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White House - Congressional Leadership Meeting, 7/8/69 (includes minutes and Ford notes)
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White House - Congressional Leadership Meeting, 7/8/69 (includes minutes and Ford notes)
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Robert T. Hartmann Papers
House of Representatives Subject Files
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Affirmative action programs
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These documents were scanned from Box 106 of the Robert T. Hartmann Papers at the Gerald R. Ford Presidential Library.
REPUBLICAN LEADERSHIP MEETING
JULY 8 - 8:30 a. m.
AGENDA
8:30 - 8:45 a. m.
I. Senate Report
8:45 - 9:00 a. m.
II. Unemployment Insurance
from Tax In
9:00 - 9:30 a.m.
III. Narcotics and Dangerous Drugs
Commoner clause.
9:30 - 9:40 a.m.
IV. House Report
95%gd.
Distribution control,
Import controls
penathls,
Contraversial
1/Dmy Industry v sinth
Find aspect,
2/. Frug sentences
FORDO is LIBRARY GENALD
DIARY OF WHITE HOUSE LEADERSHIP
MEETINGS -- 91st CONGRESS
July 8, 1969
I left home at 7:15 a. m. I did not arrive at the White
House until 8:40 a. m. Traffic was fierce. When I
entered, Shults was in the process of explaining the
Unemployment Insurance Message to the Congress.
RMN interrupted to recognize Dirksen, who had a
9:00 a. m. appointment. Dirksen said that Long
expected to report a surtax-reform package bill next
week. Harlow interrupted to say that Mansfield had
told him that the Democratic Policy Committee had
adopted a resolution that no action on the surtax hill
would be taken until the House had passed a reform bill
and the Senate Finance Committee has reported a reform
bill. RMN asked if a statement by the President urging
Senate leaders to act on the surtax bill would be advisable.
Dirksen felt not. He said the ABM bill is on the Floor
today and the debate may consume 3 weeks.
He then raised the question about the Mine Safety bill. If
the Harris-Javits bill becomes law, it will cause serious
small mine shutdowns, and these in turn will cause
electricity brownouts. Harlow said that the Administration
is awaiting the return of Secretary Hickel on Thursday
before taking any final position. Scott said that the problem
is simply that small coal miners cannot comply with industry
standards because the standards are running ahead of the
technology.
Dirksen raised a question about the excessive use of the
Members' telephone tie lines. He cited one example. One
Senator has run up an excess bill of $12, ,000.00, bills for
which he has ignored.
SERALD R. LISBURY FORD
2
Dirksen then spoke to Shultz about the Fair Employment
Quota plan which the Department has instituted in the
Philadelphia area. Dirksen asked if the Secretary knew
that Title VII of the Civil Rights Act of 1964 specifically
and explicitly forbids quotas. Shults said that he was aware
of the law but that it had become critical to make it possible
for Negroes to be employed in the construction industry.
Under the present arrangement, the employer is notified
that be must employ Negroes after the contract has been
awarded. Under the new policy, the employer will have
the benefit of advance notice. If that notice is to be mean-
ingful, the Department must indicate numerically what is
likely to be considered acceptable.1 Cramer said that the
weakness of the Department's approach is that it puts the
burden upon the employer to force the unions to make
minority labor available. RMN interjected to say that
because the construction trade unions have been traditionally
friendly to Republican candidates, the Republican Party has
"temporized" too long with this problem. It is essential
to break the bottleneck. Failure to employ mingrity workers
has driven the wage level so high that it threatens the hous-
ing industry. He cited a case in Florida where common
laborers on construction projects are paid $50 a day. In
what he called a "related digression, the President expres-
sed his fears about the present clamor for wage and price
controls. He said the controls lead to rationing and ration-
ing to black marketing. Shultz said that of the 5. 4% increase
in the cost of living last year, over half came from additional
medical costs and higher costs in the housing industry.
Cramer said that there is another side to the coin. Because
of the policy reflected by the Philadelphia plan, half the
contractors are refusing to bid on road contracts, which has
the effect of increasing road costs alarmingly.
Dirksen reported that the Administration's Voting Rights bill
has been introduced, and Senator Ervin has scheduled hearings
before his subcommittee. He said that notwithstanding the
FORD LIBRARY & GERALD
3
complaints by "some on the other side, "John Mitchell
has gotten together a darn good bill. "
Shultz returned briefly to the Unemployment Compensa-
tion Message. He said the Administration program would
meet with derision at the hands of unions. Ford asked how
different the new bill is from that passed by the House in
1966. Shults said that the new bill is more nearly akin to
the bill that actually passed rather than H. R. 8282, which
provoked so much controversy. Allott inquired how
Republicans could explain to small businessmen why the
Nixon Administration was imposing a new tax burden on on
employers of less than 4. Shultz said that the bookkeeping
required is already required by the Social Security apparatus
and that some states already have unemployment compensa-
tion taxes anyway. Allott responded that in addition to the
bookkeeping burden, it was also a major economic burden.
Tower called attention to the fact that this falls on top of
the new minimum wage burden. RMN said that while there
would be some difficulty in making some explanations, he
considered the bill a reasonable approach and absolutely
necessary to head off something that would be a great deal
more extreme. Shults said that it will help the economy.
Asked by RMN to explain this, he said it would have a
"counter-cyclical" effect when the economy is on the down-
turn. Young also expressed concern for the impact this
would have upon the small businessman. Byrnes said that
the new bill is essentially the same as the bill supported by
Republicans when it passed the House in the last Congress.
Byrnes also warned about the danger of the Senate attaching
tax reforms to the surtax bill. Such a package will meet
antoher stalemate when it reaches the House. RMN said
that those who deliberately delay the surtax extension must
assume responsibility for further cost of living increases.
Scott asked if he could be quoted to that effect. The reply
was affirmative. RMN excused Shults with a compliment
for the good job he did in the settlement of the Charleston
strike.
4
Mitchell was recognized to explain the narcotics bill.
Without going into detail, he said that it would consoli-
date all of the several narcotics laws now on the books
except the Narcotics Addict Rehabilitation Act; that it
would authorize the Attorney General, with the advice
of the Secretary of HEW and the Advisory Committee
(established under the bill), to compartmentalize
dangerous substances in 4 categories and later to
transfer them from one to another or decontrol them
altogether. He said that new enforcement provisions
were included (he had reference to Title VIII, which
authorizes search warrants, administrative inspection,
inspection without warrants, forfeiture, injunctions,
etc. ); that the regulations aspect would excite some
hostility from the industry; and that the new penalty
provisions would be the source of some dispute in
Congress. At that point, the Attorney General said
that Poff had some thoughts on that point, and the
President invited me to take the chair vacated by the
Vice President. I said that I supported fully and enthu-
siastically 7 of the 8 titles and part of the eighth.
Specifically, I favor the new technique of a mandatory
parole component in the sentence which makes it possible
not only to attempt rehabilitation but to provide continuing
supervision and control after release in order to protect
the public. I also support the new concept of consecutive
extended terms for the professional criminal, a concept
which has been endorsed by the President's Crime Com-
mission and other emperts in the field of criminology.
This extended term provision will be a minimum mandatory
term with hp opportunity for suspension, probation or
parole. This helps to make the penalty structure tougher.
However, I said I would reserve my right to offer amend-
ments to other features of the penalty structure in Title V.
I am afraid that some of the changes proposed would give
Administration critics the opportunity to say that the
Administration has gone soft on narcotics. To illustrate
my point, I cited the present penalty for sale of heroin to
a buyer under the age of 18 by a seller 3 years his senior,
FORD
&
GERALD
LIBRARY
5
which is now a minimum mandatory of 10 years and a
maximum of life or death. Under the new bill, the
penalty would be 2 years and the maximum 12 years,
but whatever penalty is imposed could be suspended.
For further illustration, I called attention to the fact
that the present minimum mandatory penalty of 10 to
40 years for a second conviction of the sale of marijuana
would be repealed. Also, all possession cases, either
of marijuana or heroin, which presently incur a mimimum
mandatory federal penalty, would become misdemeanors.
I said that I appreciate the weaknesses of the minimum
mandatory penalty, namely viz, that it discourages
prosecutors from prosecuting or prompts plea bargain-
ing or discourages juries from convicting. However, in
the field of narcotics offenses, at least in certain echelons,
the same rationale does not have the same validity.
Prosecutors, judges and jerors recognize that trafficking
offenses justify greater penalties, more certain penalties
and penalties more likely to deter. This is especially
true for second and subsequent offenses. I emphasized
that I am persuaded that more convictions for the actual
offense committed can be achieved if some flexibility is
written into the statutory penalty on first offenses, but I
was afraid critics would use the system proposed as an
excuse to say that the Nixon Administration is not earnest
in its promises to crack down on crime.
John Mitchell asked me if I thought it might be better to
leave the penalty structure blank and invite the Congress
to fix them. I replied that I had make precisely this sug-
gestion some time ago but that I was aware of the argument
that failure to include penalties would be criticized as a leader-
ship failure. At this point, RMN interjected to say that he
felt that the draft of the bill should give critics "no handle"
to charge that the Administration is soft on dope. He said
that rather than to do so, it would be better to omit the
penalties in Title V.
FORD LIBRARY & 07W830
6
(Personal Note: During the narcotics discussion, the
Vice President re-entered, and RMN invited me to come
around the table and sit in the chair on his left which
Ford had just vacated. He said to the Vice President
not to worry that he didn't have me in mind for his seat;
that I might be under consideration for the Court but not
for the Vice Presidency.)
I suggested to the President that he recognize Roman
Hruska. Roman said that Poff had summarized his own
position very well. RMN then asked that the matter be
given top legislative priority and asked me what the
prospects were in the House. I said that since the bill
would be referred to the Committee on Interstate and
Foreign Commerce, Bill Springer, who was present,
could answer more responsively. Springer said that
the Chairman had introduced his own bill which tends
to give more authority to the Department of HEW than
the Administration bill, but that he felt good legislation
could be written. He agreed that there would be some
dispute about penalty clauses.
The meeting adjourned at 10:10 in order that the Presi-
dent could welcome Emperor Haile Selassie.
RICHARD H. POFF
FOR IMMEDIATE RELEASE
JULY 8, 1969
OFFICE OF THE WHITE HOUSE PRESS SECRETARY
THE WHITE HOUSE
PRESS CONFERENCE
OF
CONGRESSMAN GERALD R. FORD
THE ROOSEVELT ROOM
AT 9:55 A.M. EDT
MR. ZIEGLER: Senator Dirksen had to go to the
Hill, to the Senate Finance Committee, where Secretary
Kennedy is testifying this morning on the surtax bill,
so Congressman Ford will give you a report on the meeting.
CONGRESSMAN FORD: Thank you very much, Ron.
Good morning. As Mr. Ziegler has indicated,
Senator Dirksen was here but had to go up to the hearing
in the Senate Finance Committee, where Secretary of the
Treasury Kennedy is testifying.
Before the Senator left there was a fairly broad
discussion of the urgency of the enactment of the surtax
legislation as it passed the House with the two very important
tax reform provisions in it; one, the repeal of the invest-
ment tax credit, and secondly, the recommendation of the
White House for the low income allowance provision.
It was pointed out that there may be an effort
on the part of some to delay the consideration of the surtax
package that was passed by the House and it is the strong
feeling of the President and the Administration that those who
for one reason or another delay the consideration and the
enactment of the surtax are responsible for any of the ill
effects that take place in the economy, such as the
increase in prices, the problems of inflation and high
interest rate.
It seems to the Administration that time is of the
essence, that we must act affirmatively as quickly as
possible on the surtax, the tax package, if we are to
really win the battle against inflation and if we are to
do something affirmatively in the area of high interest
rates and to furthermore prevent some economic difficulties
down the road.
I think all economists agree, from the left to the
right, that this legislation is vitally important and the
sooner the Congress acts, the more certain we will be in
winning the battle against inflation.
We have heard, all of us, some comments about the
need and necessity for tax reform. The President sent a
message several months ago incorporating some 16 very
R.
GERALD
FORD
important proposals for tax reform.
MORE
- 2 -
The President, in a letter to me last Monday,
reiterated this Administration's dedication to bona fide
tax reform. The Chairman of the Committee on Ways and
Means and the ranking Pepublican member have promised that
there would be tax reform legislation out of the Committee
on Ways and Means.
I hasten to add that this is the first Administration
in some 20 years I have been here, that the White House has
openly and specifically endorsed real tax reform. So the
prospects of tax reform are bright, but they should not
be mixed with the surtax proposal that is needed and necessary
for our battle against inflation.
The meeting also included a discussion of the
message which is already distributed, I understand, on
unemployment insurance proposals of the White House.
Furthermore, the Attorney General is now discussing
with the Leadership the message and the recommendations of
the Administration in reference to drugs and narcotics. The
need and necessity for this legislation is, I think, evident.
We read almost daily of serious consequences resulting from
the increase in drug traffic, increase in drug use.
The Administration is making specific recommendations.
We all know that organized crime ---
0
When will that come?
CONGRESSMAN FORD: Sometime this week, as I under-
stand it.
Is that correct, the message and recommendations
on drugs?
MR. ZIEGLER: Not necessarily this week. There is
a possibility it will be this week, but within the coming
weeks.
CONGRESSMAN FORD: Frankly, I had to leave the
meeting before the Attorney General finished, so I did not
get that detail, but I assume sometime this week or in the
near future.
Organized crime really thrives on the drug and
narcotics traffic. The Federal Government has a major
interest. The President himself passed a note to me as
the Attorney General was talking with the Members of the
Leadership, and the President's note indicates that 58 percent
of all crimes in the New York and New Jersey area last year
were committed by people somehow connected with drugs and
narcotics.
I think this is ample evidence that something
has to be done on a much vaster scale than we have been doing
in the past.
Those were the major items that were discussed.
I
R.
GERALD
FORD
will be glad to answer any questions.
LIBRARY
MOPE
- 3 -
O
What program is he proposing for curbing
narcotics, generally?
CONGRESSMAN FORD: Again, I had to leave before
all the details were developed by the Attorney General.
Before I left the Attorney General was talking about a
change in the control of distribution. There was to be a
proposal involving import controls. There was a proposal
that would give some greater flexibility in penalties. There
apparently is a tendency on the part of courts and juries
where there is this hard, mandatory, tough sentence to not
have as many convictions as you might have if there was a
lesser penalty and more flexibility given to the courts.
Q
Are you speaking there of easing up on the
penalties on marijuana?
CONGRESSMAN FORD: Again, we did not get into the
details, or at least I was not there when those details
were discussed. But there has been a tendency on the part
of juries and the courts themselves where the penalty is
hard and inflexible, to not have as many convictions.
What we need, I think, is more flexibility in the sentencing
where there has been a conviction, and one of the proposals
incorporated in this area would involve that area.
O Earlier you mentioned the need to do something
about the high interest rates. At the meeting this morning
did you get into Mr. Kennedy's meeting with those bankers,
and Mr. Patman's charges with regard to that meeting?
CONGRESSMAN FORD: We did not get into that
specific, but we related high interest rates to the
surtax proposal. I think it is recognized by everybody
if we don't pass the surtax, the probability of higher interest
rates is a foregone conclusion. If we pass the surtax proposal,
then the probability on the other hand is that interest rates
will ease and will go down rather than up.
0
Is the Administration prepared to compromise
if necessary to get the surtax through the Senate?
CONGRESSMAN FORD: The Administration feels that we
must pass the surtax now, and that as long as the Administration
is categorically on record by a message and by a letter for
tax reform, there is no need and necessity to combine the two.
Q
Mr. Ford, will you accept the additional tax
reform proposals tied to the surtax?
R.
FORD
CONGRESSMAN FORD: The Administration is against
additional tax reform proposals at the present time. They
GERALD
are committed for tax reform at a later date during this
LIBRASHA
Session of the Congress. It seems that the House bill is
the best vehicle.
Q
Suppose somebody in the Senate comes up with enough
strength to insist on some additional tax reform?
CONGRESSMAN FORD: Well, of course, the Senate will
work its will, and the conference between the House and Senate
will try to compromise whatever is included in the Senate
version in the House version, but the Administration feels very
MORE
- 4 -
strongly that the closer the bill can be to the House version
the better, and time is of the essence.
0
Was there any discussion about the increasing
cost of medical expenses in the country and the anticipated
announcement on Thursday in regard to that?
CONGRESSMAN FORD: Indirectly there was a discussion
of it with regard to the increases in the cost of living
in the last year. I think Secretary Shultz said that 60
percent of the increase in the cost of living in the last
year related to two principal factors; one, that which you
mentioned, and secondly, construction costs. But it was only
in reference to the overall, not on a specific point.
&
Was there any discussion about Mr. Nixon's
Asian trip or the trip to Romania?
CONGRESSMAN FORD: None whatsoever.
2 Mr. Ford, why should there be opposition to
accepting some tax reform now with the surcharge?
CONGRESSMAN FORD: It is a matter of delay. If the
Senate gets into a long debate, a prolonged discussion of a
multitude of reforms at this time, it will inevitably delay
the war we are waging against inflation, and as long as there
is this firm commitment by the Administration for tax reform
during this Session, it doesn't seem necessary to have tax
reform attached to the surtax bill.
O
Congressman, is it true that the House will not
vote this year on the President's draft proposal?
CONGRESSMAN FORD: The House Committee on Armed
Services, I hope, will consider the President's draft changes,
recommendations for revision in the selective service, as
soon as they get through the necessary military procurement
authorization bill. I would hope that the House would have
such a chance in 1969.
O
Was anything said about revenue sharing?
CONGRESSMAN FORD: Not this morning, no.
Q
Was anything said about the lull in military
activity in Vietnam?
R. FORD
CONGRESSMAN FORD: There was no discussion of that
this morning.
THE PRESS: Thank you.
END
(AT 10:10 AM EDT.)
HOUSE ACTION, PERIOD JULY 1 THROUGH JULY 7, 1969
Tuesday, July 1, 1969
SALINE WATER CONVERS ION PROGRAM AUTHORIZATION
The House agreed to the conference report on S.1011, to authorize
appropriations for the saline water conversion program for
fiscal year 1970, and returned the measure to the Senate for
further action.
AEC AUTHORIZATION
The House agreed to Senate amendments to H.R. 12167, to authorize
appropriations to the Atomic Energy Commission.
PRINTING RESOLUTIONS
By voice vote the House adopted eight printing resolutions.
Tuesday, July 8, 1969 and Balance of Week
H.R.11249 - To amend the John F. Kennedy Center Act to authorize
additional funds for such Center
H.R.6508 - California Disaster Relief Act of 1969
Conference Report on
H.R.11400 - Second Supplemental Appropriation Act, FY 1969
H.J.Res.247 - Relating to the Administration of the National Park
System
H.R.471 - To Hold in Trust Certain Lands for the Pueblo de Taos
Indians in New Mexico
H.R.11702 - Medical Library Assistance Extension Act of 1969
H.R.4284 - Authorizing Appropriations for the Standard Reference
Data Act
FORD i LIBRARI GERALD
MEMORANDUM
THE WHITE HOUSE
WASHINGTON
July 7, 1969
MEMORANDUM FOR THE PRESIDENT
FROM:
Bryce Harlow
BH
SUBJECT:
Status of legislation endorsed by the President
You have recommended or endorsed or otherwise become involved
in 24 major legislative proposals since January 20. A list noting
the legislative status of each is attached.
Legislative action is complete on five of the proposals.
In no instance has the Congress finally rejected one of your proposals.
On the contrary, there have been significant victories on important
test votes: surtax, two-year extension of the elementary and secondary
education act, cut-back on the Job Corps, debt ceiling increase.
FORD & LIBRARY GERALD
BILLS SENT TO CONGRESS:
Dated
1. 2-Year Extension of Reorganiza-
tion Act
1/20
X
Passed
2. Debt Ceiling Increase
2/24
X
Passed
3. Nuclear Non-proliferation
2/5
X
Ratified, not signed
4. Electoral Reform
2/20
Out of House Judiciary Comm.
5. Reform of Postal System
2/24
In Committee
6. International Development
Association
3/
x
Passed
7. Coal Mine Safety
3/3
8. ABM
3/4
9. 1 Bank Holding Companies
3/24
10. Surtax
Passed by House
11. Tax Reform
4/21
12. Organized Crime
4/23
13. Elementary & Secondary
Education
Passed by House
14. Postal Rate Increase
4/24
15. D. C. Government
4/28
16. Grant Consolidation
4/30
17. Obscenity
5/2
18. Job Corps
5/13
GENELS 1880 LEBRARY
19. Student Disorders
20. Export Control Act
Temporary ExtenSion passed
21. 2-Year OEO Extension
6/2
22. Airports & Airways
6/16
23. Voting Rights Act
6/30
24. Aid to Families with Dependent
Children Freeze, repeal of
X
Passed Sen Amendments
6/26
BILLS SENT TO CONGRESS:
Dated
1. 2-Year Extension of Reorganiza-
tion Act
1/20
Passed
2. Debt Ceiling Increase
2/24
X
Passed
3. Nuclear Non-proliferation
2/5
X
Ratified, not signed
4. Electoral Reform
2/20
Out of House Judiciary Comm.
5. Reform of Postal System
2/24
In Committee
6. International Development
Association
3/
A
Passed
7. Coal Mine Safety
3/3
8. ABM
3/4
9. 1 Bank Holding Companies
3/24
10. Surtax
Passed by House
11. Tax Reform
4/21
12. Organized Crime
4/23
13. Elementary & Secondary
Education
Passed by House
14. Postal Rate Increase
4/24
15. D. C. Government
4/28
16. Grant Consolidation
4/30
GERALD LIBRARY FORD
17. Obscenity
5/2
18. Job Corps
5/13
19. Student Disorders
20. Export Control Act
Temporary ExtenSion passed
21. 2-Year CEO Extension
6/2
22. Airports & Airways
6/10
23. Voting Rights Act
E/30
24. Aid to Families with Dependent
Children Freez
THE WHITE HOUSE
GERALD LIBRARY 4. FORD
Those who delay pressays
of tab we must bear
for higher
prices, higher interest nates.
Runaway Arform is a
smoke screen Reform
will come. admin for.
June 30, 1969
Dear Mr. Ford:
As the House nears a decision on the surtax, I want to
remove any vestige of doubt as to the commitment of this
Administration to prompt and meaningful tax reform.
I first made this commitment publicly on February 6. I
reaffirm it today.
Clearly the record supports that commitment. On April 21,
after less than three months in office, this Administration
submitted 16 substantive tax reforms to the Congress. They
included a minimum income tax to help ensure that people
with high incomes will not fail to share the tax burden. We
suggested a Low Income Allowance to remove poverty-level
people from the tax rolls and reduce the taxes of some eight
million others. We also recommended repeal of the seven
percent investment credit.
It is due in part to those initiatives that the measure before
the House today includes significant tax reform. Your
colleagues will recall that repeal of the investment credit,
ultimately releasing over $3 billion in revenue, was singled
out only three months ago by the majority of the Senate-House
Joint Economic Committee as the "first priority in tax reform."
The Low Income Allowance is also # high-priority reform.
We should delay no longer the elimination of the social para-
dox of poverty-stricken people paying a federal tax on their
meager incomes.
GERALD LIQUARY FORD
- 2 -
Important as these two reforms are, much more is needed
and will be done. On May 27, the House Ways and Means
Committee published a list of tax reform measures which
it had tentatively approved. On my direction Treasury
officials and staff have been working closely with the
Committee. They will continue to do so.
There is no reason why a far-reaching tax reform bill
cannot be put before the House of Representatives this
summer. This is the announced goal of the Ways and
Means Committee; it is also the goal of this Administration.
While these complex measures are being prepared, there
must be no question as to this Government's determination
first to slow and then to stop inflation. This requires
Congressional action now. It requires extension of the
phased surtax, and it requires enactment now of the other
tax measures proposed by the Administration and approved
by the tax committee of the House.
The goals of fiscal responsibility and tax reform are not
mutually exclusive. We can have both; we must have both.
I trust and believe that the House will move responsibly
toward both by voting today to extend the surtax.
Sincerely,
Honorable Gerald Ford
House of Representatives
Washington, D.C.
GERALO FOAD $
NEWS
CONGRESSMAN
GERALD R. FORD
HOUSE REPUBLICAN LEADER
RELEASE
--FOR IMMEDIATE RELEASE--
July 8, 1969
Statement by Rep. Gerald R. Ford, R-Mich., on the President's Message dealing
with Unemployment Insurance, July 8, 1969.
President Nixon's proposals to expand, improve and strengthen our unemploy-
ment insurance system clearly constitute one of the most important items of
legislative business on the agenda of the 91st Congress.
It is vital that we extend unemployment insurance to an additional 4,800,000
workers as recommended by the President and that we provide for payment of benefits
during worker retraining and for automatic extension of benefits during long
periods of high unemployment.
I expect that these proposals by President Nixon will be relatively non-
controversial. The fight, if any, will come over the recommendation that states
be given two years to meet the goal of paying unemployment benefits amounting to
at least 50 per cent of a worker's weekly wage.
In this connection, it should be remembered that the unemployment insurance
system is a Federal-State program. Every attempt should therefore be made to
improve the system with the full cooperation of and action on the part of the
respective states.
I subscribe to the concept that unemployment benefits amounting to at least
50 per cent of a worker's weekly pay should be paid in every state. In those
states where this objective is not being met, injustice is visited upon the
unemployed who are eligible for unemployment insurance benefits. Also, employers
in that state are given a competitive advantage over employers in other states.
But it would be far better to achieve the 50 per cent objective through
federal encouragement than through federal bludgeoning. I therefore feel a
grace period is in order.
Enactment of the other Nixon recommendations into law will greatly
strengthen our unemployment insurance system and improve the health of the
American economy.
FORD is LIBRAR GERALD
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FOR RELEASE AT 12:00 NOON, EDT
July 8, 1969
Office of the White House Press Secretary
THE WHITE HOUSE
TO THE CONGRESS OF THE UNITED STATES:
The best time to strengthen our unemployment insurance system is
during a period of relatively full employment.
The Secretary of Labor is sending to the Congress today proposed
legislation to extend unemployment insurance to 4, 800, 000 workers not
now covered; to end the shortsighted restrictions that stand in the way
of needed retraining efforts; and to add a Federal program automatically
extending the duration of benefits in periods of high unemployment.
There are three principles to be considered as we move to make the
unemployment insurance system responsive to our times.
Unemployment insurance is an earned benefit. When a man covered
by unemployment insurance is working, the employer pays a tax
on his wages to insure against the day when the employee may be between
jobs. That insurance is like a mandatory fringe benefit; it is insurance
bought in the employee's behalf, and the worker therefore is entitled to
the benefits he receives when he is unemployed. Accordingly, there is
no demeaning of human dignity, no feeling of being "on the dole, 11 when the
insured worker receives benefits due.
Unemployment insurance is one of the foremost examples of creative
Federal-State partnership. Although the system was created by Federal
law, most decisions about the nature of the program are left to the States,
which administer the system with State employees. This makes the system
far more flexible and attuned to local needs and special circumstances of
local economies.
Unemployment insurance is an economic stabilizer. If, for example
the economy were ever to slow and unemployment were to rise, this
program automatically would act to sustain personal income. This would
help prevent a downturn from gathering momentum resulting from declines
in purchasing power. When employment is at a high level, and greater
stimulation of consumer demand is unwanted, relatively little money flows
into the economy from unemployment insurance,
With these principles in mind, I am making these recommendations
for both Federal and State action:
1. We should act together to extend unemployment protection to more
employees, including many highly vulnerable to layoffs who are not now
covered.
2. The States should make certain that workers throughout the United
States receive enough money for a long enough period of time to sustain
them while they seek new jobs.
3. We should end the restrictions imposed by almost half the States
on payments to unemployed workers undergoing retraining and, instead,
follow the lead of those States which encourage retraining.
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4. We should better protect the investment made on behalf of the
insured by seeing to it that the funds are paid only to those who should
receive them.
5. We should increase the responsiveness of the system to major
changes in national economic conditions.
6. We should strengthen the financing of the system which
presently discriminates against the low-wage worker and the steady
employer.
1.
Protecting More Employees
Over 57 million workers are protected by unemployment insurance.
However, almost 17 million are not covered: more than half of these
are employees of State and local governments. The last extension of
coverage was enacted during the Eisenhower Administration, when
6 million additional workers were included; there is a clear social need
today to cover as many more employees as we can,
I propose that an additional 4.8 million workers be covered by
unemployment insurance. These include:
-- 1, 600, 000 workers in small firms with less than four employees;
400, 000 on large farms employing four or more workers in each
of 20 weeks;
200, 000 in agricultural processing activities;
1, 800, 000 in non-profit organizations;
600, 000 in State hospitals and universities;
-- 200, 000 salesmen, delivery tradesmen, and others who are
not currently defined as employees.
These 4, 800, 000 workers are in real need of protection against
unemployment. Many of them are low wage workers with little job
security and no prospect of termination pay if they are laid off.
The present gaps in coverage work a disproportionate hardship on
minority workers, since a higher percentage of the 4, 800, 000 are nonwhite,
compared to the entire labor force.
To cushion the immediate impact of this extension on employers, I
recommend that States be permitted to lower the tax rates on newly
covered employers until such time as a record of employment experience
can be compiled to determine what their true rate should be.
With the passage of this legislation, the majority of those remaining
uncovered will be employees of State and local governments. I urge the
States and localities to take action, in the light of their local circumstances,
to include their own employees in unemployment insurance coverage.
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2. Making Benefits Adequate
The basic purpose of the Unemployment Insurance Program is to pay
weekly benefits high enough to prevent a severe cut in a worker's standard
of living when he is between jobs. The principle is generally accepted that
it takes at least 50% of the worker's wage to meet this purpose.
Almost every State subscribes to this general principle, but benefit
ceilings in their legislation have in fact made this principle largely
ineffective, especially for the family breadwinner. At least two out of
five claimants currently fail to get a benefit equal to one-half their wages.
In 1954, President Eisenhower recommended to States that they pro-
vide a maximum high enough to permit the great majority of covered
workers to receive one-half their wages. This means that at least 80%
of insured workers should be able to receive a benefit of one-half their
wages in unemployed.
Men are most adversely affected by the limit on weekly benefits. In
one large industrial State, for example, only 23% of the men receive bene-
fits equal to as much as one-half their weekly wages.
If the program is to fulfill its role, it is essential that the benefit
maximum be raised. A maximum of two-thirds of the average wage in
the State would result in benefits of 50% in wages to at least 80% of
insured workers.
Up to now, the responsibility for determining benefit amounts has
been the responsibility of the States. There are advantages in States
having that freedom. However, the overriding consideration is that the
objective of adequate benefits be achieved. I call upon the States to act
within the next two years to meet this goal, thereby averting the need
for Federal action.
3. Encouraging Retraining
During the present decade, many manpower programs were launched
in the United States. We have seen how unemployed workers can be
equipped with new skills and started on new careers. When the decade
began, only three States permitted workers who enrolled in retraining
programs to continue to receive benefit payments. All the rest disqualified
them upon entry into training.
During the early 1960's, many States recognized the potential of
training for employment rehabilitation, and by 1969 twenty-five States,
plus Puerto Rico and the District of Columbia, had removed such
restrictive requirements.
However, twenty-five States continue to discourage retraining by
denying benefits to workers in such programs on the theory that they
are not "available for work. " On the contrary, the workers are trying
to keep themselves available by learning new techniques and technologies,
and government should certainly stop penalizing them for doing something
that government, business and labor all want to encourage.
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I propose a requirement that the remaining States permit workers
to continue to receive benefits while enrolled in training programs
designed to increase their employability.
4. Protecting the Insurance System
We must also be sure that benefits are going only to those people
the system is designed to protect. The funds must not be dissipated.
Attachment to the Labor Force. The unemployment insurance
system is designed to protect workers whose attachment to the labor
force is more than casual. A worker's attachment is measured by
both his past employment history and his present situation. He must
be ready, willing and able to work and trying to find work while he is
claiming benefits; and he must have had at least a certain amount of
employment in the recent past. Generally, from fourteen to twenty
weeks of work is required, depending on the employment patterns of
the State and the minimum duration of benefits.
A few States, however, measure past employment by a flat dollar
amount. This discriminates against the low-wage worker, because
it means he must work for a longer period to be eligible. Also, it
permits other high wage workers to become eligible on the basis of
very short seasonal work. I recommend that a standard based on a
minimum period of 15 weeks' employment be required as a condition of
benefit eligibility, and that no flat dollar amount be permitted as the only
yardstick.
Workers on Strike. The unemployment tax we require employers
to pay was never intended to supplement strike funds to be used against
them. A worker who chooses to exercise his right to strike is not
involuntarily unemployed.
In two States, workers on strike are paid unemployment insurance
benefits after a certain period. This is not the purpose of the unemploy-
ment insurance system.
I propose a requirement that this practice of paying unemployment
insurance benefits to workers directly engaged in a strike be discontinued.
5. Improving Responsiveness to Economic Conditions
Difficult times are far less likely to occur in nations that take the
trouble to prepare for them. The presence of a strong, anti-recessionary
arsenal will in itself help prevent the need for its ever being used.
In normal times, the duration of benefit payments may be adequate.
Most State programs now provide around twenty-six weeks of benefits;
for the great majority of claimants, this is enough to see them through
to another job. However, if the economy were ever to falter, the number
of persons exhausting benefits would grow rapidly.
In each of the last two periods of high unemployment, the President
proposed, and the Congress enacted, legislation to extend the duration of
benefits temporarily. However, while this process was taking place,
many workers were without income, and the economy was exposed to
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sharp declines in personal income due to unemployment.
FORD
GERALD
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I am proposing legislation that would automatically extend the
length of time benefits are paid in all States when the national jobless
rate of those covered by insurance equals or exceeds 4.5% for three
consecutive months. If periods of high unemployment were ever to
occur, individuals would receive benefits for an additional period up
to 13 weeks; this extension would end when the national unemployment
rate of those in the system (currently 2. 2%) fell back below 4. 5%, and
when the number exhausting their benefits in a three-month period dropped
below 1% of those covered. These additional payments would be financed
out of that portion of the unemployment tax that is now retained by the
Federal government.
6.
Strengthening and Reforming Financing
We must enable the Federal government to finance its share of the
improvements proposed in this message, along with the costs of
administering the Employment Security System. In addition, there will
be a. need to improve the ability of States to finance the higher benefit
levels I am urging.
I propose that the taxable wage base be raised over a five-year
period to $6, 000 and thereafter be reviewed periodically to make certain
the adequacy of financing.
In the majority of States, the taxable wage base for the Unemployment
Insurance Tax is the first $3, 000 of wages -- exactly what it was three
decades ago. In that same period, average wages in employment covered
by the system have increased almost five-fold. The low tax base places
obstacles in the way of hiring low-wage workers because a substantially
higher proportion of their wage is taxed. In addition, the impact of the
tax tends to encourage use of overtime rather than adding workers.
The higher base will have the desirable effect of allocating costs
more equitably among employers. Particularly at the State level, overall
benefit costs will represent a lower per cent of taxable wages, and allow
rates to reflect employer experience more accurately.
An Anchor to Windward. Unemployment insurance was begun as an
answer to the human need for sustenance of the unemployed workingman
seeking another job. It was designed to reduce the element of economic
panic in job-hunting.
But as we move now to extend that insurance and meet that need more
fully, we discover not quite by accident the bonus of serendipity.
Here is insurance purchased through a tax on the employers of America
in behalf of their employees that can be a potent counter to a downturn in
the business cycle. This proves that well-conceived social legislation
can be a great boon to business and to all Americans affected by the state
of the economy.
The success of this system can be a great example in the relationship
between the States and the Federal government.
The Federal government brought this unemployment insurance
system into being -- but the States have rightly adopted it as their own.
The Federal government has traditionally established minimum coverage
but many States have expanded that coverage to fit their own needs.
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Now the Federal-State system of unemployment insurance should
move to provide adequate benefits in accordance with the goal that has
been set and with full recognition of the diversity of economic conditions
among States. Such action is most important to protect the individual
and to achieve the anti-recessionary potential of unemployment
insurance.
The Federal and State actions recommended will help advance the
economy of each State and in protecting the economy of the nation. In
human terms, the recommended changes will better enable a worker to
weather the adversity of unemployment and to find a suitable job.
I urge that the Congress and the States enact the legislation proposed
to carry out these improvements.
RICHARD NIXON
THE WHITE HOUSE,
July 8, 1969.
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