
Q
Governor, what do you think of Senator Alquist's idea to make
former governors lifetime members of the State Senate with full voting
rights?
A
I think we don't deserve that. I think that when the day to
depart comes along, you should be allowed to depart.
0
Governor, last August, Assembly Concurrent Resolution 199 asked
for an investigation of conditions at Soledad. Has that investigation
been made and what are the results?
A
I'm going to let somebody else cue me on that as to whether it
has or not.
MEESE: Yes, the investigation was conducted by representatives
of the governor's office and representatives of the Human Relations
Agency and they found, in effect, after a detailed investigation and
talking to a number of the employees who had requested the Assemblyman
to conduct the investigation, that the prison was being properly
administered. Some changes have been made by the Department of
Corrections coincident with this period of time, and basically, that
the situation is under control.
Q
On the welfare work force payment, would the workers be paid
minimum wage or would they be paid according to their grant?
A
Well, now you're into details that I think have to be worked
as
out also/to a salary scale or whether it has to take into consideration
grant based on size of family and so forth.
SQUIRE: Thank you, governor.
# # #
-14-
PRESS CONFERENCE OF GOVERNOR RONALD REAGAN
HELD JANUARY 28, 1971
Reported by
Beverly Toms CSR
(This rough transcript of the Governor's press conference
is furnished to the members of the Capitol press corps for their
convenience only. Because of the need to get it to the press as
rapidly as possible after the conference, no corrections are made
and there is no guaranty of absolute accuracy.)
o00
GOVERNOR REAGAN:
Well, there ought to be something to
talk about now that we are all here.
2
Governor Senator Moscone has said in a speech today that
the State of California is broke and that this is due to administra-
tive errors and fiscal amateurism by your administration, and that
\
by September the State will have to issue registered warrants or
tax
to patients in order to pay its bills. Will you comment
on that?
A
Wel , in the budget message that we will submit as we have
said already, and maybe he got part of his information from me
because in the State of the State I said that we would have a tax --
or I mean a cash flow problem, and we will suggest two possible
legislative alternatives and they -- and there is another alternative
that sould be administrated regarding that in a way to meet the
cash flow situation. And those will be proposed to the Legislature.
Q
Are you saying then that the state is broke? Is he
correct in making that statement?
A
No, the cash flow problem has been a matter of public
discussion and public record, and I guess I'm the first one to have
announced it way last year when we were talking about the -- the
tax reform program. As a matter of fact, I doubt if there would
be a cash flow problem had the tax reform program passed. That was
one of the aims of that program, is to -- to solve that problem.
Senator Moscone in his running around again yelling the sky is
falling, thought, about the state being broke and all -- he isn't
serving a useful purpose even though he is running for office a
little early. Dut the situation is as we said it was, that yes, the
revenues are down beaause of the economic slump that is nationwide
-1-
and the cost of M 1-Cal and welfare which we ave repeatedly tried
to get help in reforming are much higher than had been anticipated,
and these have given us a fiscal problem. It is a problem that
we can meet, but it is nothing like the mess that we inherited a
few years ago.
a
Do you mean that --
Q
Governor, another topic.
VOICES:
No.
2
-- you will not be able to meet it through the -- ordinary
internal borrowing that we have done in the past?
A
No, that's right, and I announced that more than a year
ago, I said that by --
Q
So the possibility -- there is a possibility of registered
warrants?
A
I said that we will submit some alternatives to the Legis-
lature that can meet this problem.
Q
And that may --
A
And when I introduced the tax reform program last year
I said that by next year we would be in a borrowing position,
internal borrowing position due to cash flow that was greater than
the amount of revenues from which we had to borrow.
Q
Governor, the current budget includes almost 200 million
dollars to solve the cash equity problem. Are you saying that
you have been forced to use that 200 million dollars and it is no
longer available as a reserve to take care of the cash flow problem?
A
I stated in the State of State message that by the end of
this year the budget balance -- we would have a cash flow problem.
We would utilize cash flow.
Q
Is registered warrants, though, one of the alternatives
that y:u are going to propose?
A
I'm not going to comment on what the alternatives are as
there is a budget message coming up with all of that.
Q
Governor, apparently the revenue gap is possibly even
larger than four years ago. What's different about the mess?
A
Well, one of the things that's different about the mess is
that last -- four years ago we had a fiscal problem that was not the
result of an economic slump but it was the result of a government
that had grown over the years in which spending had been not curbed
-2-
as we have curbed it and tried to curb it in other areas. And
that they had balanced each time and paid for this excess government
by gimmicks and devices in which they borrowed ahead on their own
revenues, such as collecting certain taxes in advance, and finally
resorting to the last gimmick which was accrual bookkeeping in an
effort to stave off the need for new taxes before the election, and
what it resulted in was accepting a budget for twelve months spending
that was based on 15 months revenue. And we inherited the position
of having -- having to follow that with coming back to twelve months
revenue for a government that had been built up to that size and
it is that size government we have been trying to wind down and get
back within the twelve months revenue. Now, that's a little different
than coming onto an economic slump in which your sales tax and
income tax revenues are down and your outgo is up. Plus the fact
that in the three years since, due to the federal spending policies
and this certainly is a documented matter for anyone who wants to
study the economics of it -- in the last three years of the Johnson
administration, in a time of full employment they resorted to $40
million dollar deficit financing over those three years and brought
the inflation rate up to a sudden -- from the one and a half -- two
per cent that we have been going on along -- under the new economics
theory that that will preserve prosperity, when suddenly skyrocketed
up to three or four times the rate of inflatinn. Now, that's an
entirely different kind of problem, and we are not going to meet
it with gimmicks.
8
Governor, isn't it likely to develop into the same
kind of a problem, though, if it continues as it is? Aren't
you going to get into the same kind of fiscal bind and perhaps
have to draw on advance revenues or something?
A
No, what we are hoping for is, as I said in the State of
the State if the Legislature will accept our proposals for reducing
the size and the cost of government, particularly getting control
of welfare and Medi-Cal, and if you'll recall three years ago -- I
don't know whether you'll recall because certainly nobody has been
writing this, but in the whole history of Medi-Cal, from the first
three months we were in office we pointed to the fact that the
program within the first seven or eight months of its existence, or
its implementation, was running a hundred million dollars in the hole
and by the end of the year would run two hundred million in the hole,
-3-
and I was amused to see a legislator the other day quoted as saying
that when the legislature finally investigated they found that
there was no such deficit. Of course they didn't. Because we
have instituted a program that eliminated the deficit even though
subsequently a court ordered us to stop the -- the changes in the
program or the procedures that we had invoked. And, yos, by the
end of the year, by the time the legislature had gotten around to
it, we had reduced the cost of Medi-Cal that much. But also by that
time after the court orderthad stopped us from doing the changes
that we were doing the investigation started in again and we pointed
out then that only a third of the people in this state that were
eligible for Medi-Cal were using it and that in this entire --
this period since more and more people are discovering their
eligibility. I don't know whether all of them have found out about
it yet or not, but it is now not one out of 15, it is one out of
9 who are getting Medi-Cal.
D
Governor, did the change in accounting procedure in Los
Angeles last year contribute to the Medi-Cal deficit that you -
that you've mentioned last -- last December?
A
Yes.
0
What's your understanding of how that contributed to it?
A
Well, Los Angeles, which has 1,400,000 of the Medi-Cal
recipients, like all the other counties, we build our case load on
the estimates that are given us of case load by the counties and
Los Angeles used a system of kind of spot check and estimate and
they transferred from that to an actual head count of the recipients.
And this changed their figure about a little over 20,000. Now,
this was a -- roughly a one per cent -- a little more, maybe, one
and a half per cent error in account of a million 400 thousand.
But we had previously received their estimate on the basis they
had already -- always done it. Then we received the head count
subsequent to that.
Q
Governor, that change, according to the people in Los
Angeles, and in your own department, was made in March. But the --
and then the administration came back to the legislature in June
asking for additional funds from Medi-Cal program and they said at
that time, in June, they had not learned of the LosAngeles change.
I was wondering why there was this great delay between the significant
-4-
change in Los Angeles and the time that the administratinn made its --
discovered the change.
A
I don't know the timing on this or when the figures changed.
I do know that in -- it wasn't in May that I asked the Legislature
to add $60 million dollars more in the budget amount for this because
even then we had discovered additional cost factors.
0
But it wasn't the Los Angeles change?
A
I don't know whether it was or not.
Q
Well, Governor, if it was the Los Angeles change, was part
of it, and you learned about it -- your people in the Department of
Health Care Services learned about it in July, why in December,
when you were talking about these cuts, did you blame it on excesses
in the Medi-Cal program and why did you talk about increasing case
loads when this was an element in the creation of the deficit?
A
Because there has been an increase in the case load far
in excess of the 20,000 of Los Angeles. And even according to your
own story, only a part of the $142 million dollar deficit could be
laid to this change in accounting by Los Angeles.
Q
Was the major part, though, Governor?
A
What
Q
It was the major part, according to the figures -- your
HCS people give us.
PAUL BECK:
50 million out of 140 isn't a major part,
Bob.
Q
Well, it wasn't 50 million, it was the whole -- they call
medically needy group which totals about 70 some odd million, and
then there was another estimate that they made on -- insofar as the
creation of intermediate care facilities would be concerned, they
thought more people would go into business than went into that
business, and that accounted for, in theory, 20 million more of the
deficit, so it was this information, the estimate of who would go
into business that figured in the deficit, too. I was just curious
why you talked about excessed in the program and the deficits were
based on something else.
A
No, -- and I do not subscribe to what you are just saying
because it is typical of the same kind of distortion that was con-
tained in the Los Angeles Times headline yesterday. And I don't
agree with that and I don't challenge your right to investigate
-5-
any part of this C our good intentions or wha we have been trying
to do with the program. But I would also suggest that when you are
investigating I would find it much more pleasing to me if someone
would mention along the line that these horrifying cuts that I have made
in Medi-Cal so far were mandated on me by the legislature and not
something I dreamed up in my own mind, but there seema to be a news
boycott on that.
Q
Well, Governor, I don't -- I don't mean to talk about
that particular point but --
A
I bet you don't.
8
Well, you said in -- you said in your announcement that the
cuts were a result of Medi-Cal excesses, and the question I have is
you just said yourself that the Los Angeles change and -- the
statistical change figured into-your Department of Health Care
Services said that your own estimate of who would go into the
nursing home business figured into it. According to -- you add
it all up, it comes to nearly a hundred dillion dollars on those
two elements alone. Now, if that was the case, would you still
say that it was excesses in the program now, knowing all that now?
A
Yes, and I also would say that why don't you go back where
you were yesterday and have another conversation with Dr. Brian
who has more of the details than I have on this. I can only tell
you that the budget was submitted on the basis of the best informa-
tion to my knowledge that we had. That there are excesses in the
program, that welfare has been -- and Medi-Cal have been out of
control as long as I've been Governor, and that we have been trying
our best to seek reforms that would bring them under control.
Now,
the program was a jerry-buitt structure when itwas created. It
started going in debt the first day. We found when we took office
and it had only been in effect a few months, that they hadn't even
paid the bills that were submitted in the first week of the program.
We found it was going 200 million dollars in debt. We managed to
salvage that and then a court order reversed us. We have had
court orders that have added $461 million dollars to the welfare costs
since we have been in office. And I still say that if the legisla-
ture will joing with us in reforming these programs we can remove
the necessity for this kind of crisis in the future. But the
program is virtually unmanageable.
Q
Governor, one of the reforms you suggested in your State
of the State message was to take the pensioners, the elderly, out of
-6-
the welfare category, since you said they don't belong there.
A
Right.
6
And set up some kind of system akin to the Social Security
system where they get a check every month. They don't have to go
down and requalify every month to say they are still growing old,
I think was your terms.
A
Yes.
D
Wouldn't a standardized payment involve in some cases some
elderly people receiving less per month than they might now receive?
A
I don't think so and I think that the whole idea would be
that you would have to work out -- and there may very easily be
categories, everyone today does not receive the same amonnt of
money.
D
That's right.
A
But the thing I'm talking about is the automating and
the removing of a great many social services that are now applied
to them that bequire a great bureaucracy at the county level and
services that I don't believe are necessary. The same kind of
services that are applied to welfare recipients who are able-
bodied and supposedly temporary recipients of welfare. That these
others are so obviously permanent recipients that this procedure
could be automated. Similar to this process -- the overhead for
Social Security is only about three per cent, the administrative
overhead. That is not true of any other welfare program.
8
Well, then, as your administration envisions this particular
reform there would not then be any cuts -- even some cases of the
OES payment that is currently received by some senior citizens?
A
Now wait a minute, give me that again. There wouldn't be
what?
Q
Right now they have to go down, as I understand it,
Governor, they have to go down every month and requalify to see if
they are still eligible and they have to check their special needs.
As I understand it, the proposal which your administration is thinking
about is to have these people come down only once a year to eliminate
the monthly eligibility check. So they would get a standardized
payment for twelve months, they wouldn't have to come down every
month. But if they do get a standardized payment for twelve months
that would in some cases be less than the monthly payments they now
receive?
-7-
A
Well, all I know is that our every effort is going to be
not to penalize anyone. but 1f possible to even do better by them
and to use some of the wherewithall that might be free to better their
lot. Because I think most of those people are not receiving adequate
care now. And so I'm sure that provision would be made that no one
would be penalized and I'm sure that if anyone's circumstances changed
between visits, some catastrophe befell, that there would be provision
made that we could meet that change.
0
Governor, in Washington, either in your meeting with the
President or other officials, did you get an indication of coopera-
tion in your hope of getting federal approval for some of the
experimental reforms you talked about in the welfare system?
A
Well, I had 2 long talk with Secretary Elliott Richardson
and found him most interested in the whole idea of experiments at
state levels, and he wants to meet with our people. He -- in fact
he requested it before -- before I could get around to asking him
if we could meet with him. He wants to hear the proposals that
we have. He has problems. He has -- he has the problem of where
some regulations and waivers might require at least congressional
approval or approval of some of the congressional committees and
he pointed out to me the problem that we have of where regulations
are implementing congressinnal intent, but he also expressed a
willingness to try for that.
8
Governor, could I clarify something on the original before
we got off on the overall budget things you were talking about.
Were you saying that even if the cuts that you are recommending in
welfare, Medi-Cal and towards education, some people estimated 400
million -- 500 million dollars, if these were all done and your
reform tax -- tax reform program was adopted, allbeit belatedly so,
not much help for this year, that this fall you are going to -- with
all that still have a cash flow problem that will require outside
borrowing?
A
No, we can't go to outside borrowing. As it now --
this is against the law in California. But we will present alter-
natives to the legislature that will require legislation and there
is one alternative open to us administratively and any one of these
three will meet this problem of cash flow in the fall. But hope-
fully tax reform -- something in the same neighborhood, in general
as what we tried for lastvyear, would then remove this for the future.
-8-
Q
Registered warrants would be available administratively,
right?
You wouldn't need any legislation for that?
A
This has always been available.
D
New subject, Governor.
A
Say, wait a minute. Ray way back there wanted -- we changed
subjects three times since he --
Q
Let's keep on the subject, Governor, we can finish this
thing.
A
Is there anyone --
Q
I got one more question, Governor. If it should turn out
if you look at this, that the -- that the cuts that you've made in
theprogram were caused by changes in reporting or large part of them
caused by changes in reporting or changes in estimates and things like
that, will you still feel that the cuts that you made were justified?
That 1s, that the cuts within the program itself, in reducing services
were justified on the basis of those figures?
A
Well, the wrong word is used, "justified." The cuts are
mandated at any time that the deficit in Medi-Cal is going to exceed
by ten per cent the budgeted amount. And when that happened that
law passed in '67, which was implemented in '68, went into effect in
'68, mandated on the administration the cuts - procedures that we had
to follow. I have no choice in that matter, and these were mandated --
and incidentally it was not a bill I supported. I signed it
reluctantly. We had asked the legislature to help us then four
years ago reform the program and this was their. 1dea of reform and
it was just about as Mickey Mouse as the program they passed to begin
with.
0
Could you go to the legislature now and ask for more --
there is a bill in it now to re -- to fund the program and abolish
the cuts that you made.
A
No, we will be submitting to the legislature in a
subsequent message following the budget -- we will be submitting
a plan for a reform of Medi-Cal.
Q
Dat it won't affect this year, though?
A
No, in this year it is the cuts that We have implemented
that are bringing the program back into balance between now and the
end of the fiscal year.
Q
Then no matter what caused those cuts, what the situation
-9-
was, you feel that the -- the reductions should remain in force?
A
For the balance of this year? Well, since they are
necessary to restore a balance, again I have to say it isn't a case
of what I think. It:1s what the law mandates. And the law has
mandated these cuts on me. And most of the people who were testify-
ing before the -- the legislative committees and the legislative
committees who have been hearing this testimony all know that this
is the law, that I have no choice in the matter, and I'm just myself
a little put out that no one has bothered to mention that in passing.
Because as I said tothis legislature, I just -- now I feel a little
self conscious getting the full credit for all of this.
0
Another one back here on the same subject.
A
We will get to you.
&
You mentioned removing some social services. What were
you talking about, what kind of social services?
A
To the --
o
social services.
A
To the senior citizens, disabled and so forth?
D
Right.
weltare
A
Well, you will find that I can't list them all here, but you
will find that there is much the same procedure of it being assigned
as part of a case load to case workers, and special grants and so
forth to meet special problems of these disabled and these elderly
people, and I believe that while there are probably some individuals
that would require some special care, that the overwhelming majority
of them just the same as the people who are simply drawing Social
Security, could receive an adequate income in an automated process
and they are adults and they don't require this -- all of this admini-
strative overhead.
Q
But would you be cutting services? Would there be some
services --
A
No, we would be providing the income that would pay for
these.
Q
I see.
0
Governor, in your October 30th statewide telecast from
Anaheim you announced through Republican teamwork you got President
Nixon's assurance that he would release frozen funds for Califormia
water programs, specifically $10 million dollars for Westlands Project.
-10-
The money hasn't been released and Casper Weincerger says it is
unfortunate that false hopes were raised. He says your statements
must have resulted from a misunderstanding. Can you tell us, first,
what happened and second, didyou discuss this on your recent visit
to Washington?
A
No, and what I understand happened that day, we received --
I received a call on the road from the head of one of the labor unions
involved about this and about the continuation of the project, and
as I said before, immediately got on the phone and by nightfall was
told that the money was being -- was released. I understand now
that the misunderstanding involving myself and Washington was that
the money was released for the balance of a certain period of the
project and that the misunderstanding was -- and I didn't even know
that there was any problem concerning the subsequent year or subse-
quent stage of the project -- and it is that money which has not been
released. But the program which was due to close down the following
week WQS continued in its funding. I thought that this solved the
situation. I didn't know that it came to another point further
up the line and that that money has not yet been released or appropri-
ated for that subsequent period.
Q
Do you have any new assurances from the Nixon administra-
tion about release of this money then in the future?
A
I don't know what the situation is on that. I haven't
checked with Bill Gianelli, the people that would know about that.
It was a -- it was a -- I get mixed up on the names here, Bureau
of Reclamation project, but there was no misstatement of fact.
We had -- we had secured the release of money that stopped the
shutdown that was scheduled for the following week. This was taken
by someone, -- I made the announcement, my not understanding perhaps
that there was a subsequent appropriation that was necessary to
continue on into the future, and so evidently assumed that that
meant that had been approved, too. I didn't even know there was
such a thing.
o
Governor Reagan, the State Lands Commission approved new
offshore drilling off of Santa Barbara. What is your reaction to
this?
A
No, Ray, it is Seal Beach, and it is -- they have approved --
it is the first one we have approved. We certainly can't find any
possibility or they can't, of a hazard there. It is a man made
island. There are already 78 wells on that island. It isn't a
derrick or a platí n and it isn't up in the
ctured leaky bottom
that we have in the Santa Barbara channel, and there is going to be an
additional well drilled on that same artificial island that's built
offshore.
0
What has the State done to insure the safety of any of
this offshore drilling in the future? What assurance --
A
Well, wieh the exception of a thing of this kind, this is
the first one that we have allowed. There is a moratorium on drilling
that is still in effect on state tidelands pending the -- and while
we worked with them to find if there -- better means of handling
problems and accidents if they should happen in the future, and I
don't know whether the Lands Commission has made any change in that
position or not. As I say, this well was a totally different --
different case.
0
Governor, how do you view the reports of the last couple
days that you are -- that Washington is about to override your veto
of CRLA?
A
I still -- well, I still have to say I'm confident that
they won't. The law is very specific and clear in my right to veto
that program. It is also very clear that the only way it can be
overridden is if the -- is if Washington -- they have to establish
that contrary to my veto the program is in conformity with all of
the rules, laws and regulations concerning the program. And to do
this they'd have to -- they'd have to be rather dishonest because
it isn't.
Q
You look for a compromise?
A
I know that they would -- they have tried to find some way
in which to -- they could approve it by making great and drastic
changes in the program as it now exists, and I'm quite sure if it
should come to pass that they would still override the veto, I'm
quite sure it would not be simply to override the veto and continue
with business as is, I'm quite sure there would be drastic changes
in the program.
8
Has there been any favorable reaction to your alternative
plan you submitted at the time of your veto?
A
It was very well received in Washington. And well received
at the White House.
-12-
Q
Governor, how long can Mr. Uhler be working on preparing
an alternate plan and isn't it peculiar that he would be assigned to
do that at the same time he's theoretically the liaison between your
administration and the CRLA here in California?
A
Oh, not at all, because for the last four years we have
been trying to get Washington, each time we have told them how
reluctantly we approved the continuation of the program, because of
the same kind of faults that we were finding, and each time Washington
made promises to us that there would be changes. And the promises
weren't kept, they didn't make the changes. This is why we took the
final action this time. But I have always insisted from the very
first that in any criticism of the program or in any change of the
program that we must -- you don't defeat something with nothing.
That I was committed to the belief that the poor were entitled to
this legal service, and I have urged our people to find an alternate
program so that we could at least suggest to Washington that we
weren't just against it and asking to cancel, that we had a proposal
for something that would do the job better.
Q
Well, isn't it -- didn't it lead you subject to criticisms
if at the one time you have Mr. Uhler preparing an alternate plan,
at the same time he's doing that purportedly making objective inquiry
of the efficacy of CRLA in California?
A
No, because from the very first when they started checking
up on the hundreds of complaints that we were getting in the program
they lnew my policy, which was that if we were -- if I was going
to on the basis of the reports they'd bring back -- if it developed
that this led to a veto that I wanted, as I wanted for four years,
a concrete proposal of a program that would meet the problem of the -
of the needy, the rural poor. Now we have approved without any
hesitation any number of neighborhood legal assistance programs
in California under OEO who are representing the poor in the urban
areas, and very successfully and many of those have conducted class
suits against this administration and some of those successfully.
So it isn't true that this is our reason. The plain simple fact
is that CRLA in California is not representing the poor as the law
required it to do. And we think there is a better way to do it.
Q
Surely you and your staff must have been consulted by those
-13-
people in Washington about what form you would like to see the
drastic changes take in a new CRLA program. If that's the
direction in which they were going to go.
A
Well, we finally gave our proposal of a program. Now
our original proposal was that this program that we proposed could
be funded by foundatines and privately funded and wouldn't call for
tax dollars. We are perfectly willing to give that to OEO and let
them fund it as an OEO project. We made that clear to them. Matter
of funding was not important. If they feel that OEO wants to continue
in that business, they are welcome to the proposals that we made.
8
You said that if they overrode the veto it would only be
with major changes in program. You have an indication that you have
some specific idea of what changes would be involved if there were
an override?
A
No, I -- our people have been dealing with them and have
been talking with them at some length in the last few weeks on this
proposal and all I know is I haven't had areport on the details,
that many proposals have been made by CRLA as to changes that they
were willing to make.
Q
You don't know specifically what the administration --
Nixon administration would insist on?
A
No. No.
D
Governor, was this offered in the spirit of a compromise
of - an override?
A
Well, from their standpoint it is offered on the basis
that I think we have to agree that they'd like to find some way to
not sustain my veto. So they are exploring every avenue. Frankly,
I grow stronger by the day in my belief that the veto should be
upheld.
Q
One more question, Governor, the head of the CRLA in
California said today that your administration is asking other
governors and congressmen to actively support this -- the sustaining
of your veto by the -- your veto by the Nixon administration. Is
that true, are you asking other peopleto help you out?
A
I don't know --
MR. MEESE: Well, the congressmen in the areas served --
purportedly served by CRLA themselves have been in touch with us
because they wanted to importune the White House to sustain the veto.
Other governors have similar problems and they have asked us for
-14-
information, but as far as any massive move to these people, the answer
is no.
A
I informed the Republican governors that the possibility --
because we hadn't made the decision yet, that the possibility existed
that I would veto this program and I said if so I would inform them
of our reasons for the veto and the procedures that we had taken.
And I can only tell you that the interest in this and the interest
in getting that information was -- was great and was unanimous because
I don't know of a governor -- I haven't met a governor -- maybe
there are some that -- but I haven't met one yet that does not have
much the same criticisms of this program in their states that we have
here.
Q
Governor, why is the White House, do you think, reluctant
(CRLA)
to sustain your, veto if it was, as you say, received with some
approval initially?
A
Well, let me point something out and it fits the governor
as well as the president. Everyone insists on saying that this is
the White House versus the Governor's office. Remember that a
man who is President of the United States, I think, would only very
reluctantly inject himself into a situation involved these various
departments any more than I would. It is -- you expect in good
administration that you have appointed people and you have departments
handling these and you hope that they will arrive at the right
decision.
And
if
the
-- if it comes to a case then of overrule
one of your departments, that there is an administrative factor
enters in. I would think : long time about overruling one of our own
departments on some decision that was in their -- in their domain and
that they were running, I would have to feel that they were being
very wrong before I would just step in and reverse them and I think
this is theposition of the President. If possible he would like very
much to feel that this will be handled through legitimate channels,
through the department, and through the appointed director.
0
Are you saying then that the federal OEO is desperate in
looking for a way not to sustain your veto?
A
That's -- that's what I said, yes. And we were -- we are
prepared for that to be their attitude.
8
Is there a philosophical difference between you and the
Director of Federal OEO, or how do you see it?
-15-
A
Well, I don't know. I don't think it is a philosophical
at all. I think it is just that Washington -- various departments
and agencies in Washington sort of have a built-in reluctance to
believe that state or lòcal governments can be right. You have
seen this in the reactions even -- bi-partisan, both parties, in the
reactions to the idea of revenue sharing, that, heavens, never should
it be admitted that a local or a state government could use federal
funds as efficiently as the federal government can dispense them,
and you know, they think out here in the provinces that we -- we
aren't quite up to standard.
Q
Governor, back to your comment a moment ago about President
Nixon perhaps being reluctant to inject himself into this. Did
you take your case directly to the President -- personally to the
President when you were back there?
A
And without asking for any answer or reply from him I
simply explained to him what the case was, why our -- why we had
taken the steps that we had taken and called to his attentinn that
we did have a plan.
0
Did he give you any answer?
A
What?
: :
You said you didn't ask for any answer.
A
Didn't ask for any answer, no.
Q
But he didn't give you one either?
A
No.
(Laughter)
Q
Governor, regardless of where some of these decisions are
being made in Washington, your administration and Washington has
had some serious disagreements on programs such as some of the OEO,
welfare conformity, family assistance plan and now national health
insurance. How would you characterize your relationship with the
Nixon administration in general?
A
Well, I hate to disappoint some of the political pundits
but the relationship has always been cordial. It's always been very
close, it still is. And the visit we had for about an hour and a
half there in the -- in the White House was on that same cordial
basis. And as I have said before, the President knows that I intend
to lead a delegation at the Republican convention pledged to his
renomination for election.
Q
Governor --
-16-
Q
Governor n change --
Q
Can I follow that. Did you tell the President pessonally
that -- that you intended to lead the delegation? You do not intend
to run against him or for anything else? In '72.
A
I told him.
Q
You did offer this to the President?
A
Yes.
0
Did you or your staff have any discussions in Washington
on the possibility of expanding the role or the authority of the
Coast Guard of the navigable waters and the right to shut them down?
A
This subject never came up, no.
D
Governor, regarding your visit to Washington. Do you feel
now that since you'velbeen back there that communications between
Sacramento and Washington are far superior to what they were before?
Do you feel now that you have a direct link -- more so of a direct link
to the President or to Secretary Richardson and if so, where was
the chink in the communications link before? Specifically on the
AFDC difficulty?
A
Well, I think that that -- that one gew at a departmental
level and certainly at a level below Elliott Richardson who came in
new to that position. As I explained to you in our press conference
upstairs at the time when hhey were going to announce the cutoff of
funds, Elliott Richardson did not know, had been misinformed, he did
not know that there had not been a final court disposition of this
case. So the one thing that has been proved is I finally have met
him and, as I say, we had several hours together and I think got to
know each other well enough to know that we don't have any basic
philosophical disagreements at all and that he wants many of the same
things that we want in trying to get control of these programs, has
the same belief we do that they are -- not only in need of reform,
they are a disaster. And I think this will help. Now, as far as
the White House is concerned, let me just say this, one other thing.
There wasn't an improvement needed. From the very first the Vice
President has been designated as the liaison between state and federal
government, and on those problems, particularly which must go to the
cabinet level or to the President himself, and there has never been
any problem of communication between us. The Vice President has
been accessible. He has gotten back on every instance we have had
to refer something to him. As a matter of fact he was the channel
-17-
we went through on the eve of that aborted press conference, when
they were going to cut off funds and the -- this was when he put
Elliott Richardson in cantact with me immediately. He understood
the situation, and that's all it took, and the press conference was
cancelled, and they didn't cut off the funds. There has been --
there has been a disagreement, one disagreement between the -- this
administration and the White House, which has had to do with a family
assistance plan, and the President has been aware from the very first
and we have talked about it, that we did not -- we were in favor of
his original concept. We did not feel that the legislation that
subsequently was passed by the House of Representatives actually
carried out the original purpose and intent.
0
Governor, is there any --
Q
Governor, how soon do you expect to call a special election
to fill the State senate seat?
A
There is a time limit in which I have to do this. I
haven't pressed on this. There's been a few other things happening,
as you can imagine. We will get at this as quickly as we can. But
when I fourd out that we couldn't under the law -- we couldn't pass
it in time to get it on the ballot of the local election in Los
Angeles, it legally could not be done, then the pressure was off a
little bit because there was no way in which we could save themoney of
of a special election by coupling it with them.
SQUIRE: Thank you, Governor.
oOo
-18-
2/4
PRESS CONFERENCE OF GOVERNOR RONALD REAGAN
HELD FEBRUARY 4, 1971
Reported by
Beverly Toms, CSR
(This rough transcript of the Governor's press conference
is furnished to the members of the Capitol press corps for their
convenience only. Because of the need to get it to the press as
rapidly as possible after the conference, no corrections are made
and there is no guaranty of absolute accuracy.)
o00
GOVERNOR REAGAN: Good morning.
0
Good morning.
A
I guess we've got nothing to talk about.
Q
Governor, what assurances can you give that the counties
will not have to increase their costs by picking up the difference
if your Medi-Cal and welfare reductions are passed as well as your
proposed budget for public schools?
A
Every assurance in the world. Because I've been disturbed
about the manner in which this has been fuzzed up and certainly
the leadership of the legislature, I regret to say, has apparently
misinterpreted our intention in providing a budget and having to
tell them that we would come along in the next couple of weeks with
detailed explanations of how we would meet some of the cuts. But
it's always been our determination that we will never pass a tax onto
local government because this in our estimation doesn't answer the
problem to simply change the pocket out of which you take the money
from the same individual. And so we have pledged that our proposals
for reform of welfare and Medi-Cal will be such that they will not
only save the state money, they will save the counties money and they
will save the federal government monies because they are going to
reduce the welfare burden. And I think the latest finding of our
own audit team that right now there is sufficient error at the county
level in determining eligibility that we estimate overspending of
about $51 million dollars. Now, part of that $51 million dollars is
county funds. I will call to your attention that a short time ago
we changed the regulations when we found we could to save an estimated
75 million dollars of county administrative expense, in the staffing
standards for welfare, and SO far we know of 23 counties that have
-1-
taken advantage of that and have changed their staffing standards.
Now I just regret that the legislative leadership evidently --
when we first met, when I met with Senator Mills and Assemblyman
Moretti, they both -- I explained to them, they expressed their fears
that we would have to have an increased tax. I told them to please
hold their fire until they saw our proposals because I honestly and
sincerely believe that we can with their cooperation meet this
problem with no increase in taxes. And I think they have jumped
at this budget perhaps under the mistaken belief that I'm not sincere
in this and that I'm trying to put the tax monkey on their backs.
I am not. I tell them again, if they will cooperate and meet with
us I believe I can convince them that no tax increase is needed.
0
Governor, how about -- how about the case of local schools
where according to Allen Post your budget is more than a hundred
million dollars short of just keeping up with inflation.
A
No, once again we have -- we have increased the state fund-
ing for schools 42 per cent to match a 12 per cent increase in enroll-
ment over the last four years. Now I've said before that the
legislature and myself in passing on these additional funds to the
schools each year, not one of us has been able to prove or say to
the public that we know for a fact this money is needed.
85
cents
of every dollar the state has given to public education goes into
salary increases and we have had a task force working, as I have
explained over and over again to you, we have had this commission on
educational reform and again this is like the welfare and Medi-Cal
proposals. We believe that we found enough evidence that we can
help the school boards to better spend the money they are now getting.
And then in the event that this still reveals that additional money
is needed, at least this time we would be able to put our finger
down and prove once and for all to the public that there was an actual
need for this money, it was not the result of mis-spending of the
funds. Added to this is the other thing that I think can be
helped by tax reform, the need for a statewide equalization formula.
But the money that we have put in actually meets the legislative
requirements, the formula for funding by the state, plus which we have
added in the $88 million dollar one-time kind of windfall or
emergency gife that we gave public education last year, and we told
them then it would only be a one-year thing, but we have added it in
and extended It another year, so they are getting that money over and
-2-
above. Now, if the local school boards or districts chose to
ignore the help that can be given and that there are savings to be
made and simply take the easy way of wanting to turn to the property
taxpayer, we don't have much control over that. But I believe if
they will listen and if they will cooperate we can prove that we can
meet their financial needs and that there has been a misuse of the
funds they are getting.
0
Governor, Allen Post said yesterday that your budget takes
into account inflation in calculating revenues but ignores inflation
in calculating state spending and of course in state employees'
salaries. Can you comment on this apparent difference?
A
Well, sometimes I think Mr. Post's staff is more energetic
than it is efficient. There is no questirn but that we have,
as I frankly stated, reduced and deferred some spending in some
areas of state government which is very frankly belt-tightening and
which is the same kind of economies that our people are going to
practice in the present< of this inflation. We can't just automatically
turn the burden over onto them. This part is true. But I noticed
also that Mr. Post, after he made his initial charges about the budget,
he then did recognize that he was making those charges in advance
of seeing our proposals and without any knowledge as to whether the
proposals would meet these problems and I think the proposals will.
3
Governor, back to schools just for a moment, the type of
help that you are willing to offer districts, is that just general
help or do you have specific people who can -- if asked by the
district administration, come into a school district and show them
how to tighten up their problems?
A
Yes, an auditing team and I think I was -- I know that
Wilson Riles in his position is concerned about this budgeting figure
also but I know his very strong feelings about the need for account-
ability on the part of schools. And I think we -- when we work
together on some of these proposals -- I say we, I think can help in
some of the problems but at least then we can come to a point in
which if more money is honestly needed for the first time the state
will be able to say, how much, and prove to the public that there
is this need.
Q
Governor, Mr. Orr suggested that your welfare message would
be coming very, very shortly. Can you give us an idea of when that
might be?
-3-
A
No. I'm going to be more cautious than bhat. We said
within the next few weeks at the time we presented the budget and
it will be that. I think you can understand -- we got a new team
over there. They're members -- many of them members of the same task
force that's been working on this. It is a complicated business and
we are going to come forth with it just as fast as we can. Our
situation was, and we were very frank about this, the law calls
for us to submit a balanced budget. We submitted a balanced budget
but admittedly without the explanation of how some of the reductions
would be met. We promised that, the answer to that, and we will
have it
a
Governor, how would you balance your budget in the event
that the legislature refused to approve your welfare reforms or the
federal government refused to approve them or the courts refused to
allow them to go into effect?
A
Well, just at this point I can't tell you how much of
this will be dependent on federal government. Mainly I think these
are things that we can do statutorily and administratively. The
legislation is passed, of course. This lessens the danger from
the courts. Our problem has been the court's interpretation of
existing regulations and statutes. If the legislature refuses to
join in reforming welfare and Medi-Cal, then admittedly they have
made a choice and they have made a decision. I hope they won't
because the choice they will have made is one that will leave them
with the prospect of tax increases on an annual or every other year
basis for as far as we can see into the future.
Q
Governor, how do you justify using $126 million dollars
in the recerve funds, including 72 million from the teachers'
retirement to balance this budget in view of your previous criticism
of this method of balancing the budget?
A
Because as we have stated, this is a crisis in part of
which is a temporary slupm in revenues that we can expect to go back
up in the future as we come out of this -- out of this economic slump,
and the contingency fund of the teachers is -- is actually -- it is
paid for by the state and the state has responsibility for this fund
and if there is a contingency the state has to pay for it anyway.
So we actually see no harm whatsoever and no setback in this program
of the borrowing of those funds.
-4-
Q
Governor, do you think it is a misuse of new school state
aid to use that for teachers' salary increases?
You mentioned earlier that 85 per cent of the increases in school
aid go for teachers' salaries. Do you think that's a misuse of funds?
A
Well, not - teachers' salary increases are needed but at
the same time I think we should point out that the -- they can't have
it both ways. They can't attack the state on the basis of its
contribution to education and say that it is shorting the quality of
education or increasing class size or doing any of these other things.
And then continue to use the money almost entirely as a fund for
increasing salaries.
Q
Governor, aren't -- while you are delaying your message
aren't you allowing this group that's going to run around the state
telling what's wrong on your budget jump on you before you get a
chance to explain your position?
A
Well, this again I regret, Squire, the announcement that
they are going to run around and hold hearings. It seemed to
me
it would have been far more seemly if they had waited until they
saw the proposals and then wanted to include those in their hearings.
I think the people are entitled to know clearly what it is that we
propose and then I think in a system such as ours you would be able
to read whether the public agrees that the economi/s ban be made or
whether they are willing to tax themselves at a higher level. And
I think the announcement to suddenly go out on the basis of this
budget is again -- I regret to say, violating what I thought was a
bi-partisan approach that we were all agreed-certainly the leadership
of the other side was agreed with me, we would have in meeting these
problems. I still want that bi-partisan approach.
Q
Governor, what was your --
Q
The welfare program that you now say may not go to them
I guess until March, you say a few weeks, would you expect this to
be adopted by June 30th when the budget has to be adopted or should
be adopted?
A
I don't see no reason why it shouldn't be. The budget has
to be adopted then.
Q
How many years have you been trying to get through a major
welfare reform?
4
Well, almost every year since I've been here except not
-5-
this scale becaus ery frankly, as I have ad tted to you in this
room, in our efforts over these at least three years to get a handle
on these programs we ourselves were dealigg in almost bandaids.
We ourselves did not finally come down to the recognition that the
total overhaul was needed.
le started things that we thought would
help and now we come with total overhaul. The other thing is that
never in the four years before have we come to such a crossroad in
which the alternative is to ask the people for more money.
8
Do you have any reaction to Senator Alquist's statement
that the legislature forthwith pass your budget and send it back to
you as it stands?
A
Well, that is a little petulant on his part. And since
we have frankly stated that the -- that the means for balancing the
budget would require some legislation, if he means passing the budget'
and automatically guaranteeing me now that they will pass the legis-
lation, that goes with it, I'd be very happy to accept his offer.
Q
Governor, have you specifically previowed the upcoming
messages to the legislature to President Nixon's office at all?
A
Had I previewed it?
Q
Yes, in other words, you haven't yet presented to the --
your ideas to the legislature how you are going to make the cutbacks
but have you gone to -- when you were in Washington did you preview
some of your specific ideas? I know you discussed welfare
reform and asked for the right to experiment.
A
Oh, no, no, there was no opportunity and I wouldn't have
taken up his time because I wouldn't have had all the specifics
that
Q
A lot of this depends on the President's cooperation,
isn't that right?
A
I don't know whether the President -- I had an opportunity
to talk to Elliott Richardson , told him some of our views. He
was most interested and told me that when we are ready and when we
are prepared, he asked me if I would send our people in to talk with
him because he wanted to hear exactly what it was we had in mind,
and said he is looking himself for every suggestion he can get as to
how to get hold of it because he too recognizes that the program is a
disaster.
8
Change of subject.
Q
No, I've got another question on this. Governor, when you
-6-
say that it is not the State's intention to pass on the property tax
increases to local taxpayers, is this dependent on the Supervisors
also cutting welfare and Medi-Cal back approximately the same level
as the State does?
A
Well, yes.
Q
Do the Supervisors have to take action on their own to do
this?
A
Well, they have to -- I think they have to conform. In
other words, if we are -- let's say just in one facet, if we are talk-
ing about a ceiling on incomes above which no individual who is
earning an income can receive welfare, if we are talking about
reducing grants to those who have high earnings now and are also
receiving welfare, and remember at the same time and somehow this
seems to have been overlooked in some of the more emotional outbursts
of the last couple of days, we also have said it is a part of our
welfare reform that we recognize the necessity for increasing some
grants to those people who have no other source of revenue. Now,
if the counties simply disagree with us and say that they believe
that someone who is earning above a certain figure should continue
to get a welfare grant, then I have to say yes, they are on their own.
But we are talking about a welfare -- of a structure in which they
would continue to meet their obligation and responsibility as we
will anoiethe federal government will and all of us will be -- it
will be a reduced cost.
Q
Governor Reagan, you've mentioned legislative criticism
and yet Mr. Post yesterday said your budget is full of wishful
thinking and might go down as the property tax increase act of 1971.
How do you answer these charges?
A
Well, I answer them again with what I said about his staff.
I'm sorry that Mr. Post saw fit to come up and criticize this docu-
ment within the first 25 hours and admit himself that he had no idea
of what it was we were going to propose or what the controls were and
that he was criticizing on the basis of the way it was presented.
Well, in the way it was presented, yes, we simply said the budget
will be at "x" amount of dollars for welfare. But he's ignoring the
fact that we have said we will come in and detail the manner in which
we will arrive at that lower figure, with the legislative help. And
I have to say Mr. Post made some other statements in his testimony
-7-
that ignored facts.
Q
What were those?
A
Well, I made some notes on some of them frankly.
(Laughter)
A
Hes criticism of education and so forth, and said that we
were taking advantage of the growth in local assessed evaluation
in property taxes for public school aid, but he didn't recognize
that the state -- the slippage as it is called, is the law of the state
and that the student funds -- or the state -- the budget funds that
exist in the state law regarding the schools and at the end of the
year you are told how much is slippage. We simply estimated or
figured the slippage in advance as to what it would be. He said
that we were deleting a special math program. A special math
program expires on June 30, 1971, and there was nothing to fund for
the coming year. He called a special -- he called on special
deficiencies with regard to the -- to capital funding of construction
and apparently was counting in there the capital funding of the Medical
schools that were supposed to be funded by a bond issue which failed.
The people voted against. We believe that our figures and our
estimates are far more up to date than those that he used. As witness
one of his staff members the other day on Medi-Cal, it was just a
short time ago that Mr. Post was accusing us of hiding the $140
million dollars Medi-Cal deficit. So he sent Mr. Cooley up the
other day before the committee to testify that the deficit was only
going to be half that much, and then Mr. Cooley without a single
question as to where he got his basis for his facts, left the room.
Without we don't know where he got his so-called facts because we
have ours based on the actual figures for as late as these fall months.
And we know that the budget deficit is $140 million dollars.
Q
Governor, does it shake your confidence in the budget
proposal that a man of Mr. Post's expertise and experience has such
strong criticisms of it?
A
No, because if you check back, as I said over the last
couple of years, and I think this is probably much more due to some
ofhis eager staff members, you will find that many of his dire warnings
have not only been conflicting with his own dire warnings, but they
have proven inaccurate and in almost every instance our estimates
have been accurate and we have based these on not only good estimates
-8-
but on the facts as we have them and he can't have it both ways.
He can't tell us that we are hiding $140 million dollar deficit and
then turn around to try to take a bow for telling us that the deficit
is only half that Big. He can't tell us we are going to have a
$750 million dollar deficit and then turn around and find more money.
I remember just several months ago when we were being accused of
having a $537 million dollar surplus, and it was only a few weeks
later that we were being charged by the same source with having a
$300 million dollar deficit. So the sky hasn't fallen.
Q
Governor, ever since Post has been legislative analyst,
which has been 20 years, governors have been criticizing him but
always because he wanted to cut, trim and squeeze. Now you seem to
be criticizing him because he wants to spend. Why do you suppose
there has been this change in roles?
A
Well, maybe the difference is he's got a staff now. Yes,
I've quoted him many times on things where he went into the budget
and found a budgeted need and he explained where he could find that
this was not absolutely essential to the state and I've agreed with
those things. But I -- I do think this -- we are getting. into a
philosophical area here which I ddn't find him particularly getting
into in years past.
Q
Governor, I'm confused about Mr. Post and his staff. Are
you saying that the recommendations that Mr. Post's staff makes are
unrepresentative of -- that he doesn't stay behind them or that they
don't represent his feelings? What's the difference between staff?
A
I don't know. No, evidently -- perhaps he's putting
too much of a reliance on staff information. Now we all have to
do that when you've got a staff and I just happen to say that most of
the time my staff has been right.
8
Governor, don't you and Mr. Post have access to the SELLS
budget information, the same figures and statistics?
A
Should have. I don't think we ever attempted to hide
anything from him.
Q
Governor, if the legislature should refuse to approve your
welfare proposals and make that change and go for increased taxes,
what would your course then be?
A
What could my course be? I'm responsible for a balanced
budget and they would have made a decision. Now, again, I a1d not
submit this budget in this way to in some way make a tax increase fall
-9-
on their backs. I am dedicated to the proposition that we don't
need a tax increase. We can, if they have got the guts, meet this
problem, and I want them to meet 1t, but so far they have made all
their blasts since the budget was presented without the continuation
of the kind of communication we have had for these last few weeks up
until now without sitting down with me and finding out -- I think
some place along the line they have just assumed that like their
belief I share their belief about a tax increase and I'm trying to
get out from under it myself. I am not.
0
Do you think it is time for you to go back upstairs and talk
to Mr. Moretti about it?
A
I think this time I'll just call.
8
Governor, did you sometime late -- or try to apply yourself-
any increased pressure on the CRLA matter over Friday and Saturday?
Friday it appeared that at least there was reason to think that your
veto was going to be overridden.
Saturdaya different course was
taken. Did you apply any pressure you hadn't applied before?
A
Well, there was an area of negotiation and let me explain
it very simply. No question about it. The -- I think that some
of you were misled by some 020 office leaks that were supposed to --
the leaks were deliberately supposed to be building pressure on the
other side. The whole -- actually, what the negotiation was about
was once the issue was decided as to upholding the veto we recognized
without their telling us that there had to be a transition period.
There are cases now in court, you couldn't just suddenly pull the
rug and say it is all over as of tomorrow morning. And the
negotiations very frankly had to do with difference of opinion as to
how long the transition period had to be. We obviously felt that
it could be consummated in a shorter period of time. They held out
for a longer period of time, which would have in our opinion
virtually have been a preservation of the status quo. And we finally
came to an agreement on the 6-month period with the conditions that
most people have overlooked, very stringent conditions that were put
on
this
new six-month grant. And yes, on Saturday, right up till
the finish there was much phoning back and forth with regard to
the -- the period of time, the conditions and so forth.
Q
Do the restrictions you refer to governor, apply to criminal
cases and class action type things, is that what you are talking
about in the restrictions?
-10-
A
There's never been any outlawing of class action, but the
things that they were -- they were violating the law, criminal
action, take a case of that kind, charging harrassment and so forth,
involving themselves in labor disputes. They were all part --
I understand there is three typewritten pages of conditions that were
imposed on them.
0
Governor, many of the things that CRLA did gained support
from the courts in forcing the state to enforce its own laws and
preventing the state from violating state laws. Do you suppose
that the AdjudiCare or whatever program follows CRLA will be as
aggressive as they were in forcing the state to obey its own laws
in face of what happened to CRLA?
A
Of course you assume a premise that I won't agree with,
that sometimes this was forcing the state to obey its own laws. You
are not going to expect me at this late date to start agreeing that
all judicial decisions are right and I agree with them.
Q
Any one, for instance, the sanitation subject which you
have now embraced in the campaign of farmers provide sanitary sanita-
tion facilities.
A
But we always have -- we always have embraced this and we
have explained many times that there is a limit to the amount of
policing personnel which we have. Those are state laws that no one
ever intended to neglect and I'll state right now that I believe our
agriculture department under this administration has done more to try
and enforce those and get agriculture cooperation than any
administration before us. But we frankly had to admit that where
violations occurred they were violations of the law. It didn't mean
that it was something that we endorsed. I would only point to the
cooperative efforts that we have made with the private sector and
with OEO on migrant housing, to improve migrant housing in the farm
people
SQUIRE: Any more questions?
GOVERNOR REAGAN: Well --
SQUIRE: Thank you, Governor.
o0o
-11-
2/16
PRESS CONFERENCE OF GOVERNOR RONALD REAGAN
HELD FEBRUARY 16, 1971
Reported by
Beverly Toms, CSR
(This rough transcript of the Governor's press conference is
furnished to the members of the Capitol Press corps for their
convenience only. Because of the need to get it to the press as
rapidly as possible after the conference, no corrections are made and
there is no guaranty of absolute accuracy.)
000
GOVERNOR REAGAN: We have some visitors this morning,
Herb Jacobs, University of California, Berkeley, with some journalism
students here. Welcome, glad to have you here again.
o
Can you balance the budget without tax increases now that
there is a real possibility the earthquake damage is going to boost
the budget considerably?
A
Well, I think SO. So far we haven't seen anything that
would make that much difference. We are working -- we can't tell
you whatthe loses are, what the funding will be. We are working
right now with the federal government in view of their new legisla-
tion -- it is our information that there's been a great increase in
the various funds that are available from federal sources. I would
also pointout how much of this damage was done to public buildings,
not in the private sector. We will know more about what the loses
are and what the reimbursement in federal programs will be very
shortly. S1 aoo I can tell you is we will proceed on that basis,
but I don't see that this is going to materially affect the state
revenues.
Q
Do you have any information that the federal- the Small
Business Administration which provides -- which administers the
disaster appropriations for small businesses, is broke and is it
going to be able to help out?
A
No, we have no such indication at all. As a matter of
fact, federal representatives at our joint briefing last week sug-
gested that Congress is very much of a mind to -- to do whatever has
to be done.
Q
Governor, do you feel that the government at either the
-1-
state or the federal level has a responsibility to insure that
private citizens don't get financially wiped out by disasters of this
kind?
A
Well, now, I don't think -- I don't know whther I quite
understand you.
0
These proposals for statewide insurance programs financed
by a fund -- of public monies suggesting that the state government
has some responsibility to help people, private people, either by loans
or by grants or some -- some means of that sort when disasters of
this kind strike them. Do you think that this government does have
such a responsibility?
A
Well you are asking a -- I think kind of a hypothetical
question. I'd want to see what some of the proposals were, what
the capacity would be of government. I think morally all of us
have shown in any kind of disaster that's ever taken poace, not only
in this country but the restiof: the world, a determination to help
to the best of our ability and people are already doing that. Churche
this Sunday in Los Angeles, and I'm sure perhaps all over the state,
there were great calls for voluntary contributions. The Red Cross
is centering on an effort of that kind right now. I know that
in other parts of the country, calls and pleas have been made through
the media for contributions for earthquake relief in California.
0
That's a short term kind of relief. What we are talking
here is a situation where somebody's house is destroyed or business
is destroyed completely add he faces a prospect of spending his life
paying back a loan to --
A
Well, you've got the federal government right now with
the Small Business Administration loan, not only for businesses but
for homes, and the farm loan -- home loan mortgage does the same
thing. I don't know that government ever could just simply assume
the burden of insuring against disaster to everyone of every kind.
I wouldn't know where exactly you could stop that.
Q
May we change the subject, Governor?
Q
I have -- Senate Finance this morning passed a bill
increasing the gasoline tax by one penny to help pay for this. Will
you support this measure and what other state financial aid do you
foresee being pumped into Los Angeles?
A
Well, as I say, we are dealing now -- I think that the
greatest source of revenue from that is going to come from the federal
government on these. Obviously -- and they have a program for
restoration of public buildings.
On the one cent gas tax increase,
we don't have the information yet that that is needed and we are --
we are working very hard to get the figures and to know whethor it
will be needed or not. But certainly if this is needed, as WO have
done it before, then as I said before, I would have no objection to
this at all. But --
Q
How soon do you --
A
I still do think that we need to find out the actual
extent of the damage, what the resources are, before we automatically
turn to the people which seems to be the overpowering urge of some
in government, to immediately think the answer to everything is to
throw some more money at it and raise taxes. It seems to be an
irresistible impulse on the part of some.
Q
You will sign the bill if the money. is needed?
A
If it is needed, yes.
Q
Governor, on that earthquake and your budget, the other
side of -- you mentioned that you don't see any problems with the
funds for the damages as it seems to be today. But what about the
other side of. the equation, the revenue side? The State Controller
says, for example, that private property damage estimates can -- can
be deductible this year from this year's income tax. Will this
affect your surplus?
A
Well, as I say, this is -- while it is a great loss to the
people actually involved, the private property loss, I don't believe
when you figure a program as big as our tax program is in this
state, that that's going to make an appreciable dent.
Q
Governor, the Controller said that the deductions would
probably eat up all, if not more than, the surplus in the General
Fund.
A
That's possible. Maybe he's been figuring it closer more
than I have. I've been waiting to find out what the -- what the
actual figures and the actual loss are.
Q
Governor, this morning we understand you made the National
Guardsman available to 10 schools in San Fernando Valley for carrying
water.
Will you give us your background on this, why this is neces-
sary.
-3-
A
There is an area there that the mains are out and a lot
of this was tied in with the draining of the -- the Van Norman Reser-
voir and National Guard trucks as well as I think other agencies,
were bringing water in there by truck and I assume this is what you
mean.
0
Any estimate on how long this will continue? When will
water be restored?
A
I think we will have to find out from the Department of
Water and Power in Los Angeles.
MR. MEESE: Probably the rest of the week anyway.
A
The rest of the week.
Q
Governor, to change the subject, there seems to be a growing
move in Congress to substitute federalized welfare for the revenue
sharing. How do you view this?
A
Well, if they mean federalized welfare and the federal
government running it, I don't think their present experience with
welfare exactly qualifies them as the best to do it. I have always
felt that welfare is something that should be managed and administered
at the local level of government, the county level as it is done now.
I think the great fault with welfare being administered by the
counties is the 1 position on the counties of both state and federal
regulations that don't give them or allow them any elasticity, any
flexibility in handling the programs. I know that the professional
welfare workers union has always favored a federalizing of the pro-
gram. They would prefer to be federal employees and not subject
to local control, and this doesn't exactly cause me to -- to look
with joy upon such a thing. I don't think that the federal govern-
ment is capable of running or administering a program determined
at federal level for all the people of the United States out here at
the very fringes of the country and able to do it as well as local
government can do it.
Q
Will you accept federal funding as a substitute for revenue
sharing?
A
Yes, because the federal government has usurped so much of
the taxing authority of local government. The ideal would be if the
federal government would simply transfer some of these reponsibilities
to the states and local government and at the same time turn back
to us sources of taxation they have pre-empted. I don't think
that's the (millenium ?). I don't think thatswill ever happen so
the next best step, I think, is the revenue sharing as the President
outlined it to give the money and also give back. the responsibility
to local government.
8
Governor, this morning on the subject of welfare, the
Controller says until you get your welfare message before the legis-
lature it isgoing to be difficult to proceed with really doing anything
on the budget.
A
Well, that's true but I think there will be enough time
left. We are working night and ay on this, the welfare and Medi-
Cal reform proposals. We want to come forward, it is going to be
very complicated legislation. It isn't going to be just an omnibus
package, there are going to have to be a number of bills. We are
working with the county officials on this. We also have to be
working with the federal government in the proposals we make and
I think that we will have the proposals and the message before the
legislature with plenty of time for them to do whatever they need to
do.
D
Have you set a date, Governor?
A
Not exactly, no
Q
Target date?
Q
Will the start of this legislature be this week?
A
Weill the message to the legislature come this week? No,
I can tell you that it won't this week.
8
Well, Governor, how much time do you feel the legislature
should have to handle the package? Mr. Fluornoy said this morning
if you did it right now they'd only have 90 days including Saturdays
and Sundays.
A
No, I think they will have more than 90 days and I think
four months is enough for them to do something.
8
Well, he added 30 days --
A
I think there will be plenty of time for them to do all
of this. As I say, we are doing our best to come in with this
program. There are a number of alternatives that have to be decided
on, something like tax reform in that regard, you come down with a
variety of choises and you seek out the best alternatives.
Q
Well, Governor, this isn't exactly a new problem and the
finance problem isn't a new problem. What's taken so long to develop
-5a-
this program?
A
Well, it is the desire to have a reform and not another
band-aid application. As you know, we have had for some months a
task force working. Well, we also had three various task forces
working on tax reform before we came in with a program. Now we
have new personnel over in the welfare department and we intend to
come forward with, as I say, a complete reform.
D
Governor, that task force report came in in time to go in
the budget, according to the testimony given before a subcommittee
last week. That makes it two months old at least.
A
No, no, the tank force report that came in presented just
as the tax reform idea. It came in with alternatives, decisions
that had to be made, decisions that had to be made not just simply
imposed on others, but that we wanted to talk in concert with
county officials also because we are administering the program,
sharing in its cost, SO all of this is going forward and as I say it
is a night and day process. As a matter of fact we are working now
like the legislature works in the last three weeks.
D
Are you consulting with the legislative leadership as this
is developed?
A
We will be in consultation with the legislative leadership.
I can't tell you exactly whether there have been meetings as yet with
them or not.
a
Governor, this variety of choice and alternatives you speak
of, are you trying to decide among them or are you going to send a
bunch of alternatives to the legislature and let them decide?
A
No, we will send legislation.
Q
And do you have a target date, a deadline for getting
your bills in or for starting to get them in, or even your message?
A
No, I keep getting caught, it won't be this week.
8
I heard that.
MR. MEESE: Shortly.
A
Very shortly. That's it, that's a good word.
Q
Governor, do you think the Controller was unfair this
morning when he said he was very unhappy that you had not yet sub-
mitted the welfare package?
A
Well, I don't know about his unhappiness. I'm sorry
if we have spoiled his week-end. I'm unhappy, too. I wish we could
have had it with the budget message.
We
would
have
liked
to
have
been able to present it then. Would have liked to have been able
to present it before with the State of the State.
D
What -- Governor, what do you think of Mr. Burton's plan
to fix up what you call the Mickey Mouse thing in the present law
as far as Medi-Cal? The thing that triggered this ten per cent cut.
Under his bill it is it just goes on a cash basis and you run out of
money, you run out of money, and themprovide what's needed.
A
Yes, I think -- I have to suspect that perhaps what Mr.
Burton has in mind is that if he could force us to not make the cuts
in Medi-Cal that we have mandated on us by the legislature, they
passed in 1967, that then we would go down to about May at which point
we would run out of money and no one would be getting Medi-Cal, and
then of course they would be faced with the alternative of doing
without or increasing taxes. And since I believe that reform can
eliminate the possibility of increasing taxes, I think that the cuts
that we have made are taking hold and they are cutting the deficit and
I hope everyone now is confident tn their own minds after all of
the various speculations that we were right and we had an independent
audit and the actual Medi-Cal deficit that we face was 137 million
dollars. We have been using the round figure of 140, and I think
137 by actual outside audit is pretty close.
Q
No one seems to know, though, whether these cuts are
actually saving you much money. Is there still the threat of the
next shoe might drop cutting off the medically needy?
A
No, I think that they are making it so far. Every evidence
seems to be that we will be able to just about come out from under.
Q
Governor, you said your welfare proposals included several
alternatives. How then were you able to arrive at a fixed figure
in your budget?
A
Well, when you arrive at figures you -- I can tell you that
we take the most conservative -- in other words, we don't go overboard
and estimate a great figure optimistically hoping that this will be
done on the basis of case histories, case load and so forth, we try to
come out with a figure and then we take the most conservative making
an allowance -- a very generous allowance so that we won't be caught
short finding that the savings haven't been that much.
8
Well, then, does that mean it is possible that the program
you might submit will actually save more money than your hudget?
-7-
A
That's a possibility we hope for.
Q
And that conservative figure then is about 600 million
dollars for state, county and federal funds?
A
Uh-huh.
Q
Governor, if the Curton bill passes will you sign it or
can you see any ciscumstances under which you would?
A
Well, now, you get me to that old question that I always
try not to answer for any of you as to whether I will sign or veto
a bill. I can only tell you that I think Mr. Burton's intent was
to bring us to the end of the funds before the end of the year and
faced with no choice but tax increase.
0
Can you see any circumstances under which you would sign
it?
A
Oh, if -- by the time it came down there our savings
from those cuts had already cleared the budget, then there would
no -- as a matter of fact, under the present law once out of the
hole we couldn't mandate those cuts anyway.
2
Another topic. Just one other.
8
You've said you were unalterably opposed to tax increases to
(budget)
cover this deficit.
Is that still your position?
A
Yes, because I don't think it is needed.
Q
Revenue and Taxation Committee hf the Assembly yesterday
passed a constitutional amendment out which would boducod = a majority
of 50 per cent for bank and corporations taxes. Has your position
on this changed in any way?
A
Well, I still prefer the one that I said last year. I've
never been able to understand why the Constitution provided that
banks and corporations were protected by requiring a two-thirds vote
to increase their taxes and the rest of the people could be taxed
on a 50-per cent vote plus one. And my approach last year in tax
reform was to make all tax increases require a two-thirds vote.
I'd still prefer that, and again I think this is a case of the
philosophical difference between some of those and -- upstairs and
myself, that they want to make it easier to raise taxes and I want to
make it harder.
Q
Governor, Assemblyman McCarthy said he would not object
to having both questions put on the ballot SO that the people could
decide whether to have all taxes at 50 per cent or all taxes at two-
thirds vote.
-8-
A
Bless him.
Q
Would you agree with that?
A
I'd let the people make that choice, yes.
0
When you said you didn't understand how that two-thirds
got in there, it didn't mean you didn't understand the politics of
how, you understand how it got into the Constitution?
A
Well, it is another one of those things that I think explains
why we have a constitutional reform commission.
Q
Governor, what special qualifications did Senator Burns
have tommake you appoint him to the Liquor Control Board?
(Laughter)
A
Well, I think here is a man with a distinguished record
as a leader in the Senate, the President Pro Tem of the Senate with
a long record here. You think men of this kind, not only Senator
Burns, but others, I think there are occasions when a man who wants to
stay in government, not in the elective process, it is quite a
tradition of utilizing their vast experience, and I think he's had
vast experience that qualified him for this field.
(Laughter)
Qc
There are quite a few other former legislators around
waiting for appointments. There are some others, for example
Assemblyman Mulford, I heard the other day ha's not going to get an
appointment, he's around a long time.
A
I can't tell you who is or isn't, but I can tell you 1-
California we don't have very much of a spoil system. You don't
have too many appointments tomake, but we do have under consideration
along with him others, a number of former legislators.
Q
You consider the ABC Appeals Board part of the spoils
system?
A
Well, now, I use the term "spoils system" meaning the
ability to appoint without the fixed civil service requirement of
government, and this happens to be one of the commissions that the
Governor can appoint to. Now, I know the spoils system has a conno-
tation in many people's minds of somehow being evil, but every govern-
ment that I know of has certain exempt positions the Chief Executive
can appoint
In California it is must more limited than it is in
a great many other states, ever since the Hiram Johnson reform era.
I'm not complaining about it.
That's good.
-9-
Q
Governor, did the revalatines made last week about President
Nixon's cousin, about the help he got from CRLA change your view at
all about that insti tution?
A
About CRLA?
Q
Yes.
A
No, I think the very fact that CRLA got a hold of those
unfortunate people and persuaded them to: make themselves available
to the press on this issue is just reinforcement for my opinion of
CRLA. It doesn't serve the poor, it uses them.
D
They said that they had been served, though, by CRLA,
and they gave --
A
Oh, I'm sure there are people who have been served and I
think I've made it plain from the very first that you can't say there
haven't been cases legitimately handled in there but the over-all
balance of the program warranted the veto and I think the evidence
of that is that the veto was upheld.
a
Governor, what is your comment on the environmental
quality study council's report that smog is a clear and present
danger in California and how do you square that with your statement
to us within the last year that we have turned the corner on reducing
smog in the Los Angeles Basin?
A
Well, I think that's bee explained before. When I made
that statement I made it on the basis that there actually had been
a reduction back to about the 1960 or 162 level in hydrocarbons and
carbon monoxide. Subsequently-+thio was a report on those two --
I had a briefing on oxides of nitrogen which have increased and which we
now know and did not know sometime ago were also a factor in smog.
I do think that we are gaining -- we have to run to keep even
because of the increase in the number of cars in a state that has the
growth rate that we have, but as to the general question about the
environmental commission report, I haven't had a change to get at
that. And it was -- I think I was rather low on the list for
dissemination of the report, but now it has reached my office SO
I'll be getting into it.
Q
The clear and present danger, though, doesn't that sort of
language worry you and doesn't it call for some drastic action?
A
Well, first of all, it can't add anything additional to my
worry because if there's anybody in this state that hasn't recognized
it as a clear and present danger, they must have been living out in
-10-
the valley some place, in the mountains. I don't think any of us
have ever pretended that it is nota clear and present danger from
this. As long as you have people whose health is affected, they
have been -- as long as you know that an unusual weather period such
as we had last summer can multiply the effect of smog and make it
in the same area with no additional smog sources -- can make it several
times as bad as it was in the previous season, you have to guard
against this. We know that the killer smogs in the east and
Pennsylvania some years ago didn't occur because there was a sudden
upsurge in the polmutants in the area, it occurred because of
a weather factor and this always hangs over us, just as earthquakes hang
over us.
Q
So you feel your administration is doing enough?
A
We are doing all that I think can be done at the present time
but we are -- when I say that, that includes a constant research
for more that we can do.
Q
Governor, do you precude limits on growth or pppulation
in industry and residential developments in an area from solutions
to smog?
A
Well, again you are getting me into details, I haven't
seen their report as yet. I would think that that would be such
a drastic change in our whole national policy, the freedom of people
to move and to. live where they want to live, that you would want
to be -- if you ever embarked on that you'd want to be very sure
that it was an absolute necessity from the standpoint of protection
of the citizens' health and life.
Q
Governor, have you decided yet on the election date for that
Senate district down south?
A
I'Mad a talk with Mr. Roberti about this and I am just as
anxious as he is to get this election announced and get it held.
I think I have some bases to touch, particularly the people there in
the community also, and I explained to him I just haven't been able
to do this with some of the things that have happened. I hadn't
counted on the most recent happening to alter my schedule and change
some of the meetings. As a matter of fact, I had some meetings
scheduled on this subject that had to be cancelled because of the
earthquake.
Q
Have the Los Angeles Supervisors, who pay for the bill,
-11-
asked for the election?
A
No.
6)
Sometime ago, Governor, you said we thought we turned the
corner on smog in the Los Angeles Basin. Did I understand you this
morning, you have to run to keep up now, you no longer feel that way?
A
No, I think the fact that we are actually decreasing the amou
of smog that is emitted from both stationary and moving sources is in
effect a turning of the corner. The fact that we know that each
year the automobiles that are put on the road, and that are sold in
California will be emitting less smog than their predecessors is
a turning of corner. You refer to that when you say turning a corner,
back to a day when once conscious of smog and Dr. Hagensmhmidt having
finally discovered the mamor source, the automobile, that you knew
that the automobiles were -- if anything, increasing in the amount
of pollutants instead of decreasing. But for several years now we
have begun with plans that are taking hold much faster and the
present day automobile is emitting only a fraction of what the earlier
ones did. One of our great problems, you talk about how far can
you go in solving something, one of the great problems in California
is that we have a higher percentage of old cars on our highways than
in most other states. Our salmbrious climate out here makes them
last longer and I have wondered at times if we -- if we aren't going
to come to a point where we are going to have to take a look at the
possibility of funding and junking cars older than a certain age.
SQUIRE: Any more questions? Thank you, Governor.
doo
-12-