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Economic Club of Detroit, October 21, 1963
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The original documents are located in Box D16, folder "Economic Club of Detroit, October
21, 1963" of the Ford Congressional Papers: Press Secretary and Speech File at the Gerald
R. Ford Presidential Library.
Copyright Notice
The copyright law of the United States (Title 17, United States Code) governs the making of
photocopies or other reproductions of copyrighted material. The Council donated to the United
States of America his copyrights in all of his unpublished writings in National Archives collections.
Works prepared by U.S. Government employees as part of their official duties are in the public
domain. The copyrights to materials written by other individuals or organizations are presumed to
remain with them. If you think any of the information displayed in the PDF is subject to a valid
copyright claim, please contact the Gerald R. Ford Presidential Library.
Digitized from Box D16 of the Ford Congressional Papers: Press Secretary and Speech File at the Gerald R. Ford Presidential Library
Speedes
November 5, 1963
Mr. Lester Skene Bork
President
The Economic Club of Detroit
920 Free Press Building
321 West Lafayette
Detwoit 26, Michigan
Dear Larry:
There is a great deal of interest being generated for
copies of the transcript of the discussion I had with
Neil Staebler, and would therefore like to have about
500 copies as soon as possible, Will you please let me
know if this possible and if so, how soon may I expect
to receive them.
If it appears that I may not have the copies of the
transcript within the next week, could you please have
a corrected copy of Neil's closing statement send on to
me within the next few days?
Thanks for anything you may do to speed this up for me.
Warmest personal regards.
Sincerely,
Gerald R. Ford, M. C.
GRF:1
FORD i LIBRARY
November 4, 1963
Mr. Lester Skene Bork
President
The Economic Club of Detroit
920 Free Press Building
321 West Lafayette
Detroit 26, Michigan
Dear Larry:
Mapy thanks for your letter of October 29th with which
you enclosed a transcript of the remarks made by Neil
Staebler and me at the Detroit Economic Club.
I have edited my part of the transcript and in accordance
with your request it is returned herewith.
Once again my thanks to you and the others for your kind
hospitality.
Warmest personal regards.
Sincerely,
Gerald E. Ford, N.C.
GRF:1
LIBRARY
CHAIRMAN
EXECUTIVE COMMITTEE
BOB WILSON, M.C., CALIFORNIA
National
WILLIAM L. SPRINGER, M. C., ILLINOIS
CHARLES M. MATHIAS, JR., M. C., MD.
VICE CHAIRMEN
ROBERT J. CORBETT, M. C., PENN.
CHARLES R. JONAS, M. C., N. C.
WILLIAM M. MCCULLOCH. M. C., OHIO
Republican Angressa Committee
ARCH A. MOORE, JR., M. C., W. VA.
MELVIN R. LAIRD, M. C., WISCONSIN
CRAIG HOSMER. M.C.. CALIF.
HAROLD C. OSTERTAG, M. c., N. Y.
CHAIRMAN AUDITING COMMITTEE
J. EDGAR CHENOWETH, M. C., COLORADO
WILLIAM C. CRAMER. M. C., FLORIDA
OONGRESS HOTEL
WALT HORAN, M. C., WASHINGTON
WILLIAM G. BRAY. M. C., INDIANA
WASHINGTON 3. D. C
EXECUTIVE SECRETARY
EDWARD F. TERRAR, JR.
SECRETARY
LINCOLN 4-3010
JOHN J. RHODES, M. C., ARIZONA
TREASURER
184
ROBERT V. FLEMING, D. C.
November 4, 1963
Dear Jerry:
Pursuant to our conversation there is attached hereto
a transcript of the tape of you and Neil Staebler before the
Economics Club in Detroit. Your suggestion that Staebler's
concluding statement is probably going to be the Party's line
next year is, I believe, accurate. If you have no objection
and feel that it should be otherwise, I would like to propose
that we mimeograph Staebler's concluding statement and
hold.
distribute it to all members, plus all State chairmen of the
National Committee with an attachment indicating that this
konected any
punding receive
could well be used by the Kennedy Administration to advance
their cause next year.
I shall undertake nothing until I hear from you. In the
meantime I have retained three copies of your transcript.
Sincerely,
Edward F. Terrar, Jr.
Executive Secretary
EFT:jms
Enclosure
The Honorable Gerald R. Ford
United States House of Representatives
Room 351
Washington, D.C.
GERALD FORD LIBRARY
Lets Wantt Lane
The Economic Club of Detroit
920 FREE PRESS BLDG., 321 W. LAFAYETTE
DETROIT 26, MICH., PHONE 963-8547
OFFICE OF THE PRESIDENT
PHONE 963-8564
October 29, 1963
The Honorable Gerald R. Ford
Representative from the 5th Michigan District
House Office Building
Washington, D. C.
Dear Jerry:
Your lovely and thoughtful letter of October 25th was received
and I was happy to hear that you had personally thanked
Frank Tomlinson. These thoughtful gestures on your part
have endeared you to SO many of your constituents and they
are most appreciative of your attitude.
Enclosed is a transcript of the affair with Neil Staebler.
Request that it be edited and returned to us. You may have
100 copies or more of this reprint as soon as it is off the
press. It will take several weeks. We will send you a few
copies of the advance publication and then follow up with
another 100 for your office use.
I have heard many wonderfully complimentary remarks about
your efforts, the clarity of your statement, your fine principles
and your obvious sincerity, so I am indeed grateful for having
had the privilege of having you with us on October 21st.
Sincerely,
Lany Bork
Lester Skene Bork
President
LSB:1
Enc.
FORD & LIBRARY
ECONOMIC CLUB
Side #1 - Page #1
October 21, 1963
The first topic for discussion, Mr. Ford will be the first speaker,
is Centralization of Power in the Federal Government.
Mr. Ford: Never in the history of the United States, in peace or war,
has there been such a strong desire for or the use of centralization of power
in the Federal Government. The enormous size of federal establishment,
particularly the Executive Branch of the government, is seldom spot-lighted and
as a result, in my judgment, is getting out of hand. This establishment
comprises approximately two million 5 hundred thousand civilian employees, with
an annual pay roll of approximately 14 billion dollars each year. This vast
network of federal executive employees with authority emanating from Washington
operates in every one of bur States. Through legislation or regulations
promulgated in the Nation's Capital, this huge hi bureauracy has the authority
every
to move into every business, eveyx home, through the power to collect taxes,
to enforce regulations or to spend tax payers' money. Such authority from the
banks of the Potomac is backed by the awesome power of over one hundred billion
dollars a year in federal funds, which can and have been used to persuade, to
entice, or sometimes bludgeon States, communities, business organizations and
even individuals to fall into line, to play the game of accepting federal
domination. In the past 30 years there has been a growing, an almost insidious
trend, toward Washington dictatorship with occasional pauses when the voters took
matters in their own hands. The election of 1946 swept out O.P.A. and Ike's
victory in 1952 signed the termination of O.P.S. This trend towards centralization
of authority and abuse of Executive power has accelerated in the past 34 months
under the Kennedy Administration. During the entire 1962 session of Congress
the President made 88 new requests for funds and 29 additional requests for
1 - 2
Presidential power. The Kennedy record in 1963 is even more startling. From
January through June of this year there were 207 new demands for funds and 70
new requests for Presidential powers. Parenthetically, the flow of White
House messages since July 1st has not decreased, but increased, and all seek
more money for new programs and new policies and new Presidential authority.
To justify an all-powerful federal octupus, the arguments are often made that
now and in the future the States and local governing institutions cannot solve
our economic and social problems and, furthermore, individuals and segments of
our economy want and need federal dependence rather than independence and
responsibility. I doubt that many Americans approved of Presidential action
in anger during the steel industry controversy in 1961 that resulted in federal
mid
agents badgering innocent citizens at home at/night. I doubt if many Americans
approved of the politically inspired decision of the Secretary of Health,
Education and Welfare in the ADCU controversy that nullified the good intentions
of Governor Romney in the Michigan legislature. I think there is very little
evidence in Michigan to support the contention of the Secretary of the Interior
and Senator Hart that authorities in Washinton should determine the size, the
acreage of a park at Sleeping Bear, or write new procedures for seizing private
property or decide hunting and fishing regulations in the State of Michigan.
Furthermore, when given a clear cut choice Americans will not sell freedom II
rammed
for a handout. The Kennedy Administration in 1962, as you well know,/Kaй through
farm legislation which gave wheat farmers two choices, on the one hand, the most
rigid control plus the enticement of high price supports, or the alternative of
no controls with a slash in wheat prices. Secretary Freeman with the full backing
of the President and the massive help of federal funds and the and the personnel
of the Department of Agriculture put on the greatest propaganda campaign on
behalf of federal contbol. You know the refreshing story, the American wheat
1 - 3
farmer despite the lure of a guaranteed income voted for freedom rather than
Freeman. Our traditional form of governmentx with the specific and limited
delegation of power to the federal government has met every domestic and inter-
national crisis. We must never forget that a government big enough to give
us everything we want is a government big enough to take from us everything we
have. Centralism, with all its evil connotations, will be checked only when
national leaders refuse to encourage the easy way of federal assistance and
State and local officials assume the responsibilities and privilege of local
action. The big issue today is whether the excess concentration of federal
power and sovereignty will destryy State, local and individual freedom and
responsibility. (Applause)
: Mr. Stabler will now address himself to the first topic.
Mr. Stabler: Fr. Britt and Congressman Ford, General Bort?, members
of the Economic Club, and guests, at the outset I want to express my appreciation
in having an opportunity to be with the Economic Club again, and in the company
of my distinguished colleague, Congressman Ford. As he has pointed out,
Americans have always had a healthy distrust of government. Not all government,
however, should be regarded as an evil or an enfringement of individual freedom.
Government regulations often provide us with a greater freedom as, for example,
traffic signals which enable us to drive our automobiles safely. We cannot
rely upon drivess to regulate themselves and we can't always rely upon big
business or big labor to regulate themselves. To determine what is useful and
what is abusive federal power we need sober reflection rather than fear of vague
generalizations. Let us explore the problem of federal power by trying to
answer three questions. One, when is federal action necessary? Two, is the
federal government misusing its power? And three, is the individual citizen
more or less free today than he was when the federal government was smaller?
1 - 4
There would seem to be two situations in which federal action is necessary.
One is where States fail to meet their responsibilities. Another is where
problems are national in scope. There is no question that the federal government
is doing some things which ought to be done by State governments. For example,
inadequate State regulations in the field of water pollution have necessitated
federal action. Here in Detroit federal hearings revealed severe pollution in
the Detroit River, which was endangering the health and property of our down-
river citizens. Yet the problem goes beyond the fact that the federal government
has been forced to act when States have failed to act. In some fields, even
with the best intentions, State action would prove inadequate because many
problems are national in scope and therefore require national solutions.
Unemployment, civil rights and air pollution are a few examples of national
problems. So is the problem of deceptive packaging and advertising of consumer
goods, a problem in which Senator Hart has been working SO effectively.
Education and health are also national problems, because many of our States are
too poor to marshall funds necessary for adequate facilities and individual care.
Now lets ask: is the federal government abusing its power? Some
people think that the federal government is becoming an ever-larger network
of people interfering in our daily lives. Congressman Ford called it an octopus.
The truth is that the number of people employed by government às a percentage
of the population has actually declined since 1946. Then it was 19 people per
thousand, today its only 13 people per thousand. If you subtract from federal
employment those working in defence, the Post Office and
the Veterans Administration, the remainder of federal government employs fewer
people than the telephone industry.
Finally, I want to say a few words about the question of individual
freedom. Would the individual citizen be more free today is the federal government
1 - 5
refrained or was made to refrain from areas of regulation and positive action?
More free, perhaps, to drink polluted water, more free to fly on unregulated
airlines, more free to buy dangerous drugs, falsely advertised products, free
to be unemployed, free to have an inadequate education or unequal opportunities.
Should the individual be free to be take thalidomide? Let's be honest about
this matter. Less federal regulation does not necessarily mean greater
individual freedom. It can mean freedom for private tyrannies to assert them-
selves. One the other hand, it is true the government is big and that it over-
awes many citizens. Nowadays it isn't as simple as it was 40 years ago. It
takes time to read about government, time to ponder it, time to ask questions.
Many business and professional people brush off their responsibilities by
turning problems over to trade associations. This is fine for an individual
case affecting an industry. But what about the great problem of centralization
of power which goes beyond industries and maybe even counter to them? This
is what political parties are for. And I suggest active membership in either
political party multiplies the effectiveness of an individual and his ideas in
dealing with government at any level, particularly, the federal government.
Our political parties offer the best means we have for protecting ourselves
against unnecessary government control. And I do not doubt that with an
enlightened citizenry and an alert Congress we can be assured that x federal
power is used to provide conditions under which every individual can lead a
freer and better life. (Applause)
: The second topic is that of medicare and by prior agreement
it has been established that the first speaker for this topic will be Mr. Stabler.
Mr. Stabler: I'm sorry that I have only a few minutes to talk with you
about the very important subject of medicare for our senior citizens. Actually
the word "medicare" is a misnomer because what we are really talking about is
a program of hospital insurance paid for by social security contributions. It
1 - 6
has nothing to do with the payment of doctor bills. It would only help pay
for hospital bills and related expenses such as drugs. Its worth noting that
the United States is the only major industrial nation in the civilized world
that does not provide a program of pre-paid hospital insurance for older
citizens. In the United States today 18 million of our citizens are over 65
and 670,000 of these senior citizens are here in Mixhi Michigan. Not only will
this number continue to grow but the life expectancy of our older people also
is rising. A man who reaches 65 today can expect to live another 13 years. A
woman who is 65 can expect to see 80. In the past when a person lived only a
relatively *** few years after retirement it was often possible for him to meet
his hospital needs. Now, however, withpue people living 10 to 15 years after
retirement at a time when their medical needs continue to rise, they simply
cannot afford to meet the increased burden of health care. The vast majority
of senior citizens are living on a reduced income at best and with pitifully
small cash reserves. I am sure many of us here know of the incidents where
just one serious illness has completely wiped out the financial resources of
an elderly person. I think it is obvious to all of us that this matter will
as
become even more serious/if life expectancy increases and hospital costs go
up. Few people dispute this. The question then is how are these necessary
expenses going to be met. Should their children take up this burden? Should
we leave it to charity? Can private insurance plans do the job? Or is there
another way? I don't think children, charity or private insurance alone or
together can do the job. They can and should help, of course. But the basic
job ought to be done on a universal basis through a social security prepayment
plan. This is the program recommended by President Kennedy and the Democratic
Party. I support it and I will cast my vote for it. We've already tried the
charity approach and it doesn't work satisfactorily. I'm talking about the
1 - 7
Kerr-Mills medical assistance law passed three years ago by Congress. It sets
humiliating requirements on our older people, virtually forces them to take
a pauper's oath and doesn't do the job. Michigan was the first State to qualify
for Kerr-Mills, yet last year only 13,000 13,583 of our senior citizens qualified
for health care assistance. What about the other 656,000 Michigan citizens over
65? Should we attempt to help them by extending Blue Cross or other similar
programs? This is a solution many people suggest. The trouble with Blue Cross
or other private insurance is twofold. It lies in the increasing longevity of
people and the increasing costs of hospitalization. The very same thing that
is helping life insurance companies decreasing actuary risks works against Blue
Cross. It increases the risk for Blue Cross. Secondly, not only is life
expectancy increasing but the cost of hospital care is constantly rising.
Hospital care comprises about three-quarters of the medical costs of the elderly.
The alternative to private insurance then is the social security approach, the
principal paying for our hospital insurance during our working years. Notice
that this distributes the risk over the entire population. Not everybody will
have a big hospital bill when they are elderly, but everyone will share in the
cost of the insurance, about 25¢ a week. The real objection to hospital
insurance or medicare comes from those who fear that it would destryy either
the medical profession or the insurance business. Neither Congress nor people
will allow this to happen. In my view, the challenge of health for our senior
citizens can be met only by the broad approach of a social security program.
This isa program that preserves the self-respect of the individual
concerned by providing him with benefits he has already paid for and is entitled
to receive. (Applause)
:
Mr. Ford will now discuss medicare.
Mr. Ford:
The issues is not health care for the aged versus no
1 - 8
health care. Everyone agrees, I believe, that our elderly when who need health
care should get it when they need it, whether or not they can afford to pay for
it. The real issue is how health care for elderly can best be provided. Whether
it should be voluntary or compulsory, whether the federal government should take
care of people who can take care of themselves. The voluntary program is
available now. It combines health insurance and pre-payment plans for those
able to purchase them. And the Kerr-Mills Act and other locally administered
laws for helping those who need help in paymen paying for health care. The
compulsory alternative approach is the King-Amderson Bill referred to as
Medicare. More than 60% of the aged already have protected themselves against
the cost of illness through health insurance. The number covered has tripled
in the last 10 years and the aged are buying health insurance at a faster rate
our
than any other age grpup in/khe population. The Kerr-Mills law was passed by
Congress in 1960. The law enables the individual States to guarantee every
aged American, who needs help, the health care he requires. In addition to the
more than 2 million covered by old age assistance, the law is designed to
benefit all other older persons who are ordinarily self-supporting but unable
to meet the cost of a serious prolonged illness. It helps those that need
help. Each State can pattern its program to meet its own particular needs.
It is administered locally where the individual needs of the aged are well
known. If by only helping those who need help, it avoids waste of tax dollare;
The King-Anderson Bill is now before the Congress. This plan would provide
limited health care benefits for everyone over 65 under social security or
Railroad Retirement, plus 2 million 5 hundred thousand persons who are 65 or
older today but not covered by either act. It would pay practically no doctor
bills. It would not furnish any drugs or devices outside of a hospital. It
would not cover cost of diagnosis in a doctor's office or anywhere else unless
1 - 9
part of a hospital service. It offers no help for those confined in mental or
tuberculosis hospitals. It would actually cover less than 25% of the total
yearly care costs of the average aged person. It would establish a tax-supported
program for everyone when he reaches his 65th birthday, regardless of need.
American wage-earners and their employers would be compelled to pay the bill
through a substantial tax increase. The cost would be staggering. For the
first year alone cost has been estimated from a billion four to two billion five.
No nation that has ever tried compulsory federal government controlled medicine
has ever been able to honestly and correctly anticipate the cost. England's
own program now costs nearly five times the original estimate. King-Anderson
calls for a double increase in pay roll taxes, an increase of one-quarter of
one percent for both employees and employeers and three-eighths of one percent
for the self-employed, plus an increase from 48 hundred to 52 hundred in the
base. And additional tax burden of 35 billion dollars would be placed on the
shoulders of tomorrow's younger workers and their employers. The 35 billion
is the estimated cost for health care benefits for today's aged. during the
rest of their lives. In other words, King-Anderson, the program would start
off with a 35 billion dollar debt. It is both inequitable and immoral to
saddle the Nation's younger workers with this huge burden. Many believe the
initial tax increase would be just a beginning. Congress has been warned that
the plan would cost at least 5.4 billion by 1983. This of course would mean
a fantastic increase in social security taxes, a high Administration official
credited with writing the legislation testified before the Senate Finance
20%
Committee that he envisages an eventual pay roll tax of/20% on a base of 9 thousand
dollars, or $75 a month for the employer and the employee. This would be an
increase of 411% over the present tax. Former Congressman Forand?, one of the
original authors of this bill, explained the ultimate goal in 1961: "If we
1 - 10
can only break through and get our foot inside the door, then we can expand
the program after that. If Aside from the cost the worst aspect of King-Anderson
is the E inevitable loss in quality of health care. We are proud of the
competente of our doctors and nurses. Whenever mass medical care under govern-
ment control takes over we lose not gain in prolonging life and saving lives.
(Applause)
: Our third topic Defense and Foreign Aid. If I may inter-
jact just a brief historical item, I might note that in 1911 a Brigadier General
Allen appeared before Congress and with apologies asked for an astronomical
annual budget to insure U.S. supremacy in the air, the amount one million dollars.
The first speaker on this topic will be Mr. Ford.
Mr. Ford: Since January of 1961 under President Kennedy we have had
increased appropriations for the Armed Forces by about 10 billion dollars over
a two year period. Secondly, we have had increased manpower in the various
military services by about one hundred thousand, from two million seven hundred
thousand to two million eight hundred thousand. Thirdly, we've had an increased
amount for foreign aid, from about an average of three billion dollars under
former President Eisenhower per year to a request of four billion nine this year
by
President Kenndy Kennedy and an average during his term of office of
approximately 4 billion dollars. In the foreign aid program under President
Kennedy we had a shift from military to economic assistance. And there's also
been an alleged shift from outright grants and economic aid to so-called loans.
But before you say this is good, let me give you the terms of the loan. Forty-
year loans, a ten-year grace period with a service charge, not an interest
charge, of three-quarters of one percent. Now these increases in dollars and
manpower under President Kennedy were based on the premise that America's
prestige and influence abroad would be enhanced and inevitably as a result
1 - 11
would lead to U.S. and free world success. I think we should ask ourselves:
where do we stand today? And what are the results? One quipster in Washington
the other day might have said: The grim world of the Brothers Wonderful. Now
every American was pleased to find, thanks to Bob McNamara's honesty and
frankness, that the alleged and purely politically motivated missile gap was
wiped out within the first two weeks after the Kennedy's took over. Of course,
there never was a missile gap. It was a missile myth, perpetrated for
political purposes. Now, has defense policy changed under this Administration:
I wouldn't say it has changed very significantly. There has been some
acceleration in some programs, we have increased the size of the Army by two
divisions, we've added some airlift. But there have been cut backs in other
programs. The Skybolt got the axe, and RS70 won't go beyond and R&D program.
Frankly, I'm not concerned too much about these changes in this respect. But
the most serious progr problem is that not one new major weapons system has
come into inventory in the last 34 months. Now has our prestige abroad
improved? Are we more successful in the free world struggle against Communism;
take Europe? NATO is in disarray to use the President's own words. I wonder
if we are going to have the q courage to do what we should about troop strength
in Europe. Are we going to do anything about the fact that we are paying 9.8%
of our gross national product while our European allies are paying 5.4%
There is no solution under this Administration to General de Gaulle. There's
no breakthrough in trade. As a matter of fact, we can't even win the chicken
war. The Berlin Wall was built under this Administration. We hesitated while
it was constructed and we rationalize now and leave it alone. As a matter of
fact, we've put about a billion dollars into Spain. And as just the other
day it was revealed that despite these advances and current ones we can't even
get the rights to put Polaris submarines in those parkss ports. Let's turn
to the Far East. South Viet Nam is the best example of one step forward and
1 - 12
one step backwards. One doesn't know what is the policy in Viet Nam today.
I'm glad to say that I think that we're doing alright militarily. But on the
other hand, we have tiptoed from one end of the teeter-totter to the other on
the political problem in Viet Name. Does anybody know whether we are for or
against the Diem regime today? Let's take Latin America. With fanfare the
Alliance for Progress was launched. There has been negligible results in
achieving social or tax reform in Latin American despite vast promises of
funds by Uncle Saxe Sam. Venezuela is under seige from Castroism. Cuba is
a base for Soviet subversion and infiltration. Brazil and Bolivia are on the
brink of economic and political chaos. Military dictatorships are taking over
at an accelerated pace in all of Latin America. Our problems today stem from
the Kennedy Administration's attitude. There is no unanimity inr unity of
purpose. Some in the Administration want to win against Communism. Others
naively believe Krushchev's change of pace can be accommodated. Krushchev
still wants to bury us. He'll throw us a slow ball one day, a curve the next,
and a fast one the next. And this Administration just can't take care of this
change of pace. We must not be **** fooled. We must maintain our superior
military strength. The enemy must know that we have that strength. The enemy
must know that we will use our strength. And we must be prepared to use our
power in the cause of freedom. (Applause)
:
Mr. Stabler will now address himself to Defense and
Foreign Aid.
Mr. Stabler: Both Parties agree on the importance of our country's
security. Disagreement occurs on how best to go about it. The Kennedy
Administration approach rests on five principles, military strength second to
none; economic growth; preservation of the free world; willingness to reduce
armaments and tension is possible, and a willingness to take advantage of
1 - 13
every opportunity to divide the enemies of freedom. When President Kennedy
assumed office we had fallen behind the Russians in military development, and
weapons designed for what we now call brush war fires the Russians were ahead
of us in the development of space weapons and had been since Sputnik. Through
the expenditure of considerable sums of money, through an all-out effort in
space and with the excellent Administration Secretary of Defense McNamara we
now have pulled ahead of the Russians in missiles and have developed a capability
in conventional weapons more than adequate for any kind of kimited warfare that
we may encounter. Our defense capabilities today are second to none. The
other side of our national security is the preservation of the free world.
This is the goal of our foreign aid program. The greater part of our foreign
assistance has gone and gces today directly to countries menaced by Communist
range
aggression, external or internal. Foreign Aid measures/rearge from direct
military assistance to supplying doctors and teachers to countries kryp trying
to improve health and education *** for their people. Next to our defense
establishment, foreign aid is the single best tool of our government in its
efforts to fortify our national security. It is vital to our efforts to bring
peace and stability to a troubled world, to influence other nations toward the
course of independence and freedom. And even some places to fight cold war
battles. We got into the foreign aid business after World War II. The Marshall
Plan was the beginning. Then came the Truman Doctrine. Both were aimed at
holding back Communism and helping Western Europe get back on its economic
feet. You all know the result. The Western European economy today is
prospering. It leads the free world in economic growth. Communism is contained
in Europe and is being contained virtually on every frontier around the world.
It is interesting to note that in those early days almost 90% of our aid to
Europe was in the form IX of grants. Today the trend is just the appaskive
1 - 14
opposite, with the bulk of the program constituting loans in the interest
rate. And the House Bill just passed has been raised thanks to our Republican
friends to 2%. Since World War II we have been confronted with a world-wide
surge of nationalism among the under-developed countries. This has resulted
in many new nations, radical changes in governments of other nations. All
of these areas are plagued with low economic and social development. And it
is in these areas that we are leading the Communist challenge head-on through
our foreign aid program. The Communist preach that the shortest route to
economic and social progress lies along the totalitarian road. The free world
answer has been that of freedom and self-development. In most of the emerging
locked
nations, these who advocate freedom are/insk in struggle with those who
advocate totalitarianism. The margin of victory sometimes is supplied by
economic or military aid either from us or from the Communists. The hottest
points f C nflict t day are Latin, America, the Far East, Africa. If we
want to save freedom in these areask we must continue economic and military
aid. If we get impatient, cut aid too soon, we may find a dozen Cubas on our
doorstep in Latin America. If this happens those who thpught we were saving
money will be bitterly disappointed. The smallest military operation would
completely dwarf our aid expenditures. The present attempt to save several
hundred million dollars in the Alliance for Progress program could easily lead
to spending of billions of dollars and loss of lives in military action should
Latin America fall prey to the Communists. At the present time the foreign
aid appropriation is in great danger of drastic cuts. The authorization bill
has been cut 40% below the President's recommendation. Further cuts are
threatened. It is astonishing to observe that Congressman Ford and everyone
of the Michigan Republican representatives, except two, supported the deep cut
in foreign aid. Even more disturbing is that after the cut was made six
of these gentlemen voted against the act completely. I suggest this is tantamount
1 - 15
to abolishing the Fire Department. Let me remind you of what General Eisenhower
said recently about foreign aid: "Never has there been any question in my mind
as to the necessity of a program of economic and military aid to keep the free
nations of the world from being over-run by the Communists." Our foreign aidx
program, gentlemen, is just as much a part of our defense program as our guns,
planes and submarines. And I think we all agree that foreign aid is far less
expensive. (Applause)
: We hear much these days about the physical fitness program
and it was thought that this particular group might have a somewhat greater
interest in fiscal fitness. The fourth topic Fiscal Policy and Economic Growth,
the first discussant will be Mr. Stabler.
Mr. Stabler: I am pleased that General Bort has put this issue of
fiscal policy and the economic growth in the wind-up position of today's
discussion. Economic growth is the paramount problem of our time. President
Kennedy has recognized this fact and, in my opinion, the Kenny Kennedy
Administration has acted decisively and effectively to meet the country's needs.
We are discussing growth today in the context of booming auto production in
Michigan and general national prosperity. Yet here in Michigan 58 of our 83
counties still are distressed areas, areas of cronic unemployment and serious
economic problems. Across the country despit general prosperity many other
pockets of cronic economic problems exist. And our national unemployment level
remains high, at about 5%. Since President Kennedy has taken office our annual
rate of growth has climbed to about 4% compared with an average of 2 3/4%
during the Eisenhower years. Our gross national product is headed for an all-
time high of 580 billion. This has had a good effect on Michigan. Auto
production is booming and unemployment is at its lowest level since 1955.
These are indications of impressive growth. But this is not enough. We must
do better or face living with an unemployment of more than 7% of our national
1 - 16
work force. Let me remind you that unemployment is expensive. In 1962 it
cost the federal government and private business 4 billion 7 hundred million
dollars. Our basic problem is we are producing more with fewer workers at a
time when our labor force is being flooded with new young people. President
Kennedy is tackling economic growth at three levels. First, broad tax cut
program as a stimulus for the entire economy. Second, special programs pinpointed
to aid depressed areas. Third, increased aid to education so that we can build
new skills in our young people and retrain our older people displaced by
automation. That part of the President's program which has gain gone into
effect is working and working well. The reduction in corporate tax liabilities
last year through investment tax credits and business depreciation reform
already has pumped more than 2 billion dollars back into the economy, in terms
of plant and equipment investment. In Michigan we can see the results of
the special programs for depressed areas. We have received more than 7 million
dollars for area redevelopment. We were the first State in the Nation to begin
manpower rekai retraining. An accelerated public works programs totalling
been approved
55 million dollars have/imprexew/and are underway in scores of Michigan
communities. Ironically the accelerated public works program is which is
building badly needed municipal improvements has been opposed by 7 of our 11
Michigan Republican Congressmen, including Congressman Ford. The voted against
the AIN APW appropriation this year. The main thrust of Congress in this
Session is, of course, the President's proposal for tax reduction. The 11 billion
tax cut already has passed the House, again with Congressman Ford and 8 other
Michigan Republicans voting against it. Despite opposition of our Michigan
Republican Congressmen the tax program is not a partisan proposal. It is
supported by business, industry and labor. Our own Henry Ford is co-chairman
of the National Business Committee for Tax Reduction. Individuals who get the
1 - 17
biggest benefit of the tax cut with reductions of 8 billion 7 hundred million
the largest cuts will go to the low income families, average reduction will be
about 20%. The tax cut will mean more take-home pay for virtually every
working family in Michigan and in the country. This is the purpose of the
program, to put more money into the hands of consumers and corporations. For
families it will mean more money to spend on needed consumer goods. For
business and industry it will mean more money to spend on plant expansion and
remodelling of new equipment. The net effect will be an increase X in
production which means more jobs. Tt is estimated expansion of the economy
as a result of the tax cut will add some 3 million jobs. Opponents to the
X tax cut have muddied the waters by trying to tie tax reform to the question
of the budget. We can't have a tax cut, they say, until the budget is in
perfect balance. Well, this is like telling an auto worker he can't have a
pay increase until he has paid off his home mortgage. Don't misunderstand
me. As a business man I know the importance of making sure that expenditures
don't exceed revenue. Our Republican friends raise such a clamor about
economy, however, that the point has escaped general notice that the Kennedy
Administration has set a remarkably good record for economy. What many people
aren't aware of x is that major increases in spending in this country have been
in the national security connected areas of the budget. Non-defense spending,
money for health, education and wellfare, has dropped from 27% of the budget
in 1949 to 21% of the budget today. Republican ideas about economy differ
from ours rather sharply. They believe in cutting out whole programs or in
broad across the board slashes. We believe in applying good business principles
which squeeze the waste out of every program. Let me just give you one example.
Secretary of Defense McNamara has squeezed 3 billion dollars of savings out of
last year's defense program by instituting tighter controls. The budget, of
1 - 18
course, will increase year by year, just as the budget of a growing household
or well-run business increases each year. But in the final analysis, the tax
cut should increase our economic growth to a point where over-all tax revenues
will be more than adequate to balance the budget. We have been warned often
that if we do not act to prime the nation's economic pump, we can look forward
to another round of serious recessions. I believe we've got to act now.
(Applause)
: Mr. Ford will now address himself to fiscal policy and
economic growth.
Mr. Ford: Republicans in the Congress favor a tax reduction. We
recognize fully the inequity and the confiscatory nature of the federal tax
structure, which is the product of the need for R revenue during World War II
and Korea. We know federal taxes must be reduced if we are to have increased
growth of our nation and if we are to insure prosperity for the future.
Republicans firmly believe, however, you negate and wash out economic benefits
of a tax reduction by increased federal spending. Quite frankly, I am delighted
to see that the Democrats in Congress now favor rate reduction in federal taxes.
They are welcome Johnny-come-latelys, because in 1947 and 1954 the Democratic
Party, including the President while he was in Congress, was on the other side
of the fence. In 1963 the Democrats are riding two horses. I am delighted to
amplify what Mr. Stabler said, Henry Ford and his Committee are not riding two
horses. They believe in a tax reduction and a reduction in expenditures in the
federal government. Now in January the President proposed tax reduction and in-
creased spending of about 5 billion dollars. Now the President wants a tax cut.
But he is riding side-saddle on spending. He's off again, on again on the spending
issuez. On the day he promised Wilbur Mills, the Chairman of the House Committee
on Ways and Means, that he was going to hold down the spending he was out on a
1 - 19
non-political jaunt in the Western States promising citizens in that area
over 2 billion dollars more in additional federal spending. Now the policy
of confusion or the confusion on policy, I'm not sure which, about spending
in the Kennedy Administration is wide-spread. In January the President sub-
mitted a tight budget, according to his own words. However, in recent weeks
Secretary of Treasury Dillon has praised the Congress for budget cuts totalling
as of now about 4 billion dollars. What is the policy? Big spending or
great frugality? I think it depends upon who is talking or when or to what
audience. Frankly, the Republicans agree with and vote for economy and I'm
delighted to have my friend Neil verify that. But we have reservations about
the Democrats on this issue. The 1961 federal budget had a deficit of 3 billion
dollars, the Democrats said that was a mistake and they promised a surplus,
up
ended/with a 6 billion dolloar deficit in'62. In 1963 they promised a half a
billion dollar surplus. They made another mistake, ended up with a 6 billion
dollar deficit. Now in the current fiscal year and in the next fiscal year
they've just plain given up. And they are going to have a 9 billion dollar
deficit this year and a 9 billion dollar deficit next year. And they only
vaguely promise you a balanced budget in 1968 or 169. This fiscal irresponsibility
undermines whatever efforts have been made to solve our adverse balance of
payments, our gold flow problems. A tax cut with more spending, more interest
payments on an expanding national debt undermines confidence of the United
States dollar. It is immoral in my judgment for us of this generation to live
off the fatted calf and pass bills on to future generations in the form of
higher interest on greater debt. Its natural for everyone of us to want a
tax cut. The Democrats in Washington believe its natural for everyone to want
a federal handout. We can't have it both ways, without MM ultimately falling
on our face. To have a tax cut unmatched by expenditure restraint is to
endanger the economy not to improve it. We know from history what happens to
1 - 20
nations throughout the world that persist in living beyond their means. There
is a deep-rooted anxiety throughout the Western World right today, not about
the quantity of our dollars but about their quality. Was Quantity without
quality places & in jeopardy the savings bonds, the life insurance policies,
the bank balances and the pension benefits of our own people. Adding deficit
on defitit may get the country moving again but in the wrong direction. The
road to tax reduction is an expenditure restraint. Expenditure reduction
RE requires determination ma and forthrightness by each one of us. Lip
service and pious resolutions wont do it. We must realize that today's grandiose
political promises of more and more and more spending become tomorrow's taxes.
We must earn a tax cut by expenditure restraint. A tax cut financed by more
and more borbowed money will lead us to a fool's paradise. W If we follow
the policy of expenditure restraint and control with a firm priority list of
programs and projects the United States can have and will have earned federal
tax reduction, a klanze balanced budget, economic prosperty and sound economic
growth. (.Applause)
: X As previously announced each of our distinguished
speakers will now have five minutes for a final summary. The order of appearance
to be determined by the flip of a coin, which will be supervised by General
Bort. With apologies to the Supreme Court, I should nexxx note that this carries
the legend "In God We Trust". It has come up tails, the first summary will be
given by Mr. Ford.
Mr. Ford: First, if I may, I would like to respend to several questions
raised by Neil Stabler. He indicated that under this Administration most of the
increase in federal spending had been for the Defense Department or related
agencies. Letz me give you the facts on this. The last budged submitted by
President Eisenhower in January of 1961 for fiscal year 1962 called for an 80
1 - 21
billion dollar budget. The fiscal .64 budget submitted by President Kennedy
in January of this year called for a budget of 107 or 108 billion dollars. So
in a period of two fiscal years, we've had an increase of 27 billion dollars.
Only 10 out of the 27 billion dollars related to the Defense Department. 17
or 18 billion out of the 27 went for non-defense agencies. The facts are
that most of the increase in the budget, in the spending under this
Administration is for non-defense purposes. Let's talk for a minute about
foreign aid. There's been much comment about the efforts in the House of
Representatives to reduce President Kennedy's request for this fiscal year
of 4 billion 9 hundred million dollars for foreign aid. The House of
Representatives about a month or so ago cut this 3 billion 5. They EXA talk
about the cuts. But let me assure you a 3 to 3½ billion dollar foreign aid
program is still a big program in my opinion. And when you give them 3 to
31/2 billion dollars and you add to it what we call our surplus agricultural
commodity program of about a billion dollars a year, its a very substantial
program of substance from the American people. Well let's talk about fiscal
responsibility just a bit. This Administration whether its in office 4 years
or 8 years, I will promise you will never balance the federal budget. They
have not balanced it yes yet and they don't promise it at any time during their
term of office. Now let's talk for a minute about the 8 years under President
Eisenhower, which I think on a comparable basis was an infinitely better peiod
of time for the United States. We had a defense program at that time of about
40 billion dollars a year. We had 2 million 7 hundred khren thousand young
men and women under active duty for the Army, Navy and Air Force. This was a
program which was predicated on the hair basis of preserving the peace through
strength. And let me say quickly that it met every emergency. We handled the
crisis in Berlin in 1958, no Wall was built and Krushchev backed down. When
1 - 22
trouble broke out in Lebanon in the Middle East in 1958 President Eisenhower
sent the armed forces as Wilbur Brucker knows and the Marines to Lebanon and
we handled that situation without a shot being fired. And then there was
Quemoy and Matsu, which arose in 1958. Some people wanted to give those islands
up. Ike said no. We sent military forces there, they handled the situation and
we still have a strong front in the Far East today. Under the Eisenhower
Administration we were able to meet these crisis head-on, without an emergency
existing every other day. And I say to you that this Administration under
Eisenhower on a comparable basis did a better job fiscally, did a better job
militarily and we didn't find the world in disarray under Eisenhower that we
find today. When Ike turned over the government to the President in January
of 1961 there was no wall in Berlin, there were no military forces or military
hardware in Cuba. Viet Nam was not at War. We now have 12 to 15 thousand
military personnel in Viet Nam. Yes, when you look at the total picture, the
8 years under Ike, economically, fiscally, militarily or otherwise, on a
comparable basis was a great deal better era in the history of the United
States and I hope and trust that somehowe this Administration can stop being
indecisive and stop having 20 different spokesmen for every issue and if they
do they will get the full support of the Republican Party for any programs of
fiscal responsibility, military strength and freedom for America. Thank you.
(Applause)
: The final summary will be given by Mr. Stabler.
Mr. Stabler: Well I'm interested in this rosy glow of the Eisenhower
period which Jerry remembers. I XXE remind him that in 6 of the 8 Eisenhower
years there was a deficit, the budget was not met. And that in 1959 we
encountered the largest budget deficit ever in American history in a peace time
TORD
year, 12 billion dollars. I think you will find the Kennedy Administration
1 - 23
doing much better than that. The fact is that the federal budget has not
gotten out of hand under Kennedy. Our non-defense expenditures actually are
decreasing in terms of the total budget and in terms of the population. So
our deficit is not sky-rocketing. The federal government has a far better
record than State and local governments, than private business and even than
the American consumer. Since 1947 the federal debt per person, per person,
has declined 19% while State debt person has jumped 550%. May I remind you
there are 10 million more people in the country than when President Kennedy
took office. Our foreign aid program is vital to the security of the United
States, not a waste of money. It has in fact stood as a bulwark of the
free world since World War II. Its significant to note x that of the 15
new nations which have emerged since World War II, not one of them has swung
into the Communist bloc. Our national defense position is excellent. Our
country has never been stronger. At the same time we are bringing about an
easing of nuclear testing. The Kennedy Administration program for economic
growth, certainly a vital part in keeping this country strong, is based on
a broad individual corporate tax cut as a means of stimulating the national
economy. Its a needed reform, has bipartisan support of all segments of the
economy and its necessary if we are to prevent a recurrence of the cycle of
depressions we have experienced since World War II. The President has made
ba broad recommendations in the field of education, medicare and civil rights.
We have not dealt in any great detail in civil rights because I believe it is
accepted by both Congressman Ford and myself that there will and there must
be action in this area this year. President Kennedy's civil rights proposals
are not radical as far as Michigan is concerned. Virtually all of the measures
he has is asking for already have been acceptedx here in Michigan, equality of
opportunity in education, employment, voting and public accommodation. The
medicare program will be passed by Congress, we are long overdue in taking this
1 - 24
action for our senior citizens. I want to turn now to a brief assessment
of where we as a country stand today and what we face in the future. I think
we have three alternatives as a nation. The first is to return to the position
of the Eisenhower Administration which was essentially defensive. We waited
for the Communist world to act and then we responded to that action. The
second alternative is the one being pushed by Senator Barry Goldwater and you
have heard echoes of it today from Congressman Ford. This position can lead
only to war. This is the only conclusion you can draw from the close reading
of the statements of Senator Goldwater, who is emerging as the new spokesman
of the Republican Party. I note, incidentally, that Michigan Republican
Congressmen and other GOP leaders have said Goldwater would be acceptable to
them. Well let's take a look at what they are buying. Senator Goldwater is
opposed to the United Nations. He is opposed to the World Bank. He voted
against the nuclear best ban treaty. He is opposed to banning nuclear testing
in space. He proposes to surrender the emerging nations to Communism, which is
what would happen if we should stop foreign aid, as he favors. He would
withdraw diplomatic recognition from Russia. He makes no distinction between
Red China and Russia, nor does he see any advantage in exploiting the current
XX split between these Roxxx Communist countries. This is extremist thinking
running wild. If the country were to follow his leadership there is no question
in my mind that we would end up at war. I find an alarming tendency on the
part of many Republicans ds to try and incorporate the Goldwater attitude into
their own position. After all the Arizona Senator makes it sound so simple and
clearcut. Well its not so simple. There is only one button that we can push
that will make the Russians disappear. What sensible person would recommend
that course of action. The better alternative, our third alternative, is the
course that President Kennedy is taking. It is based on keeping our defense
1 - 25
systems second to none while maintaining a willingness to take reasonable steps
to ease world tension. We have shown Krushchev our firmness and our decisiveness.
At the same time we have taken major steps toward peace. I believe the majority
of the American people support the Kennedy approach. (Applause)
:
centralization OF POWER IN THE FEDERAL GOVERNMENT
Rep. Gerald R. Ford
Never in the history of the United States has there been a desire for or
the use of the centralization of power in the federal government in relatively
few top officials.
The enormous size of the federal establishment, particularly the
executive branch under the President, is seldom spotlighted and as a result is
getting out of hand at a rapid pace. This establishment comprises approximately
2 million 500 thousand civilian employees with an annual payroll of about
$24 billion each year. It is sugmented by 2 million 800 thousand men and women
on active duty with the Army, Navy, Air Force, and Marines.
This vast network of federal executive employees, with authority emanating
from Washington, operates in every state of the Union. Either through legislation
or through regulations promulgated in the Nation's Capital this huge bureaucracy
has the authority to move into every business, every home through theppower to
collect taxes, to enforce regulations, or to spend taxpayers' money. Such
authority from the banks of the Potomac is backed by the avesome power of over
$100 billion annually in federal funds which can and have been used to persuade,
to entice, and sometimes bludgeon states, communities, business organizations
and even individuals to fall into line, to play the game of accepting federal
domination or dependence.
In the past 30 years there has been a growing, an almost insidious trend,
toward Washington dictatorship with occasional pauses when the voters took matters
in their own hands. The election of 1946 swept out O.P.A. and Ike's victory in
1952 signed the termination of O.P.S.
BERALD FORD LIBRARY
-2-
This trend toward centralization of authority and abuse of executive
power has, however, accelerated in the past 34 months under the Kennedy
Administration. During the entire 1962 session the President made 88 new
requests for funds and 29 additional requests for Presidential powers. The
Kennedy record in 1963 is even more startling. From January through June there
were 207 new demands for funds and 70 new requests for Presidential powers.
I might add parenthetically the flow of White House messages since July 1st
has not decreased but increased and all seeking more money for new programs
and new Presidential authority to control the destiny of the 190 million Americans.
To justify an all powerful federal octopus the arguments are made that
now and in the future the states and local governing units cannot solve our
economic and social problems and furthermore individuals and segments of our
economy want and need federal dependence rather than independence and responsibility.
I doubt that many Americans approved of Presidential action in anger
during the steel industry price controwersy in 1961 that resulted in federal
agents badgering citizens in the middle of the night. I doubt if many Americans
approved of the politically inspired decision of the Secretary of Health,
Education, and Welfare in the ADC-U controversy that nullified the good
intentions of Governor Romney and the Michigan legislature. There is little
evidence in Michigan to support the contention of the Secretary of Interior and
Senator Hart that authorities in Washington should determine the size, the
acreage of a park at Sleeping Bear, or write new procedures for seizing private
property or decide hunting and fishing regulations in our state.
GERALD FORD LIBRARY
-3-
Furthermore, when given a clear-cut choice Americans will not sell
freedom for a federal handout. The Kennedy Administration in 1962 ranmed
through farm legislation which gave wheat farmers two choices - - on the
one hand the most rigid controls plus the enticement of high price supports or
the alternative of no controls with a slash in wheat prices. Secretary
Freeman with the full backing of the President and the massive help of federal
funds and the personnel of the Department of Agriculture put on the greatest
propaganda campaign on behalf of federal control.
You know the refreshing story. The American wheat farmer, despite the
lure of a guaranteed income voted for Freedom rather than Freeman.
Our traditional form of government with the specific and limited delegation
of power to the federal government has met every domestic and international
crisis of the past. We must never forget a government big enough to give us
everything ve want is a government big enough to take from us everything we have.
Centralism with all its evil connotations will be checked only when national
leaders refuse to encourage the "easy way" of federal assistance and state and
local officials assume the responsibility and privilege of local action. The
big issue today is whether the excess concentration of federal power and
accesignty will destroy state, local, and individual freedom and responsibility.
GERALD FORD LIBRARY
CHAIRMAN
EXECUTIVE COMMITTEE
BOB WILSON, M.C., CALIFORNIA
National
WILLIAM L. SPRINGER, M. C., ILLINOIS
CHARLES M. MATHIAS, JR., M. C., MD.
VICE CHAIRMEN
ROBERT J. CORBETT, M. C., PENN.
CHARLES R. JONAS, M. C., N. C.
WILLIAM M. MCCULLOCH, M. C., OHIO
Republican Congresson Committee
ARCH A. MOORE, JR., M. C., W. VA.
MELVIN R. LAIRD, M. C., WISCONSIN
CRAIG HOSMER. M.C.. CALIF.
HAROLD C. Ostertag, M. C., N. Y.
J. EDGAR CHENOWETH, M. C., COLORADO
CHAIRMAN AUDITING COMMITTEE
WILLIAM C. CRAMER. M. C., FLORIDA
CONGRESSIONAL HOTEL
WALT HORAN, M. C., WASHINGTON
WILLIAM G. BRAY, M. C., INDIANA
WASHINGTON 3. D. C.
EXECUTIVE SECRETARY
SECRETARY
EDWARD F. TERRAR, JR.
LINCOLN 4-3010
JOHN J. RHODES, M. C., ARIZONA
TREASURER
184
ROBERT V. FLEMING, D. C.
November 13, 1963
Dear Mr. Ford:
Mr. Terrar wishes to have this returned to you and
thanks you for the use of it.
Sincerely,
Joanne Stone
Miss Joanne Stone
Secretary to Mr. Terrar
The Honorable G. R. Ford
House of Representatives
Washington, D.C.
FORD & LIBRARY GERALD
Economic Club
QR21
MEDICARE
Rep. Gerald R. Ford
The issue is NOT health care for the aged versus no health care.
Everyone agrees that all of our elderly who need health care should get it when
they need it...whether or not they can afford to pay for it. The real issue
is how health care for the elderly can best be provided, whether it should be
voluntary or compulsory, whether the Federal government should take care of
people who can take care of themselfes.
The voluntary program is available now. It combines health insurance
and prepayment plans for those able to purchase them, and the Kerr-Mills Act and
other locally administered laws for helping those who need help in paying for
health care. The compulsory, alternative approach is the King-Anderson Bill
(sometimes referred to as "Medicare") now before Congress.
More than 60% of the aged already have protected themselves against the
cost of illness through health insurance. The number covered has tripled in
the past 10 years and the aged are buying health insurance at a faster rate
than any other age group.
The Kerr-Mills Law vas passed by Congress in 1960. The law enables the
individual states to guarantee to every aged American who needs help the
health care he requires. In addition to the more than 2,000,000 covered by
Old Age Assistance, the law is designed to benefit all other older persons who
are ordinarily self-supporting but unable to meet the cost of a serious or
prolonged illness. It helps those who need help. Each state can pattern the
QERALD FORD LIBRAR
-2-
program to meet its own particular needs. It is administered locally where the
individual needs of the aged are known. By helping only those who need help,
it avoids waste of tax dollars. It is financed by Federal-State matching
funds.
The King-Anderson Bill is now before Congress. This plan would provide
limited health care benefits for everyone over 65 under the Social Security
and Railroad Retirement Acts, plus 2,500,000 persons who are 65 and over but
not covered by the two acts. It would provide 90 to 180 days of hospital care
after certain payments by the aged patient, or up to 45 days at no cost to the
patient; nursing home care for up to 180 days; diagnostic services above the
first $20, which the patient would pay, and some home health services. Diagnostic
services would be limited to those which vere part of the services of a hospital.
Cost of the program would be financed by increased social security taxes.
On the other hand, it would pay practically no doctor bills. It would
not furnish any drugs or devâces outside a hospital. It would not cover cost
of diagnosis (X-ray, blood tests, etc.) in a doctor's office or anywhere else
unless part of a hospital service. It offers no help for those confined in
mental or tuberculosis hospitals. It would cover less than one-quarter (25%)
of the total yearly health care costs of the average aged person.
It would establish a tax-supported program for everyone when he reaches
his 65th bfrthday--regardless of need. America's wage-earners and their
employers would be compelled to pay the bill through a substantial tax increase.
FORD & LIBRARY GERALD
-3-
There is general agreement that the cost would be staggering. For the
first year alone, the cost has been estimated at from $1.4 billion to $2.5 billion.
But no nation that has tried compulsory Federal Government-controlled medicine
ever has been able to anticipate the cost correctly. England's socialized
medicine program now costs nearly five times the original estimates.
King-Anderson calls for a double increase in payroll taxes--an increase of
one-fourth of 1% for employees, a like amount for the employers, and three-
eighths of 1% for the self-employed...PLUS an increase in the tax base from
$4,800 to $5,200. Allffuture payroll tax increases would be figured on the
higher tax base. There have been nine increases since social security began,
and two more are already written into law. King-Anderson would add still another
increase.
When the compulsory King-Anderson payroll tax first would be deducted
from paychecks, workers making $100 a week or more (and more than one-half
do) would be forced to pay 16% more payroll tax than they pay today. By 1966
because of social security tax increases already scheduled to go into effect,
they would pay 30% more. Still another social security tax boost goes into
effect in 1968, and then the wage-earner would pay 46% more than he is paying
today. Workers making $5,200 a year would pay $27.50 in increased social security
taxes the first year under King-Anderson, and their employers would pay a like
amount for a total of $55. And these figures are based on the lowest estimated
cost of the plan. As the number of aged increased the cost of the program wpild
increase.
DERALD FORD LIBRARY
An additional tax burden of $35 billion would be placed on the shoulders
of today's and tomorrow's younger workers and their employers. The $35 billion
is the estimated cost of health care benefits for today's aged during the rest
of their lives. In other words, the King-Anderson program would start off with
a $35 billion debt. Many believe it is both inequitable and immoral to saddle
the nation's young workers with this huge burden when millions of today's aged
can afford to provide for their own health care.
Many believe the initial tax increase would be just the beginning.
Congress has been warned that the plan would cost at least $5.4 billion a
year by 1983. This, of course, would mean a fantastic increase in social
security taxes. A high administration official, credited with writing the King-
Anderson Bill and who would help administer it, told the Senate Finance Committee
that he envisions an eventual payroll tax of 20% on a base of $9,000... or $75 a
month for employee. $75 a month for employer, and more than $112 a month for
the self-employed. This would be an increase of 411% over the present tax.
The King-Anderson Bill would cost taxpayers millions of dollars more a
year than Kerr-Mills and would provide fewer health care benefits for the elderly.
Kerr-Mills helps only those who need help, but it gives them a wide range of
benefits including drugs and doctors' services.
King-Anderson is socialized medicine for a segment of the population,
those 65 and over. And inevitably would lead to socialized medicine for everyone.
Former Congressman Aime J. Forand, considered the father of King-Anderson type
legislation, explained the ultimate goal in January, 1961, in these words:
GERALD FORD LIBRARY
-5-
"If we can only break through and get our foot inside the door, then we can
expand the program after that." The AFL-CIO strongly backs this legislation
as a "framework" for a more ambitions program. One AFL-CIO lobbyist said that
if it is passed, "We will come back for more and more--and more."
FORD is LIBRARY GERALD
MEDICARE
Rep. Gerald R. Ford
The issue is NOT health care for the aged versus no health care.
Everyone agrees that all of our elderly who need health care should get it when
they need it...whether or not they can afford to pay for it. The real issue
is how health care for the elderly can best be provided, whether it should be
voluntary or compulsory, whether the Federal government should take care of
people who can take care of themselfes.
The voluntary program is available nov. It combines health insurance
and prepayment plans for those able to purchase them, and the Kerr-Mills Act and
other locally administered laws for helping those who need help in paying for
health care. The compulsory, alternative approach is the King-Anderson Bill
(sometimes referred to as "Medicare") now before Congress.
More than 60% of the aged already have protected themselves against the
cost of illness through health insurance. The number covered has tripled in
the past 10 years and the aged are buying health insurance at a faster rate
than any other age group.
The Kerr-Mills Law was passed by Congress in 1960. The law enables the
individual states to guarantee to every aged American who needs help the
health care he requires. In addition to the more than 2,000,000 covered by
Old Age Assistance, the law is designed to benefit all other older persons who
are ordinarily self-supporting but unable to meet the cost of a serious or
prolonged illness. It helps those who need help. Each state can pattern the
-2-
program to meet its own particular needs. It is administered locally where the
individual needs of the aged are known. By helping only those who need help,
it avoids waste of tax dollars. It is financed by Federal-State matching
funds.
The King-Anderson Bill is now before Congress. This plan would provide
limited health care benefits for everyone over 65 under the Social Security
and Railroad Retirement Acts, plus 2,500,000 persons who are 65 and over but
not covered by the two acts. It would provide 90 to 180 days of hospital care
after certain payments by the aged patient, or up to 45 days at no cost to the
patient; nursing home care for up to 180 days; diagnostic services above the
first $20, which the patient would pay, and some home health services. Diagnostic
services would be limited to those which were part of the services of a hospital.
Cost of the program would be financed by increased social security taxes.
On the other hand, it would pay practically no doctor bills. It would
not furnish any drugs or devéces outside a hospital. It would not cover cost
of diagnosis (X-ray, blood tests, etc.) in a doctor's office or anywhere else
unless part of a hospital service. It offers no help for those confined in
mental or tuberculosis hospitals. It would cover less than one-quarter (25%)
of the total yearly health care costs of the average aged person.
It would establish a tax-supported program for everyone when he reaches
his 65th bfrthday--regardless of need. America's wage-earners and their
employers would be compelled to pay the bill through a substantial tax increase.
GERALD FORD LIBRARY
-3-
There is general agreement that the cost would be staggering. For the
first year alone, the cost has been estimated at from $1.4 billion to $2.5 billion.
But no nation that has tried compulsory Federal Government-controlled medicine
ever has been able to anticipate the cost correctly. England's socialized
medicine program nov costs nearly five times the original estimates.
King-Anderson calls for a double increase in payroll taxes--an increase of
one-fourth of 1% for employees, a like emount for the employers, and three-
eighths of 1% for the self-employed...PLUS an increase in the tax base from
$4,800 to $5,200. Allffuture payroll tax increases would be figured on the
higher tax base. There have been nine increases since social security began,
and two more are already written into lav. King-Anderson would add still another
increase.
When the compulsory King-Anderson payroll tax first would be deducted
from paychecks, workers making $100 a week or more (and more than one-half
do) would be forced to pay 16% more payroll tax than they pay today. By 1966
because of social security tax increases already scheduled to go into effect,
they would pay 30% more. Still another social security tax boost goes into
effect in 1968, and then the wage-earner would pay 46% more than he is paying
today. Workers making $5,200 a year would pay $27.50 in increased social security
taxes the first year under King-Anderson, and their employers would pay a like
amount for a total of $55. And these figures are based on the lowest estimated
cost of the plan. As the number of aged increased the cost of the program vp83d
increase.
BRARY
An additional tax burden of $35 billion would be placed on the shoulders
of today's and tomorrow's younger workers and their employers. The $35 billion
is the estimated cost of health care benefits for today's aged during the rest
of their lives. In other words, the King-Anderson program would start off with
a $35 billion debt. Many believe it is both inequitable and immoral to saddle
the nation's young workers with this huge burden when millions of today's aged
can afford to provide for their own health care.
Many believe the initial tax increase would be just the beginning.
Congress has been warned that the plan would cost at least $5.4 billion a
year by 1983. This, of course, would mean & fantastic increase in social
security taxes. A high administration official, credited with writing the King-
Anderson Bill and who would help administer it, told the Senate Finance Committee
that he envisions an eventual payroll tax of 20% on a base of $9,000... or $75 B.
month for employee, $75 a month for employer, and more than $112 a month for
the self-employed. This would be an increase of 411% over the present tax.
The King-Anderson Bill would cost taxpayers millions of dollars more a
year than Kerr-Mills and would provide fever health care benefits for the elderly.
Kerr-Mills helps only those who need help, but it gives them a vide range of
benefits including drugs and doctors' services.
King-Anderson is socialized medicine for a segment of the population,
those 65 and over. And inevitably would lead to socialized medicine for everyone,
Former Congressman Aime Jo Forand, considered the father of King-Anderson type
legislation, explained the ultimate goal in January, 1961, in these words;
FORD : LIBRARY GERALD
&
"If we can only break through and get our foot inside the door, then we can
expand the program after that." The AFL-CIO strongly backs this legislation
as a "framework" for n more ambitions program, One AFL-CIO lobbyist said that
if it is passed, "We will come back for more and more--and more."
FORD is LIBRARY GERALD
CENTRALIZATION OF POWER IN THE FEDERAL GOVERNMENT
Rep. Gerald R. Ford
Never in the history of the United States has there been a desire for or
the use of the centralization of power in the federal government in relatively
few top officials.
The enormous size of the federal establishment, particularly the
executive branch under the President, is seldom spotlighted and as a result is
getting out of hand at a rapid pace. This establishment comprises approximately
2 million 500 thousand civilian employees with an annual payroll of about
$14 billion each year. It is augmented by 2 million 800 thousand men and women
on active duty with the Army, Navy, Air Force, and Marines.
This vast network of federal executive employees, with authority emanating
from Washington, operates in every state of the Union. Either through legislation
or through regulations promulgated in the Nation's Capital this huge bureaueracy
has the authority to move into every business, every home through theppower to
collect taxes, to enforce regulations, or to spend taxpayers' money. Such
authority from the banks of the Potomac is backed by the avesome power of over
$100 billion annually in federal funds which can and have been used to persuade,
to entice, and sometimes bludgeon states, communities, business organizations
and even individuals to fall into line, to play the game of accepting federal
domination or dependence.
In the past 30 years there has been a growing, an almost insidious trend,
toward Washington dictatorship with oscasional pauses when the voters took matters
in their own hands. The election of 1946 swept out O.P.A. and Ike's victory in
1952 signed the termination of OPS.
GERALD FORD LIBRARY
-2-
This trend toward centralization of authority and abuse of executive
power has, however, accelerated in the past 34 months under the Kennedy
Administration. During the entire 1962 session the President made 88 new
requests for funds and 29 additional requests for Presidential powers. The
Kennedy record in 1963 is even more startling. From January through June there
were 207 new demands for funds and 70 new requests for Presidential powers.
I might add parenthetically the flow of White House messages since July 1st
has not decreased but increased and all seeking more money for new programs
and new Presidential authority to control the destiny of the 190 million Americans.
To justify an all powerful federal octopus the arguments are made that
nov and in the future the states and local governing units cannot solve our
economic and social problems and furthermore individuals and segments of our
economy want and need federal dependence rather than independence and responsibility.
I doubt that many Americans approved of Presidential action in anger
during the steel industry price controwersy in 1961 that resulted in federal
agents badgering citizens in the middle of the night. I doubt if many Americans
approved of the politically imspired decision of the Secretary of Health,
Education, and Welfare is the ADC-U controversy that nullified the good
intentions of Governor Romney and the Michigan legislature. There is little
evidence in Michigan to support the contention of the Secretary of Interior and
Senator Hart that authorities in Washington should determine the size, the
acreage of a park at Sleeping Bear, or write new procedures for seizing private
property or decide hunting and fishing regulations in our state.
GERALD FORD VIBRARY
-3-
Furthermore, when given 8. clear-cut choice Americans will not sell
freedom for a federal handout. The Kennedy Administration in 1962 rammed
through farm legislation which gave wheat farmers two choices - - on the
one hand the most rigid controls plus the enticement of high price supports or
the alternative of no controls with a slash in wheat prices. Secretary
Freeman with the full backing of the President and the massive help of federal
funds and the personnel of the Department of Agriculture put on the greatest
propaganda campaign on behalf of federal control.
You know the refreshing story. The American wheat farmer, despite the
lure of a guaranteed income voted for Freedom rather than Freeman.
Our traditional form of government with the specific and limited delegation
of power to the federal government has met every domestic and international
crisis of the past. We must never forget a government big enough to give us
everything we want is a government big enough to take from us everything we have.
Centralism with all its evil connotations will be checked only when national
leaders refuse to encourage the "easy way" of federal assistance and state and
local officials assume the responsibility and privilege of local action. The
big issue today is whether the excess concentration of federal power and
awessignty will destroy state, local, and individual freedom and responsibility.
GERALD LIBRANY R. FORD
"MAJOR ISSUES
FACING THE 88TH CONGRESS"
R. FORD
Guest Speakers
GERALO
LIBRARY
HON. GERALD R. FORD
HON. NEIL STAEBLER
Monday Noon, October 21, 1963
"MAJOR ISSUES
FACING THE 88TH CONGRESS"
1.
Centralisation of Power in the Federal Government
II. Medicare
III. Defense and Foreign Aid
IV. Fiscal Policy and Economic Growth
Guest Speakers
The Honorable
The Honorable
NEIL STAEBLER
GERALD R. FORD
Congressman-at-Large
Congressman from
from Michigan
the 5th Michigan District
BEFORE THE ECONOMIC CLUB OF DETROIT
Monday Noon, October 21, 1963
Cobo Hall
12:15 P.M.
PRESIDING OFFICER
THE VERY REVEREND
LAURENCE V. BRITT, S.J.
LESTER SKENE BORK
President
President
University of Detroit
The Economic Club of Detroit
I
(The meeting was opened by President Lester Skene Bork,
who presented The Very Reverend Laurence V. Britt, S.J.,
President, University of Detroit, as Presiding Officer.)
FATHER L. V. BRITT: General Bork, distinguished guests and
gentlemen:
I think first before introducing our distinguished visitors I should
explain to you why I was chosen for this presiding task, and I am quoting
from a letter which General Bork doesn't know I had occasion to see.
He stated that, "Father Britt is definitely a non-announced neutral, I've
never heard of his being considered a Democrat or a Republican." He
apparently thinksphat Jesuits are that third political party you've heard
references made to. (Laughter) Actually every time we have a political
speaker on campus, I find that I'm quickly identified with that particular
group.
All of us I think are aware of the fact that at times democracy
has a way of muddling along with a really frightening number of wrong
solutions to very grave problems. This is a problem, but it will be
more of a pseblem and democracy will cease to exist, if the time ever
comes when concerned citizens cease to ask questions or cease to seek
solutions to the problems. And we know in the many years that this
country has endured, free discussion has been one of the most important
means we have had for arriving at new ideas.
Today we're privileged to have as our discussion leaders two
gentlemen whose experience certainly eminently qualifies them for the
task at hand. With respect to the discussion format, it has been agreed
that each speaker will have from four to six minutes to speak on each
of the four topics that you'll find listed on the front of the program.
At the end of five minutes, General Bork assures me that he will be
heard from with one sharp chime; at the end of six minutes, there will
be two chimes that will indicate the deadline has been reached.
I think
LIBRARY
2
you'll agree that this is much more subtle than the method used over
at the Vatican Council where at the end of the allotted time, the engineer
simply disconnects the Bishop's microphone. (Laughter)
At the conclusion of the discussion of the four topics, I will
flip a coin -- which is my own coin; they didn't even contribute that
to the occasion -- that will determine who will be the lead-off speaker.
Our speakers today have their biographical data summarised in
the program. I'm not going to duplicate items that are there. But if I
may begin by introducing the man who will be the lead-off speaker, I
will then also introduce the second gentleman so that there will be no gap
between the introductions and the beginnings of the discussion.
One of our distinguished visitors has been in Congress since January
of 1949. He is currently serving his eighth consecutive term. Mr. Ford,
as you know, is Michigan's Representative from the 5th District. Among
other responsibilities, he is Chairman of the Republican Conference of
the House of Representatives, a member of the Committee on Appropriations,
and a member of the Republican Policy Committee. He is the senior
Republican member of the Sub-Committee on Appxpriations for the
Department of Defense, and has a host of other responsibilities.
It will interest you to know -- I think already many of you know
this -- that he was graduated from the University of Michigan in 1935 and
in the light of recent developments I am sure he would be very much
welcomed back on that campus. He graduated after having won three
varsity letters in football, after having played on the University's
He
undefeated teams back in the early Thirties, was selected as the University's
most valuable player, was also selected to be the recipient of Sports
Illustrated's Silver Anniversary All-American Award, received his law
FORD
degree from Yale in 1935, practiced law in Grand Rapids, served he in the
U. S. Navy, and somehow found find time then to run for Congress; and has had
8817
3
Now
many marks of recognition during these many years, new in HILL his
8th term as Congressman, he is generally recognised as one of the most
experienced and most brilliant of the young Republicans in the Congress.
I will ask Mr. Ford to stand up please.
(Applause)
Our second speaker, The Honorable Neil Staebler, Michigan's
Democratic Congressman-at-Large you may recall, appeared before this
group just a year or so ago. He is also a Democratic National Committee-
and
has been
man, an Ann Arbor businessman, for three decades a worker and leader
in the Democratic Partye From 1955 to 1960, he served as Chairman of the
Democratic National Advisory Committee on Political Organization, was
a member of the National Committee's 1960 Planning Committee -- which
seems to have accomplished its objective, Graduated also from the
University of Michigam in 1926, in 1962,had the honor of receiving an
henorary Law Degree from his Alma Mater. The citation given at the
simoh instances as bases for the recognition such things as: "political skill,
dedication to purposes transcending the partisan, emphasis on substantive
issues, success in demonstrating the role that can be played by the citizen
amateur in state political life," and X
He takes justifiable pride, I think, in the fact that his own experience
enables him to look at politics and government from the businessman's
point of view, with sincere concern for such realities as taxes and
expenditures, labor, production costs and so on.
Mr. Staebler is also a Navy veteran and, as all of you know,
there are rumors being heard that he is to be considered one of the strong
possible gubernatorial candidates for the State of Michigan at the next
election. Mr. Staebler.
(Applause)
LO FORD LIB
The first topic for discussion -- Mr. Ford will be the first speaker
-- is "Centralisation of Power in the Federal Government." Mr. Ford.
HON. GERALD R. FORD: Never in the histor y of the United States,
in peace or war, has there been such a strong desire for, or the use of
contralization of power in the federal government. The enormous size of
the federal establishment, particularly the Executive Branch of the govern-
ment is sdidom spotlighted, and as a result, in my judgment is getting
out of hand,
This establishment comprises approximately 2,500,000 civilian
employees, with an annual payroll of approximately $14 billion. This
vast network of federal executive employees, with authority emanating
from Washington, operates in every one of our states. Through legislation
or regulations promulgated in the nation's capital, this huge bureaucracy
has the authority to move into every business, every home, through the
power to collect taxes, to enforce regulations or to spend taxpayers' money.
Such authority from the banks of the Potemac is backed by the awesome
power of over $100 billion a year in federal funds, which can and have
been used to persuade, to entice, or sometimesbludgeon states, communities,
business organisations and even individuals to fall into line, to play the
game of accepting federal domination.
In the past 30 years there has been a growing and almost insidious
trend toward Washington dictatorship, with occasional pauses when the
voters took matters in their own hands. The election of 1946 swept out
OPA, and Ike's victory in 1952 signed the termination of OPS. This
trend toward contralization of authority and abuse of executive power has
accelerated in the past 34 months under the Kennedy Administration. During
the entire 1962 session of Congress, the President made 88 new requests
for funds, and 29 additional requests for Presidential power.
The Kennedy record in 1963 is even more startling. From
January through June this year there were 207 new demands for funds
and 70 new requests for Presidential power. Parenthetically, the flow
of White House messages since July 1st has not decreased, but increased;
5
and all seek more money for new programs, new policies and new
Presidential authority.
To justify an all-powerful federal octopus, the arguments are often
made that now and in the future the state and local governing institutions
cannot solve our economic and social problems. Furthermore, individuals
and segments of our economy want and need federal dependence, rather
than independence and responsibility.
I doubt that many Americans approved of Presidential actions in
anger during the steel industry controversy in 1961 that resulted in
federal agents badgering innocent citizens at home at midnight. I doubt
if many Americans approved of the politically inspired decisions of the
Secretary of Health, Education and Welfare in the ADCU controversy
that nullified the good intentions of Governer Romney and the Michigan
Legislature.
I think there is very little evidence in Michigan to support the
contention of the Secretary of the Interior, and Senator Hart, that authorities
in Washington should determine the size, the acreage of a park at
Shoping Bear; or write new procedures for seising private property; or
decide hunting and fishing regulations in the State of Michigan.
Furthermore, when given a clear-cut choice, Americans will not
sell freedom for a handout. The Kennedy Administration in 1962, as you
well know, rammed through farm legislation which gave wheat farmers
two choices. On the one hand, the most rigid controls plus the enticement
of high price support; or the alternative of no controls, with a slash in
wheat prices. Secretary Freeman, with the full backing of the President,
and the massive help of federal funds and the personnel of the Department
of Agriculture, put on the greatest propaganda campaign on behalf of
federal control.
You know the refreshing story. The American wheat farmers,
despite the lure of a guaranteed income, voted for freedom rather than
6
Freeman. Our traditional form of government, with the specific and
limited delegation of power to the federal government, has met every
domestic and international crisis. We must never forget that a government
big enough to give us everything we want, is a government big enough to
take from us everything we have.
Centralism with all its ovil connotations will be checked only
when national leaders refuse to encourage the easy way of federal
assistance, and state and local officials assume the responsibility and
privilege of local action. The big issue today is whether the excess
concentration of federal power and sovereignty will destroy state, local
and individual freedom and responsibility.
(Applause)
FATHER L. V. BRITT: Mr. Staebler will now address himself
to the first topic. Mr. Staebler.
HON. NEIL STAEBLER: Father Britt, Congressman Ford,
General Bork, members of The Economic Club and guests:
At the outset I want to express my appreciation at having an
opportunity to be here with The Economic Club again, and in the company
of my distinguished colleague Congressman Ford. As he has pointed out,
Americans have always had a healthy distrust of government. Not all
government, however, should be regarded as an evil, or an infringement
of individual freedom. Government regulations often provide us with
greater freedem, as for example, traffic signals which enable us to drive
our automobiles safely. We cannot rely upon drivers to regulate themselves,
and we can't always rely upon big business or big labor to regulate
themselves. To determine what is us eful and what is abusive federal
power, we need sober reflection rather than fear or vague generalisations.
Let us explore the problem of federal power by trying to answer three
questions.
LIBRARY
7
One, when is federal action necessary? Two, is the federal
is
government misusing its power? Three, dde/s the individual citisen
more or less free today than he was when the federal government was
smaller?
There would seem to be two situations in which federal action
is necessary. One is where states fail to meet their responsibilities.
The other is where problems are national in scope. There is no question
that the federal government is doing some things which ought to be done
by state governments. For example, inadequate state regulations in the
field of water pollution have necessitated federal action. Hom in Detroit
federal hearings revealed severe pollution of the Detroit River, which
was endangering the health and property of our downriver citizens.
Yet the problems goes beyond the fact that the federal government
has been forced to act when states have failed to act. In SOME fields
even with the best intentions, state action would prove inadequate because
many problems are national in scope and therefore require national solutions.
Unemployment, civil rights and airpollution are a few examples of national
problems. So is the problem of deceptive packaging and advertising of
consumer goods, a problem in which Senator Hart has been working so
effectively. Education and health are also national problems because
many of our states are too poor to mar shall the funds necessary for adequate
facilities and individual care.
Now let's ask, is the federal government abusing its power?
Some people think that the federal government is becoming an ever larger
network of people interfering in our daily lives. Congressman Ford
called it an octopus. The truth is that the number of people employed by
government as a percentage of the population has actually declined since
1946. Then it was 19 people per thousand. Today it is only 13 people
per thousand. If you subtract from federal employment those working in
Defense, the Post Office, and the Veterans Administration, the remainder
8
of federal government employs fewer people than the telephone industry.
Finally, I want to say a few words about the question of individual
freedom. Would the individual citizen be more free today if the federal
government refrained or was made to refrain from areas of regulation
and positive action? More free perhaps -- to drink polluted water;
or to fly on unregulated airlines; more free to buy dangerous drugs,
falsely advertised products; free to be unemployed; free to have an
inadequate education or unequal opportunity. Should the individual citizen
be free to take Thalidemide?
Let's be honest about this matter. Less federal regulation does
not necessarily mean greater individual freedom. It can mean freedom
for private tyrannies to assert themselves. On the other hand, it is true
that government is big and that it overawes many citizens. Nowadays
it isn't as simple as it was 40 years ago. It takes time to read about
government, time to pender it, time to ask questions. Many business
and professional people brush off their responsibilities by turning problems
over to trade associations. This is fine for an individual case affecting
an industry, but what about the great problem of centralisation of power
which goes beyond industries and maybe even counter to them? This
is what political parties are for, and I suggest active membership in
either political party multiplies the effectiveness of an individual and
his ideas in dealing with government at any level, particularly the
federal government.
Our political parties offer the best means we have for protecting
ourselves against unnecessary government controls. I do not doubt that
with an enlightened citizenry and an alert Congress we can be assured
that federal power is used to provide conditions under which every individual
can lead a freer and better life.
(Applause)
FORD & LIBRARY GERALD
9
FATHER L. V. BRITT: The second topic is that of Medicare
and by prior agreement it has been established that the first speaker for
this topic will be Mr. Staebler.
HON. NEIL STAEBLER: I'm sorry that I have only a few minutes
to talk with you about the very important subject of Medicare for our
senior citizens. Actually the word "Medicare" is a misnomer because
what we are really talking about is a program of hospital insurance paid
for by Social Security contributions. It has mothing to do with the payment
of doctor bills. It would only help pay for hospital bills and related
expenses such as drugs.
It's worth noting that the United States is the only major industrial
nation in the civilised world that does not provide a program of propaid
hospital insurance for older citisens. In the United States today 18 million
of our citizens are over 65 and 670,000 of these senior citizens are here
in Michigan. Not only will this number continue to grow, but the life
expectancy of our older people also is rising. A man who reaches 65
today can expect to live another 13 years. A woman who is 65 can
expect to see 80.
In the past when a person lived only a relatively few years after
retirement, it was often possible for him to meet his hospital needs.
Now, however, with people living 10 to 15 years after retirement, at a
time when their medical needs continue to rise, they simply cannot afford
to meet the increased burden of health care. The vast majority of
senior citizens are living on a reduced income at best, and with pitifully
small cash reserves.
I am sure many of us here know of incidents where just one
serious illness has completely wiped out the financial resources of an
olderly person. I think it's obvieus to all of us that this matter will
become even more serious as life expectancy increases and hospital
LIBRARY
costs go up. Few people dispute this. The question then is, how are
10
these necessary expenses going to be met? Should the children take up
this burden? Should we leave it to charity? Can private insurance plans
do the job? Or is there another way? I don't think children, charity
or private insurance, alone or together, can do the job. They can and
should help, of course. But the basic job ought to be done on a. universal
basis through a Social Security prepayment plan.
This is the program recommended by President Kennedy and the
Democratic Party. I support it and I will cast my vote for it. We have
already tried the charity approach and it deesn't work satisfactorily. Pm
talking about the Kerr-Mills Medical Assistance Law passed three years
ago by Congress. It sets humiliating requirements for our older people --
virtually forces them to take a pauper's oath; and doesn't do the job!
Michigan was the first state to qualify for Kerr-Mills. Ye last
year only 13,583 of our senior citizens qualified for health care assistance.
What about the other 656,000 Michigan citizens over 65? Should we
attempt to help them by extending Blue Cross or other similar programs?
This is a solution many people suggest. The trouble with Blue Cross
or other private insurance is two-fold. It lies in the increasing longevity
of people and the increasing cost of hospitalization. The very same thing
that is helping life insurance companies decrease the actuarial risks
works against Blue Cross. It increases the risks for Blue Cross.
Secondly, not only is life expectancy increasing, but the cost of
hospital care is constantly rising. Hospital care comprises about three-
quarters of the medical costs of the elderly. The alternative to private
insurance then is the Social Security approach: the principle of paying
for our hospital insurance during our working years. Notice that this
distributes the risk over the entire population. Not everybody will have
a big hospital bill when they are olderly, but everyone will share in FORD, the
GERALD
LIBRARY
11
cost of the insurance -- about 25 cents a week.
The real objection to hospital insurance or Medicare comes from
those who fear that it will destroy either the medical profession or the
the
insurance business. Neither Congress nor/people will allow this to happen.
In my view, the challenge of health care for our senior citisens can be
met only by the broad approach of a Social Security program. This is a
program that preserves the self-respect of the individual concerned by
providing him with benefits he has already paid for and is entitled to
receive.
(Applause)
FATHER L. V. BRITT: Mr. Ford will now discuss Medicare.
HON. GERALD R. FORD: The issue is not health care for the
aged versus no health care. Everyone agrees, I believe, that our elderly
who need health care should get it when they need it, Whether or not
they can afford to pay for it. The real issue is how health care for
elderly can best be provided; whether it should be voluntary or compulsory;
whether the federal government should take care of people who can take
care of themselves?
The voluntary program is available now. It combines health
insurance and prepayment plans for those able to purchase them, and
the Kerr-Mills Act and other locally administered laws for helping those
who need help in paying for health care.
The compulsery alternative approach is the King-Anderson bill
referred to as Medicare.
More than 60% of the aged already have protected thenselves
against the costs of illness through health insurance. The number covered
has tripled in the last 10 years and the aged are buying health insurance
at a faster rate than any other age group in our population. The Kerr-Mills
Law was passed by Congress in 1960. The law enables the individual
states to guarantee every aged American who needs help the health care
12
he requires. In addition to the more than 2 million covered by Old Age
Assistance, the law is designed to benefit all other older persons who
are ordinarily self-supporting, but unable to meet the cost of a serious
or prolenged illness. It helps those that md help. Each state can pattern
its program to meet its own particular needs. It is administered locally
where the individual needs of the aged are well known. By helping only
those who need help it avoids waste of tax dollars.
The King-Anderson Bill is now before the Congress. This plan
would provide limited health care benefits for everyone over 65 under
Social Security or Railroad Retirement, plus 2,500,000 persons who are
65 or older today, but not covered by either act. It world pay practically
no doctor bills. It would not furnish any drugs or devices outside of a
hospital. It would not cover cost of diagnesis in a doctor's office, or
anywhere else unless part of a hospital service.
It offers no help for those confined in mental or tuberculosis
hospitals. It would actually cover less than 25% of the total yearly care
cost of the average aged person. It would establish a tax-supported program
for everyone when he reaches his 65th birthday, regardless of need.
America's wage earners and their employers would be compelled to pay
the bill through a substantial tax increase. The cost would be staggering.
For the first year alone the cost has been estimated from $1.4 billion
to $2.5 billion. No nation that has ever tried compulsory federal
government controlled medicine has ever been able to honestly and correctly
anticipate the cost. England's own program now costs nearly five times
the original estimate. King-Anderson calls for n double increase in
payroll taxes, an increase of 1/4 of 1% for both the employ ces and employers,
and 3/8th's of 1% for the self-employed, plus an increase from $4,800
to $5,200 in the base.
An additional tax burden of $35 billion would be placed on
DR.FORD the UNIVERS
shoulders of tomorrow's younger workers and their employers. The
13
$35 billion is the estimated cost for health care benefits for today's
the
aged, during the rest of their lives. In other words,/ King-Anderson
program would start off with a $35 billion debt. It is both inequitable
and immoral to saddle the nation's younger workers with this huge
burden.
Many believe the initial tax increase would be just a beginning.
Congress has been warned that the plan would cost at least $5.4 billion
by 1983. This of course would mean a fantastic increase in Social
Security taxes. The high Administration officials credited with writing
the legislation testified before the Senate Finance Committee that
he envisions an eventual payroll tax of 20% on a base of $9,000 --
or $75.00 a month for the employer and the employee. This would be
an increase of 411% over the present tax.
Former Congressman Farrand, one of the original authors of
this bill, explained the ultimate goal in 1961: "If we can only break
through and get our foot inside the door, then we can expand the program
after that." Aside from the cost, the worst aspect of King-Anderson
is the inevitable loss in quality of health care. We are proud of the
competence of our doctors and nurses. Whenever mass medical care
under government controls takes over, we lose,not gain in prolonging life
and saving lives.
(Applause)
FATHER L. V. BRITT: Our third topic is "Defense and
Foreign Aid." If I may interject a brief histerical item here, I might
note that in 1911 a Brigadier General Allen appeared before Congress
and, with apologies, asked for an astronomical annual budget to insure
U. S. supremacy in the air. The amount -- one million dollars!
The first speaker on this topic will be Mr. Ford.
GERALD FORD LIBRARY
14
HON. GERALD R. FORD: Since January of 1961 under President
Kennedy we have had increased appropriations for the armed forces by
about $10 billion over a 2-year period. Secondly, we've had increased
manpower in the various military services by about one hundred thousand,
from 2,700,000 to 2,800,000. Thirdly, we have had an increased amount
for foreign aid, from about an average of $3 billion under former President
Eisenhower per year, to a request of $4.9 billion this year by President
Kennedy, and an average during his term of office of appreximately
$4 billion.
In the foreign aid program under President Kennedy we've had
a shift from military to economic assistance, and there's also been an
alleged shift from outright grants in economic aid to so-called loans.
But before you say this is good, let me give you the terms of the loans.
40-year loans, a 10-year grace period, with a service charge not an
interest charge of 3/4 of 1%. Now these increases in dollars and
manpower under President Kennedy were based on the premise that
America's prestige and influence abroad would be enhanced and inevitably
as a result would lead to U.S. and free world success.
I think we should ask curselves, where do we stand today?
And what are the results? One quipster in Washington the other day
might have said, "The grim world of the Brothers Wonderful."
Now every American was pleased to find, thanks to Bob McNamara's
honesty and frankness, that the alleged and purely politically motivated
missile gap was wiped out within the first two weeks after the Kennedys
took over. Of course there never was a missile gap; it was a missile
myth perpetrated for political purposes. Has defense policy changed
under this Administration? I wouldn't say it has changed very significantly.
There has been some acceleration in certain programs. We've increased
the size of the Army by two divisions. We've added some airlift.
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But there have been cutbacks in other programs. The Skybolt got the
15
axe and the RF-70 won't go beyond an R and D program.
Frankly, I'm not concerned too much about these changes in
this respect, but the mest serious problem is that not one new major
weapons system has come into inventory in the last 34 menths.
Now, has our prestige abroad improved? Are we more successful
in the free world struggle against communism? Take Europe. NATO
is in disarray, to use the President's own words. I wonder If we
are going to have the courage to do what we should about troop strength
in Europe. Are we going to do anything about the fact that we are
paying 9.8% of our Gross National Product while our European allies
are paying 5.4%? There is no solution under this Administration to
General de Gaulle. There is no breakthrough in trade. As a matter
of fact, we can't even win the chicken war. The Berlin Wall was built
under this Administration. We hesitated while it was constructed and
we rationalise now and leave it alone. As a matter of fact, we've put
about a billion dollars into Spain and just the other day it was revealed
that despite these advances and current ones, we can't even get the
right to put Polaris submarines in those ports.
Let's turn to the Far East. South Viet-Nam is the best
example of one step forward and one step backward. One doesn't know
what is the policy in Viet-Nam today. I'm glad to say that I think we're
doing all right militarily, but on the other hand we have tiptood from
one end of the teeter totter to the other on the political problem in
Viet Nam. Does anybody know whether we are for or against the
Diem regime today?
Let's take Latin America. With fanfare the Alliance for Progress
was launched. There has been negligible results in achieving social
or tax reform in Latin America, despite vast premises of funds by
Uncle Sam. Venezuela is under siege from Castroism. Cuba is a
16
base for Soviet subversion and infiltration. Brazil and Bolivia are on
the brink of economic and political chaos. Military dictatorships are
taking over at anaccelerated pace in all of Latin America. Our problems
today stem from the Kennedy Administration's attitude. There is no
unanimity or unity of purpose. Some in the Administration want to
win against communism. Others naively believe Khrushchev's change
of pace can be accemmodated.
Khrushchev still wants to bury us. He'll throw us a slow ball
one day, a curve the next, and a fast one the next. This Administration
just can't take of this change of pace. We must not be fooled. We
must maintain our superior military strength. The enemy must know
that we have that strength. The enemy must know that we will use our
strength. And we must be prepared to use our power for the cause
of freedom.
(Applause)
FATHER L. V. BRITT: Mr. Staebler will now address himself
to "Defense and Foreign Aid."
HON. NEIL STAEBLER: Both parties agree on the importance
of our country's security. Disagreement occurs on how best to go
about it. The Kennedy Administration approach rests on five principles:
military strength second to none; economic growth; preservation of the
free world; willingness to reduce armaments and tension if possible;
and a willingness to take advantage of every opportunity to divide the
enemies of freedom.
When President Kennedy assumed office we had fallen behind the
Russians in military development and weapons designed for what we
now call brush fire wars. The Russians were ahead of us in the
development of space weapons and had been since Sputnik. Through
FORD
the expenditure of considerable sums of money, through an all-out effort
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17
in space, and with the excellent administration of Secretary of Defense
McNamara, we now have pulled ahead of the Russians in missiles and
have developed a capability in conventional weapons more than adequate
for any kind of limited warfare we may encounter.
Our del ense capabilities today are second to none. The other
side of our national security is the preservation of the free world.
This is the goal of our foreign aid program. The greater part of our
foreign assistance has gone and goes today to countries directly menaced
by Communist aggression, external or internal. Foreign aid measures
range from direct military assistance to supplying doctors and teachers
to countries trying to improve health and education for their people.
Next to our defense establishment, foreign aid is the single best tool
of our government in its efforts to fortify our national security. It
is vital to our efforts to bring peace and stability to a troubled world
to influence other nations toward a course of independence and freedom,
and in some places to fight cold war battles.
We got into the foreign aid business after World War II. The
Marshall Plan was the beginning. Then came the Truman Doctrine.
Both were aimed at holding back communism and helping Western Europe
get back on its economic feet. You all know the result. The Western
European economy today is prespering. It leads the free world in
economic growth. Communism was contained in Europe and is being
contained virtually on every frontier around the world.
It is interesting to note that in those early days almost 90% of
our aid to Europe was in the form of grants. Teday the trend is just
the opposite with the bulk of the program constituting loans, and the
interest rate in the House bill just passed has been raised thanks to
our Republican friends to 2%.
Since World War II we have been confronted with a world-wide
18
surge of nationalism among the underdevelsped countries. This has
resulted in many new nations, radical changes in government of other
nations. All of these areas are plagued with low economic and social
development and it is in these areas that we are meeting the Communist
challenge head-on through our Foreign Aid program.
The Communists preach that the shortest route to economic and
social progress lies along a totalitarian read. The free world answer
has been that of freedom and self-develepment. In most of the emerging
nations, those who advocate freedom are locked in struggle with those
who advocate totalitarianism. The margin of victory sometimes is
supplied by economic and military aid, either from us or from the
Communists.
The hottest points of conflict today are in Latin Ame rica, the
Far East, Africa. If we want to save freedom in these areas, we must
continue economic and military aid. If we get impationt, cut aid too soon,
then we may find a dosen Cubas on our decratep in Latin America.
If this happens, those who thought we were saving money will be bitterly
disappointed. The smallest military operation would completdy dwarf
our aid expenditures.
several
The present attempt to save/hundred million dollars in the Alliance
for Progress program could easily lead to spending billions of dollars
and loss of lives in military action, should Latin America fall prey to
the Communists. At the present time the Foreign Aid appropriation
a
is in great danger of/drastic cut. The authorization bill has been cut
40% below the President's recommendation. Further cuts are threatened.
It is astenishing to observe that Congressman Ford and every one of the
Michigan Republican Representatives except two supported the deep cut#
in foreign aid. Even more disturbing is that after the cut was made,
six of these gentlemen voted against the act completely. I suggest this
ASVASIT
is tantamount to abelishing a fire department.
19
Let me remind you what General Eisenhower said recently about
foreign aid: "Never has there been any question in my mind as to the
necessity of a program of economic and military aid to keep the free
nations of the world from being overrun by the Communists." Our
Foreign Aid program, gentlemen, is just as much agart of our defense
program as our guns, planes and submarines. And I think we all agree,
foreign aid is far less expensive.
(Applause)
FATHER L. V. BRITT: We hear much these days about the
physical fitness program and it was thought that this particular group
might have a somewhat greater interest in fiscal fitness. The fourth
topic: "Fiscal Policy and Economic Growth." The first discussant will
be Mr. Staebler.
HON. NEIL STAEBLER: I am pleased that General Bork has put
this issue of fiscal policy and economic growth in the wind-up position
of today's discussion. Economic growth is the paramount problem of
our times. President Kennedy has recognized this fact and, in my opinion,
the Kennedy Administration has acted decisively and effectively to meet
the country's needs.
We are discussing growth today in the context of booming auto
production in Michigan and general national prosper ity. Yet here in
Michigan 58 of our 83 counties still are distressed areas; areas of
chronic unemployment and serious economic problems. Across the
country, despite general presperity, many other pockets of chronic
economic problems exist and our national unemployment level remains
high at about 5%.
Since President Kennedy has taken effice our annual rate of
FORD
growth has climbed to about 4% compared with an average of 2-3/4%
during the Eisenhower years. Our Gross National Product is headed
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20
for an all-time high of $580 billion. This has had a good effect on
Michigan. Auto production is booming and unemployment is at its lowest
level since 1955. These are indications If impressive growth, but this
is not enough. We must do better, or face living with an unemployment
of more than 7% of our national work force. Let me remind you that
unemployment is expensive. In 1962 it cost the federal government and
private business $4.7 billion. Our basic problem is we are producing
more with fewer workers at a time when our labor force is being flooded
with new young people.
President Kennedy is tackling economic growth at three levels.
First, the broad tax cut program as a stimulus for the entire economy;
second, special programs pinpointed to aid depressed areas; third,
increased aid to education 80 that we can build new skills in our young
people and retrain our older people displaced by automation. That part
of the President's program which has gone into effect is working and
working well.
The reduction in corporate tax liabilities last year through invest-
ment tax credits and business depreciation reforms already has pumped
more than $2 billion back into the economy in terms of plant and equipment
investment. In Michigan we can see the results in the special programs
for distressed areas. We have received more than $7 million for area
redevelopment. We were the first state in the nation to begin manpower
retraining and accelerated public works programs totalling $55 million
have been approved and are under way in scores of Michigan communities.
Ironically the accelerated public works program which is building
badly needed municipal improvements has been opposed by seven of our
11 Michigan Republican Congressmen, including Congressman Ford.
They voted against the APW appropriation this year. The main thrust of
Congress in this session is, of course, the President's proposal for tax
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reduction. The $11 billion tax cut already has passed the House,
21
again with Congressman Ford and eight other Michigan Republicans
voting against it. Despite opposition of our Michigan Republican Congress-
men, the tax program is not n partisan proposal. It is supported by
business, industry and labor. Our own Henry Ford is Co-Chairman of
the National Business Committee for Tax Reduction.
Individuals will get the biggest benefit of the tax cut with reductions
of $8.7 billion. Largest cuts will go to the low-income families. The
average reduction will be about 20%. The tax cut will mean more take-
home pay for virtually every working family in Michigan and in the country.
This is the purpose of the program -- to put more money into the hands
of consume rs and corporations. For families it will mean more meney
to spend on needed consumer goods. For business and industry it
will mean more money to spend on plant expansion, remodeling and
new equipment. The net effect will be an increase in production which
means more jobs. It is estimated the expansion of the economy as a
result of the tax cut will add some three million jobs.
Opponents to the tax cut have muddled the waters by trying to
tie tax reform to the question of the budget. We can't have a tax cut,
they say, until the budget is in perfect balance. Well, this is like
telling an auto worker he can't have a wage increase until he's paid
off his home mertgage. Don't misunderstand me, as a businessna: I
know the importance of making sure that expenditures don't exceed
revenue. Our Republican friends raised such a clamer about economy,
however, that the point has escaped general notice that the Kennedy
Administration has set a remarkably good record for economy. What
many people aren't aware of is that major increases in spending in this
country have been in the national security-connected areas of the budget.
Non-defense spending, money for health, education and welfare, has ORD
dropped from 27% of the budget in 1949 to 21% of the budget today.
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22
Republican ideas about economy differ from ours rather sharply.
They believe in cutting out whole programs, or in broad across-the-board
slashes. We believe in applying good business principles which squeeze
the waste out of every program.
Let me give you just one example. Secretary of Defense
McNamara has squeezed $3 billion of savings out of last year's defen se
program by instituting tighter controls. The budget, of course, will
increase year by year, just as the budget of a growing household or
well-run business increases each year. But in the final analysis, the
tax cut should increase our economic growth to a point where overall
tax revenues will be more than adequate to balance the budget. We
have been warned often that if we do not act to prime the nation's
economic pump, we can look forward to another round of serious
recessions. I believe we've got to act now.
(Applause)
FATHER L. V. BRITT: Mr. Ford will now address himself
to "Fiscal Policy and Economic Growth."
HON. GERALD R. FORD: Republicans in the Congress favor a
tax reduction. We recognize fully the inequity and the confiscatory
nature of the federal tax structure, which is the product of the need
for revenue during World War II and Korea. We know federal taxes
must be reduced if we are to have increased growth of our nation
and if we are to insure presperity for the future.
Republicans firmly believe, however, you negate and wash out
economic benefits of a tax reduction by increased federal spending.
Quite frankly I am delighted to see that the Demecrate in Congress now
favor rate reductions in federal taxes. They are welcome Johnny Come
Lately's because in 1947 and in 1954 the Democratic Party, including
the President while he was in Congress, was on the other side of the
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fence.
23
In 1963 the Democrate are riding two horses. I am delighted to
amplify what Mr. Staebler said. Henry Ford and his Committee are
not riding two herses. They believe in a tax reduction and a reduction
in expenditures in the federal government. Now, in January, the President
proposed tax reduction and increased spending of about $5 billion.
Now the President wants a tax cut but he is riding side saddle on
spending. He's off again, on again, on the spending issue. On the day
he premised Wilbur Mills, the Chairman of the House Committee on
Ways and Means, that he was going to hold dewn the spending, he was
out on a non-political jaunt in the Western states promising citisens
in that area over $2 billion more in additional federal spending.
The policy of confusion -- or the confusion on policy, I'm not
sure which -- about spending in the Kennedy Administration is widespread.
In January the President submitted a tight budget, according to his
own words. However, in recent weeks Secretary of the Treasury Dillon
has praised the Congress for budget cuts totalling, as of now, about
$4 billion.
What is the policy -- big spending or great frugality? I think
it depends upon who is talking, or when, or to what audience. Frankly
the Republicans agree with and vote for economy, and I am delighted
to have my friend Neil verify that. But we have reservations about
the Democrats on this issue. The 1961 federal budget had a deficit
of $3 billion. The Democrate said that was a mistake and they premised
a surplus -- ended up with a $6 billion dd icit in 1962.
In 1963 they premised a half a billion dollar surplus. They made
another mistake -- ended up with a $6 billion deficit. Now intho current
fiscal year and in the next fiscal year, they've just plain given up,
and they're going to have a $9 billion deficit this year and a $9 billion
deficit next year: and they only vaguely promise you a balanced budget
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24
in 1968 or 1969. This fiscal irresponsibility undermines whatever
efforts have been made to solve our adverse balance of payments,
our gold flow problem. A tax cut with more spending, more interest
payments on an expanding national debt undermines confidence of the
United States dollars. It is immoral in my judgment for us of this
generation to live off the fatted calf and pass bills on to future generations
in the form of higher interest on greater debt.
It's natural for everyone of us to want a tax cut. The Democrats
in Washington believe it's natural for everyone to want a federal handout.
We can't have it both ways, without ultimately falling on our face. To
have a tax cut unmatched by expenditure restraint is to endanger the
economy, not to improve it. We know from history what happens to
nations throughout the world that persist in living beyond their means.
There is a deep-rected anxiety throughout the Western world right today,
not about the quartity of our dollars, but about their quality. Quantity
without quality places in jeepardy the savings bonds, the life insurance
policies, the bank balances and the pension benefits of our own people.
Adding deficit on deficit may get the country moving again, but in the
wrong direction. The road to tax reduction is an expenditure restraint.
Expenditure reduction requires determination and forthrightness by each
one of us. Lip service and pleus resolutions won't de it. We must
realise that today's grandione political promises of more and more and
more spending become tomorrow's taxes. We must earn a tax cut
by expenditure restraint. A tax cut financed by more and more borrowed
money will lead us to a fool's paradise. If we fellow the policy of
expenditure restraint and control with a firm priority list of programs
and projects, the United States can have and will have earned federal
tax reductions, a balanced budget, economic prosperity and sound
economic growth.
GERALE FORD LIBRARY
(Applause)
25
FATHER L. V. BRITT: As previously announced, each of our
distinguished speakers will now have five minutes for a final summary.
The order of spearance will be determined by the flip of a coin -- which will
be supervised by General Bork. With apologies Supreme Court, I
coin
should note that this, carries the legend "In God We Trust." (Laughter)
The coin has come up tails -- the first summary will be given by
Mr. Ford.
HON. GERALD R. FORD: First if I may, I would like to respond
to several questions raised by Neil Staebler. He indicated that under this
Administration most of the increase in federal spending had been for the
Defense Department, or related agencies. Let me give you the facts on
this. The last budget submitted by President Eisenhower in January of
1961 for fiscal year 1962 called for an $80 billion budget. The fiscal
1964 budget submitted by President Kennedy in January of this year called
for a budget of $107 or $108 billion. So in a period of two fiscal years
we've had an increase of $27 billion. Only $10 billion out of the $27 billion
related to the Defense Department. Seventeen or eighteen billion out
of the $27 billion went for non-defense agencies.
The facts are that most of the increase in the budget, in the spending
under this Administration, is for non-defense purposes.
Let's talk for a minute about Foreign Aid. There's been much
comment about the efforts in the House of Representatives to reduce
President Kennody's request for this fiscal year of $4.9 billion for foreign
aid. The House of Representatives about a month or so ago cut this
to $3.5 billion. They talk about the cut, but let me assure you a three
to three-and-a-half billion dollar foreign aid program is still a big program
in my opinion. And when you give them three to three-and-n-half billion
dollars and you add to it what we call our surplus agricultural commedity
program of about a billion dollars a year, it's a very substantial program
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26
of substance from the American people.
Now let's talk about fiscal responsibility just a bit. This Administration
whether it's in office four years or eight years, I will premise you will
never balance the federal budget. They have not balanced it yet and they
don't premise it at any time during their term of effice.
Now let's talk for a minute about the eight years under President
Eisenhower which I think on a comparable basis was an infinitely better
period of time for the United States. We had a defense program at that
had
time of about $40 billion a year. We Inlaivis 2,700,000 young men and women
under active duty for the Army, Navy and Air Force. This was a program
W hich was predicated on the bad # of preserving the peace through strength.
And let me say quickly that it met every emergency. We handled the crisis
in Berlin in 1958, no wall was built, and Khrushchev backed down. When
trouble broke out in Lebanon in the Middle East in 1958, President
Eisenhower sent the Army forces -- as Wilber Brucker knows -- and
the Marines to Lebanon and we handled that situation without a shot being
fired.
And then there was Quemoy and Matsu, which arose in 1958. Some
people wanted to give those islands up. Ike said no. We sent military
we
forces there, they handled the situation and/still have a strong front in the
Far East today. Under the Eisenhower Administration we were able to
meet these crises head-on without an emergency existing every other day.
I say to you that this Administration under Eisenhower, on a comparable
basis, did a better job fiscally, did a better job militarily, and we didn't
find the world in disarray under Eisenhower that we find today. When
Ike turned over the government to the President in January of 1961 there
was no wall in Berlin, there were no military forces or military hardware
in Cuba, Viet-Nam was not at war; we now have 12 to 15 thousand military
personnel in Viet-Nam. Yes, when you look at the total picture -- the
ABRARY
eight years under Ike, oconomically, fiscally, militarily or otherwise -
27
on a comparable basis was a great deal better era in the history of
the United States.
I hope and trust that somehow this Administration can stop being
indecisive, can stop having 20 different spokesmen for everyissue, and
if they do, they will get the full support of the Repulican Party for
any programs of fiscal responsibility, military strength and freedom for
America. Thank you.
(Applause)
FATHER L. V. BRITT: The final summary will be given by Mr. Staebler.
HON. NEIL STAEBLER: Well, I'm interested in this rosy glow of
the Eisenhower period which Jerry remembers. I remind him that in
six of the eight Eisenhower years, there was a deficit -- the budget was
not met; and that in 1959 we encountered the largest budget deficit ever
in American history in a peacetime year, $12 billion. I think you will
find the Kennedy Administration doing much better than that.
The fact is that the federal budget has not gotten out of hand under
Kennedy. Our non-defense expenditures actually are decreasing in terms
of the total budget and in terms of the population.
Federal debt -- or deficit -- is not skyrocketing. The Federal
Government has a far better debt record than state and local governments,
than private business, and even the American consumer. Since 1947 the
federal debt per person has declined 19 percent, while state debt per person
has jumped 550 percent. I remind you there are 10 million more people
in the country than when President Kennedy took office.
Our foreign aid program is vital to the security of the United States,
not a waste of money. It has, in fact, stood as a bulwark of the free
world since World War II. It is significant to note that of the 50 new
nations which have emerged since World War II, not one of them has swung
into the Communist bloc.
GERALD
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Our national defense position is excellent; our country has never
been stronger. At the same time, we are bringing about an easing of
nuclear tensions.
The Kennedy Administration program for economic growth, certainly
a vital part of keeping this country strong, is based on a broad individual
and corporate tax cut as a means of stimulating the national economy.
It is a needed reform; it has bi-partisan support of all segments of the
economy, and it is necessary If we are to prevent a recurrence of the
cyclerof recessions we have experienced since World War II.
The President has made broad recommendations in the field of
education, Medicare and civil rights.
We have not dealt in any great detail on civil rights because I believe
it is accepted by both Congressman Ford and myself that there will and
there must be action in this area this year.
President Kennedy's civil rights proposals are not radical as far
as Michigan is concerned - virtually all of the measures he is asking
for already have been accepted here in Michigan: equality of opportunity
in education, employment, voting and public accommodations.
The Medicare program will be passed by Congress. We are long
overdue in taking this action for our senior citisens.
I want to turn now to a brief assessment of where we, as a country,
stand today and what we face in the future.
I think we have three alternatives as a nation. The first is to
return to the position of the Eisenhower Administration, which was
essentially defensive. We waited for the Communist world to act and
then we responded to that action.
The second alternative is the one being pushed by Senator Barry
Goldwater, and you've heard echoes of it today from Congressman Ford.
This position can lead only to war.
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This is the only conclusion you can draw from a close reading of
the statements of Senator Goldwater, who is emerging as the new spokesman
for the Republican Party. I note, incidentally, that Michigan Republican
Congressmen and other GOP leaders have said Goldwater would be
acceptable to them. Well, let's take a look at what they are buying.
Senator Goldwater is opposed to the United Nations. He is opposed
to the World Bank. He voted against the nuclear test ban treaty; he
is opposed to banning nuclear testing in space; he proposed to surrender
the emerging nations to communism, which is what would happen if we
should stop foreign aid as he favors; he would withdraw diplomatic
recognition from Russia; he makes no distinction between Red China and
Russia, nor does he see any advantage in exploiting the current split
between these Communist countries.
This is extremist thinking running wild. If the country were to
follow his leadership, there is no question in my mind that we would
end up at war.
I find an alarming tendency on the part of many Republicans to try
and incorporate the Goldwater attitude into their own position. After all,
the Arizona Senator makes it sound so simple and clear-cut. Well, it is
not so simple. There is only one button that we can push that will make
the Russians disappear. What sensible person would recommend that
course of action?
The better alternative -- our third alternative -- is the course that
President Kennedy has taken. It is based on keeping our defense system
second to none while maintaining a willingness to take reasonable steps
to ease world tension. We have shown Khrushchev our firmness and our
decisiveness. At the same time we have taken major steps toward peace.
I believe the majority of the American people support the Kennedy
approach.
(Applause)
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LESTER SKENE BORK: Thank you very, very much, Congressman
Ford and Congressman Staebler for this very learned and impartial dis-
cussion. We appreciate your help in presiding at this meeting, Father
Britt. Thank you all for attending. The meeting stands adjourned.
ADJOURNMENT
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