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Speeches - Governor Reagan - One Time Only (not indexed by subject), 1969/1974 (1 of 3)
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Speeches - Governor Reagan - One Time Only (not indexed by subject), 1969/1974 (1 of 3)
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Governor Ronald Reagan's Speeches
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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: Speeches - Governor Reagan - One Time Only
(not indexed by subject), 1969/1974 (1 of 3)
Box: P20
To see more digitized collections visit:
https://reaganlibrary.gov/archives/digital-library
To see all Ronald Reagan Presidential Library inventories visit:
https://reaganlibrary.gov/document-collection
Contact a reference archivist at: [email protected]
Citation Guidelines: https://reaganlibrary.gov/citing
National Archives Catalogue: https://catalog.archives.gov/
SPEECH TRANSCRIPTS
INDEX
1
BUSINESS, BALLOTS AND BUREAUS (No date)
2
REPUBLICAN STATE CENTRAL COMMITTEE (Anaheim)
11-1-69
3-----Y.A.F. NATIONAL CONVENTION (Telephone Address by RR,
Houston, Texas)
9-5-71
4
ALFALFA CLUB
1-26-74
5
BUSINESS COUNCIL (Hot Springs, Virginia)
5-12-73
6
FUNDRAISER (Akron, Ohio)
6-5-74
7
-MARLBOROUGH COLLEGE COMMENCEMENT EXERCISES (L.A.)
6-6-74
8
SAN FRANCISCO BAY AREA COUNCIL (S.F.)
6-6-74
9
CAL-POLY COMMENCEMENT EXERCISE (San Luis Obispo)
6-15-74
10
WESTERN WINNERS' ROUNDUP (L.A.)
6-22-74
11
LIONS CONVENTION (S.F.)
7-3-74
12
YOUNG AMERICANS FOR FREEDOM CONVENTION (S.F.)
7-20-74
13
BULL ROAST (Centerville, Maryland)
8-24-74
14
ALABAMA FUNDRAISER (Mobile)
9-30-74
/
AS
BUSINESS, BALLOTS AND BUREAUS
An address by
RONALD REAGAN
It may seem presumptuous to some of you that a person in my profession would
address you on the serious affairs of business and the world today. It would be strange
if you didn't feel that way. We in Hollywood are well aware of the misconceptions and
the highly-colored views that our fellow citizens have about us.
In the past few years we have come to the realization of how much we ourselves
have done to contribute to these misconceptions and how high is the cost of such short-
sightedness.
The making of motion pictures is basically a first-generation business. For the
most part, the men who run our studios are the men who started this business. In their
lifetime they have built an industry of almost 3 billion dollars capital investment in
America, which gives a livelihood to a half-million of our fellow citizens. They have
captured for the Hollywood product some 70% of the playing time of all the screens of
the world. They have done it in spite of restrictions in almost every country on the
number of American movies which can be played, limitation of playing time and forced
subsidization of the foreign motion picture industries. This subsidy is taken from the
profits remaining to us after almost confiscatory taxes levied only against the American
films.
In the negotiations leading to such arrangements, on our side of the table have
sat private American businessmen. On the other side of the table -- representatives
of the foreign governments. Never once have we asked for the weight of government
on our side. We have a sneaking suspicion in Hollywood that when you ask the govern-
ment for help you wind up with a partner.
That suspicion is not without some foundation. For almost a decade the motion
picture industry has been fighting adverse economic weather while the rest of the
nation's economy flourished and boomed. Many theories have been advanced to explain
the movie slump, but rarely has anyone touched upon the part our own government
played in destroying the vitality of an entire industry.
For some 30 years following World War I the motion picture industry followed
a pattern of vertical structure. Several large studios controlled the product from raw
material to consumer. With contract lists of artists, fully manned studios, world-wide
film distribution organizations and chains of theaters, they gave the industry a stability
that carried it through the great depression and World War II.
It is a stability we no longer enjoy. In 1948 the Supreme Court handed down a
decision separating the ownership of theaters and studios and eliminating our sales,
system of block booking. One anti-trust authority in Washington called it the greatest
experiment by government in the vertical disintegration of an industry in the history of
the Sherman Act.
The result of that experiment is that motion picture employment today is 43%
of what it was in 1948. Our wage scale, once one of the highest in Los Angeles County,
-2-
is now one of the lowest and the ruling caused virtual elimination of permanent employ-
ment and the contract system. Now 26, 000 people in our community work on a free
lance system, alternating between temporary employment on single pictures and the
windows of the unemployment insurance office. Our lack of attraction to new employees
is evidenced by the fact that only 6% of our manpower is under age 30 and 50% is over
age 50.
But as I indicated earlier, we must accept a certain responsibility for all this.
For almost half a century our industry concentrated on publicity and not public relations,
We never refuted the gossip mongers, the bigots and the publicity-seeking demagogues.
We made no effort to correct the misconceptions about us. Indeed, we followed the old
Barnum philosophy of "never mind what they say--so long as they spell the name right. "
We paid so little heed to the business climate in which we existed that we soon
became a sort of village idiot on the industrial scene. When this happens, you auto-
matically become the target for all those who seek to impose their thinking on others
through rule and regimentation. You become the victim of government harassment and
interference and its twin evil, discriminatory taxation.
Hardly a year goes by without some anti-trust or anti-monopoly action and
certainly no election year goes by without an investigation. Censorship in defiance of
our principles of free speech. exists in a third of our states and more than 200 cities.
Sometimes our best comedy efforts are watched. A few years ago one senator
actually introduced a bill establishing a permanent committee of congress which would
sit in judgment and license motion picture actors on the basis of their morals. With-
out a license you couldn't be in a picture. We thought that one was pretty funny because
at the time there were two senators in prison and no actors.
A few months ago an announcement was made that the motion picture industry,
against its will, had given in to our State Department to make available for showing in
Russia, our motion pictures. We did this under protest, knowing from experience with
communists, that our movies when they leave our control and go into Russia, will be
distorted, edited and redubbed and then used as anti-American propaganda. In return
for this, our doors are to be opened for admission of Russian motion pictures. And
ours is the industry that a few years ago was being investigated because our government
charged that we were allowing our screens to be used for Russian propaganda.
Actually, it is not my purpose to dwell overlong on the problems of the motion
picture industry alone. These remarks are introductory to problems shared by all
of us.
"Collectivism"
There has been a revolution in our time and if I had to choose one word to de-
scribe the salient characteristic of this revolution, it would be collectivism. It is the
tendency of all of us to turn to the government for the answer to everything. The
weapon of this revolution has been the tax machine. Motion picture tickets were taxed
because they were a luxury, a frivolity. It was an easy way to pay a tax. Today forty-
six per cent of a package of cigarettes, sixty-eight per cent of a bottle of liquor, thirty-
one per cent of a bottle of beer is tax. Does it stop with the frivolities and luxuries
-3-
which obviously we could do without? Not at all. Thirty-four per cent of your phone
bill, twenty-seven per cent of the gas and oil you use and more than a fourth of the cost
of the automobile you drive consists of direct and indirect taxes. The Hotel Associa-
tion recently revealed that taxes on hotels amount to $1.93 per room each day.
We have seen the income tax laws, in our lifetime, go from thirty-one words to
more than four hundred and forty thousand words. These laws have become a gigantic
hodgepodge of contradictions SO complex that even the ordinary man in the street must
now get legal advice to help him compute his tax. In fairness, I must say that the
government has adopted a simplified form, called the Form 1040. It is designed for
those in the lower income tax brackets SO they won't have to get legal advice in figur-
ing out their return.
Simplified Tax Forms
Recently it was found necessary to print a pamphlet of instructions as to how to
fill out the simplified form. I am going to read just one sentence I found in those in-
structions on page 8. It is entitled, *Additional Charge for Underpayment of Estimated
Tax, and it says--and this is one sentence:
"The charge with respect to any underpayment of any installment is mandatory
and will be made unless the total amount of all payments of estimated tax made on
or before the last date prescribed for the payment of such installment equals or
exceeds whichever of the following is the lesser--
"(a) The amount which would have been required to be paid on or before such
date if the estimated tax were whichever of the following is the least--
"(1) The tax shown on your return for the previous year (if your return
for such year showed a liability for tax and covered a taxable year
of 12 months), or
"(2) A tax computed by using the previous year's income with the current
year's rates and exemptions, or
"(3) 70 per cent (66 2/3 per cent in the case of farmers) of a tax computed
by projecting to the end of the year the income received from the
beginning of the year up to the beginning of the month of the install-
ment payment; or
"(b) An amount equal to 90 per cent of the tax computed, at the rates applicable
to the taxable year, on the basis of the actual taxable income for the
months in the taxable year ending before the month in which the install-
ment is required to be paid. "
There are 212 words in that sentence. Don't ask me to interpret it. I had a
heck of a time reading it.
We have accepted the principle of the graduated surtax on personal
-4-
incomes as in keeping with the democratic theory that those best able to pay
should remove, as much as possible, the burden from those least able to pay.
Actually, in practice it represents a discrimination against individual effort and
ability such as has never existed for any long period of time in any large scale
civilized community. Nor is there any ratio between the penalty imposed on the
individual and the government need for revenue. The total revenue from all
personal surtaxes is around $5 1/2 billion. Above 50% it drops to $2 1/2.
Above the 65% bracket the government grosses less than 1/4 of a billion dollars.
The Danger Zone
This entire theory of progressive tax was spawned by Karl Marx more
than 100 years ago. He gave it as the necessary basis for a socialist state.
Karl Marx said that the way to impose statism on a people, socialism
on a country, was to tax the middle class out of existence. Let me call to your
attention that the steepest increase of surtax rates occurs through the middle
income brackets where is to be found the bulk of our small businessmen, our
professional men, our key executives, our skilled workers and many of our
farmers. Thirty-four per cent at $8, 000 of income, forty-three per cent at
$12, 000, and it reaches the fifty per cent mark at $16, 000 of income. Does it
really relieve the small taxpayer?
The average family income of America is around $6, 000. Don't stop
there, go down to the man making $3, 500 a year gross with a wife and two
children. Compiling his direct and indirect taxes, out of that $3, 500 gross
income, $1, 045 will be paid in total taxes in this country.
We have been told by our economists down through the years that if the
total tax burden of our economy ever reaches twenty-five per cent, we are in
danger of undermining our private enterprise system. Today, the total burden
is thirty-one cents out of every dollar made in the United States. Of that thirty-
one cents, twenty-three cents goes to Washington. Only eight cents are left at
the state and local level to pay our teachers, firemen, and policemen and for
streets, sewers and all the services of our daily lives.
In 1955 George Humphrey, then Secretary of the Treasury, told a
Congressional Committee that tax rates were too high and if they continued for
any length of time he did not believe our free economy could endure. In 1957
Colin Stamm, head of the tax advisors to the Joint House and Senate Committee
on Taxation, told that committee that he didn't know where they could raise a
single additional billion dollars without very serious consequences to the
American economy.
-5-
Socialistic Influences
A few moments ago I referred to the tax machine as a weapon no longer
used solely for revenue but in the dangerous realm of pressure and policing.
It is no secret that the advocates of government ownership of power have
dropped all pretense that this government invasion of business is only for the
purpose of filling a need where it is impractical for private enterprize to do
the job. One only has to read the TVA literature boasting of the lower rates
charged for government produced power to know that the ultimate aim is the
elimination of privately owned utilities. This is the background of the present
controversy over atomic power plants.
For some time private utilities have fought back in a program of
institutional advertising, pointing out that the difference in rates is exactly
equal to the taxes they must pay and which of course are not paid by govern-
ment-owned businesses. Within the last year the Bureau of Internal Revenue
ruled "such advertising could not be deducted as a legitimate expense for tax
purposes."
Lest the utilities feel lonely, let me point out that doctors and physicians
who associated themselves to oppose the rising tide of socialized medicine
have been informed by the Bureau, and I quote, "opposing socialization of
the medical, or other segment of the economy, or supporting the principles
of individual liberty and freedom of individuals in the medical profession, or
elsewhere, are not, in our opinion, per se educational functions or objectives
and you are not entitled to exemption of federal income tax. " Do we need to
spell it out any more clearly than that?
-6-
Rising Budgets
More than a year ago we were confronted with our first $74 billion budget.
For the first time a ground swell of resentment rolled across the land and began
to assume the proportions of an organized demand for economy and tax reform.
Butthose who sup at the public trough exist on a psychology of crisis and emergency
and just in time they were saved by the bell. The Russian Sputnik went into orbit.
Now, of course, we needed more spending and more taxes, as if high taxes alone
could defend our shores. Nevertheless, with typical self restraint, the American
citizen sat back, for defense he would sacrifice. Then our own satellite soared
into space and the crisis was lessened--but by this time there was a recession
and the "big spenders" kept the same tune and just changed the lyrics. In the face
of a declining revenue and an obvious demand for economy, Congress embarked
on what has been called by some of its own members the "most profligate spending
orgy in our Nation's History."
There were individuals who disputed the theory that government spending
stimulates business. More than $5 billion in cuts were suggested, reducing the
budget to some $69 billion. The Chairman of the House Appropriations Committee
said all of these cuts were still in the area of useless fat and had not scratched
a muscle fibre. The cuts were defeated and $13 billion was spent over and above
the government's revenue. As the debt ceiling was raised, we were told it was
all in the name of the twin emergencies--defense and recession. And is that true?
Not according to director of the budget Maurice Stans who just recently stated
with brutal frankness--"The deficit spending had nothing to do with (1) fighting
the recession, or (2) improving our defenses. As a matter of fact less than 1/2
billion represented an increase in the original budget figure for military spending.
Strangely enough we are recovering from the recession at a rate astounding
even the optimists and without the great multi-billion dollar projects urged as
our only salvation. Actually our recovery is due to some "do-it-yourself projects"
such as General Electric's Operation Upturn--an effort by American business,
within the framework of our free economy, to solve its own problems without
turning to government. Unfortunately, deficit spending was more attractive to
Congress politically than the stimulant business would feel from economy and tax
reform.
What a contrast with the recession of the early 1950' when in 1954 Congress
cut taxes by $6 billion and the immediate upsurge in our economy was so pronounced
that by year's end the government's revenue had only dropped $4 billion and the
following year it increased $8 billion, even at the lower rates.
"Good" Inflation
The other day a Harvard economist blithely explained that a little inflation
is necessary to an expanding economy. Unfortunately, this 2 plus 2 makes 5
philosophy is shared by many who swell along the Potomac. There is always one
element they leave out of their figures.
-7-
True, our inflation for the last few decades has been only a few percentage
points a year but, it is accompanied by a system of progressive taxation based not
on the value of the dollar but on the number of dollars earned. So, as we earn
more dollars to compensate for its shriveling value, we find ourselves in ever
higher surt brackets. Twenty years should be a fair period over which to take a
sighting on how far we have climbed on that gradual inflation slope.
The dollar today is worth roughly half of what it was in 1939. The Professor
I mentioned before thus says we only have to earn 2 for 1 to maintain our 1939 pur-
chasing power. He must have a unique relationship with the Bureau of Internal Revenue
If you earned $5, 000 a year in 1939, today you must earn $14, 000 to stay
even and pay your increased surtax, A $10, 000 a year man then, must today be a
$31, 000 a year man and $12, 000 of that will represent his increased income tax.
That individual who in 1939 had reached the $50, 000 plateau must earn
$335, 000 to have the same purchasing power and of that amount, $240, 000 will be
the increase in the government's share,
Does anyone care to project this same rate of inflation and our tax rates a
few years ahead and even pretend to believe that private enterprise can continue?
By 1975 the $5, 000 man in our first example will have to earn $33, 000 and the
$50, 000 man will have to earn $835, 000.
Uncontrollable Government
About a year ago I appeared before the House Ways and Means Committee
on behalf of the motion picture industry, urging the adoption of the Sadlak-Herlong
tax reform bill. Actually it was an experience like trying to go over Niagara Falls
in a barrel the hard way--up stream! In an off-the-record session with a member
of Congress, we were told the bill would never get out of committee because "it
made too much sense. " He said, "it cuts across so many lines and benefits people
so generally that Congress isn't feeling any pressure from any particular group."
The Congressman made some other interesting comments. He told us the
permanent structure of government has grown so big and so complicated that
Congress can no longer police their activities. Congress must take the word of
the bureau heads as to their functions, budgetary needs, etc.
Waste
Suddenly, hearing this, many things became clear. We understand how
Congress in one session can appropriate $700, 000, 000 for a project to reclaim
desert land and put it into fruitful farm production and a few hours later appropriate
$1 1/2 billion in soil bank payments to take farm land out of production.
An $18 million highway is built in an Asian country where there are only
9, 000 automobiles in the entire country. Sawmills lie rusting on a Middle East
hillside because they can't handle the native wood. An electric pump is shipped
to another area where there is no electricity.
-8-
Land of the Free
People of the Amish faith in Ohio who do not and cannot (because of their
religion) accept any form of relief, pension or payment from government find
their bank accounts seized and their cattle sold at auction to force them into the
Social Security program. This in a country where religious freedom is held so
sacred that a man is excused from military service because of religious belief.
In Texas a farmer who sought to grow wheat on his own land for his own
private use finds his property seized by the Federal Government. The Supreme
Court upheld the government position that all farmers, whether they accept
subsidies or not, can be ordered to cultivate their land in accordance with "quotas"
dictated by a federal bureau.
In Michigan a young farmer in an identical case has become the first
American to leave this land in search of personal freedom. He and his wife and
children are Australia bound after the government sells his possessions to satisfy
a judgement against him for growing wheat on his own farm to feed his own poultry.
By contrast the Congressional Record lists 2200 farmers who last year
received payments ranging from $10, 000 to $320, 000 for not growing crops. Three
rice growers received subsidy payments totaling $3, 400, 000.
Search for Sanity
Under the chairmanship of Herbert Hoover a commission appointed by two
administrations tried to evolve a program of sanity in government. They described
their task as a "fantastic nightmare of working in regimented chaos. " The Navy
buys sunglasses at $5 a pair while the Air Force sells the same kind as surplus
at $1.25.
The government owns 2 1/2 typewriters for every employee who uses one.
Office space for paperwork done by the government equals 1, 250 Empire State
Buildings. Still, 100 million dollars is appropriated by Congress for a third
"house" office building. One Congressman speaking against this said it was not
only unnecessary, but housing as it will one-third of the representatives, it pro-
rates to a cost of $375, 000 for each Congressman's office space.
The government is engaged in thousands of businesses in direct competition
with private enterprise. The Defense Department alone accounts for 2, 500 of
these in 47 different fields including ownership and operation of 150 ice cream plants.
These thousands of businesses cost the government $30 billion a year--almost the
total amount paid in all the personal income tax.
A Possible Solution
A few years ago Mr. C. E. Wilson, of General Electric, who had served
as War Mobilization Director, suggested a plan SO simple, yet SO startling in its
unanswerable logic, one can't see how it failed adoption. Mr. Wilson suggested
-9-
that the government allow American citizens to exchange their bonds for shares
of stock in the government-owned industries.
Their appraised value was about 10% of the total national debt SO (1) the
debt would be reduced by 10%, (2) the annual interest payments would be cut
1 billion a year, and (3) the government would be relieved of a $30 billion cost
each year. In addition, $28 billion worth of tax free industries would be added to
the tax rolls to share the expense of government with the rest of us. The only
reaction he got in Washington was a comment that it didn't look "smart politically."
Saving Money Loses Votes
It is an axiom in Washington that Congressmen don't get re-elected for
saving money. They get re-elected by telling their constituents how much federal
spending they were able to secure for their district. For this we are responsible.
We have asked for and received a great many services and benefits under
the general heading of "social progress, " forgetting that every service we demand
of government must be paid for in the loss of a personal freedom. In spite of this,
I'm sure many of these government programs do reflect our Democracy and we
would not buy them back at any price. Certainly no thinking American disputes
the wisdom of building an economic floor beneath which none of our citizens should
be allowed to exist. However, shouldn't we keep a wary eye on those social planners
who are busy designing an economic ceiling above which no citizen shall be allowed
to rise? Desirable as our dream of security may be, it should not be bought at
the risk of putting wishbones where backbones should be.
More than 1, 000 lobbyists are registered in Washington. None of them
ask the government to save money. Virtually all of them are urging more govern-
ment spending.
Steps Toward Socialism
How many of us as veterans agree with the many things being urged by
our various organizations in our behalf? We number some 25 million. Can we
oppose socialized medicine as individuals while legislation for increased medical
benefits for us and our dependents under the Veteran Administration Act is pending
before Congress. This year some $12 million will be spent enlarging Veteran
Hospitals in Los Angeles county alone. Today, three out of four Veterans Hospital
beds are occupied by non-service connected disabilities. Indeed, there are only
some 40, 000 service connected disabilities in the United States.
Add to this the program suggested for medical benefits to all on Social
Security. The measure is estimated to cost $6 billion the first year and $25 billion
a year by 1975. If this becomes law, socialized medicine will be a reality without
our ever using the term.
-10-
If those who urge more compulsory health insurance and retirement benefits
were honestly concerned with the peoples good, wouldn't they recognize the extent
to which union plans, industrial pension programs and private medical insurance
have met much of the need? More than 100 million Americans today have some
form of medical or hospital insurance. Isn't it rather obvious that the continued
pressure for more government in these fields is simply because of a belief, on
the part of those exerting the pressure, that government must become Big Brother
to us all?
A close parallel exists in the prediction made some years ago by Norman
Thomas, presidential candidate of the Socialist party. He said, Americans would
never knowlingly accept Socialism. However, under the guise of "liberalism,"
one by one they would adopt socialistic measures until one day, without knowing
how it happened, we would have become a socialist state. How far along this road
have we come? Today more than 40 million Americans receive some direct payment
from the government.
Control of Education
The National Education Association with its $900 million foot in the door
gleefully announces a bill being readied for this Congress calling for $4 1/2 billion
in Federal aid to education. Federal aid at that price means Federal control.
This too will be done in the name of emergency and defense, ignoring the fact
that 500 colleges in America as of this moment can handle an additional 200, 000
students without adding a single classroom.
Most communities are faced with problems of school expansion and under-
paid teachers, but is the solution Federal aid? Wouldn't it make more sense to
leave the money in the local community to begin with instead of putting it on a
round trip through Washington where a certain inevitable shrinkage occurs.
Bureaucratic Dictatorship
Already we have seen the growth of a collective dictatorship of internal power
and bureaucratic institutions against which the individual citizen is absolutely
helpless. This concentration of power, under whatever name and in whatever
ideology, is the very essence of totalitarianism.
Early in our Nation's history a Frenchman cynically predicted our Democracy
would last only until those in power realized they could perpetuate themselves
through taxation. While it is true that neither political party has held uninterrupted
sway, it is time we checked on the permanent structure of government. The two-
party system--bulwark of our Democracy--is meaningless if policy is to be
determined by bureaus instead of those chosen by ballot -- bureaus beyond the
reach of any election because they are frozen into permanency by civil service
regulations.
-11-
A House Sub-committee has just reported back to Congress on the 2 1/2
million Federal employees. The committee found that in 1942 there was only
one top salaried executive for every eighty-nine government employees, today
there is one for every seventeen. The committee further stated it found no
evidence that any department or agency created to act on an emergency ever
disappeared once the emergency ceased to exist.
The ridiculous truth is Congress can appropriate and spend with no
reference to balancing its expenditures against the government revenue. Thus
the Rural Electrification Cooperatives enjoying a virtual tax free status as they
compete with tax paying private industry can call on the U.S. Treasury for loans
at 2% interest and the Treasury must borrow this money in the open market at 4%
What Can We Do
What to do? It has been said that for evil to triumph it is only necessary
that good men do nothing. There is something we can do. We can give our support
to those individuals of both parties who still speak the old fashioned philosophy
that the least government is the best government. Do not ignore the simple device
of writing to Congressmen and Senators.
We must have the unselfish wisdom to not ask for economy in the other
fellow's district while we rush to Washington for housing funds and airport subsidies
in our areas. We can't protest the closing of a useless government facility in our
town and cry for tax relief in the same breath.
Right now there are four specific issues on which we can take a stand.
Rep. Cannon, Democrat of Missouri, chairman of the house appropriation committee,
has introduced a bill calling for a 20% reduction in Federal employees without
firing a single individual. His measure would put a freeze on hiring replacements
until the reduction was effected. This shouldn't take long--the annual turnover
is 375, 000.
Secondly, Senator Byrd has introduced legislation which would put an end
to the practice of "backdoor appropriations. Today Congress can pass a measure
outside of the budget and give a government bureau the right to "collect on demand"
oney from the Treasury--money which the Treasury must borrow. There are
$7 billion worth of such measures before this session of Congress.
The Senator's measure will also correct the ridiculous situation now existing
wherein bureaus and departments with unexpended funds can get new appropriations
to add to these funds.
Third, Congressmen Herlong, Democrat, and Baker, Republican, have a
tax reform bill before the Ways and Means Committee similar to last year's
Sadlak-Herlong bill. This well-thought-out reform measure would, in five years,
bring income taxes down to a 15% base and a 47% ceiling on surtax in place of
the present 91% ceiling.
-12-
We are told we can't reduce taxes until we reduce government spending.
I contend this is dishonest. No government in history has ever voluntarily reduced
itself in size. Governments don't tax to get the money they need, they always
find a need for the money they get. We must reduce the fodder upon which our
government has fed and grown beyond the consent of the governed.
Fourth is the major battle shaping up over the budget. The spenders charge
that the administration figure of $77 billion is penny pinching and unrealistic in
the present world situation. The truth is the budget is several billions too large.
It represents a compromise in an effort to placate the spenders and lessen their
opposition.
Heed the Warnings
Are we to ignore the warnings spelled out for us in the words of the Kremlin
leaders or are we going to wait and view them from hindsight as we did the warning
in Mein Kampf.
Lenin said, "First we will take Eastern Europe, then the masses of Asia,
then we will encircle the U.S. which will be the last bastion of capitalism. We
will not have to attack. It will fall like an over ripe fruit into our hands. " They
have said over and over again they will use inflation, and force us to tax and spend
our way into Socialism. Only a year ago Khrushchev told American newspapermen
that in fifteen years we will have become SO Socialistic that the causes of the cold
war will have disappeared.
While we trust in the dedicated patriotism of our men in uniform to guard
the ramparts of freedom, we have an obligation to see that those ramparts are not
lost by default. Our Democracy, freedom, and free enterprise system are the
sources of our strength. There can be no security anywhere in the Free World if
there is not fiscal and economic stability in the United States.
In all the history of mankind there have been but a few moments of freedom--
most of those moments have been ours. All of them have occurred in a Capitalistic
system--indeed there can be no individual liberty without Capitalism.
We have been profligate with our yesterdays. It is late in the afternoon of
the day of decision. Can anyone here be so optimistic as to believe our enemies
within and without will allow us a tomorrow.
2
"IN LESS THAN THREE YEARS
If
Remarks by Governor Ronald Reagan
REPUBLICAN STATE CENTRAL COMMITTEE
Anaheim, California
November 1, 1969
The last time we met under these circumstances, we were preparing
for a campaign and our efforts culminated in the national victory
and the inauguration of Richard Nixon in Washington on January 20th.
Well, thanks to all of you, we also have had some other victories
to celebrate, only we got ours on the installment plan; four
special elections, plus that big win last November. The best way
to thank you, I think, is just to tell you a few of the things
those victories and the Republican majorities in Sacramento -
have made possible.
FIGHTING CRIME
We passed some of the most significant crime legislation in more
than a decade. Many of the measures passed are the same ones that
we have been trying to pass every year, only to have them buried
in committee or defeated on the floor; thanks to you and that
Republican majority, there have been some changes made in the
committees.
We passed the presumptive limits law. This, of course, is a help
to local law enforcement; we have established a level by which it
can be assumed that a driver is under the influence of alcohol.
We passed the first anti-pornography laws that have been enacted
in eight years. You know, it is a funny thing: through the years
that Republicans have been trying to get these laws everyone was
in favor of anti-pornography laws if you could get them out of
committee where everyone then has to vote in the light of day.
Well, under the leadership of the former Speaker, it was pretty
difficult if not impossible to get such laws out of committee.
Once Republicans got a majority in the Assembly, we changed Speakers
and started passing these laws.
Drugs and Narcotics
We sought and supported tougher laws to crack down on the dope
peddler and the narcotics pusher. Working with Republican leader-
ship, Howard Way and Bob Monagan, we passed laws increasing the
penalties for the possession and sale of dangerous drugs and
narcotics; laws that permit the school principal to expel or sus-
pend students who are caught selling narcotics on the school
grounds, and laws which prohibit juveniles under 18 from going to
Mexico without the written consent of their parents or guardians.
We established an Interagency Council on Drug Abuse. In a major
creative society program, we organized a public education program
of drug abuse which would have cost us two million dollars, except
that the private sector donated their talent and their money to
prepare the advertisements and publish the pamphlets. Now, radio
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and TV stations and newspapers are running the ads on a public
service basis without charge.
After we managed to gain a one vote Republican majority in both
houses, we were able to pass some laws to curb campus violence.
Laws that make it illegal for anyone disturbing the peace to return
within 72 hours if he has been thrown off a campus. Laws that
withhold state school and other tax financial aid from students
convicted of illegal campus disturbances. Laws that make it first
degree murder to plant a bomb that results in someone's death.
We have tightened the states' statutes against unlawful assembly;
passed laws giving local authorities the power to control topless
and bottomless entertainment and laws to protect those witnesses
who are willing to testify on the activities of organized crime
such as the "Mafia".
We have added 5 to 25 years to the prison sentence if the criminal
was carrying a gun at the time of the commission of the crime. We
have also increased the penalties for rape, robbery and burglary
if the victim suffers bodily harm in the commission of the crime.
And, we passed laws making it illegal for unauthorized persons to
carry a loaded firearm into schools and other public places. (I
hope the Sierra Club will take note that the teachers have now
been added to the list of the protected species.)
The opposition whose veracity decreases as its volume increases
cites crime statistics and charges that in the 1966 campaign,
we boasted that we would wipe out crime. Well, just for the record,
we said we would do something about crime instead of wringing
our hands and blaming society for every crime that was committed.
And in less than three years we have passed more effective anti-
crime legislation than they did in all the eight that they were
there. As a matter of fact, the record will show that they made
no real effort to pass such legislation in those eight years; to
the contrary, they devoted their efforts to reducing the penalties
for crime.
Administrative Action
Not all of our efforts in fighting crime have been confined to
passing laws. We have also acted administratively -- and are
working closely with the private sector and local government
agencies. We established a California Council on Crime, bringing
together for the first time in this nation every element of law
enforcement to develop a master plan for preventing and detecting
and fighting crime. We established the nation's first computer-
to-computer crime information hookup. This is the first time this
has ever been done - linking our state crime computer with the
leading cities in our state and with the Federal crime computer
in Washington. Now, we have one system with an almost instantaneous
exchange of knowledge on criminal activities and criminal records.
Representatives of law enforcement have been assigned to the Adult
Authority to lend their experience and their expertise so they
could help shape the policies and the probation policies with
regard to parole.
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None of this was possible without all of you. All of you who
worked and contributed. Those of you who lived in motels and
walked precincts in strange towns in special elections. You can
be very proud. You made this and more possible.
CUTTING THE COST OF GOVERNMENT
Not too long ago I was on my way into a luncheon to make a speech
and Mike Deaver, of my office, overheard somebody say, "I hope he
isn't going to talk about how much money they saved on typewriter
ribbons". Well, I won't do that, although we did save money on
typewriter ribbons.
The cost of government continues to be the biggest thing on the
peoples' minds. So let me just make a passing reference to the
progress we have made in government economy and you will realize
that we haven't retreated or weakened in our determination to make
government more efficient and as economic as it can possibly be.
You have often heard me say in the past that no government has
ever voluntarily reduced itself in size. Well, we may just be the
first to do it. If we had continued the rate of increase in the
size of government in our state that we found when we took office,
there would now be 15 thousand more employees than when we started.
But, on July 1, the start of this fiscal year, there were just
657 more employees than when we started 2½ years ago. And I
believe that on next July 1 there will be fewer and certainly no
more employees than when we started.
In one of our largest departments, the Department of Public Works,
the workload in 2½ years has increased by 25 percent; the number
of employees has increased just one percent.
In the Department of Motor Vehicles, the workload has gone up 30
percent. At the same time the number of employees has remained
the same and at the same time we have reached a goal that I out-
lined to you some time ago: we are now processing the applications
for drivers licenses in ten days; it used to take 39.
More than $382 million in new highway projects are now being built,
over and above the scheduled construction, with money that has been
saved in Jim Moe's Public Works shop through economies and effi-
ciencies. To have achieved this same result to do this much
more highway building without those economies -- would have
required a 2 cent increase in the gasoline tax.
Task Force on Efficiency
The number of citizens task forces recommendations that we have
now implemented has more than doubled what it was the last time
we met. The figure now is 876.
We have reduced the amount of office space the state government
occupies by 22 percent.
-4-
A few weeks ago, the Controller General of the United States govern-
ment told the Congress that California was buying many of the same
supplies the federal government was buying and we were doing it
for from 36 to 42 percent less. The items ranged from $250 less
for an automobile, to $80 less for two-way radios. (You will
notice I didn't even mention typewriter ribbons!)
We have moved from 9th lowest among the states in the cost of
government proportionate to population, to the 5th lowest and we
intend to be the lowest. We do not subscribe to the philosophy of
those who would rate government's quality on the basis of how much
it spends instead of how much it achieves.
In that part of government that we can control administratively,
by way of our own appointees, a total of only 13 percent. But
if you adjust for inflation, and if you compute that in adjusted
dollars, you will find that actually represents a decrease of
3.4 percent.
Let me give you some basis for comparison. The budget for higher
education in the same period has increased 54 percent. If you
adjust that to constant dollars you will find that is a 38 percent
increase.
TAX RELIEF
We were forced to increase taxes, as all of us know to our pain
and sorrow, almost before we unpacked -- simply to pay our pre-
decessors profligacy. Well, let's bring the record up-to-date
in this department. While we are reminded of that tax increase,
little is being said about some steps we have taken in the
direction of tax relief.
In these almost three years, we have provided the taxpayers cash
refunds on property tax (those famous $70 checks), provided a
$750 property tax exemption, a double standard of state income
deduction to provide property tax relief for renters, a special
property tax relief for the low-income senior citizens, reduced
rates in the lowest bracket of the state income tax, abolished
personal property tax on household furnishings and reduced business
inventory tax of 30 percent. And, in April, you will receive an
$87 million tax rebate on your state income tax.
All of this adds up in two years to $633 million in direct tax
relief. If this comes as a surprise, it is because much of this
must appear in the budget as an expense. (Since we collect the
money and give it back, correct bookkeeping requires that we show
it as an outgoing item.)
Now, if you add to the $633 million, another $651 million of
indirect tax relief by way of increased school aid and so forth --
which otherwise would have been added to the local tax burden,
the property tax burden, and the $600 million that we simply
collect on behalf of local government, such as in the sales tax
and cigarette tax and so forth -- you can see that overall budget
is hardly an accurate reflection of the cost of state government.
In this year's budget, for example, $225 million of the $6.2
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billion budget is actually money that is being given back to the
individual taxpayers. If we could have found some way to do this
similar to next April's rebate on the income tax not collect
the money in the first place the budget would have been under
$6 billion. Incidentally, even at $6.2 billion, it is less than
the budget for New York City. I said "city", not state. (It is
also less than the state budget of New York, too.)
Incidentally, that tax rebate on your income tax next April which
has a $100 maximum for the individual taxpayer; that is the most
that anyone can get back regardless of the amount of tax they paid.
That ceiling was not our idea. The money was originally taken on
a proportionate basis and frankly, I believe it should have been
given back on the same basis, ten percent across the board. Next
January, I would like to see the legislature amend that bill so
as to remove the $100 ceiling.
New Form for Budget
I have long felt that the people have difficulty understanding a
state budget and thus they are not so well able to show their
displeasure when excessive spending takes place. We are trying
to find some method of breaking up the budget to show the actual
cost of state government. For example, one budgetwould show you
exactly how much it costs to run the shop. How much does it take
for all the legitimate functions of state government? Then, a
second budget would show those funds that we were collecting and
returning to local governments and counties and school districts.
And, when we could do it, a third budget would show the amount of
money we returned directly to the taxpayers. Thus, the taxpayer
could take a look at these three figures: he could be happy if
that first one the cost of government was going down, and,
likewise, he could be happy if he saw that third one the rebate
to the taxpayers was going up. In fact, the citizens could
ask some pretty sharp questions when our opponents start offering
those expensive goodies they like to dream up and hold out to the
people as a gift from Sacramento. They could question how much
it might add to that first budget and how much it might reduce
that third budget.
While I am on this subject, you might as well be prepared for
some screams of anguish you are going to hear in the months ahead.
There will be no area of government that will not feel the pain
of the pruning knife. Those costs over which we have so little
control or no control at all -- particularly in the area of social
reform - continue to rise at such an extent that here and there,
particularly among our opponents, we are beginning to hear some
little murmurs and some talk about additional revenue and the need
to find some new areas to tax. Well, I, for one, refuse to be a
party to that; I intend to go in the opposite direction.
Our new budget procedure, started this year, is designed to make
tax reduction a priority item as soon as possible. In other words,
as soon as we can, we intend to put into the budget a figure for
tax reduction; then we will require every single government pro-
gram to match its priority and its necessity against the desire
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of the people for tax reduction. In this way we shall see whether
some of those programs are not less important indeed than giving
back to the people some of their own money.
TAX REFORM
In January, we intend to introduce a program of tax reform: one
which will once-and-For-a11 give real and lasting property tax
relief; one which will give the public schools a source of revenue
other than the residential property tax. What we will propose is
a cut in the residential property tax of 50 percent, and we will
replace this -- or suggest replacing it -- with an increase in
the sales tax which will be completely earmarked and go directly
for support of public schools. Thus, schools will have a source
of income that expands with the economy, that grows so that each
year they can count on revenues that come from the economic growth
of our state.
Supporting Education
If we secure passage of this measure, we will be able to equalize
state support for every school district and provide $500 for
every child in kindergarten and progressively up to $725 for every
student in junior college. And, that would be a force reduction
of the property tax; the only way that the property tax for schools
could be increased would be if the people in the district vote to
increase their own taxes.
The measure to do this will require legislation and they will also
require constitutional amendment. Hopefully, this would be on
the ballot next June -- or, if not in June, then in November -
and it will then be for the people to decide. It is also our
hope that we can construct this program so that even when the
legislation is passed, all of the tax reform programs will be tied
to the constitutional amendments in such a way that, for the first
time, the people of California by the ballot will make the
decision as to whether this tax reform program is to go into
effect or whether we are to look for something else.
COMPASSION IN GOVERNMENT
There are those who are concerned that perhaps our energies and
our diligence have been in one direction only: dollars and cents,
costs and economies. Well, the record would indicate otherwise.
Last year, for example, we moved from 11th to 2nd among the states
in the rehabilitation of the physically handicapped. In that one
year, we trained, rehabilitated and put into self-supporting jobs
14,450 of the physically handicapped. This is an increase of
10,000 over what had been the annual total in this area. (I must
admit that even this has a practical side: in seven years, the
increase in income tax will pay back the entire cost of rehabili-
tation.)
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Mental Hygiene Reforms
Probably the best hatchet job that our opponents have been able
to do on us is in the area of mental hygiene. Even our friends
aren't so sure of us in this department. Now what makes it
unusual is that the truth is completely contrary - directly the
opposite - to what the opposition would have you believe. We
are spending more per patient than any other major state, but we
are getting our money's worth because we are number one in achieve-
ment in this field.
We not only are a model for other states but even world-wide ---
nations such as Japan, Switzerland, England and others have sent
delegations to California to study our system of mental hygiene,
to learn the reasons behind the progress we made.
When we took office, the staffing standards - the ratio of
patients to staff were based on 1952 staffing standards. In
all the years since 1952, the State of California had never even
achieved 100 percent of those staffing standards, even though all
the while medical personnel throughout the nation and throughout
our state were admonishing that those standards had long been
obsolete. In February of 1968, we adopted standards recommended
in 1967 by the medical association. We set out on a five-year
program. Our target: full implementation of those 1967 standards
within five years. We are already at 93 percent of that imple-
mentation in our state hospitals for the mentally ill. And, the
day before yesterday, I was able to announce publicly that next
June we will reach 100 percent of the full 1967 staffing standards
---- four years ahead of schedule:
In the hundred-year-old history of mental hygiene in California,
there has been a basic standard for space allotted per patient
in our hospitals: 55 square feet. That's not very much when
you figure that the bed itself takes up 35 square feet. The
American Hospital Association recommends 70 square feet. As of
right now, that is the allotment in every state hospital for the
mentally ill in California - 70 square feet per patient. It is
in full effect.
When we took office, the budget for mental hygiene was $213
million; in 1969-70, it rose to $275 million.
We have increased the number of county mental health care centers
from 41 to 53 and increased the state's share in this program 300
percent -- from $15 to $3 million. The state is now paying 90
percent of the costs instead of the 50, and sometimes 75 percent
that was being paid 2½ years ago.
By June, 1970, we will be able to close down the Modesto State
Hospital which has been occupying temporary wooden army barracks
from World War II. To ease the economic impact on the Modesto
area, we are turning over to the county all those facilities and
the 258 acres of land for whatever public use they can make that
might help ease the transition as they lose this state function
in their area.
-8-
Our emphasis on local treatment plus faster and more effective
treatment in the hospitals has reduced the patient population
from 22,000 to 14,000. By next June, it will be down to 12,300.
To give you some frame of reference, the next state to us in size
is New York and they had 66,000 hospitalized mentally ill patients.
We have reduced the waiting list on our hospitals for the mentally
retarded from more than 800 in 1967 to a little over 200. Two
weeks ago, at UCLA, we dedicated a medical research center in the
field of mental retardation to see if we can find the answer to
this tragic illness.
Now, this isn't exactly the picture that you have been getting,
is it? It would seem that someone has been very busy hiding our
light under their bushel.
PARKS FOR PEOPLE
Well, again in contrast to what some would have you believe, we
have added 25,000 new acres to our state system. (You will recall
those charges about someone going to Sacramento to sell all the
state parks?) Three offshore areas have been designated to become
underwater marine parks. We have reorganized the system and
developed a 20-year plan that will make sure there will be a
state park within easy driving distance of every citizen. We
have already started to contract with the private enterprise
sector for the development of resort facilities and recreational
facilities on state lands - particularly around some of the lakes
that have been created in the water program.
Even the national park system has sent people out to study one of
the things we started two years ago; a park reservation system.
You remember those terrible stories you used to read every summer
weekend about the thousands of people, with their campers and
their trailers, who tried to get into state parks but there was
no more camping space so they spent the weekend roaming around on
the highways? Well, we set up what any citizen should be able to
expect on a vacation: the ability to make reservations in advance
and to know the space would be there. For two years, we have been
taking reservations all through the winter months; a person
receives a ticket that tells him he has "x" number of days at
such-and-such a time in a certain state park.
And, now we have gone a step farther. We have computerized the
system. Shortly you will find computers set up in banks, and
savings and loans, and department stores throughout the state where
you can go in, pay your money, punch the button and take out a
ticket that tells you you have your reservations in a state park
for whatever date that you have selected.
You know the federal government is not only stealing so much of
our staff, but copying so many of our programs, I wanted to suggest
to the President the other day that he just leave our people here
and contract out with us!
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QUALITY OF ENVIRONMENT
Next to the cost of government, the people are most concerned
about the preservation of our environment and we have been doing
something about that.
Air Pollution Controls
We have created the nation's first statewide Air Pollution Board.
It includes some of the top men in this field in the nation. It
has broad powers to enforce the toughest air pollution regulations
in the country. I know it is hard to think that something is
really happening in this field when you go out and breathe the
air on a bad smoggy day. But a couple of years ago we turned the
corner and, actually, smog is decreasing in California. But you
must remember we have to run just to keep up with the great
increase in population and the number of cars.
Even so, there is much more to be done. You will recall that
Senator George Murphy led the fight in Washington to get us a
waiver -- we had to fight, a year or two ago, to get the Federal
government to let California have tougher regulations than the
federal government wanted us to impose. The result has been that
Detroit literally has to manufacture its cars to meet the
regulations and requirements for the State of California.
Periodically, every year or two, we raise those standards and
they get tougher because we are going to clean the air of
California.
Our California Highway Patrol is now experimenting with vehicles
that are powered with steam engines and liquid propane gas; per-
haps the answer lies in another form of propulsion.
California is the first state to set out to control pollution by
jet air craft.
Water Quality Control
In 1967 we signed into law the first complete revision of the
state's water quality control laws in 20 years. The Los Angeles
Times called it "the strongest state water pollution control act
in the United States". It established fines of up to $6,000 a
day for violators and it makes the violators pay for cleaning up
the pollution they cause.
Ecological Values
Within government, we have formed a Joint Transportation-Resources
Agency Commission to protect the aesthetic and ecological values
in the planning of all types of public works from highways to
reservoirs. Today, routes for highways and freeways are not
chosen on the basis of the shortest distance between two points.
The joint committee of the Parks and Recreation people and the
Highway Commission sits down and plans so as to preserve and not
destroy any ecological features or beautiful areas.
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We cancelled the bridge that was planned across Emerald Bay at
Lake Tahoe and we cancelled out a highway that was to go through
one of our bird sanctuaries in the North. We created an Environ-
mental Quality Study Council to find ways to protect the natural
environment and we established a bi-state agency to protect Lake
Tahoe.
We were one of the first to call for passage of the bill to extend
protection and preservation of San Francisco Bay (the BCDC). And,
I think we shocked the United States Corps of Army Engineers when
we refused to go along with their Dos Rios Dam which would flood
Round Valley. Let me assure you this does not mean that we are
going to renege our contractural obligations in the state water
system to provide the water that southern California needs. But,
we intend to preserve for our children this way of life we call
California with all its natural wonder and beauty.
Consumer Protection
I could go on listing our positive achievements through a dozen
pieces of legislation passed in the last session for consumer
protection -- protect you if your credit cards are lost or stolen,
to protect you from the flood of nuisance mail that you get and
to reorganize the executive branch, and eliminate dozens of Boards
and Commissions.
We have started a prairie fire. One of the first Governors to
come to me and ask about our citizens' task forces was the Governor
of Maryland, Ted Agnew. Now he has become Vice President.
Let me just tell you something about Ted. He launched a task
force like ours, he got it underway in the State of Maryland
before he became Vice President. He was succeeded by a Democratic
Governor who is now running up and down the state telling every-
body about the wonderful economies they are making under his
administration.
At the last Governors' Conference, in Colorado Springs, two
governors came up to me. They are doing better than we are about
economies, but then they are in two states that don't have our
growth problems. But they came to me on their own, stuck out
their hands and said "Ne just want to thank you".
One of them is on his way to a 10 percent reduction in the size
of his state's government. The other is half way to a 20 percent
reduction and he said, "All we have done is copy what is going on
in California and we just want to thank you for getting the ball
rolling and tell you what it has meant to us and our states."
The federal government has just announced a plan for a Human
Resources Development Agency. This was an idea started by us;
the Legislature approved it. It was to go into effect next
January but it will start ahead of time on November 1.
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Human Resources Development; this is bringing together finally
all those multitudinous agencies of welfare and job training and
state employment into one department. It is designed to take
people off welfare by the way of job training and to put them into
self-sustaining work.
We are getting a lot of interest in our highway safety program.
It has attracted national attention. The traffic fatalities in
the nation have been going up 5 percent a year; ours have gone
down. We have developed such things as soft hardware, as we call
it; signs, pillars and posts that have to be erected along our
highway. We have made them, as they do in Hollywood, into break-
away fixtures so that when someone hits them, they give way instead
of the driver.
EDUCATION & YOUR MONEY
Now, despite what you may have heard, under this Republican
administration, we are spending more money for education in
California than ever before.
This year in state subventions and other programs, we are spending
almost $1.6 billion for local schools -- K through 14. This
includes the increase of $120 million which we voluntarily included
in the budgets we presented to the legislature. This was the
first time a Governor had ever done such a thing. And, it includes
about $80 million which will be added because of unanticipated
revenues and economies made in other state operations. Ours is
an all-time record increase in state support of elementary and
high schools and junior colleges in one year.
Higher Education
And what about higher education - the taxpayer supported state
university and colleges?
Three years ago the taxpayer's total general fund support for the
University of California campuses and the state colleges was $414
million. Today, it is $638 million.
The current budget includes $329.8 million in general fund sup-
port for the University of California -- an increase of 13 percent
over the previous year for an estimated increase in enrollment
of 6 percent. The budget for the state colleges was increased
$46 million this year up 24 percent over last year for an
anticipated increase in enrollment of 12 percent. And, the budget
also includes $12.9 million for college scholarships and loans --
57 percent more than the previous year.
Higher education has received an overall 54 percent increase
budget support during the past three years - while all other
state agencies have increased 18 percent. Incidentally, those
agencies administered by my appointees had an increase during
this three year period of 13 percent. And, when these dollars
are adjusted for population and inflation growth, our state opera-
tions have actually decreased by 3.4 percent during this same
period of time.
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Still there are those who claim that we have cut their budgets for
higher education. Well, if your household budget were cut the
same way, you'd be on easy street.
I know what some of you are thinking -- you're asking why we have
increased state support of higher education in face of the problems
on certain campuses. Well, we do just not believe that it would
be fair to penalize the thousands upon thousands of industrious,
sincere, students because of the anarchy and the vandalism of
those few teachers and students and non-students - who seem
intent upon wrecking a system which it has taken the taxpayers
of this state years of sacrifice and billions of dollars to build.
Our record is clear: we will not put up with violence, or
destruction, or anarchy on our campuses; we will protect the
rights and provide the support for those who go to college to
learn, and those who are there to teach.
At the same time, we expect the administrators on those campuses --
the chancellors and the presidents and their staffs -- to see that
the maximum education is provided for the dollars spent, just as
we expect from every other agency of government. The students
should be their first priority, not their last.
Financing Education
Now let me just conclude with something that has just come to my
attention. I have been informed the teacher and school organi-
zations are seriously considering endorsing a proposed initiative
measure designed to shift 50 percent of the cost of school
financing to the state. This would be presented to the voters
as a massive tax reduction. That would be a fraud. It would
instead be a massive tax increase.
The measure calls for the state to pay more than one-half billion
dollars, in addition to the present $1.5 billion that we are now
subventing to the schools. This would go up at the rate of
about $150 million each year.
Undoubtedly this will be presented to the people, if this initia-
tive goes on the ballot, as a property tax reduction. Well, this
was how the original sales tax was presented to the people back
in 1933; that if the voters would pass the sales tax, somehow
property tax would decline. But there was no provision to clamp
a lid on the property tax; so, the new tax was added and the old
property tax kept right on going up.
Let's look again at the tax reform proposal that we are suggesting.
It won't be 50-50; the state will be putting up 80 percent of
school financing and we will actually be cutting the property tax
50 percent not just hoping that it will go down by itself. And
we are putting the power to increase the property tax in the
people's hand. Unless you put such a restriction on future
increases, you're deluding the people. The property tax must be
forced down, and it will not go down simply because you find some
additional money someplace else.
-13-
Now what this other initiative really will mean, if it is passed,
is an unwarranted and intolerable addition to the crushing burden
the taxpayers are now carrying. Even worse, it will mean the job
producing industries here or about to come to California will
look to locate elsewhere with disastrous results to our economy.
It is most unfortunate and significant that the California Teachers
Association, which may decide to support this guaranteed tax
increase initiative, will also be considering next week a proposal
that the association condone teacher strikes. The people of
California can hardly be expected to look with favor upon a pro-
posal guaranteeing a massive tax increase in the schools when it
is linked with the open threat of a teachers' strike.
I hope that we can have confidence in the tens of thousands of
dedicated teachers throughout this state who have been doing such
a good job in our schools. I hope that reason will prevail in
their meeting next week.
The Right to Strike?
I spent 25 years, as you know, as an officer in organized labor.
I led my union in the only strike that it ever had. I recognize
the right of a working man to withhold his services by way of a
strike. And yet, I cannot agree that public employees can have
that same right.
If, in each one of your districts, they don't have the proper
machinery to sit down at the table and hear the grievances and
work out with the representatives of education --- or whatever
group of public employees it is
work
out
a
solution
to
their
problems, that machinery should be set up. That is what we are
trying to set up in the State of California right now. That is
an obligation we have. But there can be no justification for a
strike against the public and it is time for us to think this
through.
First of all, the leadership of our own State Employees Associa-
tion recently voted to rescind the no strike pledge they have
had these many years. We have to face this fact: government
cannot close up shop. It is not like a private business which
can shut the doors until the matter is resolved. It has to keep
on providing the services.
Beyond that, in any strike in the private sector, the idea is
inherent that if the dispute once imposes too unfairly on the
general public, there are higher levels by way of government and
the public that the adversaries in the disagreement can go to for
arbitration.
There is no higher authority than the people. The people are the
source of all authority in this land. And, therefore, when
employees of the people have a grievance, there is no arbitration
board to which government can turn. Government is the representa-
tive of the people and of their authority and if a strike takes
-14-
place, government has no recourse but to replace the strikers and
continue on with the duties.
In connection with that, there is one bright spot. The next time
you see a California Highway Patrolman take a second look - you
might even give him a friendly wave. Their association has just
notified me that the California Highway Patrol is pledged to
protect the people of California and nothing will prevent them
from fulfilling that pledge.
I hope that I have been able to give you a few of the things that
make all that you have done worthwhile - all of your service,
all that you have contributed and sacrificed.
Just one last thing in closing. I told you about some of the
governors coming up to me at the Governors Conference and talking
about some of the things I mentioned. Well, you will remember
how torn with dissention our party was just a few years ago
here in this State. One of the most frequent questions my fellow
Republican governors ask of me is "How can we get the party in
our state to work together and to be as unified as the Republican
Party seems to be in California?"
You just keep them asking that question because I don't mind
answering that question one bit.
Thank you.
TELEPHONE ADDRESS BY GOVERNOR RONALD REAGAN
Y.A.F. NATIONAL CONVENTION
Houston, Texas
September 5, 1971
Since you've been so kind as to grant me these few moments for
greetings and salutations, perhaps you'll not take it too
unkindly if I impose further on your time. As representatives
of Y.A.F., you are political independents. Still, you've found
in your political activism an affinity for the Republican Party,
rejecting the albumin brained socialist engineers who would set
mass above man, and who think social progress is superior to
individual action or choice, group compulsion is the only road
to Utopia, and economic security is a more desirable goal than
personal freedom.
When I think of the philosophy prevalent in so much of the
intellectual community, I marvel at the way you have obtained
an education, yet remained steadfast in your beliefs, resisting
the zeitgeist--the wind of our times.
Poll after poll reveals that a most persistent myth is the
acceptance of the Democratic Party as the most efficient and
reliable in times of economic stress. Evidence of this is the
rush to register Democrat by so many of your newly enfranchised
peers. These are the same young people who have been so stri-
dently vocal in their denunciation of the establishment, and
who find government too big, impersonal and oppressive.
I suppose the myth of the Democrats' economic capability had
its beginning in the fact that a Republican Herbert Hoover was
President at the time of the crash and depression which began
in 1929. The Democrats came to power in the election of 1932,
and for almost forty years they have been applying a variety of
nostrums from their social medicine chest.
In just one two-year period--1953 through 1954-- has there been
a Republican Congress, and, curiously enough, that is the only
time in all the forty years that the dollar remained stable.
when Herbert Hoover left the White House there were two hundred
and thirty Americans for every federal employee. When Richard
Nixon entered the White House there were only sixty-seven citi-
zens for each federal employee. And what prosperity did such a
growth in government bring us? In 1939, after seven years of
New Deal programs costing billions of dollars, twenty-five
percent of the labor force was still unemployed. But then in
1939 we became the arsenal of Democracy; full employment and
prosperity were on their way, and SO was World War II.
Following the war, as we began to catch up with the shortage of
-2-
consumer goods, unemployment began to increase. But then
came war again, this time in Korea, and once again we had
full employment. A Republican President ended that war and
led us through the longest period of peace we've known since
World War II. Also during that time of peace we had virtually
no inflation. Peace was not the result of appeasement. At
one point Red China threatened war and an invasion of Taiwan.
President Eisenhower said, "They'd have to climb over the
seventh fleet to do it, and there was no war.
Then came Camelot and three years of unemployment averaging
higher than the unemployment we have now in this time of
economic hardship. Some how the communications media was una-
ware of it, and in the many Presidential press conferences of
those three years no reporter ever asked President Kennedy
what he intended doing about unemployment.
It was from Camelot that the first American combat troops went
to Vietnam. And soon we had another Democratic President,
the Great Society, full-scale war in Vietnam, and, of course,
full employment and prosperity on the home front, but no sacri-
fice. The war was conducted on a "guns and butter" basis,
which brought on runaway inflation. The 1939 dollar had lost
sixty-one cents of its purchasing power by 1968. One has to
wonder at the staying power of the Democratic myth.
Now a Republican President is bringing this fourth war in our
century to halt. In the transition from a war to a peacetime
economy, some two million defense workers and military per-
sonnel have been thrown on the job market. There is unemploy-
ment and, of course, economic dislocation. There is also the
inflation he inherited and which neither his predecessor nor
George Meany had the guts to tackle. He is confronted by a
hostile Congress and a bureaucratic jungle peopled by perma-
nent government employees determined to carry on the discredit-
ed social tinkering of the past forty years.
There is more. John F. Kennedy announced the discovery of a
missile gap in 1960. After the election he admitted no such
gap existed, so in eight years the Democrats created one.
And the present Democratic Congress has made it plain they
have little stomach for any rebuilding of our deteriorated
defense structure.
In summing it up, there have been four major wars in my life-
time, all under Democratic Presidents, and we've only achieved
full employment and prosperity during and because of those
wars.
Now our opponents would lead the nation again, shedding
-3-
crocodile tears over the present economic distress, and pro-
fessing absolute innocence over having anything to do with it.
Somehow they remind me of the wide-eyed blonde in the
tabloids who has just bunched six shots from a '38 in her
boyfriend's bread basket, and says she didn't know the gun
was loaded.
And what do they have in store for us if they get back in
charge? well, six would-be-Presidents now in the Senate have,
between them, introduced more than one hundred forty-three
billion dollars in new social welfare programs. The Democra-
tic Party Council has declared open season on taxpayers. The
Council has called for "A shift of financial resources from
private to government channels to meet the growing needs of
health, welfare, employment and other domestic problems.
They call for a "vigorous tax program, and we learn that the
wage-earning citizen who averages working five months out of
the twelve to pay for the cost of government should be denied
such legitimate tax deductions as interest on his home mort-
gage or installment payments, or his property tax. They
would also impose a limit on charitable contributions. It is
time to ask ourselves seriously if this nation can survive
four years of what they have in mind.
I know something of your discomfort and your unhappiness with
what you feel has been the present administration's abandon-
ment of some Republican principles. At the same time, I have
been the beneficiary of your friendly approval, warm commen-
dation, and generous words. I was terribly tempted tonight
to limit myself to simply expressing my personal gratitude,
and I am grateful--humbly grateful--to all of you. But you
are too important--too vital to this country's very existence
--for me to indulge in what would be a copout.
Perhaps we have all been at fault. We've forgotten that our
President lives in a liberal community; that the heritage of
these four decades is a constant pressure in the nation's
Capitol from the left. We who think of ourselves as Conser-
vatives have sat back critically observing, but doing no
pressuring in behalf of our own views. Be critical, be vocal
and forceful in urging your views on the President. He needs
that input to counter the constant pressure from the opposite
side; he needs the arguments you can provide. In all of this
we've fallen short.
Let me take the one issue of the announced China visit and
ask you to consider a few points that might have been over-
looked in your deliberations.
I've heard staunch Republicans say if Hubert Humphrey were
President and had announced such a visit we as Republicans
-4-
would be horrified and united in our opposition.
Of course we would, and why not? Look at the track record. A
Democratic President brought back the bitter fruit of appease-
ment from Yalta and Potsdam. A Democratic President snatched
defeat from the jaws of victory in Korea. A Democratic Presi-
dent scaled the heights of statesmanship in the Cuban missile
crisis and then lacked the courage or wisdom to take the final
step to the summit. A Democratic President disgraced this
nation at the Bay of Pigs, and a Democratic President faltered
and was unwilling to exact a price for the thousands of young
Americans who died in the jungles of Vietnam. A Democratic
President made possible the godless, inhumane tyranny of Mao
Tse Tung's Red China. Yes, we'd be horrified, and with good
reason, if Hubert Humphrey were representing us in talks
with China.
But it is a Republican President who has said he's willing to
talk. He has been blunt in his declaration that we will not
under any circumstances desert an old friend and ally, Chiang
Kai Shek. There is no indication that he'll give anything
away or betray our honor. If I am wrong and that should be
the result--time then for indignation and righteous anger.
But in the meantime, let us remember that this American
President who has said hell go to China is the same man who as
Vice President went to Moscow; and there in the glare of the
television flood lights, surrounded by microphones, heard
Nikita Khrushchev threaten action by the Soviet Union against
the United States, and he replied, "Try it and we'll kick
the hell out of you."
Young ladies and gentlemen, remember your very title--you are
young Americans for freedom. That is your mission above all
others. You are most important in this particular moment of
history, because so many of your peers have listened to false
prophets and demagogues. Consider very carefully the long
hard struggle that lies ahead, and how far we've traveled
together to reach this moment of hope for all the things we
believe in. Weight the alternatives, and use your strength
wisely and well.
God bless you in your deliberations, and grant you wisdom
and courage and strength.
ALFALFA CULB
January 26, 1974
Remarks by Governor Ronald Reagan
Mr. President of Alfalfa, Mr. Vice President of the United
States, my Fellow Members, Distinguished Guests
Is the tape
rolling?
I doubt that I can find words to tell you all what is in my
heart tonight. I am truly grateful, even if the action you have
taken was inspired, at least in part, by curiosity. After all, you
never had a nominee who has been riding off into the sunset for 25
years with "The End" superimposed on his back. Well, that is, with
the possible exception of Cabot Lodge, but you bestow a great honor
on me. Ten years ago, from this platform, Arthur Crock referred to
the Alfalfa nomination as meaningless and hollow. I find Crock's
crack incomprehensible. To be nominated for the presidency on the
Alfalfa ticket is second only to owning a gas station in downtown
Tel Aviv.
Tonight completes a political cycle. I was born a Democrat
and remained a Democrat until I reached the age of reason at which
time, naturally, I became a Republican. But tonight, I am an Alfalfan
and will remain an Alfalfan until I die or until the Independents need
a candidate whichever comes first. This is an historic occasion.
Some will criticize you for nominating a former actor. I say this
is precisely why I should be your nominee. I am used to having my
big scenes recorded. But I can understand why some of you are
concerned. After all, it was only a generation ago that actors
couldn't even be buried in the church yards. But the world has
improved since then: we can be buried now. Indeed, the eagerness
of some of you to perform that service gets a little frightening
-1-
alfalia Club
at times. But believe me, I am through with show business or
with trying to entertain or any of the tricks of that tinsel
profession. My mission now is to balance the budget and reduce
taxes, and if I get a big enough hand for that, for an encore
I'll do a chorus of "Springtime in the Rockies," while drinking
a glass of water at the same time.
I am sure that some of you have heard the cheap partisan
charge that I know nothing of international diplomacy. Well,
Henry Kissinger himself has briefed me on foreign affairs. He
has told me about a couple of domestic affairs that weren't bad.
And look how the President trusts me, sending me on those missions
abroad. He sent me to Taiwan right after he announced he was
going to Peking. And that isn't all. While he was busy bringing all the
Americans home from the fighting in Vietnam, he sent me to Ireland.
I remember it well it was during our presidential primary. I'll
never forget my return; there he stood, hand outstretched, his face
a mirror of mixed emotions surprise and quick recovery.
My fellow Alfalfans, think big, we could be the new majority.
This is the time to offer a home to the Republicans, both of them;
three if Lowell Weiker carries out his threat to join the GOP.
The political guns are booming, John Connolly says nothing can
replace the dollar and it practically has. The Democrats are in
disarray; the only way their Senate delegation can get a quorum is
to hold a meeting between planes in Chicago. If a little green man
from a flying saucer should say to one of them "take me to your leader",
they both would be in for one hell of a trip.
2-
Now don't think that I am complacent. President Dowey once
told me never to be overconfident. After all, Sargent Shriver can
still arouse the Porsch and Poodle populists in Palm Beach and Teddy
Kennedy isn't going to be a stalking horse for George Wallace forever.
Anything can happen. There was a lot of excitement just the other day;
someone rushed in and reported that Teddy, Tunney and Lindsay were
photographed in the New York Times in a friendly, intimate pose.
I tell you, it gave me quite a start, until I saw it was the Andrew
Sisters who are also coming out of retirement.
Nelson Rockefeller was giving Barry Goldwater's old speech
on law and order very effectively and often, but now he has given
up the quest for higher office. That grand old man of the Hudson
River Valley has decided to spend his sun set years studying the
great problems facing our country. He will present his findings to
an appropriate forum
like the 1976 Republican convention.
Chuck Percy of course is an enigma. We won't have a line on
him until he stops saying, "How now, brown COW. 11
In the meantime, you will be pleased to know the expressions
of support and approval are already pouring into the mail room in
Sacramento in an ever increasing flood
three post cards last week
alone. You realize how aware the people are of the awesome responsibilit
of holding public office when you read a letter that says, "What is
it like being Governor being the star of Death Valley Days, how do
you have time for it all?" But right now, you want to know my choice
for the second lead
I
mean, Vice President.
Well, John Wayne would be an obvious choice, but he is too tall
for the part. Besides, I don't see this as an action role. But don' t
worry. I intend to get the advice of the best casting directors in
3-
Alfalfa Club
Hollywood. We'll have an all-star cast. Burt Reynolds has nothing
to hide. Or Dean Martin. You'd never have to worry about looking
up and discovering him drunk with power. You might look down now
and then and find he was just plain drunk.
I have thought of Archie Cox for Attorney General, but I am
naming Archie Bunker.
Rumors about Jane Fonda and Daniel Ellsberg being press
secretary are absolutely false. I want a man handling press
relations who is one of the common people; who will level with
the people; who will be available to the press around the clock
Howard Hughes.
On the whole matter of appointments, we will stuff I mean
fill
as many jobs as possible purely on merit with members of
Alfalfa. There may be some Republicans, of course, as a part of
our rehabilitation program.
I want the people to be happy. Therefore I promise you,
we will continue government's present level of waste and extravaganza
Can you imagine how miserable they' 'd be if they were getting all the
government they are paying for?
On the subject of money, there will be no arm twisting for
campaign contributions. I intend to re-release one of my greatest
epics
Bedtime for Bonzo, with all the box office receipts going
directly into the campaign fund. That should assure us at least $1.49.
My original choice had been the Knute Rockne film in which I played
the Gipper, but there is only one print of that and the President
won't release it.
4-
Alfalfa Club
As for meeting the energy crisis, my plan is very simple.
If you can't stand the cold, stay out of the kitchen. Some 40
years ago, an American President promised to put two cars in every
garage. Well, we are keeping that promise. We 11 put them there
and we'll keep them there. But I also have a back-up plan. The
two automobiles giving the most mileage per gallon are the Japanese
Toyota and the German VW. If it becomes absolutely necessary, I
will reopen WWII. We will lose it this time and get all the Toyotas
and VW's we want with no import charge.
Another Alfalfa candidate some years ago said that New York
should be sawed off and floated out to sea. Well, we won't have to
do that. The Japanese have bought it.
I will explain the pros and cons of every issue to the people.
I want them informed and so as to not confuse them, I will illustrate
by example, the meaning of these two terms pro and con: progress and
congress.
The energy crisis is real, so I'll return to California by
commercial airline, unless it snows out west, in which case I'll hitch
a ride with Jerry Ford.
On other subjects of interest to you, there will be no taint of
male chauvinism on the Alfalfa ticket. There will be plenty of women
involved in my administration. I am asking Henry Kissinger to stay on.
I realize that some educators are concerned about my policies
in their field. Well, it ain't true that I don't set no store by
booklearning. With a good education you can worry about things all
over the world. Look what education did for Congress. How much time
they saved when they discovered the dictionary was arranged in
alphabetical order.
-5-
As for national security, I shall do my best to follow the
teachings of our great military leaders. Our watch word will be the
immortal words of George Armstrong Custer at the Little Big Horn:
Take no prisoners.
I am aware of the inspiration for your hallowed name. The
botanical characteristic of that particular plant is that it will
travel any distance for a drink. Of equal importance is the common
sense practicality of rural life it brings to mind. Thomas Jefferson
said, "State a moral case to a ploughman and a professor and the
farmer will decide it as well and often better because he hasn't
been led astray by any artificial rules. Ask a farmer where he'd
like to be when a nuclear bomb goes off and he'll tell you someplace
where I can say, "What was that?" He is smart enough to know that
someone can get a bigger slice of the pie if you reduce someone else's
slice, but everyone can get a bigger slice if you'll make a bigger pie.
That's a hell of a lot more than professors know.
I've been asked if I like Washington. Well, I have always found
it a pleasant place to visit, but I think the time has come to make the
White House a fulltime public building like all these other puzzle
palaces here on the Potomac. I lived upstairs above the store when
I was a kid and I didn't like it. My administration will build a
suitable presidential residence. The site has already been selected,
just west of the present location about 3,000 miles west, just
outside L.A.
I intend to strive for cordial relations with the press; to
every barb I shall have a soft reply. I'll whisper: bend over a little
closer. I won't miss a single press conference; I won't have any and
I won't miss them.
-6-
Alfalia Club
I accept the nomination of Alfalfa proudly but at the same time
with great feeling of humility. Just the other day when Nancy was
measuring the carpet in the Oval Office, I said, "You know, it will
be humiliating as hell not being Governor of California anymore."
Gentlemen, again, I thank you and I pledge you a peaceful and
prosperous United Statesof California. Winston Churchill said of the
young Americans in WWII that we seem to be the only people in the
world who could laugh and fight at the same time. For almost as long
as I have lived, Alfalfa has met in this atmosphere of gentle satire
and jest, so uniquely and typically American. I thank you for allowing
me to be a participant. Bless you and bless the land where this can
take place.
******
American business
Government encroachment -
loss of personal freedom
Economy mythology - tax inequities
loopholes
Tax reform
Efficiency & economy in
5
government
Welfare reform
Surplus
Tax limitation & reduction
QUOTE:
Whitaker Chambers
Idle to speak of saving Western
Civilization, because WC is already
a wreck from within
REMARKS BY GOVERNOR RONALD REAGAN
BUSINESS COUNCIL
Hot Springs, Virginia
May 12, 1973
I want you to know how very honored Nancy and I both are,
being here and being invited to come to the Homestead, and how
honored we are that David Packard, a native Californian, is here
in the capacity that he is. I want you to know also that it has
been 17 years since we last had locusts in California and that
we expect, but I am a little disappointed because it has also
been 17 years since you have met in California. I would like to
take this opportunity to invite you, whether I am there to impose
on you or not, to have one of your meetings, in the very near future,
in the State of California,
Today, American business and something called the Establishment
stands in the dock of the court of public opinion charged with a number
of crimes. Demagoguery is the prosecution, and so far the people have
heard very little from the defense. You are charged with making an
otherwise noble citizenry, selfish and materialistic; your employees,
dull-witted robots from the daily turn at the assembly line; your
customers are seduced into buying things they neither need nor want
because clever ad men from Madison Avenue create an artificial desire.
You are supposed to have concentrated great powers into a few hands in
most of what is unpleasant in our society. You have done so deliberately
because somehow you profit from it, whether it is racial prejudice, slum
living, poverty, or war. And you are a little bewildered I think, because
you don't feel very powerful right now. You find yourselves regulated,
harrassed, beset by bureaucratic "Lilliputians" who tell you that if you
all charge everyone the same price for the things that you produce, you
are guilty of price fixing and if you don't charge them the same price
Business Council
Page 2
for the same things, you are guilty of unfair trade practices.
The voices of demagoguery are heard on practically every front from
the pulpit to the classroom and from the podium to a great many
politicians. For the sake of argument, what if I conceive that your
advertising can snow John Q. Public into where he cannot buy a box of
breakfast cereal without being cheated? Well, what is the way out of
the dilemma that is proposed by the same people who make this charge?
They propose that he turn his money over to the government in the form
of taxes and thus an omnipotent state will spend every penny wisely as it
provides all of us with the goods and services that we are too stupid
to buy for ourselves. Who runs that omnipotent state? Politicians,
elected by guess who? The same people who are not intelligent enough
to buy a box of corn flakes!
The time has come to ask, if we can no longer plan our own lives
where among us are we going to find that little special elite who cannot
only plan their own, but ours too? The very essence of the American
Revolution and the system it produced was limited government and
individual freedom. By limiting government to that authority voluntarily
granted by the people, free men will be released to perform such miracles
of invention, construction and production such as the world has never seen
One-half of all the economic activity that has taken place in the entire
history of mankind has taken place on this continent under American
auspices. The government's function is not one of productive enterprise,
it is one of restraint and when that restraint is used to protect us
from each other, peaceful men produce and build. Milton Friedman said
the federal government was, until 40 years ago, used primarily as a keeper
of the peace, an umpire. Today we view it as treating every social and
personal ill, as the source from which all blessings flow.
Business Council
Page 3
Well, the time has come again to recognize that government
perhaps is not the solution, government is the problem. And the
only thing we can be thankful for about government is its waste
and extravagance. Could you imagine what it would be like if we
were getting all the government that we are paying for? As it is
there is a 940 page catalog of federal domestic assistance. It lists
more than 1,000 different programs and there is little or no correlation
between the money spent and the results achieved. But the 91st Congress
went right on introducing 24,600 new bills---3,000 of them on pollution
alone. What serious study was given to those bills? Well, even if
they only skimmed through them as fast as they could, the Congressmen
would have had to read 12 of them every hour of every day for 52 weeks
of the year with no time for committee meetings, or personal appearances,
or trips back home to their districts. They don't, of course, do this
which means that many of those bills are disposed of by a part of the
great permanent structure of government which includes legislative staff.
No one, including the Office of Management and Budget knows how many
agencies, commissions and boards there are, but the federal registry
in which their regulations are set forth contains 25,497 pages, which
comes within 3,000 pages of as many as there are in the Encyclopedia
Britannica. The Inter-state Commerce Commission in its 85 year history
has accumulated a file of 43 trillion railroad rates with no index.
The Federal Communications Commission Act has been amended
every
year since it started in 1934. The Occupational Safety and Health
Administration laid down 15,000 regulations in its first year and
it still had time to force an employer to install separate mens and
and women's bathrooms in spite of the fact that his only employee was
his wife and at home they used the same bedroom and bath.
Business Council
Page 4
Stuart Alsop, writing about his Alma Mater Yale, said "like
every other major college, it is graduating scores of bright young
men who despise the American political and economic system. After
graduation some of them will find their way into business and industry
and quickly unlearn a lot of misinformation. Many will find their way
into the communications media, into the foundations, teaching, or take
appointed positions in government, even in the regulatory agencies
regulating the establishments they neither approve of or believe in.
Thus they will continue to perpetuate the political and economic
mythology which is becoming 'standard Americana'." I am sure that
Mr. Alsop did not mean this as a blanket indictment of higher
education nor do I, but I do happen to be a Johnny-one-note on this
particular subject.
A recent Harris Poll found that the vast majority of the American
people have become increasingly hostile toward American business and
industry. Since 1966 this has been going on and they believe, in ever-
increasing numbers, that the answer is that the government should increase
its control over you.
A few years ago a poll was taken of a group of Americans and they
found that these Americans believed that the average rate of profit for
American business is 21 percent. Not too long ago they repeated this
poll with the same people and found that now they believe the average
rate of profit is 28 percent. So an additional question was asked.
What did they think would be a fair profit? And the replies of the
overwhelming majority was that they thought that business should be
happy with an average profit of 10 percent. I think business would be
ecstatic with a 10 percent profit because for the last 20 years it has
been running about 4 and 4-1/2 percent and I think right now it is
around 4.3 percent.
Business Council
Page 5
In the mythology believed by so many people, you are the
"bad guys." The truth is, as figures like the one above indicate,
that perhaps this is not necessarily SO, Let me hold up another
myth versus the fact. You are representatives of a concentrated
power, exploiting the people as a result of that. The truth is,
if you are, and if you are subject to any more government control
and harassment some of the people think you should be, a lot of
citizens are going to find out that it is their OX that is being
gored.
What about the ownership of this great industrial combination
of ours in this country? Well we know there are 31 million owners
of stock in the corporations of America listed on the exchanges.
We know there are another 28 million that participate because the
private pension funds they live on are dependent on stock dividends.
One hundred and thirty million insurance policy holders in this
country are indirect investors in American business. There are
87 million men and women in this country who cannot prosper unless
business and industry prosper because they are your employees. Our
whole economy is based on profit and yet profit has become a six
letter dirty word. We hear over and over again "the rich are getting
richer and the poor are getting poorer." The distribution between
owner and employees seems to refute this because they out-gain in the
profit from business the employee gets 7/8 and the owner gets 1/8.
A few weeks ago, on the Johnny Carson Show there was a young author
among his guests. This author has written a new book that is devoted to
the tax loopholes that we hear so much about today. He was on the show,
of course, to plug his product, I assume in the hope of making a profit
(although his book gives
a very dim view of profit-making in
general). There he was, the theme is that big business and the rich
Business Council
Page 6
are in collusion with government to preserve an unjust tax system by
which they, with the help of a smart lawyer, can escape their fair
share of the tax burden. In fact, he refers to it as a welfare program
for the rich. Well he attracted a lot of attention and I am sure that
his book is probably going to turn out to be a best seller. The
publishing and the book-selling businesses interest themselves in
making a profit and having best sellers and they actually print books
like this with their heart's blood instead of printer's ink. That
night, he had the studio audience and I presume millions of television
viewers
mad enough to march on the Bastille. He related, for example,
that one bank held $3 billion worth of tax-free bonds upon which it
collected $150 million in interest and it did not even have to report
that as income. If this is true, I have to assume that those must
have been California bonds because with our AAA credit rating we are
the only government that can borrow money at 5 percent interest these
days. Nevertheless, he made the bank sound like a thief and there
was no one to set the record straight. Who is going to start telling
the simple truth? If these are California bonds, the bank didn't
just "buy" them. The people of California borrowed $3 billion of
depositors' savings in order to complete our water project, build
medical school facilities for our great University, help local
governments modernize their sewage plans, among other things. If the
taxpayers of California, in borrowing this money, insist that the bank
pay a tax on that interest that we are giving them, then we are going
to have to increase the amount of interest we are giving the banks
certainly at least equal to the amount of the tax. Thus the same
taxpayers are going to find that having done that, the Franchise Tax
Board are the only ones that will be happy about it because they are
going to hire more accountants and more clerks, bureaucracy is going
Business Council
Page 7
to grow and the citizens are going to find their taxes are increased
to fund the growth of government. One of the ugly side effects of
the present economic mythology is the ability of the demagogues to
present this case as one of the "haves versus the have nots." Anyone
making a profit or even those in the higher earning brackets is
casually lumped under the term "rich." One of our legislative leaders
in a tax discussion with me not too long ago discussed, (it was an
argument) tax policy. He finally drew himself up and said to me "I am
not interested in helping the rich." Well I was happy to hear that
because about that time I thought that he wanted to burn me at the
stake. But, I told him that I wasn't interested in helping the rich
but I was very much interested in seeing that this country remained a
country in which somebody could still get rich, When George Foreman
punched his way out of poverty and into the World's Heavyweight
Championship a few months ago I don't think that this man should be
penalized by a tax structure that makes it impossible for him to keep
a fair share of his earnings. Political demagogues love statistics,
they love to speak of the bottom 20 percent and contrast it with how
much less they earn than the top 20 percent. And one gets the picture
automatically of two groups of people; one frozen into permanent
poverty and the other wallowing in unearned wealth. Well it is true,
there is a difference. The top 1/5 earns 15 times more than the bottom
1/5 in this country. What is not added when they give that statistic
is that the top 1/5 also pays 130 times as much tax. While the lowest
1/5 includes, of course, the least fortunate and the hardcore unemployed
in our country, it also is made up of first-time job holders who are
just beginning their careers, made up of apprentices, it is even made
up of graduate students who are living on campus and are trying to get
an advanced degree. These graduate students will probably, in one jump,
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Page 8
make it all the way to that top 20 percent because you are in that
top 20 percent when you start earning $12,000 per year.
That brings us to another one of the myths that same mysterious
"they" can avoid their fair share of taxes. "They" of course, are
always rich, and "they" always have sharp lawyers the device they
use is the loophole and if the loopholes are closed the tax burden
of the average man will be greatly reduced. Well everyone knows there
are loopholes but most people have trouble naming one. Nothing the
mythmakers have come up with has done more to divide our people than
mistrust among our people in the institution of government itself.
Columnist Jack Anderson says the amount the rich can avoid by
loopholes is a whopping $50 billion per year. Harriet Van Horn says
it is $65 billion and the gaggle of others "various unnamed experts"
put the figure at $200 billion. Now it is a funny thing, that figure
comes pretty close to the truth, but a lot of people change sides when
they learn what is being called "loopholes" to arrive at that figure.
If you include your own personal exemption and the exemptions for
children and dependents, special deductions for the elderly, interest
on home mortgages, medical expenses, contributions to church and charity,
state income tax if there is one in your state, property tax, other
local and state taxes, expenses connected with the job such as tools
and uniforms and report every single deduction and exemption, you
would have a total of $199 billion and of that amount only $7 1/2 billion
is taken by people with incomes of $50,000 a year or above.
The big casino of all the loopholes, of course, and used by any
self-respecting demagogue, is the oil depletion allowance. If that
one were closed entirely the government would get less than $1 billion.
Business Council
Page 9
Strangely enough one of those who today is talking tax reform in
the halls of government in regard to closing loopholes has not said
one word about lightening the tax burden of the average man. When
they talk tax reform they are seeking more revenue for government and
they are trying to make it more palatable to the taxpayer by pretending
that someone else can be made to pay. The same voices are very fond
of suggesting that business can be made to pay, and can, but only if
you raise the price of your product. You know, and the people must
learn, that to stay in business you have to pass on the tax as well
as all the other costs of production to the customer. That is the
reason why one-half of the cost of a loaf of bread is made up of 151
accumulated taxes beginning with the farmer's property tax on the
farm where he raises the wheat. If government makes you collect too
many taxes you price yourself out of the market and become noncompetitive
There is more reason than that for making the people knowledgeable and
sophisticated about taxes. Making them understand that they and they
alone bear the full cost of government federal, state and local
but silently and skillfully with a multitude of hidden and indirect levies
The institution of government has become the biggest cost item in the
American family budget. Taxes take more of the worker's income than he
spends to provide food, shelter and clothing for his entire family.
He is unaware of this because much of it is in the price he pays for
these very items 116 actual taxes by count in a suit of clothes. At
the turn of the century the classical economists were positive that they
could relate taxes to the recurrent economic slump in our free economic
system. But when government increases the share of the citizens'
earnings beyond a certain point, it automatically creates a drag on
the economy.
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Page 10
Many economists today say that we cannot continue to take what
is presently being removed from the private sector. A great many of
your business colleagues I know, perhaps even some of you, are discouraged
You see little hope of reversing the trend of the last four years and
reducing the enormity and the power of government. So some hang on,
feeding the alligator, hoping it will eat them last. Actually, the
chance of changing it has never been better. The President, we know,
wants to decentralize government, to eliminate programs that have been
costly failures and to give more authority to local and state governments.
These gentlemen who are here from the administration in Washington, are
dedicated to this goal. A man who heads up the biggest and the costliest
part of the federal government Health, Education and Welfare
I can
tell you from personal experience is the toughest man with a dollar
that Washington has seen in a very long time. He was my finance
director for two years and I earned the title of "Scrooge." But, in an
effort to make this change, you would be surprised how much is "Horatio
at the Bridge" when they must face the hostile bureaucracy that is
determined to preserve its own power. You and I must join and must help
make the people immune to the preachings of the demagogue. The task
can be done by simply using the facts, by using the expertise that is
to be found in such abundance in the private sector. I can give personal
testimony that this works. I don't mean to be presumptuous, but sometimes
I wonder if the men and women of American industry really know the
capacity that you have to make changes even in the overall philosophy
of government. Six and a half years ago I arrived on the state steps
and since Californians are broadminded enough to give their governors
on-the-job training
I arrived there with only a few very serious
beliefs that justified my being there. One of those was that government
has grown beyond the consent of the governed. Another was that only a
great people can make a great society.
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Page 11
A bookkeeping trick had been employed by the previous administration
to avoid a tax increase prior to the elections, and so we found the
state was virtually on the edge of insolvency. It had a 12-months'
budget based on 15 months' revenue through a bookkeeping trick. In
my previous occupation I would have called for a stunt man; instead
I called for the business and industrial community of California,
including some of the men who are in this room. We chose Cabinet
members and department heads who served, for the most part, at great
personal sacrifice. They were willing to come and give a great period
of their lives to the community and to government service. The only
requirement was a thing that they shared in common, they agreed that
they would be the first to tell me if their job and their department
was unnecesssary and some did and we have never missed their
departments to this day. More than 250 citizens of our state
some
of the greatest expertise and knowledge of business and professions-
gave up an average of 117 days, full time, to serve on task forces,
to go into every agency and department in state government and see how
modern business practices could be put into effect in those departments.
We have implemented 1,560 of their recommendations to date. We have
continued to practice this task force idea, including a task force on
welfare a few years ago, and more recently one on taxation.
A few years ago welfare in California was increasing in caseloads
40,000 a month and was increasing in cost 26 percent a year. Two
years ago we began implementing Welfare Reforms that had been
recommended by the task force and today there are 270,000 fewer people
on Welfare than there were two years ago in March. In the six years
preceding our Administration, State government in California had
increased its number of employees more than 25 percent. We have been
there a little over six years and we have actually reduced the number
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Page 12
of employees we found when we arrived and yet its reduced number
has absorbed a 30 percent workload increase. From near insolvency
we now find ourselves with a one-time surplus of $850 million and
a projected annual ongoing surplus. I am proposing to return to the
people the one-time surplus by way of a tax rebate much as you might
give a bonus to employees or perhaps a better description would be
"cut up a melon with the stockholders." I would say that to suggest
to some legislators that the money should be returned to the people
is alittle like getting between the hog and the bucket, one gets
buffeted about a bit. You know one Senator told me that he considered
giving this money back to the people "an unnecessary expenditure of
public funds." As for the ongoing surplus, we have asked for a reduction
in state income tax of 7½ percent but a total elimination of the state
income tax for families with incomes of $8,000 or less. This has prompte
one Senator to say that if we go through with such a program we will no
longer be able to redistribute the earnings of the people of California.
I don't think that should be the function of government.
We had a task force on taxation because we wanted an answer to why,
with all the success we have had in reducing costs and eliminating
waste, the cost of government continues to rise. The institutions
of government, federal, state and local, in 1930 were taking 15
percent of the total earnings of the people of this country. Twenty
years later, by 1950, they were taking 32 percent. Today they are
taking 44.7 percent. If we project this rate for the next fifteen
years, it becomes 541/2 cents. When you try to reduce the costs of
government by reducing expenses you discover that some of the expenses
have votes.
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Page 13
As Dr. Milton Friedman said (I have quoted him once before)
"expenditures rise to meet revenues and then some." Our task force
included some of the nation's most distinguished economists and they
declared that we not only must halt, at every level of government, this
increase in the continuing cost of government, we actually must reduce
the present level of spending if we are to preserve a free economy.
This nation is at a crossroads and government spending is out of
control. California State share of the 44.7 percent we are taking in
taxload is 8-3/4 cents. If the historic pattern continues uninterrupted,
government revenues will increase faster than the people's earnings.
We don't propose to reduce the actual dollar amount the state government
is getting, quite the contrary. We are proposing in addition to the
one-time rebate and the income tax cut, that government's revenues
increase to meet the need of growth and inflation increase at a
slower rate than the increase in the people's earnings, so that in
this way the people will notonly grow more prosperous but actually
be more prosperous instead of just turning over more money to government.
Very simply, we have proposed a Constitutional Amendment and we
are submitting it to the people. It calls for one-tenth of one percent
cut in that 8-3/4 cents that the government is now taking each year,
for 15 years until we reach a percentage that is in the neighborhood
of 7 percent and that then this will be fixed in the State Constitution
as the maximum percentage of the total revenues that the State government
can take without the consent of the people. Reducing this 8-3/4 cents
to 7 cents may not sound like much, but over the 15 years it will put
back in the Californians' pockets $118 billion that will otherwise go
to state government. That will buy a lot of products and that will
invest in a lot of good sound investments and make jobs for more people.
Business Council
Page 14
What it means over the years, just to give you some idea, is that it
could reduce the income tax, if we chose to go that route, 25 percent
in the next five years. In 10 years we could reduce it 50 percent,
or we could cut the sales tax by a full one third, or we could have
a combination of reductions in those taxes. There is no interference
with the legislative process other than the overall ceiling. They
would have all the power, as they do now, to raise and lower taxes,
create new ones, eliminate old ones, simply staying beneath this
percentage limit unless they get the consent of the people. We have
provided full flexibility for emergencies, either economic or in a
state of natural disaster, such as earthquakes or floods or whatever
could happen that would require a greater output by the people.
Being a Constitutional Amendment it requires the vote of the
people. We have asked the legislature to approve putting this on
the ballot and this, they have refused to do. The Speaker of the
Assembly said that if we did this it would put government in a
straitjacket. I have to ask what's wrong with that? The truth is,
that even within the limit, the budget could still double in the next
ten years, it could triple in the next 15 years which I think makes
it a very loose-fitting straitjacket. By the projections, it would
make an increase in state revenues in California of between 115 and 120
percent to keep pace with growth and inflation. But the actual increase
in revenues is going to be in the vicinity of 200 percent. This leaves
us a margin between that 115 and 120 percent all the way to 200 percent
not only for growth and inflation but for new projects, for new spending,
for new things, services for the people which someone might think of.
Denied by the legislative leadership, we have taken our case to the
people. We are submitting petitions in accordance with our law and when
enough signatures are obtained we intend to call a special election for
the sole purpose of allowing the people to vote on the one-time rebate,
the income tax cut and the Constitutional limit on the future percentage
of earnings that the State can take.
Business Council
Page 15
I like to think of it as an offer they can't refuse, You now are often
accused, in this time of political mythology, of being a special interest
group wielding great influence with state government. From the special
interest groups I have seen over these last several years, I wish you
were and I wish you would become an active special interest group.
The people must be made to realize that special interest groups today
are more likely to be devoted to persuading government to take more
of the people's earnings to provide services that directly benefit the
special interest group. Last week Congress was called upon, a
Congressional committee heard the testimony from the Coalition of
Human Needs and Budget Priority. This coalition warned the Congress
that major reforms in the spending system could limit the opportunity
to allocate more federal funds for social programs. The coalition is
made up of 75 diverse groups including the Union of Public Employees,
which has an obvious interest in government spending.
Now it is time for us to deal with three questions. Who in this
Coalition shall wield power, for whom shall they wield it and at whose
expense shall that power be wielded? The answer to the first two
questions is very obvious. The people should wield the power and the
power should be wielded for the good of all of the people. The answer
to the third question, I think, should also be the people. Bastiat
said that's who will have to bear the expense. Bastiat, the French
philosopher and economist, said the state can have an abundance of
money only by taking from everyone, especially the masses. The
state is not an entity where everyone can live at the expense of
everyone else. Today there are too many Americans who have replaced
faith in the economic freedom with trust in the government as the
distributor of material goods.
Business Council
Page 16
We have been sold, for example, the idea over recent decades that
inflation is necessary to continue prosperity. Well inflation is a
device for siphoning private property into the coffers of government.
Paring government back to size is the only way to protect private
property against confiscation and the right of ownership is the
very basis of personal freedom. Are we still able to believe in
ourselves and our capacity to sell the truth or will we accept the
pessimism of Whitaker Chambers who became disillusioned after many
years of Communism which he had embraced out of a sense of idealism
and yet after so many years when he had turned away from it
disillusioned he could no longer regain his faith in us. And he
wrote shortly before his death: "It is idle to speak of saving
Western Civilization, because Western Civilization is already a
wreck from within. That is why we can do little more than snatch a
fingernail from a saint from the rack, or a handful of ashes from
the fagots and bury it secretly in a flower pot against the day ages
hence when a few men will begin toagain dare believe that there was
once something else, that something else was thinkable and needs
some evidence of what it was and the fortifying knowledge that it
existed at this great nightfall that there were those who took long
thought to preserve these tokens of hope and truth for the future.
I cannot subscribe to that pessimism. I refuse to believe that destiny
of this generation, a generation that has lived through four great
wars, through a great depression, that have seen man literally go from
Main Street in the horse and buggy to the Moon, is destined to preside
over the coming of that great nightfall.
Business Council
Page 17
In these last several weeks, Nancy and I have had a very rare and
unusual experience. We have had the privilege to become acquainted
with, and to get to know at first hand, an unusual and very special
group of men. And if I had no other reasons for the belief that I
have just stated, I would feel justified in believing it because of
those men who were able to endure almost a decade of imprisonment and
unimaginable torture, and they had nothing to sustain them except to
believe in God and an unshakable faith in a dream, a dream that man
was born to be an individual, to have individual freedom, to go his
own way and fly as high and as far as his own strength would take him
without being penalized for his ability and his effort. It is a 200
year old dream they simply call the United States of America.
#####
Watergate
Demo. social tinkering
Middle East
Vietnam
Inflation
Demo. historic rule
Welfare
Campaign spending
Rendezvous with destiny
6
AKRON, OHIO FUNDRAISER
June 5, 1974
Ray Bliss, I take a lot of four-hour rides in an airplane and
I still wouldn't have made much of a contribution of appreciation to
you for all that you have meant to the Republican Party in this country.
Mr. Toastmaster, Mr. Mayor, Finance Chairman, chairman and other
officials of the Party, the officials of the county government that
are here, my fellow Republicans and those Democrats who aspire to a
better life.
It really is a pleasure to be here in this particular state that
has history so rich with names of great stature among the statesmen
in the history of our country. I know that when someone in public life
says how happy he is to be some place on an occasion like this he is
always suspect and probably people in public life have earned that.
We had a candidate for Congress out in California who journeyed out into
the hinterlands to solicit the votes of the people there. He sat down on
a bench beside an oldtimer on the courthouse lawn, made his pitch for
votes. The oldtimer said what are you going to do about the geese? He
look and the courthouse lawn was covered with geese. "Well, "he said,
isn't that a lovely scene @ Just look at that pastoral scene, I think
they should be preserved," The fellow said "You just lost my vote".
He said "They mess up the lawn, they chase: the kids, they peck at their
legs, they ought to be destroyed. " He moved on to another bench, sat
down beside another old fellow, made his same pitch and got the same
question "What are you going to do about the geese?" "Well, "he said
"look at them messing up the lawn, chasing the kids, pecking at their
legs, they ought to be destroyed." The old fellow said "you just lost my
vote, I raise geese, they are an important part of the economy of this
community.' He got to the third bench, same pitch, same question and this
time he had learned. He put his arm around the fellow's shoulders and
- 2 -
said "Brother, on that question I'm with you. II
I just want to say also I appreciate all of you who are here.
I know the difficult task for those of you who do the raising of the
money but I also know it costs you a pretty penny to be here tonight.
You deserve some credit for that. The only thing I can say by way of
reward or compensation to you is that if we continue having a Democratic
Congress that is going to be the regular price for dinner.
We live in troubled times, inflation is such that we can no longer
afford the wages of sin. Dollars to donuts aren't very good odds any
more. If someone offers you the world on a silver platter take the
platter. It isn't all dark, there is still a bright side, you can still
use a dime for a screwdriver. Republicans have a tendency to be
discouraged these days but I have had the opportunity of speaking to
some Republican groups and not too long ago in the dead of winter,
however, I was back in New England and there I heard a story that I
think should be an inspiration to all Republicans. A little elderly
lady in that town had been to see her doctor and she hurried out of the
doctor's office right down the street as fast as she could go to the
Registrar's office and reregistered Democrat. He said "Tilly, how can
Republican
you do this, you have been a
all your life, your parents, your
grandparents before you were Republicans in this community." She said
"I've just been to the doctor and he tells me that my time is near and
if someone's got to go I'd rather it be one of them."
But seriously, these are troubled times for Republicans. Our
opponents would have us all itching and scratching beneath the hairshirt
called "Watergate". For a year and a half now the American people have
been subjected to a daily around-the-clock barrage of accusations,
innuendos and unsubstantiated charges until we have come to accept that
every statement by every unnamed source is proof positive of guilt.
- 3 -
And with a kind of death wish that sometimes plagues Republicans, we
have attempted to self-destruct in five seconds to the joy of our
opponents. In Pennsylvania the special election to fill a vacant seat
in Congress, the Democratic vote was within 1 percent of what it had
been in the '72 election. 32 percent of the Republicans stayed home
and we lost the seat by 122 votes. In Michigan 55 percent stayed home.
Since that election the poll reveals that most of those who stayed home
honestly
admitted they believed the Republican was the best man
but they were upset about Watergate. Well, we are all upset about
Watergate, it was an illegal, immoral and, frankly, a very stupid act.
As Republicans we have been on the receiving end of too many such
shenanigans to see any virtue in this one, We have been outvoted in
big cities by tombstones, warehouses and empty lots and we have never
liked it. It is time to put the matter of Watergate in the proper
perspective. Those who committed the breakin have been apprehended,
tried, convicted and are undergoing punishment. Whether othere were
involved will be determined by the courts and by the Congress in the
manner prescribed by the Constitution. But while that procedure takes
place if we continue to have a belief in this system of ours we will
say to those who would be self-appointed judge, jury and executioner
"all of the accused will be presumed innocent unless and until proven
guilty beyond reasonable doubt."
In the meantime we have a right to ask the Democratic leadership
of the Congress to get on with the business of government which they
have so irresponsibly and shamefully neglected for this last year and a
half.
With regard to the election which will take place in November,
we have a right to know more than what the Democratic candidates think
about Watergate. We would like to hear their views on the issues which
will affect our lives and the future of this nation. Frankly, I don't
- 4 -
think they are very eager to do this. If they state their true beliefs
they will only remind the rank and file of their own Party that the
control of that Party is still in the hands of those who radicalized
the Party and hijacked its own convention in 1972. And they will
remember the mandate of the people in 1972 all too well. Never in the
lifetime of any one of us have the issues in a National campaign been
more clearly defined. Never have the American people crossed Party lines
in such overwhelming numbers to make it quite plain they do not believe
their hopes and aspirations can be realized under the philosophy of the
Democratic leadership.
We, as Republicans, have a responsibility in the coming campaign to
see that the difference in philosophy is held up to view so that the
people can choosenot just between party labels but between party beliefs.
There is nothing wrong with us reminding the voters of how long-time
Democratic Party stalwarts who wouldn't forsake the principles of
Thomas Jefferson, were denied the right to participate and sometimes
even to attend their own convention in Miami. Indeed, the first Democrat
eliminated from that convention was Thomas Jefferson himself and why not?
Jefferson had urged us to make a choice between economy and liberty or
profusion and servitude. Well, the Democratic leadership choseprofusion
and servitude a long time ago and called it a planned economy. Sometimes
I wonder if it is really Watergate that bothers them or if it is our
resistance to their continued social tinkering.
For 40 years they have been conjuring up new programs, always
with the promise that each one will solve all the problems of human
misery and, of course, the programs always fail. But that doesn't bother
them, they thrive on failure. If the programs ever succeeded it would
put them out of business- the problems are their whole reason for being,
Like Dr. Parkinson said government hires a ratcatcher and he soon
becomes a rodent control officer and has no intention of getting rid of
- 5 -
the rats. We must insist that the candidates in the coming campaign
talk about inflation, about the tax burden that is eating away the
vitality of the free enterprise system. Certainly about the energy crisis
So far our opponents have devoted themselves to looking for a scapegoat
instead of an answer. They want more government, we are asking for
more oil. They talk about punitive taxes when they should be talking
about incentives and most revealing as to their basic philosophy is their
eagerness to solve the energy crisis by having the government go into
the oil business. Now there's an answer that might turn out to be as
economic and efficient as the Post Office.
Then there's the matter of National Security. The Soviet Union
has just fired a new advanced missile down the Pacific Range and is
building a new type of nuclear submarine. With typical statesmanship
our opponents demand
a reduction in our defense budget and an
increase in welfare.
No one will deny that political campaigns must concern themselves
with the record of past performance as well as proposals for future action
Watergate, politically speaking, therefore, is a part of the record.
It is not the entire record. The troubles of the Middle East have had
the world closer to Armageddon than any of us realize. Most of the
World's leaders shut their eyes, and pretended that the problem would go
away if you didn't look at it. But step by step the United States
brought about a ceasefire, a retreat from confrontation, a meeting of
the enemies around a negotiating table for the first time in more than
a quarter of a century and finally the agreement that was announced just
a few days ago between Syria and Israel. And Henry Kissinger, for all of
his brilliant work, would be the first one to say that he was carrying out
the policy of the President of the United States.
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who #
The same President, when he received the intelligence information
the irreputable truth that the Russians had seven divisions poised ready
for air transport into the combat in the Middle East, picked up the
telephone and said to the Russians "I wouldn't do it if I were you,
and they didn't!
A year ago young Americans were dying in a war that had dragged on
longer than any war in our history. One Democratic administration
abandoning the Eisenhower policy which had brought eight years of peace
started the war and a second Democratic administration which wouldn't
win it and didn't know how to end it, carried it on. Today no young
Americans are dying in the rice paddies of Vietnam. They are not dying
there because a Republican President ended a war not of his making in
1973 just as another Republican President ended a war not of his making
in 1953. There have been four wars in my lifetime and not one of them
started under a Republican
administration and the only full
employment we have known since the 1929 crash has been in time of war.
Right now, in spite of the energy crisis, we have the lowest
unemployment rate we have had in peacetime in this nation for more
than 40 years. Let the record also show that blaming the present
administration for inflation is a blatant rewrite of history. Inflation
was sold to us, sold to us by the New Deal, the Fair Deal, the New
Frontier and the Great Society. We were told it was essential to
maintain prosperity. We are supposed to forget that all of those years
as Republicans as the loyal opposition on the outside, we warned over
and over again against such a policy. We pointed out that inflation was
like radioactivity it was cumulative and that some day it would run wild
out of control as it has. But our warnings were ignored. They were
tagged as Republican obstructionism. We just didn't understand the new
economics. Well, there isn't anything to understand, there is no mystery
- 7 -
about inflation. Very simply it comes when government spends more than
it takes in. That is why Republicans have introduced legislation to
restore fiscal common sense to government and in so doing they have also
learned that when you suggest common sense with relation to government
you create something of a traumatic shock. The only time in the last
42 years that the dollar did not lose one penny of its purchasing power
was the only two-year period in those 42 years when a Republican Presiden
had a Republican majority in both houses of the Congress. For the last
20 years the Democratic majority of both Houses could have halted the
unbroken increase of inflation by simply continuing the Republican
policy of those two years.
Now in this election year they have the gall to grandstand by
proposing a $6 billion cut in taxes. There again is the difference
between our two philosophies. We would like a tax cut too if, and it's
a big IF, if they would also agree to cut the spending by $6 billion.
Some of those same Senators who are talking about a tax cut,
including the one who wants to give us $55 million worth of "Teddycare."
Those same formed a group of 11 Democratic Senators, who at the beginning
of this 93rd Congress set a new record in the history of the United
States because the 11 of them between them sponsored measures which
would have added one trillion dollars to the cost of the United States
government. They have just voted to kill Harry Byrd's bill that would
have required a balanced budget. They weep crocodile tears about a
tax structure which they claim is riddled with loopholes benefiting the
rich but why don't they change it? They have had a majority in both
Houses of Congress, we couldn't stop them if they wanted to. If they
really mean to reform taxes we might be willing to help them.
- 8 -
For example, how about simplifying the income tax so that a
worker doesn't have to employ legal help to find out how much he owes
the government? We live in the only country in the world where it takes
more brains to figure out your income tax than it does to earn the
income in the first place.
They do a lot of talking about these things but the truth of the
tax
matter is that the structure of this country bears a Democratic trademark
Now one of the simplest reforms that might curb government spending
would be to simply require any legislator who offered a spending
measure to offer, at the same time, a tax bill to pay for it. They won't
do this, of course, because this is an election year. This is not a
time to raise taxes but the truth is raising them is exactly what they
have in mind.
Some time ago the Democratic council made this very plain. They
called for a shift of financial resources from the private to government
euphemism
channels. Now that is, kind of nice
which means we want to
raise taxes. To quote them they say "there is no cheap, easy way to
meet the public sector needs, we believe that realization of these
priorities requires a commitment to a vigorous tax program."
I don't know, they have made it plain that their public needs are
in the area of more social welfare and I don't know how much more vigor
we can afford. There is only one thing we can be happy about now and
that is government's waste and extravagance. Can you imagine how
miserable we would be if we were getting all the government we are
paying for? The young Senator from Massachusetts who is one of those
11 who would increase government's cost a trillion dollars, journeyed
to Alabama last July 4. He delivered a speech there that was tailored
to the occasion and that particular audience and very well received,
He had just discovered that there was a giant bureaucracy in Washington
and he saw that as a threat to individual freedom. He even expressed
- 9 -
alarm about the high cost of government which he, of course, blamed
on a Republican President. It wasn't the kind of speech he usually
makes in Massachusetts George Wallace sat there listening to him
and thought they had sent the wrong sound track.
James Buchanan has said that even the keenest, most analytic surgeon
when operating on a Democratic politician can't separate demagogic
from solid tissue without causing the death of the patient. But like
the tax structure, the bureaucracy in Washington bears a Democratic
trademark. It is the result of 40 years of Democratic rule and it
dictates in large part National policy to a greater extent than
does even the Congress of the United States. Not even the Office of
Management and Budget knows how many boards, commissions, bureaus and
agencies there are, but all of them have the authority to adopt
regulations which have the power of law and these regulations today
take almost as many pages in the federal registry as the entire
Encyclopedia Britannica, Small businessmen spend 130 million manhours
per year filling out government forms and it adds $30 to $50 million
a year to the cost of doing business.
Then government spends another $15 billion finding places to store
that paper. A baker in Illinois said even if he understood the forms
he wouldn't have time to fill them out. The druggist, in Connecticut
said it takes more time to fill out the government forms for one
prescription than it does to make up the prescription. A fellow in
California found out about the Office of Occupational Safety and Health.
He was told he had to install separate toilets and washrooms for his
men and women employees. He only has one employee and she's his wife
and at home they sleep in the same bed.
10 I I
What is bureaucracy's level of service? What success have they
had? Not too long ago you could send a gallon of oil from Texas to
New York for one penny and you could send a postcard the same way for
the same price. I am told you can still deliver a gallon of oil for
one penny but it costs 8 cents to deliver a postcard now to the wrong
address. Government's involvement in things not its proper province
is not marked by spectacular success. Urban renewal--they were going
to build low-cost housing for the poor. They built 201,000 units, half
of which can only be afforded by the well-to-do, but they tore down
538,000 that the poor could afford. All of the costs were borne by
those millions of Americans who ask nothing of government except to be
left alone, those Americans who, regardless of Party, pay an average
of 45 cents out of every dollar they earn to maintain governments,
federal, state and local. These Americans are in their time of
discontent. They feel that government and the nation they supported
so loyally only knows of their existence at taxpaying time. These are
the people who get up in the morning, send the kids to school, go to
work, contribute to their church and charity. They make the whole system
work and yet their own dreams have become ever more unattainable.
The good life they have earned and deserve is just beyond their reach.
Political demagogues fan their discontent telling them that some
mysterious "they" is somehow robbing them of their just reward and only
those same demagogues can correct this but they have to have a little
more power which means bigger and more costly government. Well these
Americans, these unsung heroes, have been too long unrepresented in
government. These are the Americans from the Republican Party to whom
we should address ourselves. Our task is one of education, exposing
the political and economic mythology that has been built up under
decades of Democratic rule. In the first place, we must understand
ourselves and then make them understand that time for a change is a
- 11 -
proper Republican slogan. Just occupying the White House or even the
State House doesn't give a Party control if the Congress and the
Legislature is in the hands of the other Party. Our opponents have been
in control of both Houses of Congress for 20 unbroken years. There
isn't one problem besetting the people of America that they couldn't
resolve any time they wanted if they were of a mind to. They talk
loudly of the energy crisis. The President submitted 17 specific proposal
They adopted one, the Alaska pipeline, and they were four years late
with that. They disagreed with his other 16 proposals but they haven't
come up with a single piece of legislation of their own, only talk.
They have been successful in persuading the majority of the people to
believe that Republicans are more concerned with serving the needs of
certain special interest groups than representing the people as a whole.
And yet it is they who historically appeal to the worst of us in dividing
us into voting blocks promising to take from one group to give a favor
to another. They tell us we can only have a bigger slice of the pie if
we will reduce someone else's slice. Well our philosophy is we can all
have a bigger slice if the government will get out of the way and let
free
the
enterprise system produce a bigger pie,
In California we have had 73/2 years of Republican administration
implementing Republican doctrine over the opposition of a majority in
both Houses of the Democratic legislature. Our success has come from
taking our case to the people. I was shocked standing here tonight to
hear the record that was read to you of what has taken place in a few
years. It is a curious coincidence that I should hear that here in this
state because when I first became governor my first journey was to the
Republican governor of Ohio. I heard of what he had done. I heard of
the record, I heard of
how he involved task forces of private business
people in government to help bring and implement modern business
practices in government and I came to find out that when I returned
- 12 -
to California and called a meeting in a room like this of the
leadership of business and industry of California to tell them what
it was we wanted from them he sent his Finance Director to help us
explain the problem to California. When we started eight years ago
one of the reasons I needed that help Democratic rule had left our
state virtually insolvent. California was spending $1½ million a day
more than it was taking in. The cost of living index was higher in
California than the National average. The state was adding 5500 new
employees each year to the government payroll and 40,000 new recipients
to welfare rolls each month. We instituted a program of cut, squeeze
and trim based on the common sense principles that you employ in your
own affairs. Everything we proposed the Democratic leadership opposed.
On the Welfare reforms they said if we instituted the reforms we
finally evolved that the caseload would go up instead of down, that
the county property taxes would have to go up to bear the added costs
and we would end the year with a $700 million deficit. Other than that
they didn't find much wrong with what it was we were suggesting.
The state payroll at the end of the eight years when I leave office
in January will be exactly what it was when we started eight years ago
even though the workload in some departments has increased as much as
66 percent because of our growth. The welfare rolls are not increasing
at 40,000 a month, there are today almost 400,000 fewer people on welfare
in California than there were three years ago and we have saved the
taxpayers $2 billion in welfare. More than 40 of our 58 counties have
cut their property taxes for two years in a row and that $700 million
deficit turned out to be an $850 million surplus which we returned to
the people of California in the form of a one-time tax rebate.
- 13 -
The new governor of California will be the first governor in
decades who will inherit a balanced budget. And yet what would have
been the Democratic
record? In these eight years I have vetoed
spending measures which would have added $15.3 billion to the spending
of state government.
I might add, I said we returned the $850 million, I made that
sound pretty easy, When you face a Democratic legislature and suggest
giving $850 million back to the people it is a little like getting
between the hog and the bucket. One Senator indignantly proclaimed
that this was an unnecessary expenditure of public funds. But if we
are to succeed in our mission we must expose the falseness of our image
our opponents have successfully created over the years. Our own sons
and daughters in great numbers have accepted this image
and turned from us. We are the party of the rich supported by
a few wealthy contributors who help buy elections and then expect
special favors from government. That's our image. That's not the
truth. But I wonder how many Republicans when they go into a campaign
know what really is the truth. Do you know, for example, that for more
than a quarter of a century the Republican Party has never been able
to match the Democratic Party in campaign spending, that 75 percent of
our funding has come from contributions of $100 or less and that we
outnumber the Democratic Party 5 to 1 in such small contributors,
Oh that couldn't be true about 1972, not in view of all we are being
told and being told and being told. It is true that the Federal
Communications Commission's official figures do show that Republican
candidates in that 1972 election spent $20 million on radio and televisio
alone and the Democrats spent $34 million.
- 14 -
Then there are all those dairy contributions. They gave $577,000
to Republican candidates. They gave $613,000to Democratic candidates.
Now the Rodino Committee is self-righteously proclaiming that it will
investigate to see if the contributions by the dairy industry to
Republicans actually constituted bribes even though 16 members of that
committee, including Chairman Rodino himself, received thousands of
dollars from that same dairy industry which, of course, they consider
just a campaign contribution. In the midst of all the demagoguery so
prevalent today
a look at the record might be timely. In March of
1971 the administration was holding the milk price at 80 percent
of parity. The industry was pressing for 90 percent of parity and pressing
hard so 125 members of the Congress authored or cosponsored legislative
proposals to demand the 90 percent increase and 29 Senators did likewise
in that House and on the floor of the Senate speeches were made on a
daily basis by Hubert Humphrey, by Senator Mondale, by Vance Hartke, by
Harris of Oklahoma, by Proxmire, by any number of others. The Speaker
of the House, Albert, and chairman Pogue of the Agriculture Committee,
bluntly stated that they would pass a bill and override a Presidential
veto if he attempted such a thing. So Secretary of Agriculture Hardin
of the Nixon administration, administratively compromised by raising the
price to 85 percent and Senator McGovern publicly proclaimed this
reversal can be construed as a victory for this Congress in speaking out
vigorously in behalf of the dairy farmers."
I have never been able to figure out why it is that a rich
Republican is a "fat cat" and a rich Democrat is a public spirited
philanthropist.
Our sons and daughters yearn for a cause that is worthy of their
youthful idealism and they reject a society that
they believe is
suffering from a terminal illness. We fail them miserably if we don't
make them see how much there is to really love in this land,
- 15 -
A sick society bereft of courage and moral stamina couldn't bring
forth the men who set foot on the moon or who circled the earth in
Skylab. Nor a sick society produce the men who endured almost a decade
of savage torture and imprisonment in Vietnam and return to us unbroken
in spirit with their heads held so high voicing faith in God and
country. It is time for some voices to be raised our voices
in reply to the doomcriers abroad in the land today. Double our present
troubles and we are still better off than any other people on earth.
We live better, we have more freedom in spite of, not because of, the
social tinkering of the last four decades and with the material
blessings has come a compassion on the part of our people unmatched
anywhere. We share our wealth more widely than any society in the
history of mankind. We have more churches, more libraries supported
with voluntary contributions, more symphonies, more operas, more non-
profit theater, and publish more books than all the rest of the world
put together. We have more doctors per thousand people, more hospitals,
and one third of all of the young people in the world who are getting a
college education are getting it in the United States.
In the days of World War II, right after World War II when our
economic strength and military might was all that stood between the
world and a return to the dark ages Pope Pius XII said "The American
people have a great genius for splendid and unselfish action. Into
the hands of America God has placed the destinies of an afflicted
mankind. =
You and I have not kept or fulfilled entirely our rendezvous with
destiny, mankind is still afflicted. Mankind looks to us for a
realization of their long-time dream of human dignity and freedom.
I believe the things we stand for offer a better chance for fulfillment
of that dream and for the realization of the hopes and aspirations of
- 16 -
our people than does the giveaway philosophy of our opponents who have
lost faith in the capacity of our people for greatness,
Sometimes in our past, and hungry for victory, we have wavered in
our adherence to our Republican philosophy. Sometimes we have allowed
the basic difference between our two parties to become blurred.
This we can no longer afford. Millions of those unsung heroes,
Democrat and Republican and Independent, are out there waiting for a
banner to be raised. They are represented in government by the kind of
men that I think our Party is offering in this election campaign, at
the state level and the national level. But there aren't, at present,
truly enough people in government representing them. That is what this
election is all about.
One last little story
during the American Revolution the
Rev. Mullenberg was preaching a sermon on a bright Sunday morning.
Someone approached him and handed him a note. He stopped preaching and
silently read the note. Then his congregation saw him remove his
ministerial robes and he was wearing the uniform of George Washington's
army. To his surprised congregation he said "there is a time to
preach and a time to fight." Republicans this is a time to fight:
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