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    "ocrText": "FOR IMMEDIATE RELEASE\nJANUARY 10, 1975\nOFFICE OF THE WHITE HOUSE PRESS SECRETARY\nTHE WHITE HOUSE\nPRESS CONFERENCE\nOF\nJOHN T. DUNLOP\nNEUTRAL COORDINATOR OF THE\nPRESIDENT'S LABOR-MANAGEMENT COMMITTEE\nTHE BRIEFING ROOM\n2:40 P.M. EST\nMR. HUSHEN: We have Dr. John Dunlop, the\ncoordinator of the Labor-Management Committee, to give\nyou a briefing on this recommendation that the committee\nhas made to the President.\nDr. Dunlop.\nMR. DUNLOP: Thank you.\nI was enjoying a peaceful life on some other\nproblems and I was asked to come down and not brief you,\nbut answer some questions that anyone may have about the\nstatements that the White House released this morning,\nI understand, growing out of the work of our committee.\nThese statements speak very much for themselves,\nand I am just really here to answer any questions that\nyou may have, and I think I ought to just leave it at\nthat.\nQ\nDid you really mean 1975 returns? That\nis the major question that we had that we talked about.\nMR. DUNLOP. The intent of the committee, as it\nstates, is that the reduction in individual income taxes\nbe effective January 1, 1975. That means that as soon as\nthe legislation would be passed, withholdings would\nimmediately take place of a reduced nature and that they\nwould be retroactive to January 1, 1975.\nQ\nDr. Dunlop, what we want to know is when\nyou get ready to pay your tax bill for 1974, if the law\nhas been passed, would you deduct it off that income tax\nyou file in April, or would this be after you have\nfiled?\nMORE\nDigitized from Box 6 of the White House Press Releases at the Gerald R. Ford Presidential Library\n- 2 -\nMR. DUNLOP: That kind of question I think we\ndid not consider, and it would be up to perhaps the Internal\nRevenue people to work out. I would have thought that insofar\nas you had Uncle owing you some money by, let's say, the\nfirst, suppose the statute were signed by the first of\nApril or some such time as that, then you would have an\namount of withholding which was in excess of that\nrequired under the new statute from January to that date,\nand I presume that the Treasury would provide that you\ncould deduct that in that sense, yes.\nQ\nDr. Dunlop, news reports today have it that\nthe President is planning to recommend a 10 percent rebate\non 1974 taxes. If that should turn out to be the case,\nhow would that affect this proposal for a $15 billion tax\nreduction in 1975?\nMR. DUNLOP: I do not know because I have no knowledge\nof what you describe --\nQ\nIn terms of economic impact. Should the\nrebate be in fact given, would that change the economic\ncircumstances under which the proposal for a $15 billion\ntax break would come about?\nMR. DUNLOP: The.committee's discussion was\nnot based upon the presumption of a change in the\n1974 tax rates. The committee's discussion was based upon\nwhat it thought was an appropriate stimulus to the economy\nat this point.\nWe expressed neither favor nor disfavor with\nthe suggestion that you are talking about. It was not\nbefore us.\nQ Sir, would this be a one-year plan or two\nor permanent or what?\nMR. DUNLOP: That is a fair question. You will\nnotice that the language does not say either temporary\nor permanent. I think the intent of the committee was\nthat the tax changes proposed should go into effect.\nThe committee was aware that in the course of\nthis upcoming Congress sometime in the next couple of\nyears there would be hopefully a set of legislation\ndealing with tax reform and the duration of this whole\nmatter could at that time be considered, but it\nspecifically did not wish to label the matter as a\ntemporary affair.\nQ\nDr. Dunlop, President Ford has had this\nreport, we are told, for about a week now and he released\nit just 24 hours before he is to tell us when he is going\nto disclose his new economic program. Does that lead\nyou to the conclusion that he is going to adopt much of\nthis for his economic program?\nMORE\n- 3 -\nMR. DUNLOP: I have absolutely no knowledge\nabout that subject. I have not participated in any\nof the discussions of the economic policy group or\nEconomic Policy Board on the subject of taxes. All I\ncan tell you is that the committee met on the 30th\nas a continuation of its earlier meeting on the 18th\nof December, and that at the end of the day a summary\nof this recommendation was transmitted to the President,\nwho at that time was in Colorado.\nI had no discussion about the question of\nwhether he intends to adopt it or not. I would hope\nhis thinking would be influenced by the committee's\nrecommendation.\nQ Dr. Dunlop, the committee went into\nconsiderable detail on its tax proposals, but did not\non its energy proposals. What was the reason for that?\nMR. DUNLOP: It went into quite a lot of\ndetail, I think, on the energy matter. It was much\nless specific in some respects, I would say. Partly,\nthe committee did not perhaps take the time to go into\nthat kind of detail, it was more interested in laying\ndown general ideas about the energy matter.\nWe did not have the kind of specific numbers.\nPerhaps also the committee was more anxious and felt\nthere was much greater need for an immediate attention to\nthese economic initiatives and that clearly some of\nthese energy matters insofar as they related to tax matters\nmight lay over until after this initial stimulus to\nthe economy could take place, although we had no detailed\ndiscussion of that point. We wanted to get the\neconomic stimulus.\nQ\nWere such mandatory measures as rationing\nand increase in excess tax discussed and rejected by\nthe committee? Is that the reason for their absence?\nMR. DUNLOP: We did not discuss those in\ndetail. I think it is fair to say that some things\nmight not appear in the energy statement because had\nthey been pursued, there would be no basis of an\nagreement.\nThe committee has long adopted the principle\nthat it would explore subjects and if it felt that it\nwas basically fruitless for it to seek agreement on a\nproblem, it would not do so, but if it felt that continued\nexaminations of facts and continued discussion could produce\nan agreement, it would pursue it. That is what\nhappened in these two areas.\nMORE\n- 4 -\nQ\nDoctor, can you explain, sir, if you\nhave a reduction in individual income taxes effective\nJanuary 1, 1975, how does that create increased purchasing\npower this year? Wouldn't most of the impact be next\nyear?\nMR. DUNLOP: No.\nQ Could you explain that?\nMR. DUNLOP: Let me be very specific about it.\nIn the committee's view, it is important to introduce\ninto the economy a larger stream of purchasing power,\nparticularly as the statement says for low and middle\nincome people, but the personal tax reduction that is\nhere proposed would, of course, apply across the board.\nThey would constitute a much larger percentage\nof low and middle incomes, as you can figure out.\nIf that means each week more money is in the\ntake-home pay after taxes of the household, immediately\nthe household begins to inject a larger stream of money\ninto the purchases of the community. The household has\nmore money to spend on food, on clothing, on automobiles,\non making commitments to buy durable consumer goods.\nIt was the view of the members of the committee,\nand I pass no judgment on any other proposal, but it\nwas the view of the committee that that was likely to\nbe more stimulative on a continuing basis than a stimulus\nthat constitutes a kind of SO much a week at one time\nbecause you don't quite know what is going to happen to\nthose one-shot kinds of stimulus, whereas a continuous\nstimulus would provide the household with some notion\nthat it was going to have more money out of which to make\npurchases over the long run.\nThat was the thinking of the committee.\nQ\nDr. Dunlop, on the committee's proposal to\nspeak to the $375 maximum per return, is that $375\nabsolute top maximum or is that $375 plus the $70 tax?\nMR. DUNLOP: No, that is an aggregate of $375\ntops.\nQ\nSo, if you have five exemptions, then he\nwould get another $25?\nMR. DUNLOP: The $375 is a top that is\ncontrolling.\nMORE\n- 5 -\nQ\nDr. Dunlop, the investment tax credit, is\n12 percent higher than has ever been adopted? The present\n4 to 7 percent, how does that break out. Is most of it\nin 4 percent or 7? Tell us what you can about that.\nMR. DUNLOP: I am not a specialist in that\narea, but insofar as we discussed it in the committee,\nmy understanding essentially in rough popular terms is\nthat we do have a lower 4 percent rate with respect\nto utilities.\nThe proposal was to raise the utility rate to the\ngeneral rate. That is what the phrasing which says \"across\nthe board\" is designed to mean. The utilities will be\nbrought up with the others.\nI do think that 12 percent is a higher rate\nthan has previously been talked about -- representing as\nthe whole statement is a fully agreed upon statement\nwithin the committee -- recognizing the need to develop\nbusiness stimulus from investment as well as from higher\npurchasing power through personal income tax reductions.\nMORE\n- 6 -\nQ\nDr. Dunlop, there are proposals here for\ncutting taxes for people who pay taxes. What sort of help\nwould be envisioned for people who pay no taxes at all?\nMR. DUNLOP: You are talking at the low end of the\nscale, I take it.\nQ Yes.\nMR. DUNLOP: I want to be clear.\nI think it is correct to say the committee did not\nspecifically address that question.\nQ\nDr. Dunlop, to go back a moment, in other words\nwhat you are saying is that the committee felt it was prefer-\nable to change the withholding schedule, it was preferable to\ndo that than to have a rebate of some kind of income taxes?\nMR. DUNLOP: Well, what I said was that the committee\naddressed itself to the question of 1975 primarily. We did not\naddress ourselves to the question of 1974 taxes. We felt that\na continuing reduction was likely in our view to be more\neffective than one which was essentially a one-shot proposition.\nQ\nDr. Dunlop, did the committee, if I read this\ncorrectly, decide that the President's voluntary program on\nenergy conservation was sufficient?\nMR. DUNLOP: We did not reach that conclusion.\nQ Dr. Dunlop, you said that in your view it might\nbe retroactive to January 1.\nMR. DUNLOP: Well, not in my view. The text of it\nsays effective January 1.\nQ\nWhat happens to the withholding taxes that would\nhave been reduced, the withholding taxes between January 1 and\nthe time this thing is adopted?\nMR. DUNLOP: I thought I had covered that point\nearlier. I suppose that the correct answer is that the person\ncould take that and we didn't discuss that. That is, I would\nassume that would have to be worked out in the regulations of\nthe Bureau of Internal Revenue but there are several obvious\nalternatives. One is that the amount could be taken as an\noffset perhaps to the 1974 tax bill that was due and in that\nsense it is a kind of a one-shot proposition for the period\nfrom January 1 up until say the first of April. Thereafter,\nit is the continuing impact that we are interested in.\nQ\nDoctor, what is your reaction to a 10 percent\ntax rebate on 1974 returns versus what you proposed?\nMORE\n- 7 -\nMR. DUNLOP: I have no comment about that because\nI have not studied it.\nQ\nDr. Dunlop, can you tell us why you think the\nWhite House chose to release your recommendations now so long\nafter their being submitted?\nThen one more question. What do you see the role of\nyour committee being in the near future after this? What\nfollows?\nMR. DUNLOP: Well, I really have no basis to\nspeculate as to the timing of the release. The committee has\na rule in these matters, which I may add is a rule from earlier\nlabor-management committees into the 1960s, so it is not a\nspecially designed rule at the present time; namely, that any\nrelease of the committee's work would be in charge of the\nchairman or coordinator, and I hold that role, and that the\nindividual members of the committee would themselves not\nrelease statements. That is one of our rules.\nThe other is that sometimes our statements you may\nsay are designed as advice to the parties in collective\nbargaining, sometimes they are advice to other people. This\nwas a statement obviously directed to the President, and the\ncommittee in this case said that the control of the publicity\n-- the committee recommended to the President that he release\nit but that the timing of it and the final decision on it\nshould be his since it was directed specifically to him. I\ncannot tell you any more about that than that.\nNow the second part of your question was, what does\nthe committee intend to go on to? The committee has talked\nabout a number of items on its agenda and these two problems\nhave specifically taken a great deal of our time in the meet-\nings we have held up to now. Just to be precise about that,\nwe held a meeting on the 11th of November. We held another\nmeeting on the 18th of December where we asked the President\nif he would be willing to let us comment, if he would invite\ncomments on the key economic issues for the message forthcom-\ning, and he very much encouraged us to do that so we held a\nmeeting on the 30th and that is how these two subjects were\nwrapped up at that time.\nI do not now have a date for the next meeting of\nthe committee nor a scheduled agenda. There are a number of\nissues that interest us which we have talked about but we have\nnot agreed to put any particular item at the top of our list.\nQ\nDr. Dunlop, there is nothing in the committee\nrecommendations about inflation as the continuing problem.\nCan we assume then that the committee has told the President\nin effect that the battle against recession is now of over-\nriding importance as compared to any continuing fight on\ninflation?\nMORE\n- 8 -\nMR. DUNLOP: I think that would be an unfair\ninference. The committee has talked about the inflation\nproblem a great deal. It takes me away from these two\nstatements. In several industries, I am --- particularly in\nconstruction -- very much active, as you may know, with respect\nto trying to put together another committee to improve the\nperformance of collective bargaining in that industry and\nin some other sectors.\nI do think it is fair to say that the committee's\nview is that at this point it is felt that its most urgent\nrecommendation and one on which it might help the President\nin pursuading the Congress to act quickly and to act in this\nrange was the subject of economic incentives, and because we\nwish to be helpful to him and express our views to him on it\nwe concentrated on getting this done. No, we have not in any\nsense felt that the other problem was of no importance or that\nit had all been solved, and I am continuing to work both\nwithin the committee and in separate industries on the problem.\nQ\nWhat if you had a situation, sir, where you got\nthis proposal through but you also had the tariff and increased\ntaxes on oil that raised consumer prices and you had other\nactions taken that in effect took the same money out of the\nconsumer pockets?\nMR. DUNLOP: We did not discuss that situation.\nQ\nWhat would that do, sir? Not as a matter as\nan expert but could you tell us?\nMR. DUNLOP: I am not here to testify as an expert\nabout economic policy, I am here as the coordinator of the\nLabor-Management Committee explaining its actions.\nMORE\n- 9 -\nQ\nMr. Dunlop, on the duration, would you not\nhave to at least go one year because of the tax year involved?\nThere would have to be at least one year of this.\nMR. DUNLOP: Well, you are going back to your\nearlier question, aren't you?\nQ Right.\nMR. DUNLOP: The committee was of the view that it\ndid not wish to label this as temporary, and I think one\nshould expect that it is the committee's view that this should\ncontinue, so to speak, indefinitely, knowing full well that\nthe Congress is likely in the next two years to take up the\nsubject of reform -- indeed, this statement specifically\nurges the Congress to do so, and that may very well be a\nsubject on which our committee may wish also to make some\nrecommendations. And at that time, the question that you\nask it seems to us is appropriate to raise.\nQ\nIt would have to be at least a year for\ntax purposes?\nMR. DUNLOP: It may very well be two.\nQ\nMr. Dunlop, to clarify one point -- this\n12 percent investment tax credit is actually a bigger\nboost for the utilities than it is for other industries\nbecause they are not at a lower level, is that correct?\nMR. DUNLOP: That is correct, and we made that\nrecommendation knowingly with the view that we think the\nutilities have special difficulties and a special need.\nAs a matter of fact, if you will look at the energy\nstatement, you will see that there is incorporated in the\nenergy statement a reference to the utilities which\nrecognizes that special tax arrangements may be appropriate\nin the utilities, and this economic incentive statement\nis a demonstration of that.\nQ\nSir, although I understand you didn't\ndiscuss the tax cut in terms of the possible revenue\nraising energy measures, the committee is recommending a\nnet stimulus of $20 billion by these two measures, isn't it?\nMR. DUNLOP: Well, your use of the word \"net\" is\nputting words in my mouth and the committee's mouth. It\nwas the intention of the committee to provide a stimulus\nto the economy, in its view, in the form and in the amount\nwhich is fairly specifically indicated in the statement.\nMORE\n- 10 -\nWe did not, as I have said to you, discuss various\nkinds of offsets. You mentioned one possible one, and there\nare others as you can imagine. We did not in any way discuss\nthat subject.\nQ\nIsn't this the first time the labor people\nhave come out for investment tax cuts?\nMR. DUNLOP: You ought to ask them, but I think\nyour impression is correct.\nQ\nWhy change?\nMR. DUNLOP: What?\nQ\nCould you describe why they changed?\nMR. DUNLOP: Mr. Meany is perfectly able to speak\nfor himself.\nQ\nI thought the coordinator was supposed to\nhandle all this.\nMR. DUNLOP: But you are asking me now not about\nthe committee, you are asking for one segment of the committee.\nQ I see.\nQ\nWhy don't you give us both segments?\nQ\nIf I could follow that, Mr. Dunlop, on the\ncommittee's discussion of this, was this a quid pro quo?\nDid the discussion go this way: labor wants individual taxes\ncut, business wants investment tax credit and we will give\nand take? Was there some negotiation, or were both groups\njust for it?\nMR. DUNLOP: Well, I think I can answer that\nquestion by saying, with eight labor fellows and eight\nmanagement fellows, you may assume that it was necessary to\nhave a couple of meetings of discussion in order to find\nan area of accommodation.\nQ\nAs an individual, now, would you personally\nlevel with us?\nMR. DUNLOP: I am listening all the time.\nQ\nWould you be personally, now, unhappy with\na 10 percent rebate on the 1974 return? Not as a member\nof the committee, now, but as someone who studied it.\nMORE\n- 11 -\nMR. DUNLOP: I insist that that is a question that\nis beyond what I came here to answer and talk about, and it\nis not my custom to change my roles. I will not answer it.\nQ\nNot even as a private citizen?\nMR. DUNLOP: Not as a private citizen -- today I\nam working for the Government.\nQ\nMr. Dunlop, is there any probability that you\nwill be working for the Government on a full-time basis in\nthe near future?\nMR. DUNLOP: I know of no reason for thinking SO.\nTHE PRESS: Thank you, sir.\nEND\n(AT 3:04 P.M. EST)"
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