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    "title": "80th Annual Convention, Michigan Association of Plumbing, Heating and Cooling Contractors, Grand Rapids, MI, February 11, 1972",
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    "ocrText": "The original documents are located in Box D32, folder \"80th Annual Convention, Michigan\nAssociation of Plumbing, Heating and Cooling Contractors, Grand Rapids, MI, February\n11, 1972\" of the Ford Congressional Papers: Press Secretary and Speech File at the Gerald\nR. Ford Presidential Library.\nCopyright Notice\nThe copyright law of the United States (Title 17, United States Code) governs the making of\nphotocopies or other reproductions of copyrighted material. The Council donated to the United\nStates of America his copyrights in all of his unpublished writings in National Archives collections.\nWorks prepared by U.S. Government employees as part of their official duties are in the public\ndomain. The copyrights to materials written by other individuals or organizations are presumed to\nremain with them. If you think any of the information displayed in the PDF is subject to a valid\ncopyright claim, please contact the Gerald R. Ford Presidential Library.\nDigitized from Box D32 of The Ford Congressional Papers: Press Secretary and Speech File at the Gerald R. Ford Presidential Library\nAN ADDRESS BY REP. GERALD R. FORD, R-MICH.\nREPUBLICAN LEADER, U.S. HOUSE OF REPRESENTATIVES\nBEFORE THE 80th ANNUAL CONVENTION\nOF THE MICHIGAN ASSOCIATION OF PLUMBING, HEATING AND COOLING CONTRACTORS\nAT THE PANTLIND HOTEL\nGRAND RAPIDS, MICHIGAN\nFRIDAY, FEBRUARY 11, 1972\nIRS surpose\nhurang\nFOR RELEASE AT 10:30 a.m. FRIDAY, FEB. 11\nLadies and gentlemen, every time I am asked to make a speech -- and I give\nseveral hundred a year the first question that enters my mind, naturally, is\nwhat am I going to talk about. In your case, the answer came easily. Lynn Briggs\ntold me what to say. So if there is anything in this speech that you don't like,\njust blame it on Lynn. Seriously, what Lynn asked me to do was to just cover the\nwaterfront. So you may not like what I say, but at least I don't plan to leave\nanything out.\nFirst of all, let's take a wide-scope look at what lies ahead on the economic\nroad.\nSNP\nLeading business economists are predicting a rise of fully 9 per cent in our\ngross national product in 1972 -- an expansion of nearly $100 billion in the market\nvalue of total goods and services we produce this year. I think it's significant\nthat this would be the largest annual gain in the value of total national output on\nrecord. It says something about the kind of year 1972 is going to be.\nThese economists figure that the real rise in GNP in 1972 will be 6 per cent,\nwith the other 3 per cent attributed to inflation. In other words, they expect the\ntheil\n71\ncost of living this year will rise only 3 per cent, as compared with 4.3 per cent\n70/5.5\nin 1971, 5.5 per cent in 1970 and 6.1 per cent in 1969.\n69/6.1\nThese economists also expect the jobless rate to decline in each successive\nYoung\nquarter, until by the end of 1972 it will be as low as it was prior to the beginning\nof the economic adjustment two years ago -- about 5 per cent.\nWe will constantly have to be on guard against a resurgence of inflation as\nthe economy picks up steam in 1972. Therefore we must continue restraints on prices\nand wages until the atmosphere of inflationary expectations which has done so much\nharm to this country is fully dissipated.\nAs for my own personal outlook on the economy, I think we will see slow,\nsteady growth in 1972 -- solid growth that will push employment up, soak up the\n(more)\nGERAL FORD LIBRARY\n-2-\nincreased number of job-seekers in the labor market and drop unemployment down to\n5 per cent by the end of the year.\nEmployment should rise about 2.1 million new jobs. This will be some\n400,000 jobs more than would be necessary to take care of the 1.5 million people\nbeing added to the work force plus the additional 200,000 coming out of the Armed\nForces. And bear in mind that we created 1.7 million additional jobs in the last\nsix months of 1971, but this was offset by cutbacks in defense payrolls and the size\nof the military, and by other factors.\nAs you know, the strongest element in the national economy in 1971 was housing.\nThe number of 1971 housing starts topped out at an all-time record of 2-million-plus.\nHousing\nThat was an increase of 41 per cent over 1970 starts. It was 10 per cent greater\nthan the previous record year of 1950, when the homebuilding industry was still\ntrying to relieve the shortage resulting from a long depression and World War II.\nIf new mobile homes are added to the conventional housing total for 1971, we wind\nup with 2.6 million units. That surpasses the 1950 total by nearly one-third.\nWhen an objective of 26 million new and rehabilitated units was established\nby Congress as the housing goal for the decade 1968-78, some said it was impossible.\nWith about 2.6 million units in 1971, we have now reached the average annual pace\ncalled for by that goal.\nWhat is the housing outlook for 1972? I believe 1972 will be another\nrecord year, topping 1971 by a modest margin.\nThe condition of the mortgage market will determine the progress of housing\nin 1972. In that connection we have the word of Preston Martin, chairman of the\nFederal Home Loan Bank Board, that 1972 will be a \"nifty\" year for the home buyer.\nMartin predicts that interest rates on conventional loans will at least hold steady\nor possibly even drop a fraction of a per cent.\nI can assure you that the Administration will continue to place a high level\nof priority on housing -- and that is important if we are to have another record\nyear in 1972.\nMuch of the thrust for the housing boom in 1971 was provided by government\nand quasi-government agencies. You can expect that kind of impetus to continue.\nI suppose no discussion of the economy would be complete without at least\nsome mention of Phase II of the wage and price stabilization program.\nI personally believe Phase II is working. Price stabilization is working\ndespite the absence of a large bureaucracy. The reason is that pricing by\n(more)\n-3-\nbig business is being controlled, and smaller businesses pretty much fall into line\nsimply because of the pressures of competition.\nWage stabilization has been a rockier road, and the reluctance of some leaders\nof organized labor to cooperate in the national interest has been clearly apparent\nand rather painful. But I took heart when the Price Commission refused to pass\nalong the entire amount of the coal industry pay boost, which in turn put pressure\nphme\non the Pay Board. Subsequent to that, the Pay Board refused to give the machinists\nall they had negotiated. So I think we've come to the point where we have had to\nmake some hard decisions and we have made them. I believe the pieces are finally\nfalling into place.\nHow long will Phase II last? As long as necessary -- until inflation no longer\nIMPORT\nfeeds on itself and inflationary expectations are a thing of the past. What comes\nafter Phase II? Probably some form of voluntary pay guidelines linked with\nSTAX\nproductivity increases, rather than the mandatory system we have currently.\nNow I would like to discuss some of the legislation pending in Congress,\nassessing it from the standpoint of what's desireable and what's likely.\nI personally feel it is vitally important that the Congress approve some form\nof Federal revenue sharing this year. I would like to see the President's plan\nadopted -- a percentage sharing of $5 billion with the States and local units of\ngovernment, free of red tape so we could zero in on local needs.\nThis is important for those in the construction field, since it probably\nwould touch off a flurry of local building projects of various kinds.\nChances for adoption of a revenue sharing plan, by whatever name, look fairly\ngood this year. House Ways and Means Chairman Wilbur Mills, who is the key man on\nthis legislation, has introduced a revenue sharing bill of his own which goes about\n80 per cent of the way with the President. I believe there is room for compromise.\nSo revenue sharing prospects are quite bright.\nThe outlook for welfare reform has picked up. A short time ago, welfare\nreform looked dead when Sen. Abraham Ribicoff dropped his support for it. But\nRibicoff is again backing welfare reform on the basis that there will be a test run\nof it before it goes fully into effect on a permanent basis. The House has already\napproved a welfare reform bill. So it now appears we will get some kind of welfare\nreform legislation this year.\nAnother Administration priority is health care. The Ways and Means Committee\nconducted fullscale hearings on health care last year and is about to go into\n(more)\nGERALD FORD LIBRARI\n-4-\nexecutive session on it. There is no way of knowing what will emerge from the\nexecutive sessions but I would expect a measure dealing with catastrophic illness\nas a minimum. And the legislation we get from the committee may go beyond that.\nThe difficulty, I believe, will be in the Senate. But I believe the American people\nwant improvements in health care, particularly provisions to handle catastrophic\nillnesses. I feel we are going to get some kind of health care legislation through\nHR10488 the Congress this year.\nNow we come to a bill in which everyone connected with the construction\nbusiness should be interested. It is H.R. 10488, which would give the General\nServices Administration authority to make purchase contracts for the construction\nof 63 building projects costing an estimated $750 million. This bill has already\npassed the Senate and is close to being reported out by the House Public Works\nCommittee.\nH.R. 10488 would create a Federal public buildings revolving fund, which\nwould be built up over a three-year period. Rent charged to all Federal agencies\noccupying a building would go into this fund. The fund then would be used to pay\nfor new Federal buildings on the installment plan.\noat\nThe G.S.A. budget request for public buildings construction in fiscal 1973\nhil-sh\nS only $114,060,000, as compared with $200.4 million in fiscal 1972 and\n$133.5 million in fiscal 1971. But G.S.A. is looking forward to a big new\nconstruction program under H.R. 10488. This is legislation that all contractors\nshould get behind.\nWhat happens in Washington should be of vital concern to contractors. You\nshould make your interests known. You should take an active part in the political\nprocess. You should help to make democracy work.\nI was not going to talk politics at all today, since this is a nonpartisan\naudience. But Lynn Briggs has asked me to make some comment about the upcoming\nInno\nelection.\nLet me begin by saying that the major issues in any national election are\npeace and prosperity.\nI have already discussed the economic outlook. Let me simply add that I am\nsure the economy will be an issue in the 1972 campaign. The Democrats will paint\nit in the darkest of colors and try to make you believe, like Chicken Little, that\nthe sky is falling. I am sure you will find by next fall that the economy will be\n(more)\n-5-\nmoving strongly upward. In fact, I expect an upsurge in the fourth quarter after\nslow, steady growth in the first three quarters. So the American people will be the\njudge of this Administration's performance on the economy -- and I do not fear for\nthat judgment. Surely the people know that we have seldom had peace and prosperity\nat the same time, and that we are now trying to achieve prosperity while ending our\ninvolvement in a tragic and costly war. What we want is real prosperity, not the\nphony prosperity generated by war that creates a defense plant boom, puts hundreds\nof thousands of our young men into uniform, and sends prices sky-high.\nThe other big issue will be peace -- the conduct of our foreign affairs.\nPresident Nixon inherited the Vietnam War, just as he inherited inflation. He is\ncurbing inflation and he is ending our involvement in Vietnam -- ending it in an\nhonorable way and not through the surrender urged on him by his critics. I think\nin the final analysis the American people will find this the right way.\nPresident Nixon has brought a new quality of realism to American foreign\npolicy -- the Nixon Doctrine and an era of negotiation in place of confrontation.\nWe have agreed to accept Mainland China as a sovereign nation, adjusting our\npolicies in Asia to meet changed economic and political conditions there. Following\nour military withdrawal from Vietnam, we will continue to provide support under the\nNixon Doctrine for our non-Communist friends in Asia.\nIn our relations with the Soviet Union, new realism on both sides has\nrecognized a mutual interest in reducing the risk of nuclear war. There are signs\nthat an agreement on curbing nuclear weapons will result from the Strategic Arms\nLimitation Talks. Should these talks prove successful, they will show that with\nhard bargaining and diligent negotiation we can avoid a new upward spiral of the\nnuclear arms race.\nThe foreign relations of the United States have changed drastically in the\nlast few months, with President Nixon's upcoming visit to China and his planned\ntrip to the Soviet Union in late May. The President also has consulted with our\nFree World partners in advance of his trips to the summit in Peking and Moscow.\nWe are turning from an era of confrontation to an era of negotiation. But\nthere is no question in my mind that negotiation will prove fruitful only if we\nnegotiate from a position of strength. I also firmly believe that no useful purpose\nis served when some candidates for the Democratic presidential nomination reject\nthe President's proposals for ending the Vietnam War even before the North Vietnamese\ndo.\n(more)\nGERALD FORD LIBRARY\n-6-\nWe are achieving solid success in our foreign affairs. We are achieving\nthat success because we are continuing to show the world that we are determined to\ndischarge America's responsibility for maintaining world peace.\nThe challenge that faces us in foreign affairs is that we continue to assert\nworld leadership in the face of neo-isolationism, well-meaning but misguided\npacifism and some radically organized protest movements which tend to benefit the\nother side.\nWe must put the nation on a new course, take her in new directions that\npoint toward a new era of greatness for the American people.\nWe must lay a foundation for prosperity without war and we must build a new\nstrategy for peace.\nOur goals are clear. Our purpose is strong. With the help of the American\npeople, we cannot fail.\n###\nBERALD FORD LIBRARY\n5th\nDistrict\nMedia\nand\nHause\nCopy\nAN ADDRESS BY REP. GERALD R. FORD, R-MICH.\nREPUBLICAN LEADER, U.S. HOUSE OF REPRESENTATIVES\nBEFORE THE 80th ANNUAL CONVENTION\nOF THE MICHIGAN ASSOCIATION OF PLUMBING, HEATING AND COOLING CONTRACTORS\nAT THE PANTLIND HOTEL\nGRAND RAPIDS, MICHIGAN\nFRIDAY, FEBRUARY 11, 1972\nFOR RELEASE AT 10:30 a.m. FRIDAY, FEB. 11\nLadies and gentlemen, every time I am asked to make a speech -- and I give\nseveral hundred a year -- the first question that enters my mind, naturally, is\nwhat am I going to talk about. In your case, the answer came easily. Lynn Briggs\ntold me what to say. So if there is anything in this speech that you don't like,\njust blame it on Lynn. Seriously, what Lynn asked me to do was to just cover the\nwaterfront. So you may not like what I say, but at least I don't plan to leave\nanything out.\nFirst of all, let's take a wide-scope look at what lies ahead on the economic\nroad.\nLeading business economists are predicting a rise of fully 9 per cent in our\ngross national product in 1972 -- an expansion of nearly $100 billion in the market\nvalue of total goods and services we produce this year. I think it's significant\nthat this would be the largest annual gain in the value of total national output on\nrecord. It says something about the kind of year 1972 is going to be.\nThese economists figure that the real rise in GNP in 1972 will be 6 per cent,\nwith the other 3 per cent attributed to inflation. In other words, they expect the\ncost of living this year will rise only 3 per cent, as compared with 4.3 per cent\nin 1971, 5.5 per cent in 1970 and 6.1 per cent in 1969.\nThese economists also expect the jobless rate to decline in each successive\nquarter, until by the end of 1972 it will be as low as it was prior to the beginning\nof the economic adjustment two years ago -- about 5 per cent.\nWe will constantly have to be on guard against a resurgence of inflation as\nthe economy picks up steam in 1972. Therefore we must continue restraints on prices\nand wages until the atmosphere of inflationary expectations which has done so much\nharm to this country is fully dissipated.\nAs for my own personal outlook on the economy, I think we will see slow,\nsteady growth in 1972 -- solid growth that will push employment up, soak up the\n(more)\n-2-\nincreased number of job-seekers in the labor market and drop unemployment down to\n5 per cent by the end of the year.\nEmployment should rise about 2.1 million new jobs. This will be some\n400,000 jobs more than would be necessary to take care of the 1.5 million people\nbeing added to the work force plus the additional 200,000 coming out of the Armed\nForces. And bear in mind that we created 1.7 million additional jobs in the last\nsix months of 1971, but this was offset by cutbacks in defense payrolls and the size\nof the military, and by other factors.\nAs you know, the strongest element in the national economy in 1971 was housing.\nThe number of 1971 housing starts topped out at an all-time record of 2-million-plus.\nThat was an increase of 41 per cent over 1970 starts. It was 10 per cent greater\nthan the previous record year of 1950, when the homebuilding industry was still\ntrying to relieve the shortage resulting from a long depression and World War II.\nIf new mobile homes are added to the conventional housing total for 1971, we wind\nup with 2.6 million units. That surpasses the 1950 total by nearly one-third.\nWhen an objective of 26 million new and rehabilitated units was established\nby Congress as the housing goal for the decade 1968-78, some said it was impossible.\nWith about 2.6 million units in 1971, we have now reached the average annual pace\ncalled for by that goal.\nWhat is the housing outlook for 1972? I believe 1972 will be another\nrecord year, topping 1971 by a modest margin.\nThe condition of the mortgage market will determine the progress of housing\nin 1972. In that connection we have the word of Preston Martin, chairman of the\nFederal Home Loan Bank Board, that 1972 will be a \"nifty\" year for the home buyer.\nMartin predicts that interest rates on conventional loans will at least hold steady\nor possibly even drop a fraction of a per cent.\nI can assure you that the Administration will continue to place a high level\nof priority on housing -- and that is important if we are to have another record\nyear in 1972.\nMuch of the thrust for the housing boom in 1971 was provided by government\nand quasi-government agencies. You can expect that kind of impetus to continue.\nI suppose no discussion of the economy would be complete without at least\nsome mention of Phase II of the wage and price stabilization program.\nI personally believe Phase II is working. Price stabilization is working\ndespite the absence of a large bureaucracy. The reason is that pricing by\n(more)\n-3-\nbig business is being controlled, and smaller businesses pretty much fall into line\nsimply because of the pressures of competition.\nWage stabilization has been a rockier road, and the reluctance of some leaders\nof organized labor to cooperate in the national interest has been clearly apparent\nand rather painful. But I took heart when the Price Commission refused to pass\nalong the entire amount of the coal industry pay boost, which in turn put pressure\non the Pay Board. Subsequent to that, the Pay Board refused to give the machinists\nall they had negotiated. So I think we've come to the point where we have had to\nmake some hard decisions and we have made them. I believe the pieces are finally\nfalling into place.\nHow long will Phase II last? As long as necessary -- until inflation no longer\nfeeds on itself and inflationary expectations are a thing of the past. What comes\nafter Phase II? Probably some form of voluntary pay guidelines linked with\nproductivity increases, rather than the mandatory system we have currently.\nNow I would like to discuss some of the legislation pending in Congress,\nassessing it from the standpoint of what's desireable and what's likely.\nI personally feel it is vitally important that the Congress approve some form\nof Federal revenue sharing this year. I would like to see the President's plan\nadopted -- a percentage sharing of $5 billion with the States and local units of\ngovernment, free of red tape so we could zero in on local needs.\nThis is important for those in the construction field, since it probably\nwould touch off a flurry of local building projects of various kinds.\nChances for adoption of a revenue sharing plan, by whatever name, look fairly\ngood this year. House Ways and Means Chairman Wilbur Mills, who is the key man on\nthis legislation, has introduced a revenue sharing bill of his own which goes about\n80 per cent of the way with the President. I believe there is room for compromise.\nSo revenue sharing prospects are quite bright.\nThe outlook for welfare reform has picked up. A short time ago, welfare\nreform looked dead when Sen. Abraham Ribicoff dropped his support for it. But\nRibicoff is again backing welfare reform on the basis that there will be a test run\nof it before it goes fully into effect on a permanent basis. The House has already\napproved a welfare reform bill. So it now appears we will get some kind of welfare\nreform legislation this year.\nAnother Administration priority is health care. The Ways and Means Committee\nconducted fullscale hearings on health care last year and is about to go into\n(more)\n-4-\nexecutive session on it. There is no way of knowing what will emerge from the\nexecutive sessions but I would expect a measure dealing with catastrophic illness\nas a minimum. And the legislation we get from the committee may go beyond that.\nThe difficulty, I believe, will be in the Senate. But I believe the American people\nwant improvements in health care, particularly provisions to handle catastrophic\nillnesses. I feel we are going to get some kind of health care legislation through\nthe Congress this year.\nNow we come to a bill in which everyone connected with the construction\nbusiness should be interested. It is H.R. 10488, which would give the General\nServices Administration authority to make purchase contracts for the construction\nof 63 building projects costing an estimated $750 million. This bill has already\npassed the Senate and is close to being reported out by the House Public Works\nCommittee.\nH.R. 10488 would create a Federal public buildings revolving fund, which\nwould be built up over a three-year period. Rent charged to all Federal agencies\noccupying a building would go into this fund. The fund then would be used to pay\nfor new Federal buildings on the installment plan.\nThe G.S.A. budget request for public buildings construction in fiscal 1973\nis only $114,060,000, as compared with $200.4 million in fiscal 1972 and\n$133.5 million in fiscal 1971. But G.S.A. is looking forward to a big new\nconstruction program under H.R. 10488. This is legislation that all contractors\nshould get behind.\nWhat happens in Washington should be of vital concern to contractors. You\nshould make your interests known. You should take an active part in the political\nprocess. You should help to make democracy work.\nI was not going to talk politics at all today, since this is a nonpartisan\naudience. But Lynn Briggs has asked me to make some comment about the upcoming\nelection.\nLet me begin by saying that the major issues in any national election are\npeace and prosperity.\nI have already discussed the economic outlook. Let me simply add that I am\nsure the economy will be an issue in the 1972 campaign. The Democrats will paint\nit in the darkest of colors and try to make you believe, like Chicken Little, that\nthe sky is falling. I am sure you will find by next fall that the economy will be\n(more)\n-5-\nmoving strongly upward. In fact, I expect an upsurge in the fourth quarter after\nslow, steady growth in the first three quarters. So the American people will be the\njudge of this Administration's performance on the economy -- and I do not fear for\nthat judgment. Surely the people know that we have seldom had peace and prosperity\nat the same time, and that we are now trying to achieve prosperity while ending our\ninvolvement in a tragic and costly war. What we want is real prosperity, not the\nphony prosperity generated by war that creates a defense plant boom, puts hundreds\nof thousands of our young men into uniform, and sends prices sky-high.\nThe other big issue will be peace -- the conduct of our foreign affairs.\nPresident Nixon inherited the Vietnam War, just as he inherited inflation. He is\ncurbing inflation and he is ending our involvement in Vietnam -- ending it in an\nhonorable way and not through the surrender urged on him by his critics. I think\nin the final analysis the American people will find this the right way.\nPresident Nixon has brought a new quality of realism to American foreign\npolicy -- the Nixon Doctrine and an era of negotiation in place of confrontation.\nWe have agreed to accept Mainland China as a sovereign nation, adjusting our\npolicies in Asia to meet changed economic and political conditions there. Following\nour military withdrawal from Vietnam, we will continue to provide support under the\nNixon Doctrine for our non-Communist friends in Asia.\nIn our relations with the Soviet Union, new realism on both sides has\nrecognized a mutual interest in reducing the risk of nuclear war. There are signs\nthat an agreement on curbing nuclear weapons will result from the Strategic Arms\nLimitation Talks. Should these talks prove successful, they will show that with\nhard bargaining and diligent negotiation we can avoid a new upward spiral of the\nnuclear arms race.\nThe foreign relations of the United States have changed drastically in the\nlast few months, with President Nixon's upcoming visit to China and his planned\ntrip to the Soviet Union in late May. The President also has consulted with our\nFree World partners in advance of his trips to the summit in Peking and Moscow.\nWe are turning from an era of confrontation to an era of negotiation. But\nthere is no question in my mind that negotiation will prove fruitful only if we\nnegotiate from a position of strength. I also firmly believe that no useful purpose\nis served when some candidates for the Democratic presidential nomination reject\nthe President's proposals for ending the Vietnam War even before the North Vietnamese\ndo.\n(more)\n-6-\nWe are achieving solid success in our foreign affairs. We are achieving\nthat success because we are continuing to show the world that we are determined to\ndischarge America's responsibility for maintaining world peace.\nThe challenge that faces us in foreign affairs is that we continue to assert\nworld leadership in the face of neo-isolationism, well-meaning but misguided\npacifism and some radically organized protest movements which tend to benefit the\nother side.\nWe must put the nation on a new course, take her in new directions that\npoint toward a new era of greatness for the American people.\nWe must lay a foundation for prosperity without war and we must build a new\nstrategy for peace.\nOur goals are clear. Our purpose is strong. With the help of the American\npeople, we cannot fail.\n# # #\nDistribution\n5th Falleries District p.m. Media 2/9/72 pm. 2/7/72 M Office Copy\nAN ADDRESS BY REP. GERALD R. FORD, R-MICH.\nREPUBLICAN LEADER, U.S. HOUSE OF REPRESENTATIVES\nBEFORE THE 80th ANNUAL CONVENTION\nOF THE MICHIGAN ASSOCIATION OF PLUMBING, HEATING AND COOLING CONTRACTORS\nAT THE PANTLIND HOTEL\nGRAND RAPIDS, MICHIGAN\nFRIDAY, FEBRUARY 11, 1972\nFOR RELEASE AT 10:30 a.m. FRIDAY, FEB. 11\nLadies and gentlemen, every time I am asked to make a speech -- and I give\nseveral hundred a year -- the first question that enters my mind, naturally, is\nwhat am I going to talk about. In your case, the answer came easily. Lynn Briggs\ntold me what to say. So if there is anything in this speech that you don't like,\njust blame it on Lynn. Seriously, what Lynn asked me to do was to just cover the\nwaterfront. So you may not like what I say, but at least I don't plan to leave\nanything out.\nFirst of all, let's take a wide-scope look at what lies ahead on the economic\nroad.\nLeading business economists are predicting a rise of fully 9 per cent in our\ngross national product in 1972 -- an expansion of nearly $100 billion in the market\nvalue of total goods and services we produce this year. I think it's significant\nthat this would be the largest annual gain in the value of total national output on\nrecord. It says something about the kind of year 1972 is going to be.\nThese economists figure that the real rise in GNP in 1972 will be 6 per cent,\nwith the other 3 per cent attributed to inflation. In other words, they expect the\ncost of living this year will rise only 3 per cent, as compared with 4.3 per cent\nin 1971, 5.5 per cent in 1970 and 6.1 per cent in 1969.\nThese economists also expect the jobless rate to decline in each successive\nquarter, until by the end of 1972 it will be as low as it was prior to the beginning\nof the economic adjustment two years ago -- about 5 per cent.\nWe will constantly have to be on guard against a resurgence of inflation as\nthe economy picks up steam in 1972. Therefore we must continue restraints on prices\nand wages until the atmosphere of inflationary expectations which has done so much\nharm to this country is fully dissipated.\nAs for my own personal outlook on the economy, I think we will see slow,\nsteady growth in 1972 -- solid growth that will push employment up, soak up the\n(more)\n-2-\nincreased number of job-seekers in the labor market and drop unemployment down to\n5 per cent by the end of the year.\nEmployment should rise about 2.1 million new jobs. This will be some\n400,000 jobs more than would be necessary to take care of the 1.5 million people\nbeing added to the work force plus the additional 200,000 coming out of the Armed\nForces. And bear in mind that we created 1.7 million additional jobs in the last\nsix months of 1971, but this was offset by cutbacks in defense payrolls and the size\nof the military, and by other factors.\nAs you know, the strongest element in the national economy in 1971 was housing.\nThe number of 1971 housing starts topped out at an all-time record of 2-million-plus.\nThat was an increase of 41 per cent over 1970 starts. It was 10 per cent greater\nthan the previous record year of 1950, when the homebuilding industry was still\ntrying to relieve the shortage resulting from a long depression and World War II.\nIf new mobile homes are added to the conventional housing total for 1971, we wind\nup with 2.6 million units. That surpasses the 1950 total by nearly one-third.\nWhen an objective of 26 million new and rehabilitated units was established\nby Congress as the housing goal for the decade 1968-78, some said it was impossible.\nWith about 2.6 million units in 1971, we have now reached the average annual pace\ncalled for by that goal.\nWhat is the housing outlook for 1972? I believe 1972 will be another\nrecord year, topping 1971 by a modest margin.\nThe condition of the mortgage market will determine the progress of housing\nin 1972. In that connection we have the word of Preston Martin, chairman of the\nFederal Home Loan Bank Board, that 1972 will be a \"nifty\" year for the home buyer.\nMartin predicts that interest rates on conventional loans will at least hold steady\nor possibly even drop a fraction of a per cent.\nI can assure you that the Administration will continue to place a high level\nof priority on housing -- and that is important if we are to have another record\nyear in 1972.\nMuch of the thrust for the housing boom in 1971 was provided by government\nand quasi-government agencies. You can expect that kind of impetus to continue.\nI suppose no discussion of the economy would be complete without at least\nsome mention of Phase II of the wage and price stabilization program.\nI personally believe Phase II is working. Price stabilization is working\ndespite the absence of a large bureaucracy. The reason is that pricing by\n(more)\n-3-\nbig business is being controlled, and smaller businesses pretty much fall into line\nsimply because of the pressures of competition.\nWage stabilization has been a rockier road, and the reluctance of some leaders\nof organized labor to cooperate in the national interest has been clearly apparent\nand rather painful. But I took heart when the Price Commission refused to pass\nalong the entire amount of the coal industry pay boost, which in turn put pressure\non the Pay Board. Subsequent to that, the Pay Board refused to give the machinists\nall they had negotiated. So I think we've come to the point where we have had to\nmake some hard decisions and we have made them. I believe the pieces are finally\nfalling into place.\nHow long will Phase II last? As long as necessary -- until inflation no longer\nfeeds on itself and inflationary expectations are a thing of the past. What comes\nafter Phase II? Probably some form of voluntary pay guidelines linked with\nproductivity increases, rather than the mandatory system we have currently.\nNow I would like to discuss some of the legislation pending in Congress,\nassessing it from the standpoint of what's desireable and what's likely.\nI personally feel it is vitally important that the Congress approve some form\nof Federal revenue sharing this year. I would like to see the President's plan\nadopted -- a percentage sharing of $5 billion with the States and local units of\ngovernment, free of red tape so we could zero in on local needs.\nThis is important for those in the construction field, since it probably\nwould touch off a flurry of local building projects of various kinds.\nChances for adoption of a revenue sharing plan, by whatever name, look fairly\ngood this year. House Ways and Means Chairman Wilbur Mills, who is the key man on\nthis legislation, has introduced a revenue sharing bill of his own which goes about\n80 per cent of the way with the President. I believe there is room for compromise.\nSo revenue sharing prospects are quite bright.\nThe outlook for welfare reform has picked up. A short time ago, welfare\nreform looked dead when Sen. Abraham Ribicoff dropped his support for it. But\nRibicoff is again backing welfare reform on the basis that there will be a test run\nof it before it goes fully into effect on a permanent basis. The House has already\napproved a welfare reform bill. So it now appears we will get some kind of welfare\nreform legislation this year.\nAnother Administration priority is health care. The Ways and Means Committee\nconducted fullscale hearings on health care last year and is about to go into\n(more)\n-4-\nexecutive session on it. There is no way of knowing what will emerge from the\nexecutive sessions but I would expect a measure dealing with catastrophic illness\nas a minimum. And the legislation we get from the committee may go beyond that.\nThe difficulty, I believe, will be in the Senate. But I believe the American people\nwant improvements in health care, particularly provisions to handle catastrophic\nillnesses. I feel we are going to get some kind of health care legislation through\nthe Congress this year.\nNow we come to a bill in which everyone connected with the construction\nbusiness should be interested. It is H.R. 10488, which would give the General\nServices Administration authority to make purchase contracts for the construction\nof 63 building projects costing an estimated $750 million. This bill has already\npassed the Senate and is close to being reported out by the House Public Works\nCommittee.\nH.R. 10488 would create a Federal public buildings revolving fund, which\nwould be built up over a three-year period. Rent charged to all Federal agencies\noccupying a building would go into this fund. The fund then would be used to pay\nfor new Federal buildings on the installment plan.\nThe G.S.A. budget request for public buildings construction in fiscal 1973\nis only $114,060,000, as compared with $200.4 million in fiscal 1972 and\n$133.5 million in fiscal 1971. But G.S.A. is looking forward to a big new\nconstruction program under H.R. 10488. This is legislation that all contractors\nshould get behind.\nWhat happens in Washington should be of vital concern to contractors. You\nshould make your interests known. You should take an active part in the political\nprocess. You should help to make democracy work.\nI was not going to talk politics at all today, since this is a nonpartisan\naudience. But Lynn Briggs has asked me to make some comment about the upcoming\nelection.\nLet me begin by saying that the major issues in any national election are\npeace and prosperity.\nI have already discussed the economic outlook. Let me simply add that I am\nsure the economy will be an issue in the 1972 campaign. The Democrats will paint\nit in the darkest of colors and try to make you believe, like Chicken Little, that\nthe sky is falling. I am sure you will find by next fall that the economy will be\n(more)\n-5-\nmoving strongly upward. In fact, I expect an upsurge in the fourth quarter after\nslow, steady growth in the first three quarters. So the American people will be the\njudge of this Administration's performance on the economy -- and I do not fear for\nthat judgment. Surely the people know that we have seldom had peace and prosperity\nat the same time, and that we are now trying to achieve prosperity while ending our\ninvolvement in a tragic and costly war. What we want is real prosperity, not the\nphony prosperity generated by war that creates a defense plant boom, puts hundreds\nof thousands of our young men into uniform, and sends prices sky-high.\nThe other big issue will be peace -- the conduct of our foreign affairs.\nPresident Nixon inherited the Vietnam War, just as he inherited inflation. He is\ncurbing inflation and he is ending our involvement in Vietnam -- ending it in an\nhonorable way and not through the surrender urged on him by his critics. I think\nin the final analysis the American people will find this the right way.\nPresident Nixon has brought a new quality of realism to American foreign\npolicy -- the Nixon Doctrine and an era of negotiation in place of confrontation.\nWe have agreed to accept Mainland China as a sovereign nation, adjusting our\npolicies in Asia to meet changed economic and political conditions there. Following\nour military withdrawal from Vietnam, we will continue to provide support under the\nNixon Doctrine for our non-Communist friends in Asia.\nIn our relations with the Soviet Union, new realism on both sides has\nrecognized a mutual interest in reducing the risk of nuclear war. There are signs\nthat an agreement on curbing nuclear weapons will result from the Strategic Arms\nLimitation Talks. Should these talks prove successful, they will show that with\nhard bargaining and diligent negotiation we can avoid a new upward spiral of the\nnuclear arms race.\nThe foreign relations of the United States have changed drastically in the\nlast few months, with President Nixon's upcoming visit to China and his planned\ntrip to the Soviet Union in late May. The President also has consulted with our\nFree World partners in advance of his trips to the summit in Peking and Moscow.\nWe are turning from an era of confrontation to an era of negotiation. But\nthere is no question in my mind that negotiation will prove fruitful only if we\nnegotiate from a position of strength. I also firmly believe that no useful purpose\nis served when some candidates for the Democratic presidential nomination reject\nthe President's proposals for ending the Vietnam War even before the North Vietnamese\ndo.\n(more)\n-6-\nWe are achieving solid success in our foreign affairs. We are achieving\nthat success because we are continuing to show the world that we are determined to\ndischarge America's responsibility for maintaining world peace.\nThe challenge that faces us in foreign affairs is that we continue to assert\nworld leadership in the face of neo-isolationism, well-meaning but misguided\npacifism and some radically organized protest movements which tend to benefit the\nother side.\nWe must put the nation on a new course, take her in new directions that\npoint toward a new era of greatness for the American people.\nWe must lay a foundation for prosperity without war and we must build a new\nstrategy for peace.\nOur goals are clear. Our purpose is strong. With the help of the American\npeople, we cannot fail.\n# # #"
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