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80th Annual Convention, Michigan Association of Plumbing, Heating and Cooling Contractors, Grand Rapids, MI, February 11, 1972
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80th Annual Convention, Michigan Association of Plumbing, Heating and Cooling Contractors, Grand Rapids, MI, February 11, 1972
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Gerald R. Ford Congressional Papers
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The original documents are located in Box D32, folder "80th Annual Convention, Michigan
Association of Plumbing, Heating and Cooling Contractors, Grand Rapids, MI, February
11, 1972" 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States of America his copyrights in all of his unpublished writings in National Archives collections.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 D32 of The Ford Congressional Papers: Press Secretary and Speech File at the Gerald R. Ford Presidential Library
AN ADDRESS BY REP. GERALD R. FORD, R-MICH.
REPUBLICAN LEADER, U.S. HOUSE OF REPRESENTATIVES
BEFORE THE 80th ANNUAL CONVENTION
OF THE MICHIGAN ASSOCIATION OF PLUMBING, HEATING AND COOLING CONTRACTORS
AT THE PANTLIND HOTEL
GRAND RAPIDS, MICHIGAN
FRIDAY, FEBRUARY 11, 1972
IRS surpose
hurang
FOR RELEASE AT 10:30 a.m. FRIDAY, FEB. 11
Ladies and gentlemen, every time I am asked to make a speech -- and I give
several hundred a year the first question that enters my mind, naturally, is
what am I going to talk about. In your case, the answer came easily. Lynn Briggs
told me what to say. So if there is anything in this speech that you don't like,
just blame it on Lynn. Seriously, what Lynn asked me to do was to just cover the
waterfront. So you may not like what I say, but at least I don't plan to leave
anything out.
First of all, let's take a wide-scope look at what lies ahead on the economic
road.
SNP
Leading business economists are predicting a rise of fully 9 per cent in our
gross national product in 1972 -- an expansion of nearly $100 billion in the market
value of total goods and services we produce this year. I think it's significant
that this would be the largest annual gain in the value of total national output on
record. It says something about the kind of year 1972 is going to be.
These economists figure that the real rise in GNP in 1972 will be 6 per cent,
with the other 3 per cent attributed to inflation. In other words, they expect the
theil
71
cost of living this year will rise only 3 per cent, as compared with 4.3 per cent
70/5.5
in 1971, 5.5 per cent in 1970 and 6.1 per cent in 1969.
69/6.1
These economists also expect the jobless rate to decline in each successive
Young
quarter, until by the end of 1972 it will be as low as it was prior to the beginning
of the economic adjustment two years ago -- about 5 per cent.
We will constantly have to be on guard against a resurgence of inflation as
the economy picks up steam in 1972. Therefore we must continue restraints on prices
and wages until the atmosphere of inflationary expectations which has done so much
harm to this country is fully dissipated.
As for my own personal outlook on the economy, I think we will see slow,
steady growth in 1972 -- solid growth that will push employment up, soak up the
(more)
GERAL FORD LIBRARY
-2-
increased number of job-seekers in the labor market and drop unemployment down to
5 per cent by the end of the year.
Employment should rise about 2.1 million new jobs. This will be some
400,000 jobs more than would be necessary to take care of the 1.5 million people
being added to the work force plus the additional 200,000 coming out of the Armed
Forces. And bear in mind that we created 1.7 million additional jobs in the last
six months of 1971, but this was offset by cutbacks in defense payrolls and the size
of the military, and by other factors.
As you know, the strongest element in the national economy in 1971 was housing.
The number of 1971 housing starts topped out at an all-time record of 2-million-plus.
Housing
That was an increase of 41 per cent over 1970 starts. It was 10 per cent greater
than the previous record year of 1950, when the homebuilding industry was still
trying to relieve the shortage resulting from a long depression and World War II.
If new mobile homes are added to the conventional housing total for 1971, we wind
up with 2.6 million units. That surpasses the 1950 total by nearly one-third.
When an objective of 26 million new and rehabilitated units was established
by Congress as the housing goal for the decade 1968-78, some said it was impossible.
With about 2.6 million units in 1971, we have now reached the average annual pace
called for by that goal.
What is the housing outlook for 1972? I believe 1972 will be another
record year, topping 1971 by a modest margin.
The condition of the mortgage market will determine the progress of housing
in 1972. In that connection we have the word of Preston Martin, chairman of the
Federal Home Loan Bank Board, that 1972 will be a "nifty" year for the home buyer.
Martin predicts that interest rates on conventional loans will at least hold steady
or possibly even drop a fraction of a per cent.
I can assure you that the Administration will continue to place a high level
of priority on housing -- and that is important if we are to have another record
year in 1972.
Much of the thrust for the housing boom in 1971 was provided by government
and quasi-government agencies. You can expect that kind of impetus to continue.
I suppose no discussion of the economy would be complete without at least
some mention of Phase II of the wage and price stabilization program.
I personally believe Phase II is working. Price stabilization is working
despite the absence of a large bureaucracy. The reason is that pricing by
(more)
-3-
big business is being controlled, and smaller businesses pretty much fall into line
simply because of the pressures of competition.
Wage stabilization has been a rockier road, and the reluctance of some leaders
of organized labor to cooperate in the national interest has been clearly apparent
and rather painful. But I took heart when the Price Commission refused to pass
along the entire amount of the coal industry pay boost, which in turn put pressure
phme
on the Pay Board. Subsequent to that, the Pay Board refused to give the machinists
all they had negotiated. So I think we've come to the point where we have had to
make some hard decisions and we have made them. I believe the pieces are finally
falling into place.
How long will Phase II last? As long as necessary -- until inflation no longer
IMPORT
feeds on itself and inflationary expectations are a thing of the past. What comes
after Phase II? Probably some form of voluntary pay guidelines linked with
STAX
productivity increases, rather than the mandatory system we have currently.
Now I would like to discuss some of the legislation pending in Congress,
assessing it from the standpoint of what's desireable and what's likely.
I personally feel it is vitally important that the Congress approve some form
of Federal revenue sharing this year. I would like to see the President's plan
adopted -- a percentage sharing of $5 billion with the States and local units of
government, free of red tape so we could zero in on local needs.
This is important for those in the construction field, since it probably
would touch off a flurry of local building projects of various kinds.
Chances for adoption of a revenue sharing plan, by whatever name, look fairly
good this year. House Ways and Means Chairman Wilbur Mills, who is the key man on
this legislation, has introduced a revenue sharing bill of his own which goes about
80 per cent of the way with the President. I believe there is room for compromise.
So revenue sharing prospects are quite bright.
The outlook for welfare reform has picked up. A short time ago, welfare
reform looked dead when Sen. Abraham Ribicoff dropped his support for it. But
Ribicoff is again backing welfare reform on the basis that there will be a test run
of it before it goes fully into effect on a permanent basis. The House has already
approved a welfare reform bill. So it now appears we will get some kind of welfare
reform legislation this year.
Another Administration priority is health care. The Ways and Means Committee
conducted fullscale hearings on health care last year and is about to go into
(more)
GERALD FORD LIBRARI
-4-
executive session on it. There is no way of knowing what will emerge from the
executive sessions but I would expect a measure dealing with catastrophic illness
as a minimum. And the legislation we get from the committee may go beyond that.
The difficulty, I believe, will be in the Senate. But I believe the American people
want improvements in health care, particularly provisions to handle catastrophic
illnesses. I feel we are going to get some kind of health care legislation through
HR10488 the Congress this year.
Now we come to a bill in which everyone connected with the construction
business should be interested. It is H.R. 10488, which would give the General
Services Administration authority to make purchase contracts for the construction
of 63 building projects costing an estimated $750 million. This bill has already
passed the Senate and is close to being reported out by the House Public Works
Committee.
H.R. 10488 would create a Federal public buildings revolving fund, which
would be built up over a three-year period. Rent charged to all Federal agencies
occupying a building would go into this fund. The fund then would be used to pay
for new Federal buildings on the installment plan.
oat
The G.S.A. budget request for public buildings construction in fiscal 1973
hil-sh
S only $114,060,000, as compared with $200.4 million in fiscal 1972 and
$133.5 million in fiscal 1971. But G.S.A. is looking forward to a big new
construction program under H.R. 10488. This is legislation that all contractors
should get behind.
What happens in Washington should be of vital concern to contractors. You
should make your interests known. You should take an active part in the political
process. You should help to make democracy work.
I was not going to talk politics at all today, since this is a nonpartisan
audience. But Lynn Briggs has asked me to make some comment about the upcoming
Inno
election.
Let me begin by saying that the major issues in any national election are
peace and prosperity.
I have already discussed the economic outlook. Let me simply add that I am
sure the economy will be an issue in the 1972 campaign. The Democrats will paint
it in the darkest of colors and try to make you believe, like Chicken Little, that
the sky is falling. I am sure you will find by next fall that the economy will be
(more)
-5-
moving strongly upward. In fact, I expect an upsurge in the fourth quarter after
slow, steady growth in the first three quarters. So the American people will be the
judge of this Administration's performance on the economy -- and I do not fear for
that judgment. Surely the people know that we have seldom had peace and prosperity
at the same time, and that we are now trying to achieve prosperity while ending our
involvement in a tragic and costly war. What we want is real prosperity, not the
phony prosperity generated by war that creates a defense plant boom, puts hundreds
of thousands of our young men into uniform, and sends prices sky-high.
The other big issue will be peace -- the conduct of our foreign affairs.
President Nixon inherited the Vietnam War, just as he inherited inflation. He is
curbing inflation and he is ending our involvement in Vietnam -- ending it in an
honorable way and not through the surrender urged on him by his critics. I think
in the final analysis the American people will find this the right way.
President Nixon has brought a new quality of realism to American foreign
policy -- the Nixon Doctrine and an era of negotiation in place of confrontation.
We have agreed to accept Mainland China as a sovereign nation, adjusting our
policies in Asia to meet changed economic and political conditions there. Following
our military withdrawal from Vietnam, we will continue to provide support under the
Nixon Doctrine for our non-Communist friends in Asia.
In our relations with the Soviet Union, new realism on both sides has
recognized a mutual interest in reducing the risk of nuclear war. There are signs
that an agreement on curbing nuclear weapons will result from the Strategic Arms
Limitation Talks. Should these talks prove successful, they will show that with
hard bargaining and diligent negotiation we can avoid a new upward spiral of the
nuclear arms race.
The foreign relations of the United States have changed drastically in the
last few months, with President Nixon's upcoming visit to China and his planned
trip to the Soviet Union in late May. The President also has consulted with our
Free World partners in advance of his trips to the summit in Peking and Moscow.
We are turning from an era of confrontation to an era of negotiation. But
there is no question in my mind that negotiation will prove fruitful only if we
negotiate from a position of strength. I also firmly believe that no useful purpose
is served when some candidates for the Democratic presidential nomination reject
the President's proposals for ending the Vietnam War even before the North Vietnamese
do.
(more)
GERALD FORD LIBRARY
-6-
We are achieving solid success in our foreign affairs. We are achieving
that success because we are continuing to show the world that we are determined to
discharge America's responsibility for maintaining world peace.
The challenge that faces us in foreign affairs is that we continue to assert
world leadership in the face of neo-isolationism, well-meaning but misguided
pacifism and some radically organized protest movements which tend to benefit the
other side.
We must put the nation on a new course, take her in new directions that
point toward a new era of greatness for the American people.
We must lay a foundation for prosperity without war and we must build a new
strategy for peace.
Our goals are clear. Our purpose is strong. With the help of the American
people, we cannot fail.
###
BERALD FORD LIBRARY
5th
District
Media
and
Hause
Copy
AN ADDRESS BY REP. GERALD R. FORD, R-MICH.
REPUBLICAN LEADER, U.S. HOUSE OF REPRESENTATIVES
BEFORE THE 80th ANNUAL CONVENTION
OF THE MICHIGAN ASSOCIATION OF PLUMBING, HEATING AND COOLING CONTRACTORS
AT THE PANTLIND HOTEL
GRAND RAPIDS, MICHIGAN
FRIDAY, FEBRUARY 11, 1972
FOR RELEASE AT 10:30 a.m. FRIDAY, FEB. 11
Ladies and gentlemen, every time I am asked to make a speech -- and I give
several hundred a year -- the first question that enters my mind, naturally, is
what am I going to talk about. In your case, the answer came easily. Lynn Briggs
told me what to say. So if there is anything in this speech that you don't like,
just blame it on Lynn. Seriously, what Lynn asked me to do was to just cover the
waterfront. So you may not like what I say, but at least I don't plan to leave
anything out.
First of all, let's take a wide-scope look at what lies ahead on the economic
road.
Leading business economists are predicting a rise of fully 9 per cent in our
gross national product in 1972 -- an expansion of nearly $100 billion in the market
value of total goods and services we produce this year. I think it's significant
that this would be the largest annual gain in the value of total national output on
record. It says something about the kind of year 1972 is going to be.
These economists figure that the real rise in GNP in 1972 will be 6 per cent,
with the other 3 per cent attributed to inflation. In other words, they expect the
cost of living this year will rise only 3 per cent, as compared with 4.3 per cent
in 1971, 5.5 per cent in 1970 and 6.1 per cent in 1969.
These economists also expect the jobless rate to decline in each successive
quarter, until by the end of 1972 it will be as low as it was prior to the beginning
of the economic adjustment two years ago -- about 5 per cent.
We will constantly have to be on guard against a resurgence of inflation as
the economy picks up steam in 1972. Therefore we must continue restraints on prices
and wages until the atmosphere of inflationary expectations which has done so much
harm to this country is fully dissipated.
As for my own personal outlook on the economy, I think we will see slow,
steady growth in 1972 -- solid growth that will push employment up, soak up the
(more)
-2-
increased number of job-seekers in the labor market and drop unemployment down to
5 per cent by the end of the year.
Employment should rise about 2.1 million new jobs. This will be some
400,000 jobs more than would be necessary to take care of the 1.5 million people
being added to the work force plus the additional 200,000 coming out of the Armed
Forces. And bear in mind that we created 1.7 million additional jobs in the last
six months of 1971, but this was offset by cutbacks in defense payrolls and the size
of the military, and by other factors.
As you know, the strongest element in the national economy in 1971 was housing.
The number of 1971 housing starts topped out at an all-time record of 2-million-plus.
That was an increase of 41 per cent over 1970 starts. It was 10 per cent greater
than the previous record year of 1950, when the homebuilding industry was still
trying to relieve the shortage resulting from a long depression and World War II.
If new mobile homes are added to the conventional housing total for 1971, we wind
up with 2.6 million units. That surpasses the 1950 total by nearly one-third.
When an objective of 26 million new and rehabilitated units was established
by Congress as the housing goal for the decade 1968-78, some said it was impossible.
With about 2.6 million units in 1971, we have now reached the average annual pace
called for by that goal.
What is the housing outlook for 1972? I believe 1972 will be another
record year, topping 1971 by a modest margin.
The condition of the mortgage market will determine the progress of housing
in 1972. In that connection we have the word of Preston Martin, chairman of the
Federal Home Loan Bank Board, that 1972 will be a "nifty" year for the home buyer.
Martin predicts that interest rates on conventional loans will at least hold steady
or possibly even drop a fraction of a per cent.
I can assure you that the Administration will continue to place a high level
of priority on housing -- and that is important if we are to have another record
year in 1972.
Much of the thrust for the housing boom in 1971 was provided by government
and quasi-government agencies. You can expect that kind of impetus to continue.
I suppose no discussion of the economy would be complete without at least
some mention of Phase II of the wage and price stabilization program.
I personally believe Phase II is working. Price stabilization is working
despite the absence of a large bureaucracy. The reason is that pricing by
(more)
-3-
big business is being controlled, and smaller businesses pretty much fall into line
simply because of the pressures of competition.
Wage stabilization has been a rockier road, and the reluctance of some leaders
of organized labor to cooperate in the national interest has been clearly apparent
and rather painful. But I took heart when the Price Commission refused to pass
along the entire amount of the coal industry pay boost, which in turn put pressure
on the Pay Board. Subsequent to that, the Pay Board refused to give the machinists
all they had negotiated. So I think we've come to the point where we have had to
make some hard decisions and we have made them. I believe the pieces are finally
falling into place.
How long will Phase II last? As long as necessary -- until inflation no longer
feeds on itself and inflationary expectations are a thing of the past. What comes
after Phase II? Probably some form of voluntary pay guidelines linked with
productivity increases, rather than the mandatory system we have currently.
Now I would like to discuss some of the legislation pending in Congress,
assessing it from the standpoint of what's desireable and what's likely.
I personally feel it is vitally important that the Congress approve some form
of Federal revenue sharing this year. I would like to see the President's plan
adopted -- a percentage sharing of $5 billion with the States and local units of
government, free of red tape so we could zero in on local needs.
This is important for those in the construction field, since it probably
would touch off a flurry of local building projects of various kinds.
Chances for adoption of a revenue sharing plan, by whatever name, look fairly
good this year. House Ways and Means Chairman Wilbur Mills, who is the key man on
this legislation, has introduced a revenue sharing bill of his own which goes about
80 per cent of the way with the President. I believe there is room for compromise.
So revenue sharing prospects are quite bright.
The outlook for welfare reform has picked up. A short time ago, welfare
reform looked dead when Sen. Abraham Ribicoff dropped his support for it. But
Ribicoff is again backing welfare reform on the basis that there will be a test run
of it before it goes fully into effect on a permanent basis. The House has already
approved a welfare reform bill. So it now appears we will get some kind of welfare
reform legislation this year.
Another Administration priority is health care. The Ways and Means Committee
conducted fullscale hearings on health care last year and is about to go into
(more)
-4-
executive session on it. There is no way of knowing what will emerge from the
executive sessions but I would expect a measure dealing with catastrophic illness
as a minimum. And the legislation we get from the committee may go beyond that.
The difficulty, I believe, will be in the Senate. But I believe the American people
want improvements in health care, particularly provisions to handle catastrophic
illnesses. I feel we are going to get some kind of health care legislation through
the Congress this year.
Now we come to a bill in which everyone connected with the construction
business should be interested. It is H.R. 10488, which would give the General
Services Administration authority to make purchase contracts for the construction
of 63 building projects costing an estimated $750 million. This bill has already
passed the Senate and is close to being reported out by the House Public Works
Committee.
H.R. 10488 would create a Federal public buildings revolving fund, which
would be built up over a three-year period. Rent charged to all Federal agencies
occupying a building would go into this fund. The fund then would be used to pay
for new Federal buildings on the installment plan.
The G.S.A. budget request for public buildings construction in fiscal 1973
is only $114,060,000, as compared with $200.4 million in fiscal 1972 and
$133.5 million in fiscal 1971. But G.S.A. is looking forward to a big new
construction program under H.R. 10488. This is legislation that all contractors
should get behind.
What happens in Washington should be of vital concern to contractors. You
should make your interests known. You should take an active part in the political
process. You should help to make democracy work.
I was not going to talk politics at all today, since this is a nonpartisan
audience. But Lynn Briggs has asked me to make some comment about the upcoming
election.
Let me begin by saying that the major issues in any national election are
peace and prosperity.
I have already discussed the economic outlook. Let me simply add that I am
sure the economy will be an issue in the 1972 campaign. The Democrats will paint
it in the darkest of colors and try to make you believe, like Chicken Little, that
the sky is falling. I am sure you will find by next fall that the economy will be
(more)
-5-
moving strongly upward. In fact, I expect an upsurge in the fourth quarter after
slow, steady growth in the first three quarters. So the American people will be the
judge of this Administration's performance on the economy -- and I do not fear for
that judgment. Surely the people know that we have seldom had peace and prosperity
at the same time, and that we are now trying to achieve prosperity while ending our
involvement in a tragic and costly war. What we want is real prosperity, not the
phony prosperity generated by war that creates a defense plant boom, puts hundreds
of thousands of our young men into uniform, and sends prices sky-high.
The other big issue will be peace -- the conduct of our foreign affairs.
President Nixon inherited the Vietnam War, just as he inherited inflation. He is
curbing inflation and he is ending our involvement in Vietnam -- ending it in an
honorable way and not through the surrender urged on him by his critics. I think
in the final analysis the American people will find this the right way.
President Nixon has brought a new quality of realism to American foreign
policy -- the Nixon Doctrine and an era of negotiation in place of confrontation.
We have agreed to accept Mainland China as a sovereign nation, adjusting our
policies in Asia to meet changed economic and political conditions there. Following
our military withdrawal from Vietnam, we will continue to provide support under the
Nixon Doctrine for our non-Communist friends in Asia.
In our relations with the Soviet Union, new realism on both sides has
recognized a mutual interest in reducing the risk of nuclear war. There are signs
that an agreement on curbing nuclear weapons will result from the Strategic Arms
Limitation Talks. Should these talks prove successful, they will show that with
hard bargaining and diligent negotiation we can avoid a new upward spiral of the
nuclear arms race.
The foreign relations of the United States have changed drastically in the
last few months, with President Nixon's upcoming visit to China and his planned
trip to the Soviet Union in late May. The President also has consulted with our
Free World partners in advance of his trips to the summit in Peking and Moscow.
We are turning from an era of confrontation to an era of negotiation. But
there is no question in my mind that negotiation will prove fruitful only if we
negotiate from a position of strength. I also firmly believe that no useful purpose
is served when some candidates for the Democratic presidential nomination reject
the President's proposals for ending the Vietnam War even before the North Vietnamese
do.
(more)
-6-
We are achieving solid success in our foreign affairs. We are achieving
that success because we are continuing to show the world that we are determined to
discharge America's responsibility for maintaining world peace.
The challenge that faces us in foreign affairs is that we continue to assert
world leadership in the face of neo-isolationism, well-meaning but misguided
pacifism and some radically organized protest movements which tend to benefit the
other side.
We must put the nation on a new course, take her in new directions that
point toward a new era of greatness for the American people.
We must lay a foundation for prosperity without war and we must build a new
strategy for peace.
Our goals are clear. Our purpose is strong. With the help of the American
people, we cannot fail.
# # #
Distribution
5th Falleries District p.m. Media 2/9/72 pm. 2/7/72 M Office Copy
AN ADDRESS BY REP. GERALD R. FORD, R-MICH.
REPUBLICAN LEADER, U.S. HOUSE OF REPRESENTATIVES
BEFORE THE 80th ANNUAL CONVENTION
OF THE MICHIGAN ASSOCIATION OF PLUMBING, HEATING AND COOLING CONTRACTORS
AT THE PANTLIND HOTEL
GRAND RAPIDS, MICHIGAN
FRIDAY, FEBRUARY 11, 1972
FOR RELEASE AT 10:30 a.m. FRIDAY, FEB. 11
Ladies and gentlemen, every time I am asked to make a speech -- and I give
several hundred a year -- the first question that enters my mind, naturally, is
what am I going to talk about. In your case, the answer came easily. Lynn Briggs
told me what to say. So if there is anything in this speech that you don't like,
just blame it on Lynn. Seriously, what Lynn asked me to do was to just cover the
waterfront. So you may not like what I say, but at least I don't plan to leave
anything out.
First of all, let's take a wide-scope look at what lies ahead on the economic
road.
Leading business economists are predicting a rise of fully 9 per cent in our
gross national product in 1972 -- an expansion of nearly $100 billion in the market
value of total goods and services we produce this year. I think it's significant
that this would be the largest annual gain in the value of total national output on
record. It says something about the kind of year 1972 is going to be.
These economists figure that the real rise in GNP in 1972 will be 6 per cent,
with the other 3 per cent attributed to inflation. In other words, they expect the
cost of living this year will rise only 3 per cent, as compared with 4.3 per cent
in 1971, 5.5 per cent in 1970 and 6.1 per cent in 1969.
These economists also expect the jobless rate to decline in each successive
quarter, until by the end of 1972 it will be as low as it was prior to the beginning
of the economic adjustment two years ago -- about 5 per cent.
We will constantly have to be on guard against a resurgence of inflation as
the economy picks up steam in 1972. Therefore we must continue restraints on prices
and wages until the atmosphere of inflationary expectations which has done so much
harm to this country is fully dissipated.
As for my own personal outlook on the economy, I think we will see slow,
steady growth in 1972 -- solid growth that will push employment up, soak up the
(more)
-2-
increased number of job-seekers in the labor market and drop unemployment down to
5 per cent by the end of the year.
Employment should rise about 2.1 million new jobs. This will be some
400,000 jobs more than would be necessary to take care of the 1.5 million people
being added to the work force plus the additional 200,000 coming out of the Armed
Forces. And bear in mind that we created 1.7 million additional jobs in the last
six months of 1971, but this was offset by cutbacks in defense payrolls and the size
of the military, and by other factors.
As you know, the strongest element in the national economy in 1971 was housing.
The number of 1971 housing starts topped out at an all-time record of 2-million-plus.
That was an increase of 41 per cent over 1970 starts. It was 10 per cent greater
than the previous record year of 1950, when the homebuilding industry was still
trying to relieve the shortage resulting from a long depression and World War II.
If new mobile homes are added to the conventional housing total for 1971, we wind
up with 2.6 million units. That surpasses the 1950 total by nearly one-third.
When an objective of 26 million new and rehabilitated units was established
by Congress as the housing goal for the decade 1968-78, some said it was impossible.
With about 2.6 million units in 1971, we have now reached the average annual pace
called for by that goal.
What is the housing outlook for 1972? I believe 1972 will be another
record year, topping 1971 by a modest margin.
The condition of the mortgage market will determine the progress of housing
in 1972. In that connection we have the word of Preston Martin, chairman of the
Federal Home Loan Bank Board, that 1972 will be a "nifty" year for the home buyer.
Martin predicts that interest rates on conventional loans will at least hold steady
or possibly even drop a fraction of a per cent.
I can assure you that the Administration will continue to place a high level
of priority on housing -- and that is important if we are to have another record
year in 1972.
Much of the thrust for the housing boom in 1971 was provided by government
and quasi-government agencies. You can expect that kind of impetus to continue.
I suppose no discussion of the economy would be complete without at least
some mention of Phase II of the wage and price stabilization program.
I personally believe Phase II is working. Price stabilization is working
despite the absence of a large bureaucracy. The reason is that pricing by
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big business is being controlled, and smaller businesses pretty much fall into line
simply because of the pressures of competition.
Wage stabilization has been a rockier road, and the reluctance of some leaders
of organized labor to cooperate in the national interest has been clearly apparent
and rather painful. But I took heart when the Price Commission refused to pass
along the entire amount of the coal industry pay boost, which in turn put pressure
on the Pay Board. Subsequent to that, the Pay Board refused to give the machinists
all they had negotiated. So I think we've come to the point where we have had to
make some hard decisions and we have made them. I believe the pieces are finally
falling into place.
How long will Phase II last? As long as necessary -- until inflation no longer
feeds on itself and inflationary expectations are a thing of the past. What comes
after Phase II? Probably some form of voluntary pay guidelines linked with
productivity increases, rather than the mandatory system we have currently.
Now I would like to discuss some of the legislation pending in Congress,
assessing it from the standpoint of what's desireable and what's likely.
I personally feel it is vitally important that the Congress approve some form
of Federal revenue sharing this year. I would like to see the President's plan
adopted -- a percentage sharing of $5 billion with the States and local units of
government, free of red tape so we could zero in on local needs.
This is important for those in the construction field, since it probably
would touch off a flurry of local building projects of various kinds.
Chances for adoption of a revenue sharing plan, by whatever name, look fairly
good this year. House Ways and Means Chairman Wilbur Mills, who is the key man on
this legislation, has introduced a revenue sharing bill of his own which goes about
80 per cent of the way with the President. I believe there is room for compromise.
So revenue sharing prospects are quite bright.
The outlook for welfare reform has picked up. A short time ago, welfare
reform looked dead when Sen. Abraham Ribicoff dropped his support for it. But
Ribicoff is again backing welfare reform on the basis that there will be a test run
of it before it goes fully into effect on a permanent basis. The House has already
approved a welfare reform bill. So it now appears we will get some kind of welfare
reform legislation this year.
Another Administration priority is health care. The Ways and Means Committee
conducted fullscale hearings on health care last year and is about to go into
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executive session on it. There is no way of knowing what will emerge from the
executive sessions but I would expect a measure dealing with catastrophic illness
as a minimum. And the legislation we get from the committee may go beyond that.
The difficulty, I believe, will be in the Senate. But I believe the American people
want improvements in health care, particularly provisions to handle catastrophic
illnesses. I feel we are going to get some kind of health care legislation through
the Congress this year.
Now we come to a bill in which everyone connected with the construction
business should be interested. It is H.R. 10488, which would give the General
Services Administration authority to make purchase contracts for the construction
of 63 building projects costing an estimated $750 million. This bill has already
passed the Senate and is close to being reported out by the House Public Works
Committee.
H.R. 10488 would create a Federal public buildings revolving fund, which
would be built up over a three-year period. Rent charged to all Federal agencies
occupying a building would go into this fund. The fund then would be used to pay
for new Federal buildings on the installment plan.
The G.S.A. budget request for public buildings construction in fiscal 1973
is only $114,060,000, as compared with $200.4 million in fiscal 1972 and
$133.5 million in fiscal 1971. But G.S.A. is looking forward to a big new
construction program under H.R. 10488. This is legislation that all contractors
should get behind.
What happens in Washington should be of vital concern to contractors. You
should make your interests known. You should take an active part in the political
process. You should help to make democracy work.
I was not going to talk politics at all today, since this is a nonpartisan
audience. But Lynn Briggs has asked me to make some comment about the upcoming
election.
Let me begin by saying that the major issues in any national election are
peace and prosperity.
I have already discussed the economic outlook. Let me simply add that I am
sure the economy will be an issue in the 1972 campaign. The Democrats will paint
it in the darkest of colors and try to make you believe, like Chicken Little, that
the sky is falling. I am sure you will find by next fall that the economy will be
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moving strongly upward. In fact, I expect an upsurge in the fourth quarter after
slow, steady growth in the first three quarters. So the American people will be the
judge of this Administration's performance on the economy -- and I do not fear for
that judgment. Surely the people know that we have seldom had peace and prosperity
at the same time, and that we are now trying to achieve prosperity while ending our
involvement in a tragic and costly war. What we want is real prosperity, not the
phony prosperity generated by war that creates a defense plant boom, puts hundreds
of thousands of our young men into uniform, and sends prices sky-high.
The other big issue will be peace -- the conduct of our foreign affairs.
President Nixon inherited the Vietnam War, just as he inherited inflation. He is
curbing inflation and he is ending our involvement in Vietnam -- ending it in an
honorable way and not through the surrender urged on him by his critics. I think
in the final analysis the American people will find this the right way.
President Nixon has brought a new quality of realism to American foreign
policy -- the Nixon Doctrine and an era of negotiation in place of confrontation.
We have agreed to accept Mainland China as a sovereign nation, adjusting our
policies in Asia to meet changed economic and political conditions there. Following
our military withdrawal from Vietnam, we will continue to provide support under the
Nixon Doctrine for our non-Communist friends in Asia.
In our relations with the Soviet Union, new realism on both sides has
recognized a mutual interest in reducing the risk of nuclear war. There are signs
that an agreement on curbing nuclear weapons will result from the Strategic Arms
Limitation Talks. Should these talks prove successful, they will show that with
hard bargaining and diligent negotiation we can avoid a new upward spiral of the
nuclear arms race.
The foreign relations of the United States have changed drastically in the
last few months, with President Nixon's upcoming visit to China and his planned
trip to the Soviet Union in late May. The President also has consulted with our
Free World partners in advance of his trips to the summit in Peking and Moscow.
We are turning from an era of confrontation to an era of negotiation. But
there is no question in my mind that negotiation will prove fruitful only if we
negotiate from a position of strength. I also firmly believe that no useful purpose
is served when some candidates for the Democratic presidential nomination reject
the President's proposals for ending the Vietnam War even before the North Vietnamese
do.
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We are achieving solid success in our foreign affairs. We are achieving
that success because we are continuing to show the world that we are determined to
discharge America's responsibility for maintaining world peace.
The challenge that faces us in foreign affairs is that we continue to assert
world leadership in the face of neo-isolationism, well-meaning but misguided
pacifism and some radically organized protest movements which tend to benefit the
other side.
We must put the nation on a new course, take her in new directions that
point toward a new era of greatness for the American people.
We must lay a foundation for prosperity without war and we must build a new
strategy for peace.
Our goals are clear. Our purpose is strong. With the help of the American
people, we cannot fail.
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