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Press Conference of John T. Dunlop, Neutral Coordinator of the President's Labor-Management Committee
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Press Conference of John T. Dunlop, Neutral Coordinator of the President's Labor-Management Committee
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FOR IMMEDIATE RELEASE
JANUARY 10, 1975
OFFICE OF THE WHITE HOUSE PRESS SECRETARY
THE WHITE HOUSE
PRESS CONFERENCE
OF
JOHN T. DUNLOP
NEUTRAL COORDINATOR OF THE
PRESIDENT'S LABOR-MANAGEMENT COMMITTEE
THE BRIEFING ROOM
2:40 P.M. EST
MR. HUSHEN: We have Dr. John Dunlop, the
coordinator of the Labor-Management Committee, to give
you a briefing on this recommendation that the committee
has made to the President.
Dr. Dunlop.
MR. DUNLOP: Thank you.
I was enjoying a peaceful life on some other
problems and I was asked to come down and not brief you,
but answer some questions that anyone may have about the
statements that the White House released this morning,
I understand, growing out of the work of our committee.
These statements speak very much for themselves,
and I am just really here to answer any questions that
you may have, and I think I ought to just leave it at
that.
Q
Did you really mean 1975 returns? That
is the major question that we had that we talked about.
MR. DUNLOP. The intent of the committee, as it
states, is that the reduction in individual income taxes
be effective January 1, 1975. That means that as soon as
the legislation would be passed, withholdings would
immediately take place of a reduced nature and that they
would be retroactive to January 1, 1975.
Q
Dr. Dunlop, what we want to know is when
you get ready to pay your tax bill for 1974, if the law
has been passed, would you deduct it off that income tax
you file in April, or would this be after you have
filed?
MORE
Digitized from Box 6 of the White House Press Releases at the Gerald R. Ford Presidential Library
- 2 -
MR. DUNLOP: That kind of question I think we
did not consider, and it would be up to perhaps the Internal
Revenue people to work out. I would have thought that insofar
as you had Uncle owing you some money by, let's say, the
first, suppose the statute were signed by the first of
April or some such time as that, then you would have an
amount of withholding which was in excess of that
required under the new statute from January to that date,
and I presume that the Treasury would provide that you
could deduct that in that sense, yes.
Q
Dr. Dunlop, news reports today have it that
the President is planning to recommend a 10 percent rebate
on 1974 taxes. If that should turn out to be the case,
how would that affect this proposal for a $15 billion tax
reduction in 1975?
MR. DUNLOP: I do not know because I have no knowledge
of what you describe --
Q
In terms of economic impact. Should the
rebate be in fact given, would that change the economic
circumstances under which the proposal for a $15 billion
tax break would come about?
MR. DUNLOP: The.committee's discussion was
not based upon the presumption of a change in the
1974 tax rates. The committee's discussion was based upon
what it thought was an appropriate stimulus to the economy
at this point.
We expressed neither favor nor disfavor with
the suggestion that you are talking about. It was not
before us.
Q Sir, would this be a one-year plan or two
or permanent or what?
MR. DUNLOP: That is a fair question. You will
notice that the language does not say either temporary
or permanent. I think the intent of the committee was
that the tax changes proposed should go into effect.
The committee was aware that in the course of
this upcoming Congress sometime in the next couple of
years there would be hopefully a set of legislation
dealing with tax reform and the duration of this whole
matter could at that time be considered, but it
specifically did not wish to label the matter as a
temporary affair.
Q
Dr. Dunlop, President Ford has had this
report, we are told, for about a week now and he released
it just 24 hours before he is to tell us when he is going
to disclose his new economic program. Does that lead
you to the conclusion that he is going to adopt much of
this for his economic program?
MORE
- 3 -
MR. DUNLOP: I have absolutely no knowledge
about that subject. I have not participated in any
of the discussions of the economic policy group or
Economic Policy Board on the subject of taxes. All I
can tell you is that the committee met on the 30th
as a continuation of its earlier meeting on the 18th
of December, and that at the end of the day a summary
of this recommendation was transmitted to the President,
who at that time was in Colorado.
I had no discussion about the question of
whether he intends to adopt it or not. I would hope
his thinking would be influenced by the committee's
recommendation.
Q Dr. Dunlop, the committee went into
considerable detail on its tax proposals, but did not
on its energy proposals. What was the reason for that?
MR. DUNLOP: It went into quite a lot of
detail, I think, on the energy matter. It was much
less specific in some respects, I would say. Partly,
the committee did not perhaps take the time to go into
that kind of detail, it was more interested in laying
down general ideas about the energy matter.
We did not have the kind of specific numbers.
Perhaps also the committee was more anxious and felt
there was much greater need for an immediate attention to
these economic initiatives and that clearly some of
these energy matters insofar as they related to tax matters
might lay over until after this initial stimulus to
the economy could take place, although we had no detailed
discussion of that point. We wanted to get the
economic stimulus.
Q
Were such mandatory measures as rationing
and increase in excess tax discussed and rejected by
the committee? Is that the reason for their absence?
MR. DUNLOP: We did not discuss those in
detail. I think it is fair to say that some things
might not appear in the energy statement because had
they been pursued, there would be no basis of an
agreement.
The committee has long adopted the principle
that it would explore subjects and if it felt that it
was basically fruitless for it to seek agreement on a
problem, it would not do so, but if it felt that continued
examinations of facts and continued discussion could produce
an agreement, it would pursue it. That is what
happened in these two areas.
MORE
- 4 -
Q
Doctor, can you explain, sir, if you
have a reduction in individual income taxes effective
January 1, 1975, how does that create increased purchasing
power this year? Wouldn't most of the impact be next
year?
MR. DUNLOP: No.
Q Could you explain that?
MR. DUNLOP: Let me be very specific about it.
In the committee's view, it is important to introduce
into the economy a larger stream of purchasing power,
particularly as the statement says for low and middle
income people, but the personal tax reduction that is
here proposed would, of course, apply across the board.
They would constitute a much larger percentage
of low and middle incomes, as you can figure out.
If that means each week more money is in the
take-home pay after taxes of the household, immediately
the household begins to inject a larger stream of money
into the purchases of the community. The household has
more money to spend on food, on clothing, on automobiles,
on making commitments to buy durable consumer goods.
It was the view of the members of the committee,
and I pass no judgment on any other proposal, but it
was the view of the committee that that was likely to
be more stimulative on a continuing basis than a stimulus
that constitutes a kind of SO much a week at one time
because you don't quite know what is going to happen to
those one-shot kinds of stimulus, whereas a continuous
stimulus would provide the household with some notion
that it was going to have more money out of which to make
purchases over the long run.
That was the thinking of the committee.
Q
Dr. Dunlop, on the committee's proposal to
speak to the $375 maximum per return, is that $375
absolute top maximum or is that $375 plus the $70 tax?
MR. DUNLOP: No, that is an aggregate of $375
tops.
Q
So, if you have five exemptions, then he
would get another $25?
MR. DUNLOP: The $375 is a top that is
controlling.
MORE
- 5 -
Q
Dr. Dunlop, the investment tax credit, is
12 percent higher than has ever been adopted? The present
4 to 7 percent, how does that break out. Is most of it
in 4 percent or 7? Tell us what you can about that.
MR. DUNLOP: I am not a specialist in that
area, but insofar as we discussed it in the committee,
my understanding essentially in rough popular terms is
that we do have a lower 4 percent rate with respect
to utilities.
The proposal was to raise the utility rate to the
general rate. That is what the phrasing which says "across
the board" is designed to mean. The utilities will be
brought up with the others.
I do think that 12 percent is a higher rate
than has previously been talked about -- representing as
the whole statement is a fully agreed upon statement
within the committee -- recognizing the need to develop
business stimulus from investment as well as from higher
purchasing power through personal income tax reductions.
MORE
- 6 -
Q
Dr. Dunlop, there are proposals here for
cutting taxes for people who pay taxes. What sort of help
would be envisioned for people who pay no taxes at all?
MR. DUNLOP: You are talking at the low end of the
scale, I take it.
Q Yes.
MR. DUNLOP: I want to be clear.
I think it is correct to say the committee did not
specifically address that question.
Q
Dr. Dunlop, to go back a moment, in other words
what you are saying is that the committee felt it was prefer-
able to change the withholding schedule, it was preferable to
do that than to have a rebate of some kind of income taxes?
MR. DUNLOP: Well, what I said was that the committee
addressed itself to the question of 1975 primarily. We did not
address ourselves to the question of 1974 taxes. We felt that
a continuing reduction was likely in our view to be more
effective than one which was essentially a one-shot proposition.
Q
Dr. Dunlop, did the committee, if I read this
correctly, decide that the President's voluntary program on
energy conservation was sufficient?
MR. DUNLOP: We did not reach that conclusion.
Q Dr. Dunlop, you said that in your view it might
be retroactive to January 1.
MR. DUNLOP: Well, not in my view. The text of it
says effective January 1.
Q
What happens to the withholding taxes that would
have been reduced, the withholding taxes between January 1 and
the time this thing is adopted?
MR. DUNLOP: I thought I had covered that point
earlier. I suppose that the correct answer is that the person
could take that and we didn't discuss that. That is, I would
assume that would have to be worked out in the regulations of
the Bureau of Internal Revenue but there are several obvious
alternatives. One is that the amount could be taken as an
offset perhaps to the 1974 tax bill that was due and in that
sense it is a kind of a one-shot proposition for the period
from January 1 up until say the first of April. Thereafter,
it is the continuing impact that we are interested in.
Q
Doctor, what is your reaction to a 10 percent
tax rebate on 1974 returns versus what you proposed?
MORE
- 7 -
MR. DUNLOP: I have no comment about that because
I have not studied it.
Q
Dr. Dunlop, can you tell us why you think the
White House chose to release your recommendations now so long
after their being submitted?
Then one more question. What do you see the role of
your committee being in the near future after this? What
follows?
MR. DUNLOP: Well, I really have no basis to
speculate as to the timing of the release. The committee has
a rule in these matters, which I may add is a rule from earlier
labor-management committees into the 1960s, so it is not a
specially designed rule at the present time; namely, that any
release of the committee's work would be in charge of the
chairman or coordinator, and I hold that role, and that the
individual members of the committee would themselves not
release statements. That is one of our rules.
The other is that sometimes our statements you may
say are designed as advice to the parties in collective
bargaining, sometimes they are advice to other people. This
was a statement obviously directed to the President, and the
committee in this case said that the control of the publicity
-- the committee recommended to the President that he release
it but that the timing of it and the final decision on it
should be his since it was directed specifically to him. I
cannot tell you any more about that than that.
Now the second part of your question was, what does
the committee intend to go on to? The committee has talked
about a number of items on its agenda and these two problems
have specifically taken a great deal of our time in the meet-
ings we have held up to now. Just to be precise about that,
we held a meeting on the 11th of November. We held another
meeting on the 18th of December where we asked the President
if he would be willing to let us comment, if he would invite
comments on the key economic issues for the message forthcom-
ing, and he very much encouraged us to do that so we held a
meeting on the 30th and that is how these two subjects were
wrapped up at that time.
I do not now have a date for the next meeting of
the committee nor a scheduled agenda. There are a number of
issues that interest us which we have talked about but we have
not agreed to put any particular item at the top of our list.
Q
Dr. Dunlop, there is nothing in the committee
recommendations about inflation as the continuing problem.
Can we assume then that the committee has told the President
in effect that the battle against recession is now of over-
riding importance as compared to any continuing fight on
inflation?
MORE
- 8 -
MR. DUNLOP: I think that would be an unfair
inference. The committee has talked about the inflation
problem a great deal. It takes me away from these two
statements. In several industries, I am --- particularly in
construction -- very much active, as you may know, with respect
to trying to put together another committee to improve the
performance of collective bargaining in that industry and
in some other sectors.
I do think it is fair to say that the committee's
view is that at this point it is felt that its most urgent
recommendation and one on which it might help the President
in pursuading the Congress to act quickly and to act in this
range was the subject of economic incentives, and because we
wish to be helpful to him and express our views to him on it
we concentrated on getting this done. No, we have not in any
sense felt that the other problem was of no importance or that
it had all been solved, and I am continuing to work both
within the committee and in separate industries on the problem.
Q
What if you had a situation, sir, where you got
this proposal through but you also had the tariff and increased
taxes on oil that raised consumer prices and you had other
actions taken that in effect took the same money out of the
consumer pockets?
MR. DUNLOP: We did not discuss that situation.
Q
What would that do, sir? Not as a matter as
an expert but could you tell us?
MR. DUNLOP: I am not here to testify as an expert
about economic policy, I am here as the coordinator of the
Labor-Management Committee explaining its actions.
MORE
- 9 -
Q
Mr. Dunlop, on the duration, would you not
have to at least go one year because of the tax year involved?
There would have to be at least one year of this.
MR. DUNLOP: Well, you are going back to your
earlier question, aren't you?
Q Right.
MR. DUNLOP: The committee was of the view that it
did not wish to label this as temporary, and I think one
should expect that it is the committee's view that this should
continue, so to speak, indefinitely, knowing full well that
the Congress is likely in the next two years to take up the
subject of reform -- indeed, this statement specifically
urges the Congress to do so, and that may very well be a
subject on which our committee may wish also to make some
recommendations. And at that time, the question that you
ask it seems to us is appropriate to raise.
Q
It would have to be at least a year for
tax purposes?
MR. DUNLOP: It may very well be two.
Q
Mr. Dunlop, to clarify one point -- this
12 percent investment tax credit is actually a bigger
boost for the utilities than it is for other industries
because they are not at a lower level, is that correct?
MR. DUNLOP: That is correct, and we made that
recommendation knowingly with the view that we think the
utilities have special difficulties and a special need.
As a matter of fact, if you will look at the energy
statement, you will see that there is incorporated in the
energy statement a reference to the utilities which
recognizes that special tax arrangements may be appropriate
in the utilities, and this economic incentive statement
is a demonstration of that.
Q
Sir, although I understand you didn't
discuss the tax cut in terms of the possible revenue
raising energy measures, the committee is recommending a
net stimulus of $20 billion by these two measures, isn't it?
MR. DUNLOP: Well, your use of the word "net" is
putting words in my mouth and the committee's mouth. It
was the intention of the committee to provide a stimulus
to the economy, in its view, in the form and in the amount
which is fairly specifically indicated in the statement.
MORE
- 10 -
We did not, as I have said to you, discuss various
kinds of offsets. You mentioned one possible one, and there
are others as you can imagine. We did not in any way discuss
that subject.
Q
Isn't this the first time the labor people
have come out for investment tax cuts?
MR. DUNLOP: You ought to ask them, but I think
your impression is correct.
Q
Why change?
MR. DUNLOP: What?
Q
Could you describe why they changed?
MR. DUNLOP: Mr. Meany is perfectly able to speak
for himself.
Q
I thought the coordinator was supposed to
handle all this.
MR. DUNLOP: But you are asking me now not about
the committee, you are asking for one segment of the committee.
Q I see.
Q
Why don't you give us both segments?
Q
If I could follow that, Mr. Dunlop, on the
committee's discussion of this, was this a quid pro quo?
Did the discussion go this way: labor wants individual taxes
cut, business wants investment tax credit and we will give
and take? Was there some negotiation, or were both groups
just for it?
MR. DUNLOP: Well, I think I can answer that
question by saying, with eight labor fellows and eight
management fellows, you may assume that it was necessary to
have a couple of meetings of discussion in order to find
an area of accommodation.
Q
As an individual, now, would you personally
level with us?
MR. DUNLOP: I am listening all the time.
Q
Would you be personally, now, unhappy with
a 10 percent rebate on the 1974 return? Not as a member
of the committee, now, but as someone who studied it.
MORE
- 11 -
MR. DUNLOP: I insist that that is a question that
is beyond what I came here to answer and talk about, and it
is not my custom to change my roles. I will not answer it.
Q
Not even as a private citizen?
MR. DUNLOP: Not as a private citizen -- today I
am working for the Government.
Q
Mr. Dunlop, is there any probability that you
will be working for the Government on a full-time basis in
the near future?
MR. DUNLOP: I know of no reason for thinking SO.
THE PRESS: Thank you, sir.
END
(AT 3:04 P.M. EST)