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Night Industrial Clubs (YMCA) and Industrial Executives Club (YMCA), Saginaw, MI, January 11, 1967
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Night Industrial Clubs (YMCA) and Industrial Executives Club (YMCA), Saginaw, MI, January 11, 1967
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This file contains material relating to Adam Clayton Powell.
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The original documents are located in Box D21, folder "Night Industrial Clubs (YMCA)
and Industrial Executives Club (YMCA), Saginaw, MI, January 11, 1967" 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States of America his copyrights in all of his unpublished writings in National Archives collections.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 D21 of The Ford Congressional Papers: Press Secretary and Speech File at the Gerald R. Ford Presidential Library
FOR RELEASE AT 12 NOON WEDNESDAY, JANUARY 11, 1967
AN ADDRESS BY REP. GERALD R. FORD, R-MICH.
BEFORE THE NIGHT INDUSTRIAL CLUBS (YMCA) AND THE INDUSTRIAL EXECUTIVES CLUB (YMCA)
SAGINAW, MICHIGAN
Gentlemen:
I am most happy to be in Saginaw. It is doubly a pleasure to be here--first
because Saginaw is the hometown of an outstanding member of Congress, Jim Harvey, and
second because Saginaw is the kind of hard-working industrial community which has
helped to make Michigan the great state it is.
I enjoy talking about Jim Harvey. Jim and I do not always agree, but I have
the greatest respect for him and for his ability. Jim is a fine individual and a man
of the highest integrity.
The question of integrity in the federal government--both in the Legislative
and Executive Branch--is very much before us today. Let me say first off that I am
encouraged by the action taken Tuesday by the House of Representatives--a I think
it not immodest to emphasize that this action was taken on the insistence of
Republicans.
The Adam Clayton Powell case goes beyond any one individual. It brings into
sharp focus the entire issue of honesty in government.
At the outset, I pledge to you that Republicans intend to press vigorously for
honesty in government during the 90th Congress--honesty both in the personal conduct
of members of Congress and honesty by the Executive Branch of the government in the
conduct of our national affairs.
Republicans moved with a clear conscience to keep Mr. Powell from being seated
in the House pending an investigation by a special committee or an Ethics Committee.
We did so because we were looking beyond Mr. Powell to a crackdown on the expenditure
of the funds of the House of Representatives.
In this session of Congress you will find Republicans demanding that the House
tighten up its internal accounting controls. We will offer safeguards against fraud
and other misuse of House funds by any member.
You will also see Republicans advocating new laws setting standards of conduct
for congressmen and establishing an Ethics Committee or Committee on Standards and
Conduct to see that those laws are enforced.
Individual misconduct cannot be permitted to besmirch the image of the entire
House of Representatives. It therefore is imperative that the House adopt and enforce
a Code of Ethics for its members.
There is another kind of dishonesty in government that is more difficult to
attack. It lacks excitement. It is not the basis for a good human interest story in
(MORE)
-2-
the newspapers although it deeply affects the life of every American. It is the
story of dishonesty in the federal budget.
I would be mistakenly charitable if I told you the Johnson Administration's
fiscal 1967 budget was anything other than deceptive. It is important to look at
that exercise in budgetary dishonesty because it now is federal budget time again.
While we're talking about truth-in-budgeting, let's be candid about what has
happened to federal finances in the past year. The Johnson Administration, through
excessive domestic spending with a cloak thrown over it, has hatched a giant-sized
mess. The Administration now is proceeding to drop this fiscal mess into the lap of
the 90th Congress.
I'll tell you frankly that after the kind of fiscal fiction practiced by the
Johnson Administration last year I find it difficult to believe anything the President
says on the subject of federal finances.
The American people wanted so much to be believers last January when the
President blithely told them the Nation could boost social welfare spending by $3.5
billion and fight a $2 billion-a-month war in Vietnam and still wind up with only a
$1.8 billion deficit.
The trouble with being a believer last January was that the President's budget
was dishonest to begin with. It simply concealed the true level of federal spending.
The President was playing games with the federal budget--and the name of the
game was COVERUP.
The best proof of that is that we now face staggeringly large federal deficits
in fiscal 1967 and 1968.
Let's lay aside the fact that there were a number of one-shot devices in the
fiscal 1967 budget to make the revenue side of the ledger look better. These moves
were not wrong in and of themselves, but they did blind the American people to the
sharply upward and dangerous trend in federal spending. They distorted the financial
picture because they were one-time-only propositions.
The dishonesty in the budget--and there was dishonesty in it--came in the form
of some pieces of paper the Johnson Administration proposed to sell. The Administra-
tion called this paper "participation certificates." These certificates ostensibly
give the buyer an interest in a pool of government-owned assets. The government
doesn't sell the assets. These certificates are just another form of government
borrowing--borrowing at a higher rate of interest than the government pays out on
regular longterm government securities.
The beauty of this scheme for the Johnson Administration was that they could
get away with crediting the sale of participation certificates as a reduction in the
cost of government. What they did was to treat the sale of PC's as a sale of assets
(MORE)
-3-
when actually it was just another form of borrowing--borrowing that is more costly to
the taxpayers in increased interest costs than regular Treasury borrowing.
Republicans fought the plan in the 89th Congress, but it was railroaded through
by the Administration.
We will make another fight against this kind of budgetary dishonesty in the
90th Congress because we believe it to be dangerous. It tends to deceive both the
public and the Congress as to whether the federal budget is in reasonable balance.
This fiscal year, for instance, the Johnson Administration is empowered to
borrow more than $4 billion via the participation certificates route. That's $4
billion that does not have to be recorded as part of the national debt and $4 billion
that will not show up as part of federal expenditures for this fiscal year.
The Participation Sales Act of 1966 should be repealed if we are to move
toward honesty in accounting for expenditure of the people's money in Washington.
Honesty in budgeting is the first step toward a goal the 90th Congress must
set for itself if we are ever to halt runaway federal spending. That goal is federal
expenditure control.
The simplest way for us to achieve federal expenditure control would be for
the President to give the Bureau of the Budget a spending ceiling and tell the budget
director to fit all expenditures under that roof.
But we know that isn't going to happen and so the burden falls on the Congress.
Spending in the remaining months of fiscal 1967 can only be curtailed by the
President. But the job of making deep cuts in fiscal 1968 spending must be under-
taken by Congress.
The goal in Congress should be to bring the federal budget into reasonable
balance by calendar year 1968--and to do this without an income tax increase.
With defense expenditures projected to run as high as $75 billion in fiscal
1968, it is nonsense for the Johnson Administration to continue to talk about a guns
and butter economy. Non-defense spending must be held down. If nothing else,
built-in increases in social welfare spending must be laid aside.
If substantial, truly meaningful cuts are made in projected federal spending,
does this mean that existing social welfare programs will grind to a screeching halt?
The answer is an emphatic "no."
Unnecessary federal spending now viewed as built-in because of previous con-
gressional action can be washed out without damage.
Just before the Eisenhower Administration left office in January, 1961, then
Budget Director Maurice Stans projected federal expenditures for the Sixties on the
basis of a frugal budget, a medium-sized budget, and a budget which assumed the carry-
ing out of all the reasonable ideas advanced by various government agencies at the time.
Maury Stans now tells us that the Johnson Adm inisration has been accelerating
federal spending at a rate even greater than that in his--Stans' -high level projection
of 1961 for the decade of the Sixties.
This country can make progress toward its great national goals without sub-
scribing to a philosophy of sharply spiraling federal spending. We can and must make
progress, but let it be progress at a pace we can afford. Thank you.
FOR RELEASE AT 12 NOON WEDNESDAY, JANUARY 11, 1967
AN ADDRESS BY REP. GERALD R. FORD, R-MICH.
BEFORE THE NIGHT INDUSTRIAL CLUBS (YMCA) AND THE INDUSTRIAL EXECUTIVES CLUB (YMCA)
SAGINAW, MICHIGAN
Gentlemen:
I am most happy to be in Saginaw. It is doubly a pleasure to be here--first
because Saginaw is the hometown of an outstanding member of Congress, Jim Harvey, and
second because Saginaw is the kind of hard-working industrial community which has
helped to make Michigan the great state it is.
I enjoy talking about Jim Harvey. Jim and I do not always agree, but I have
the greatest respect for him and for his ability. Jim is a fine individual and a man
of the highest integrity.
The question of integrity in the federal government--both in the Legislative
and Executive Branch--is very much before us today. Let me say first off that I am
encouraged by the action taken Tuesday by the House of Representatives--and I think
it not immodest to emphasize that this action was taken on the insistence of
Republicans.
The Adam Clayton Lowell case goes beyon, any one individual. It brings into
sharp focus the entire issue of honesty in government.
At the outset, pledge to you that Republicans intend to press vigorously for
honesty in government during the 90th Congress--honesty both in the personal conduct
of members of Congress and honesty by the Executive Branch of the government in the
conduct of our national affairs.
Republicans moved with a clear conscience to keep Mr Powell from being seated
in the House pending an investigation by a special committee or an Ethics Committee
We did so because we were looking beyond Mr. Powell to a crackdown on the expenditure
of the funds of the Houst of Represe atives,
In this session of Congress you will find Republicans demanding that the House
tighten up its internal accounting controls. We will offer safeguards against fraud
and other misuse of House funds by any member.
You will also see Republicans advocating new laws setting standards of conduct
for congressmen and establishing an Ethics Committee or Committee on Standards and
Conduct to see that those laws are enforced.
Individual misconduct cannot be permitted to besmirch the image of the entire
House of Representatives. It therefore is imperative that the House adopt and enforce
a Code of Ethics for its members.
There is another kind of dishonesty in government that is more difficult
attack. It lacks excitement. It is not the basis for a good human interest
13 story FORD in LIBRARY
(MORE)
-2-
the newspapers although it deeply affects the life of every American. It is the
story of dishonesty in the federal budget
I would be mistakenly charitable if I told you the Johnson Administration's
fiscal 1967 budget was anything other than deceptive. It is important to look at
that exercise in budgetary dishonesty because it now is federal budget time again.
While we're talking about truth-in-budgeting, let's be candid about what has
happened to federal finances in the past year. The Johnson Administration, through
excessive domestic spending with a cloak thrown over it, has hatched a giant-sized
mess. The Administration now is proceeding to drop this fiscal mess into the lap of
the 90th Congress.
I'll tell you frankly that after the kind of fiscal fiction practiced by the
Johnson Administration last year I find it difficult to believe anything the President
says on the subject of federal finances.
The American people wanted so much to be believers last January when the
President blithely told them the Nation could boost social welfare spending by $3.5
billion and fight a $2 billion-a-month war in Vietnam and still wind up with only a
$1.8 billion deficit.
The trouble with being a believer last January was that the President's budget
was dishonest to begin with. It simply concealed the true level of federal spending.
The President was playing games with the federal budget--and the name of the
game was COVERUP.
The best proof of that is that we now face staggeringly large federal deficits
in fiscal 1967 and 1968.
Let's lay aside the fact that there were a number of one-shot devices in the
fiscal 1967 budget to make the revenue side of the ledger look better. These moves
were not wrong in and of themselves, but they did blind the American people to the
sharply upward and dangerous trend in federal spending. They distorted the financial
picture because they were one-time-only propositions.
The dishonesty in the budget--and there was dishonesty in it--came in the form
of some pieces of paper the Johnson Administration proposed to sell. The Administra-
tion called this paper "participation certificates." These certificates ostensibly
give the buyer an interest in a pool of government-owned assets. The government
doesn't sell the assets. These certificates are just another form of government
borrowing--borrowing at a higher rate of interest than the government pays out on
regular longterm government securities.
The beauty of this scheme for the Johnson Administration was that they could
get away with crediting the sale of participation certificates as a reduction in the
cost of government. What they did was to treat the sale of PC's as a sale of assets
(MORE)
-3-
when actually it was just another form of borrowing--borrowing that is more costly to
the taxpayers in increased interest costs than regular Treasury borrowing.
Republicans fought the plan in the 89th Congress, but it was railroaded through
by the Administration.
We will make another fight against this kind of budgetary dishonesty in the
90th Congress because we believe it to be dangerous. It tends to deceive both the
public and the Congress as to whether the federal budget is in reasonable balance.
This fiscal year, for instance, the Johnson Administration is empowered to
borrow more than $4 billion via the participation certificates route. That's $4
billion that does not have to be recorded as part of the national debt and $4 billion
that will not show up as part of federal expenditures for this fiscal year.
The Participation Sales Act of 1966 should be repealed if we are to move
toward honesty in accounting for expenditure of the people's money in Washington.
Honesty in budgeting is the first step toward a goal the 90th Congress must
set for itself if we are ever to halt runaway federal spending. That goal is federal
expenditure control.
The simplest way for us to achieve federal expenditure control would be for
the President to give the Bureau of the Budget a spending ceiling and tell the budget
director to fit all expenditures under that roof.
But we know that isn't going to happen and so the burden falls on the Congress.
Spending in the remaining months of fiscal 1967 can only be curtailed by the
President. But the job of making deep cuts in fiscal 1968 spending must be under-
taken by Congress.
The goal in Congress should be to bring the federal budget into reasonable
balance by calendar year 1968--and to do this without an income tax increase.
With defense expenditures projected to run as high as $75 billion in fiscal
1968, it is nonsense for the Johnson Administration to continue to talk about a guns
and butter economy. Non-defense spending must be held down. If nothing else,
built-in increases in social welfare spending must be laid aside.
If substantial, truly meaningful cuts are made in projected federal spending,
does this mean that existing social welfare programs will grind to a screeching halt?
The answer is an emphatic "no."
Unnecessary federal spending now viewed as built-in because of previous con-
gressional action can be washed out without damage.
Just before the Eisenhower Administration left office in January, 1961, then
Budget Director Maurice Stans projected federal expenditures for the Sixties on the
basis of a frugal budget, a medium-sized budget, and a budget which assumed the carry-
ing out of all the reasonable ideas advanced by various government agencies at the time
Maury Stans now tells us that the Johnson Adm inisration has been accelerating
federal spending at a rate even greater than that in his--Stans'--high level projectic
of 1961 for the decade of the Sixties.
This country can make progress toward its great national goals without sub-
scribing to a philosophy of sharply spiraling federal spending. We can and must make
progress, but let it be progress at a pace we can afford. Thank you.