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National Machine Tool Builders Association Spring Meeting, Washington, DC, May 12, 1967
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National Machine Tool Builders Association Spring Meeting, Washington, DC, May 12, 1967
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The original documents are located in Box D22, folder "National Machine Tool Builders
Association Spring Meeting, Washington, DC, May 12, 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States of America his copyrights in all of his unpublished writings in National Archives collections.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 D22 of The Ford Congressional Papers: Press Secretary and Speech File at the Gerald R. Ford Presidential Library
CONGRESSMAN
NEWS
GERALD R. FORD
HOUSE REPUBLICAN LEADER
RELEASE
FOR RELEASE IN PMs
of Friday, May 13, 1967
STATEMENT BY REP. GERALD R. FORD, R-MICH., BEFORE THE NATIONAL MACHINE TOOL
BUILDERS ASSOCIATION SPRING MEETING, STATLER-HILTON HOTEL, WASHINGTON, D.C.
Gentlemen: I want you to know at the outset that I do not profess to be a
prophet. Like you, I am deeply concerned about the outlook for the economy. In
my role as Republican leader in the House, I take a hard look at the economic
indicators and then make a judgment on pending legislation affecting the economy.
Today I will give you my latest reading, for whatever it may be worth.
The theme for your spring meeting is a challenging one Six Months To
Sixty-Eight. It poses the question
where do we go from here.
Well, let's look at what we have to go on.
The Johnson Administration has been predicting a sharp upswing in the
economy in the last half of 1967. On that basis, the President last January
asked that a 6 per cent add-on to the income tax be imposed on corporations and
individuals as of July 1.
Now, what has been happening? We have seen the economy turn dangerously
sluggish since Congress at the request of the President suspended the 7 per cent
investment tax credit last September as a brake on inflation. We have seen
American consumers turn cautious in their spending, with resultant slumps in the
sale of automobiles, heavy appliances and television sets.
It became obvious to me and other Republican leaders at the start of the year
that the economy was undergoing a grinding adjustment and that suspension of the
investment tax credit had seriously damaged prospects for economic growth.
For that reason I called last January 19 for "immediate" restoration of the
investment tax credit. I issued that call in our Republican State of the Union
Message.
President Johnson belatedly asked Congress in March to restore the tax
credit. With the unanimous support of Republicans, the House passed the tax
credit restoration bill on March 16. The President and the Secretary of the
Treasury had asked for quick action. The House gave it to them.
But in the Senate the tax credit bill became ensnarled in a fight over the
(more)
-2-
presidential campaign subsidy law passed last year. The White House contributed
to the delay by lobbying against a campaign subsidy repeal amendment which had
been attached to the tax credit bill.
With Senate passage of the bill this week, the only remaining question on
the investment tax credit is that of retroactivity. I strongly favor the House
version, which gives business and industry a better break on retroactivity. I
have always had misgivings about the Administration move to suspend the tax
credit in the first place. The timing of the action was particularly bad. I am
forced to say bluntly that the Johnson-Humphrey Administration has mismanaged the
economy, and the timing of its investment tax credit move was part of that mis-
management.
Now we find the Administration eager to restore the investment tax credit
to stimulate the economy, yet playing a role in delaying enactment of the tax
credit restoration bill and continuing to demand an income tax increase which
may depress the economy. Does that make sense to you? I find it completely
inconsistent.
I said as long ago as last November that an income tax increase would be
damaging to the economy, and nothing that has happened since has changed my mind.
The Joint Economic Committee of the Congress recently said that, instead of a
surtax, we should have a $5 to $6 billion cut in non-essential federal spending.
I agree. That has long been my contention. I also believe that if federal
non-military spending had been cut in that amount in early 1966 we could have
restored balance to a badly overheated economy and stifled the fires of inflation.
If the Majority Party had brought non-essential federal spending under control,
we would now not even be talking about an income tax increase.
The Administration's failure to halt inflation also laid the foundation for
large wage increases in 1967 and the possibility of crippling strikes. Industrial
contracts involving more than three million workers are up for negotiation this
year. We know that wages will go up substantially, at the same time that pro-
ductivity increases only slightly. The result may well be a new round of price
increases, a new inflation spiral.
You gentlemen in the machine tool industry are only too familiar with the
developments I have sketched for you. You know that the Johnson Administration
used you, along with the home builders and the farmers, as the whipping boys of
inflation. The Administration put most of its anti-inflation chips on suspension
(more)
-3-
of the investment tax credit because only business would get rubbed the wrong way.
I haven't talked about the East-West Trade Bill. It hasn't even been sent
to Congress yet. This is a most delicate subject, since it involves foreign
policy as well as import-export matters. I think Congress needs all the infor-
mation it can get before making judgment. For that reason, House Republicans have
set up a task force to gather all available facts and projections. We will take
a firm position when all the facts are in.
I wish I could be optimistic about trends in the economy in the next six
months. But of the 12 leading economic indicators--the signposts used to guess
where the economy is going--nine point downward right now. And Acting Commerce
Secretary Alexander Trowbridge said just yesterday that the economy is "still
sluggish."
What the economy needs for a new surge of sound growth is the proper mix
of monetary and fiscal policy and a system of taxation that does not act as a
drag. I wish you luck. Thank you.
###
CONGRESSMAN
NEWS
GERALD R. FORD
HOUSE REPUBLICAN LEADER
RELEASE
FOR RELEASE IN PMs
of Friday, May 12, 1967
STATEMENT BY REP. GERALD R. FORD, R-MICH. BEFORE THE NATIONAL MACHINE TOOL
BUILDERS ASSOCIATION SPRING MEETING, STATLER-HILTON HOTEL, WASHINGTON, D.C.
Gentlemen: I want you to know at the outset that I do not profess to be a
prophet. Like you, I am deeply concerned about the outlook for the economy. In
my role as Republican leader in the House, I take a hard look at the economic
indicators and then make a judgment on pending legislation affecting the economy.
Today I will give you my latest reading, for whatever it may be worth.
The theme for your spring meeting is a challenging one Six Months To
Sixty-Eight. It poses the question where do we go from here.
Well, let's look at what we have to go on.
The Johnson Administration has been predicting a sharp upswing in the
economy in the last half of 1967. On that basis, the President last January
asked that a 6 per cent add-on to the income tax be imposed on corporations and
individuals as of July 1.
Now, what has been happening? We have seen the economy turn dangerously
sluggish since Congress at the request of the President suspended the 7 per cent
investment tax credit last September as a brake on inflation. We have seen
American consumers turn cautious in their spending with resultant slumps in the
sale of automobiles, heavy appliances and television sets
It became obvious to me and other Republican leaders at the start of the year
that the economy was undergoing a grinding adjustment and that suspension of the
investment tax credit had seriously damaged prospects for economic growth.
For that reason I called last January 19 for "immediate" restoration of the
investment tax credit. I issued that call in our Republican State of the Union
Message.
President Johnson belatedly asked Congress in March to restore the tax
credit. With the unanimous support of Republicans, the House passed the tax
credit restoration bill on March 16. The President and the Secretary of the
Treasury had asked for quick action. The House gave it to them.
But in the Senate the tax credit bill became ensnarled in a fight over the
(more)
FORD LIBRARY
-2-
presidential campaign subsidy law passed last year. The White House contributed
to the delay by lobbying against a campaign subsidy repeal amendment which had
been attached to the tax credit bill.
With Senate passage of the bill this week, the only remaining question on
the investment tax credit is that of retroactivity. I strongly favor the House
version, which gives business and industry a better break on retroactivity. I
have always had misgivings about the Administration move to suspend the tax
credit in the first place. The timing of the action was particularly bad. I am
forced to say bluntly that the Johnson-Humphrey Administration has mismanaged the
economy, and the timing of its investment tax credit move was part of that mis-
management.
Now we find the Administration eager to restore the investment tax credit
to stimulate the economy, yet playing a role in delaying enactment of the tax
credit restoration bill and continuing to demand an income tax increase which
may depress the economy. Does that make sense to you? I find it completely
inconsistent.
I said as long ago as last November that an income tax increase would be
damaging to the economy, and nothing that has happened since has changed my mind.
The Joint Economic Committee of the Congress recently said that, instead of a
surtax, we should have a $5 to $6 billion cut in non-essential federal spending.
I agree. That has long been my contention. I also believe that if federal
non-military spending had been cut in that amount in early 1966 we could have
restored balance to a badly overheated economy and stifled the fires of inflation.
If the Majority Party had brought non-essential federal spending under control,
we would now not even be talking about an income tax increase.
The Administration's failure to halt inflation also laid the foundation for
large wage increases in 1967 and the possibility of crippling strikes. Industrial
contracts involving more than three million workers are up for negotiation this
year. We know that wages will go up substantially, at the same time that pro-
ductivity increases only slightly. The result may well be a new round of price
increases, a new inflation spiral.
You gentlemen in the machine tool industry are only too familiar with the
developments I have sketched for you. You know that the Johnson Administration
used you, along with the home builders and the farmers, as the whipping boys of
inflation. The Administration put most of its anti-inflation chips on suspension
(more)
-3-
of the investment tax credit because only business would get rubbed the wrong way.
I haven't talked about the East-West Trade Bill. It hasn't even been sent
to Congress yet. This is a most delicate subject, since it involves foreign
policy as well as import-export matters. I think Congress needs all the infor-
mation it can get before making judgment. For that reason, House Republicans have
set up a task force to gather all available facts and projections. We will take
a firm position when all the facts are in.
I wish I could be optimistic about trends in the economy in the next six
months. But of the 12 leading economic indicators--the signposts used to guess
where the economy is going--nine point downward right now. And Acting Commerce
Secretary Alexander Trowbridge said just yesterday that the economy is "still
sluggish."
What the economy needs for a new surge of sound growth is the proper mix
of monetary and fiscal policy and a system of taxation that does not act as a
drag. I wish you luck. Thank you.
#HH