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This file contains:
Proposed action steps and calendar for getting out the President's vote on November 7. 3 pgs. [Subject: Campaign] [Report], 9/29/1972
Handwritten notes RE campaign/field staff activities (author & recipient unknown). 1pg. [Subject: Campaign] [Other Document], no date
From Fred Malek to Clark MacGregor RE Voter Turnout Plan. 1pg. [Subject: Campaign] [Memo], 10/2/1972
A program for voter identification and turnout. 87 pg brochure, only the cover is scanned. [Subject: Campaign] [Brochure], no date
Author: Ken Khachigian. Recipient: Mr. Haldeman. California ballot initiatives. [Subject: Campaign] [Memo], 9/5/1972
Overview of Marijuana initiative upcoming vote in California. [Subject: Campaign] [Newspaper], 9/4/1972
Overview of controversial initiatives in California. [Subject: Campaign] [Newspaper], 7/5/1972
Author: Fred Malek. Recipient: Gordon Strachan. California propositions. [Subject: Campaign] [Memo], 9/29/1972
Political evaluation of 1972 ballot propositions in California general election. 3 pgs. [Subject: Campaign] [Report], 9/26/1972
Author: Gordon Strachan. Recipient: Fred Malek. California propositions. [Subject: Campaign] [Memo], 9/7/1972
Author: Devan L. Shumway. Through: Jeb S. Magruder. Recipient: Clark MacGregor. The Westinghouse Broadcasting invitation to a background breakfast. [Subject: Campaign] [Memo], 10/24/1972
Clark MacGregor's schedule of October 25, 1972. [Subject: White House Staff] [Other Document], 10/24/1972
Author: Al Abrahams. Through: Jeb Magrude. Recipient: Clark MacGregor. Welfare, taxes and the economy. Cover letter and George McGovern's speeches attached. [Subject: Economy] [Memo], 10/12/1972
Author: Clark MacGregor. Recipient: Fellow Nixon supporter. Senator George McGovern economic and welfare speech; Tax increases speech; McGovern-Sriver Smear campaign. 74 pgs. [Subject: Campaign] [Brochure], 10/12/1972
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WHSF: Contested, 39-1
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1
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26146060
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WHSF: Contested, 39-1
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This file contains:
Proposed action steps and calendar for getting out the President's vote on November 7. 3 pgs. [Subject: Campaign] [Report], 9/29/1972
Handwritten notes RE campaign/field staff activities (author & recipient unknown). 1pg. [Subject: Campaign] [Other Document], no date
From Fred Malek to Clark MacGregor RE Voter Turnout Plan. 1pg. [Subject: Campaign] [Memo], 10/2/1972
A program for voter identification and turnout. 87 pg brochure, only the cover is scanned. [Subject: Campaign] [Brochure], no date
Author: Ken Khachigian. Recipient: Mr. Haldeman. California ballot initiatives. [Subject: Campaign] [Memo], 9/5/1972
Overview of Marijuana initiative upcoming vote in California. [Subject: Campaign] [Newspaper], 9/4/1972
Overview of controversial initiatives in California. [Subject: Campaign] [Newspaper], 7/5/1972
Author: Fred Malek. Recipient: Gordon Strachan. California propositions. [Subject: Campaign] [Memo], 9/29/1972
Political evaluation of 1972 ballot propositions in California general election. 3 pgs. [Subject: Campaign] [Report], 9/26/1972
Author: Gordon Strachan. Recipient: Fred Malek. California propositions. [Subject: Campaign] [Memo], 9/7/1972
Author: Devan L. Shumway. Through: Jeb S. Magruder. Recipient: Clark MacGregor. The Westinghouse Broadcasting invitation to a background breakfast. [Subject: Campaign] [Memo], 10/24/1972
Clark MacGregor's schedule of October 25, 1972. [Subject: White House Staff] [Other Document], 10/24/1972
Author: Al Abrahams. Through: Jeb Magrude. Recipient: Clark MacGregor. Welfare, taxes and the economy. Cover letter and George McGovern's speeches attached. [Subject: Economy] [Memo], 10/12/1972
Author: Clark MacGregor. Recipient: Fellow Nixon supporter. Senator George McGovern economic and welfare speech; Tax increases speech; McGovern-Sriver Smear campaign. 74 pgs. [Subject: Campaign] [Brochure], 10/12/1972
citationUrl
collections
Richard M. Nixon's Returned Materials Collection
Contested Materials Files
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Richard Nixon Presidential Library
Contested Materials Collection
Folder List
Box Number
Folder Number
Document Date
No Date
Subject
Document Type
Document Description
39
1
9/29/1972
Campaign
Report
Proposed action steps and calendar for
getting out the President's vote on November
7.3 pgs
39
1
Campaign
Other Document
Handwritten notes RE campaign/field staff
activities (author & recipient unknown). 1pg.
39
1
10/2/1972
Campaign
Memo
From Fred Malek to Clark MacGregor RE
Voter Turnout Plan. 1pg.
39
1
Campaign
Brochure
A program for voter identification and
turnout. 87 pg brochure, only the cover is
scanned.
Tuesday, November 15, 2011
Page 1 of 3
Box Number
Folder Number
Document Date
No Date
Subject
Document Type
Document Description
39
1
9/5/1972
Campaign
Memo
Author: Ken Khachigian. Recipient: Mr.
Haldeman. California ballot initiatives.
39
1
9/4/1972
Campaign
Newspaper
Overview of Marijuana initiative upcoming
vote in California.
39
1
7/5/1972
Campaign
Newspaper
Overview of controversial initiatives in
California.
39
1
9/29/1972
Campaign
Memo
Author: Fred Malek. Recipient: Gordon
Strachan. California propositions.
39
1
9/26/1972
Campaign
Report
Political evaluation of 1972 ballot
propositions in California general election. 3
pgs.
Tuesday, November 15, 2011
Page 2 of 3
Box Number
Folder Number
Document Date
No Date
Subject
Document Type
Document Description
39
1
9/7/1972
Campaign
Memo
Author: Gordon Strachan. Recipient: Fred
Malek. California propositions.
39
1
10/24/1972
Campaign
Memo
Author: Devan L. Shumway. Through: Jeb S.
Magruder. Recipient: Clark MacGregor. The
Westinghouse Broadcasting invitation to a
background breakfast.
39
1
10/24/1972
White House Staff
Other Document
Clark MacGregor's schedule of October 25,
1972.
39
1
10/12/1972
Economy
Memo
Author: Al Abrahams. Through: Jeb
Magrude. Recipient: Clark MacGregor.
Welfare, taxes and the economy. Cover letter
and George McGovern's speeches attached.
39
1
10/12/1972
Campaign
Brochure
Author: Clark MacGregor. Recipient: Fellow
Nixon supporter. Senator George McGovern
economic and welfare speech; Tax increases
speech; McGovern-Sriver Smear campaign.
74 pgs.
Tuesday, November 15, 2011
Page 3 of 3
MacG, malek, Field staff
10/2
new am Majority / Bwad Based Support,
macG
to replace handslide / mandate<
neither to be used again
- Broad based - all segments of Society
only 2 more was of caneass - nowall
FM
Get Out Vote
- -Oct 30 - nov 7-all telephones te
all Repis +1 supporters
- Plans not concrete
Rich Fore - countium colendor to Elee.
1
Desig priority 8ts + eveations Pa
S-get
Get Out Vote in 23 May 80
cc of
Fore
Key se, marginal ses + Key Sen Roces
-Sursis touse voter Turnout
Talpap
Fm trying longrage to and out fr/ Teeter whe
large ternout natels helps P or
just turn out our waters.
2
Voter Blocs phase out tall
to turn out
-Oct 28 - Gete ut Vote Day
3
10/16- comm mobilized te key into
for any cities.
&- 4 Oct 28- massive Sun Get
Mordin -act
Out cote similar te
out our undedicated
Vote in congane
w/conyma
canvass Kulc off
Wordshop Sessions in Sts. 10/16-22
October 2, 1972
MEMORANDUM FOR:
CLARK MacGREGOR
FROM:
FRED MALEK
SUBJECT:
Voter Turnout Plan
As we have discussed, the basic thrust of the field organization is be-
ginning to turn to the voter turnout program. The basic parts of this
thrust consist of:
1. Pre-election reminder to vote phone calls to all supporters.
October 30 - November 7.
2. Election day phone calls to all supporters. November 7.
3. In all states, Victory Squad volunteers going door-to-door
in the afternoon and evening to supporters who have not voted.
November 7.
4. Poll checking coordinated with phoning and victory squads.
November 7. (In states where poll checking is permitted.)
Our initial plan and calendar for accomplishing these activities are
attached at Tab A. At Tab B is a proposed special event using surrogates
to promote turn-out-the-vote activities. This event is still in the dis-
cussion stage, and I would like to get your views at an early date. I
will keep you informed as our plans develop.
Attachments
bcc: H. R. Haldeman
TAB A
September 29, 1972
PROPOSED ACTION STEPS AND CALENDAR FOR GETTING OUT
THE PRESIDENT'S VOTE ON NOVEMBER 7
1. September 29 - October 4 - Work with polling staff to designate priority
states, cities, counties, and precincts for Get Out the Vote
2. October 2 - Outline to the Regional Directors our Get Out the Vote plans,
timetable and materials available to aid in program implèmentation
3. October 4-6 - Tour Division and White House get brief memo with talking
points for mention by surrogates, Vice President, etc. in all appearances,
or communication with state and local supporters. Regular emphasis by them
will help us get across the importance of canvassing and voter turnout.
4. October 4 - Assign Business and Industry full time to locate loan a phone
addition
operations available in cities and urban areas throughout the country to
augment the phone centers and other boiler rooms already available for
Election Day use.
volunting
5. October 4-24 - Voter blocs (including Citizens, Youth, Women, etc)
begin to close out "doing their own thing" and to focus on the voter
turnout program which must be everyone's activity for the last ten
days of the campaign.
In this latter regard, the voter blocs will be responsible for contacting
every possible member of their active following to secure commitments
for the following:
1. Participation in the October 28 Get Out the Vote
Kick-Off - Final Canvass effort
2. A definite time commitment for the Get Out the Vote
activity during the week of October 30-November 6
3. Definite Election Day assignments
Each national voter bloc director will be responsible for placing
lists of those recruited with addresses and phone numbers and specific
commitments into the hands of appropriate Regional Director by close
of business on October 24.
6. October 4-7 - Develop a contingency plan for key areas that have not
successfully completed voter identification. This plan will enlarge
the base of probable favorable voters to be turned out in these areas
by:
a. Analyzing and selecting high priority precincts for broad
voter turnout
TAB A
b. Securing lists of all registered Republicans and GOP primary
voters (in non-party Registration states) for in-mass turnout
7. October 16 - Mobilize a majority of the national staff into key counties
in key states to promote voter turnout under the direction of the Regional
Directors and National Field Representatives.
8. October 16-21 - In the key and marginal states, National field
Representatives make Regional presentations and make sure
"Get Out the Vote" meetings are scheduled at the county level and
state program is set for voter turnout
9. October 22-26 - State should hold county Get Out the Vote workshops
in each county. The 450 priority counties will receive a sophisticated
slide/tape presentation for this workshop. Some 2000 tape messages
on Get Out the Vote will be delivered to the states for use with simple
tape recorders at these workshops in other counties.
10. October 28 - Get Out the Vote Kick-Off - Surrogates go to key states,
marginal states, and states with important Senate races - approximately
Maybe
50 media markets.
October 28 activity -
1. Surrogate speaks on the importance of Get Out the Vote
activities
2. Get Out the Vote volunteers recruited by telephone and flyers
in shopping centers
3. Completion of canvass
4. Completion of Get Out the Vote preparations and clerical work
5. Public emphasis on the importance of the volunteer and the
people-to-people basis of the President's campaign
11. November 7 - Maximum number of National CREP, RNC and State CREP staff
take Election Day field assignments. State and local leadership must be
persuaded to join in to make Election Day Voter Turnout activity the
"must" program in which everyone participates.
September 27, 1972
TAB B
PROPOSED SPECIAL EVENT TO PROMOTE "TURN OUT OUR VOTE" ACTIVITIES
SUGGESTED DATE:
Saturday, October 28
ALTERNATIVE SITES:
1. Key States only
2. Key States and Marginal States
3. Key and Marginal States and States with important
Senate Races (Our recommendation)
PURPOSE:
1. Stress the high priority which must be placed on pre-election
and election day activities to get out our vote. Dangers of
apathy and overconfidence, etc.
2. Emphasize the massive number of volunteers needed to help the
President on election day to insure a mandate from the voters
for the next four years.
3. Survey preparations for election day in the area visited by
the surrogate.
4. Recruit and give definite election day assignments to volunteers
who come to meet the surrogate.
5. Receive extensive volunteer help this day, as outlined in point
3 below.
PLAN:
Schedule each surrogate to at least one headquarters and one phone
center in the city he will visit.
1. This is not a rally
another emphasis on people-to-people
politics and dignifying the role of the volunteer.
2. Surrogate speaks on the importance of election day turnout.
Statistics on previous close elections, information showing
that a candidate with less than a majority of public support
can win, and other motivational material is provided surrogate.
Speaker makes a public appeal for Nixon election day volunteers.
3. Everyone present is signed up for an election day activity.
Everyone recruited for October 28 commits to help with
election day preparations on that Saturday by:
a. Recruiting supporters by phone to help with election day
activities
b. Completing the clerical work from door-to-door and phone
canvassing
C. Concluding the door-to-door and phone canvass
4. As the surrogate leaves to visit another headquarters, volunteers
begin to do above tasks. Surrogate visits additional headquarters
to further survey election day plans and to motivate volunteers.
I
TAB B
September 27, 1972
POSSIBLE NEGATIVE FACTORS TO CONSIDER REGARDING A SPECIAL EVENT
UTILIZING SURROGATES TO PROMOTE TURNOUT ACTIVITIES
1. One additional function for which preparations must be made and advance
men received might take more time away from the core program and what
we have already asked of them than it would add measured by motivation
and added manpower.
2. They may have had their fill of surrogates with so many being scheduled
already into these same areas.
3. Poor (disappointing) surrogate selections will generate complaining.
President Nixon
Now more than ever
TARGET 72
Sixty Days To Victory
a program for
VOTER IDENTIFICATION & TURNOUT
Republican
Committee
National
for the Re-election
Committee.
of the President
Senator Bob Dole, Chairman
Clark MacGregor, Campaign Director
THE WHITE HOUSE
WASHINGTON
September 5, 1972
ADMINISTRATIVELY GONFIDENTIAL
MEMORANDUM FOR: MR. HALDEMAN
FROM:
KEN KHACHIGIAN De
SUBJECT:
CALIFORNIA BALLOT
As usual, the California ballot will have a number of initiatives
on it. They have serious political implications needing advance
consideration. The 1958 Right-to-Work example ought to be a
lesson for us in this respect.
The attached articles discuss, among others, the three items
which will probably be the most serious for us, and I imagine that
somewhere along the line, RN will have to take some position.
(1) The Death Penalty; (2) Legalized marijuana; (3) Cesar Chavez
and the farmworkers.
Here is my recommendation: Nofziger, Finch, Klein, and other
California hands should be asked to do an analysis of the California
initiative questions with their recommendations. This is essential
in order that we go into our California strategy prepared for the
possible whipsaw effect these measures can have on a close election.
Once we have decided what to do, the word should get out in the
clearest possible terms just how these issues are to be handled in
California.
Attachments
A MARIJUANA VOTE WITH IMPACT
ON RACE FOR WHITE HOUSE
SAN FRANCISCO
out against the initiative. Says Dr.
California voters in November will
Jones:
be the first in the nation to have a
"Legalization would undoubtedly in-
choice on a Statewide basis of saying
crease usage, particularly with the
"yes" or "no" to marijuana.
young, 40 per cent of whom are now
Going on the ballot is a proposition
using it. Laws against marijuana are a
that would amend State law to permit
deterrent to those who respect the law.
private use and cultivation of marijuana
Most who are not using it are not using
by adults.
it because it is illegal. Those who are
Leaders of the California Marijuana
masterminding this know that, if they
Initiative collected 382,095 signatures
can get California to legalize marijuana,
to put the proposition on the ballot.
-USN&WR Photos
they can get it anywhere else."
What are its chances in November?
Pin in shape of marijuana leaf is offered
Governor Ronald Reagan has voiced
Says Robert Ashford, 28, a San Fran-
to $10 contributors in drive aimed at
his opposition, saying, "I resist anything
cisco attorney and State co-ordinator
easing California law. T-shirts selling at
that psychologically would seem to be
of the CMI organization:
$2.50 to $3 help fund the campaign.
endorsing any leniency in this regard
"Six months ago the issue was politi-
when we are marshaling all our forces to
cal suicide. Now that we have gotten
fight the total drug problem."
so much support, it is becoming politi-
Effect on election. Much specula-
cally respectable to support it. If we
tion has centered on whether the Mari-
lose this time, we will keep trying until
juana Initiative-and other special prop-
we get it passed."
ositions on the California ballot-will
Win or lose, the marijuana issue is
have an impact on the presidential race.
already raising this question: Will it
Evelle Younger, California attorney
draw enough voters to the polls-partic-
general, predicts:
ularly young people-to have an effect
"We can expect a large voter turn-
on the State's presidential race?
out. Who will benefit from the turnout
Proposed change. To be voted on
in the presidential race is anyone's
is a proposed addition to the State's
California
guess."
Health and Safety Code to make it read:
NTIATIVE
But Willie Brown, a State assembly-
"No person in the State of Califor-
MARIJUANA
man whose help was important in the
nia 18 years of age or older shall be
primary campaign of Senator George
punished criminally, or be denied any
McGovern, contends the Democratic can-
right or privilege, by reason of such
didate will benefit. He says:
person's planting, cultivating, harvest-
"I think the marijuana issue will help
ing, drying, processing, otherwise pre-
McGovern. People who may not other-
paring, transporting, or possessing
wise want to help him, because they
marijuana for personal use, or by reason
think he is not revolutionary or radical
of that use.
FREEDOM
enough, will be out there working for
"This provision shall in no way be
the Marijuana Initiative."
construed to repeal existing legislation,
Choice for courts. Under present
or limit the enactment of future legisla-
Officials of the California Marijuana
California law, State courts have the
tion, prohibiting persons under the in-
Initiative claim widespread support of
choice of treating marijuana possession
fluence of marijuana from engaging in
young people. Gordon Brownell, CMI
or use as either a felony or a misde-
conduct that endangers others."
political co-ordinator, describes the drive
meanor. Marijuana arrests by State or
Backers of the proposition argue that
as "an emerging political movement,
local officials have been running from
this wording would not permit "legali-
like the antiwar movement was in the
60,000 to 70,000 each year. They would
zation" of marijuana to the extent of
'60s." He says 2.5 million to 3.5 million
end if the proposition is approved.
permitting commercial sales and adver-
Californians have used marijuana at
The federal law which prohibits pos-
tising but would merely constitute "de-
least once.
session of marijuana without a medical
criminalization" of its use.
An organization called Citizens Op-
prescription would not be affected. But
Says one opponent:
posing the Marijuana Initiative was
John Milano, special U.S. attorney in
"That's a phony issue. If you decrimi-
formed in June to fight the move. It is
charge of drug-abuse enforcement in
nalize marijuana, you legalize it."
preparing billboards and bumper stick-
San Francisco, comments:
For and against. The most influen-
ers that bear the slogan "Don't Let Cali-
"I can't anticipate that the Federal
tial organization to join in support of
fornia Go to Pot." The group has youth-
Government would try to fill the gap left
the marijuana initiative so far has been
ful leaders, but it is relying on broad
by law enforcement locally. Our job is
the San Francisco Bar Association. In an
support from church groups and civic
going after those trafficking in drugs in
April referendum, the active members
organizations.
large volume. And we pay more atten-
who voted favored the amendment by
Prof. Hardin Jones, of the University
tion to harder drugs than to marijuana.
1,133 to 502.
of California at Berkeley, has also spoken
We have to be realistic."
50
U.S. NEWS & WORLD REPORT, Sept. 4, 1972
A2
Wednesday, July 5,1972 THE WASHINGTON POST
California Voters Take Their Grievances to the Poll
By John Berthelsen
these issues have been ig-
cruel and unusual punish-
by more than 100 conserva-
on a June primary ballot,
and minors will not be al-
legislature for three straight
mento," says Democrat
Special to The Washington Post
nored or turned down by
ment.
tion organizations, including
at work again. Proponents
lowed to use it.
years, and it has never got-
Sieroty, one of the tw
SACRAMENTO, Califor-
the lawmakers in past sev-
The U.S. Supreme Court
the Sierra Club, as well as
are predicting $1 million,
Both the coastline and the
ten out of committee.
thors of the coastline p1
nia-Voters have decided
eral legislative sessions.
on Thursday at least partly
50 of the state's 120 legisla-
will be spent in the cani-
marijuana measures should
A worried Democratic As-
tion bill.
At least nine initiatives
affirmed that decision. On
tors.
pull in thousands of young,
that if their state legislature
the same day Gov. Ron-
When the proposal was
paign.
committed voters expected
sembly Speaker Bob Mor-
Other ballot measur
are almost certain to qualify
or courts won't act for them,
for next November's ballot.
ald Reagan held a press con-
before the legislature, a
Also on the ballot is a
to help out George Mc-
etti, watching as the legisla-
clude a controversial
they will do it themselves-
Those in statute form re-
ference to say he hopes the
broad coalition of lobbyists
drug measure that is almost
Govern. if he is the Demo-
ture wiped out consumer,
posal to limit pro
by the initiative ballot proc-
quire 325,504 signatures of
measure will stay on the bal-
from local government, busi-
identical to recommends
cratic Partv's nominee.
environment and human
taxes, sponsored by Lo
ess.
registered voters, while con-
lot, and that people will
ness and labor helped kill
Another initiative, which
rights legislation, forecast
geles Co
tions of the President's
They are setting out-on a
stitutional amendments re-
turn out overwhelmingly to
it in a state senate commit-
qualified months ago with
that the people would be-
Philip Watson
Tax
vote for it, although consti-
tee. So backers collected
Commission on Marijuana
wide spectrum from con-
quire 520,086. Both figures
525,000 signatures, would
come furious enough to take
too, has been a major
servative to liberal-to re-
are based on a percentage of
tutional lawyers say the
460,000. signatures in five
It will 'decriminalize in
severely curtail the type of
their grievances to the poll-
lative issue
institute the death penalty,
the vote in the last guberna-
vote may be no more useful
weeks to put the issue on
the words of its backers, the
unionizing tactics used by
ing booth.
Other measures wou
protect the California coast-
torial election.
than a straw poll.
the Nov. 6 ballot.
use of marijuana. Unlike the
Cesar Chavez and his
"It's a sad commentary
down on obscenity, rais
line, legalize the personal
Perhaps the most explo-
The other measure that
Now, it appears that the
commission recommends
United Farm Workers
when the people have to do
aries for state highwa
use of marijuana, take away
sive ballot issue is the
probably will attract signiff-
same opposition that cata-
tions, it will also allow resi
Union. It would ban the sec-
what the legislature cannot
trolmen, and restrict
their lawmakers' ability to
death penalty, which was
cant attention is a stiff
lyzed to kill Proposition 9,
dents to grow marijuana for
ondary boycott, Chavez'
do because of the dispropor-
governor's yeto power
set their own salaries, and
outlawed last February by.
coastline preservation plan.
the "Environment Initiative"
home use, although penal-
most important tool. That
tionate power held by spe-
state employees' sal
act on tax reform. All of
the State Supreme Court as
The initiative is now backed
in the legislature and later
ties for selling will remain
measure has been before the
cial interests, in Sacra-
among other things.
Committee
for the Re-election
of the President
1701 PENNSYLVANIA AVENUE, N.W., WASHINGTON, D.C. 20006 (202) 333-0920
1
September 29, 1972
MEMORANDUM FOR:
GORDON STRACHAN
FROM:
FRED MALEK 7M
SUBJECT:
California Propositions
As you requested, I am enclosing the following related to the California
Propositions:
1. A brief review of the political impact of the 22 propositions
prepared by Marvin Collins.
2. A booklet prepared by the Assembly Republican Consultants
giving a thorough analysis of the propositions.
3. A booklet from the Secretary of State's office,
I hope this will provide the information that you need. Please let me
know if anything further is needed.
Enclosures
9/26/72
POLITICAL EVALUATION OF 1972 BALLOT
PROPOSITIONS IN CALIFORNIA GENERAL ELECTION
PROPOSITION
#1
No organized opposition, but California voters have in recent
years made a habit of voting against bond issues.
Support by Community College Association and teachers' unions.
Chances of passage: 50-50.
#2
Third time this bond issue has been presented to voters. Has
failed in the past because of student unrest on California
campuses.
Strongly supported by doctors.
This time the proposition has a better chance of passage.
Governor Reagan supports.
#3
Considered to be a "special interest" propostion, but not much
controversy over it. Highly technical.
No way of knowing how the voters will act on it.
#4
Has bi-partisan legislative support, but many newspapers are
opposing it.
Chances of passage are not good because people are suspicious
of legislature staying in session continuously.
#5
Non-controversial. No known opposition. Expected to pass.
#6
Non-controversial. Merely cleans up technical language in the
present constitution. Expected to pass.
#7
Wide support. Will almost certainly pass.
#8
Companion proposition to #3.
Controversial because it sounds like a tax-giveaway to certain
industries.
Opposition beginning to build.
Chances less than 50-50 of passage.
#9
Called the "earthquake" bonds so as to provide safe schools
that are structurally sound.
Probably will pass.
#10
No controversy. Will pass.
#11
Somewhat pointless in its stated purpose. No organized
opposition, and should pass.
#12 No controversy. Will pass.
Page 2
#13
Labor sponsored. No opposition. Should pass.
NOTE:
#1 - #13 (reviewed above) are all relatively non-controversial
and will not cause any additional voter turnout that could be
measured. The more controversial propositions are included
between #14 - 22.
#14
Highly technical and controversial tax revision proposal
that would severely limit property taxes and would at the
same time raise the sales tax, the "sin" taxes and cause
inner-shifting of other taxes.
Opposed by almost all legislators in both parties, by the
school districts, teachers, labor and most liberal groups.
Supported by farmers, some businesses, and some taxpayer
associations.
A lot of advertising being run in opposition to Proposition 14.
Odds are against passage.
#15
Would remove governor's power to veto salary increases to
state employees.
Opposed by most newspapers, Governor Reagan and AFL-CIO.
Almost certainly will not pass.
#16
Would determine and adjust salaries for Highway Patrol and
take power away from governor to control same through veto
power.
Odds against passage better than 50-50.
#17
Would supplant State Supreme Courts' decision against the
death penalty by reinstating it in the Constitution.
Highly controversial and yet expected to carry by 2-1 margin.
Strong support by Governor, the attorney general, blue collar
workers, law enforcement agencies. Opposed by ACLU and certain
liberal groups.
Will help turnout large vote of conservatives and law-and-order
advocates.
#18
Many feel it is unconstitutional. Most newspapers opposed to
it being restrictive of freedom of speech.
Not expected to pass --- feel it goes too far in trying to
control pornography. Not much controversy being aroused by it,
however.
#19 Marijuana "legalization" in that it would remove all criminal
penalties.
Will bring out large youth vote favorable to it, but expected
to fail by about 2-1 margin.
#20
Controversial. Big issue to conservationists, who strongly
favor it.
For: Most major newspapers, about 1/2 the legislature, Sierra
Clubs, and LWV.
Page 3
#20
(Continued)
Against: Organized labor, State Chamber of Commerce and
county supervisor associations.
Because it is being sold as a "save the coast" proposition,
it will probably pass, but a lot of money will be spent to
defeat it.
#21 An anti-busing proposition. Busing not that big an issue in
California, however, so this one hasn't heated up.
Too close to call --- will depend on mood of voters at that
time. Blacks will be urged to turn out and vote against it,
therefore could increase Black voter turnout.
#22 Most controversial of all.
Would restrict Chavez' union by outlawing secondary boycotts
and would require secret ballot elections on unionization of
farm workers.
Very close, but not expected to pass as of now.
Most liberals and especially organized labor is strongly
against.
Governor Reagan and the farmers are the strongest advocates.
May be thrown off the ballot on, the basis of fraudulent
collection of signatures gathered to get the proposition on
the ballot.
This will affect turnout - in that Mexican-Americans will be
urged to turn out and vote against it.
H
ADMINISTRATIVELY CONFIDENTIAL
n
September 7, 1972
9/12
9/29
MEMORANDUM FOR:
FRED MALEK
FROM:
GORDON STRACHAN
SUBJECT:
California Propositions
Pursuant to our telephone conversation this morning,
it would be an excellent idea for your political coordi-
nator for California to review with the top California
political operatives the effect of the various proposi-
tions. In addition to the widely publicized marijuana
proposition, there is also one on the death penalty, I
believe. Propositions on a California election ballot
have historically been huge issues in the campaign. The
analysis should probably cover not just the affect of
the proposition on voter turnout, etc., but also an
assessment of the proposition's chances.
Would you advise me when this project might be complete.
GS/jb
FU - 5 days
9/15 - on way
9/12
9/28 - beeing done
G.Strechant
Committee for the Re-election of the President
MEMORANDUM
October 24, 1972
MEMORANDUM TO THE HONORABLE CLARK MacGREGOR
THROUGH:
JEB S. MAGRUDER
The Westinghouse Broadcasting bureau staff in Washington
would like to make arrangements to have a background break-
fast with you on either Monday or Tuesday of next week from
8:00 - 9:30 a.m. Westinghouse, as you know, serves most
large metropolitan areas through both their radio and television
outlets. I would place this in a low priority catagory and
leave the ultimate decision to you. :
Approve
Disapprove
Comments:
DEVAN L. SHUMWAY
October 24, 1972/6:55p.m.
SCHEDULE:
CLARK MacGREGOR
TUESDAY, OCTOBER 24, 1972
Nothing scheduled for this evening.
WEDNESDAY, OCTOBER 25, 1972
6:45 a.m. - TODAY Show, NBC Studios, 4001 Nebraska Avenue, N.W.
8:15 a.m. - Roosevelt Room
9:15 a.m. - Staff Meeting
12:00 Noon - Get Out the Vote Press Conference w/Senator Dole,
3rd Floor Conference Room, 1701
12:30 'p.m. - Lunch w/Eleanor MacGregor
6:30 p.m. - Fund raising party for Bill Weeks, 3933 Fordham Road
Mr. Strachan
Committee for the Re-election of the President
MEMORANDUM
October 12, 1972
MEMORANDUM FOR THE HONORABLE CLARK MacGREGOR
THROUGH: Jeb Magrude
FROM:
A1 Abrahams
SUBJECT: Welfare, Taxes and the Economy
Inasmuch as welfare, taxes, and the economy will continue to be
a theme in the coming weeks, here is a suggested draft letter
from you to our people in the field, with suggested enclosures,
including speech inserts.
Approve
Disapprove
See Me
Attachments:
1. Draft Letter
2. Economic and Welfare Speech
3. Speech Insert - McGovern Tax Increases
4. Speech Insert - McGovern-Shriver Smear Campaign
5. Memo - The Economy, Spending, Taxes and Welfare
(with attachments)
Committee
for the Re-election
of the President
1701 PENNSYLVANIA AVENUE, N.W., WASHINGTON, D.C. 20006 (202) 333-0920
October 12, 1972
Dear Fellow Nixon Supporter:
You received last week from me materials dealing with the welfare
and economic programs of Senator George McGovern. Included in
that package was a suggested draft speech for use by our speakers.
We would like you to continue emphasizing the economic, spending,
tax and welfare policies of Senator McGovern in the coming week,
and add to the material available to our speakers, a speech insert
which is critical of the McGovern policy of desperation--his smear
campaign in a losing cause.
In addition to the speech inserts, I am attaching other materials
dealing with both the positive aspects of the President's effort,
such as the achievements of the New Economic Policy, and an analysis
of George McGovern's own positions.
Some of this may be duplicative in that the material may have been
previously sent you. Inasmuch as we intend to stress these issues
in the weeks ahead, I thought you might be interested in the entire
package bound together for you, in the thought that it might con-
tribute to your own thinking and that of your associates.
We are about to enter the home stretch. It is important that we con-
tinue to stress the positive, but always remembering that the policies
of our opponent are not popular with Americans and that this lack of
popularity needs to be re-emphasized.
Sincerely,
Clark MacGregor
Campaign Director
Enclosures:
1. Economic and Welfare Speech
2. Speech Insert - McGovern Tax Increases
3. Speech Insert - McGovern-Shriver Smear Campaign
4. Memo - The Economy, Spending, Taxes and Welfare
(with attachments)
ECONOMIC AND WELFARE SPEECH FOR SURROGATES' USE
In recent 'months we have witnessed the extraordinary take-over
of a major political party by a small band of intellectual elitists who
want to force their ideas on the Democratic Party.
This fact alone makes a close examination of the issues in this
election campaign one of sharp contrasts and startling surprises.
Nowhere is the contrast clearer than on the issues of economic
and welfare policies. The divergence of views between the candidates
is stark and revealing.
On the one hand, we have the President's proven record. It is a
record of responsible accomplishment, based on moderate, free
enterprise principles.
On the other hand, we have George McGovern's hastily drafted - -
and constantly changing -- programs to over heat the economy and
push up inflation while taxing individuals at an ever increasing rate.
"McGovernomics" would put an increasing number of Americans on
welfare while weakening our national defense and reducing our capacity
to achieve peace. Payrolls would give way to welfare rolls, and the
working taxpayer would have to foot the bill.
This is not an over-simplification of the opposition's program.
-2-
The tiny cadre of elitist economists that has temporarily taken
over the Democratic Party with Senator McGovern has an important
message to deliver to the Nation and its working people. But they are
calling us collect. They want us to pay for their social experiments
and welfare giveaways. And believe me, the American people don't
want to pay any more of the "collect" charges -- charges that are
extracted through inflation, massive welfare programs, and ques-
tionable economic policies.
The people know the record of accomplishment of this President.
They realize that attacks on his record are expedient fabrications
that grow ever wilder as the challenger grows more desperate.
And there is nothing more desperate, more unprincipled, than a
demagogue on the losing end of a campaign.
A demagogue, you know, is a politician who rocks the boat and
then alarms you about the dangerous storm at sea.
Well, there is some pretty peculiar boat rocking going on these
days, and I think the American people aren't going to be fooled by it.
For example, we have Senator McGovern and his economists
calling for the dismantling of the President's very successful Phase II
economic program of wage-price controls. He calls it "unworkable"
and "unsound. 11
The opposition candidates would scrap the controls in favor of
voluntary guidelines and the type of "jawboning" that between 1965
and 1968 resulted in a disastrous growth in the rate of inflation.
-3-
Still, he hasn't said what his guidelines would be. Nor has he
convinced the American people that the Phase II program has been
either unworkable or unsound. Because it is working, and it is sound.
Polls show overwhelming support for the President's economic
initiatives of last August 15. The people know that this is the way to
the problem -- through responsible statesmanship.
While the boat rockers are shouting the alarm over the non-existent
storm, let's look at the facts:
-- The rate of increase in the cost of living, which had been
cut by one-third before the freeze, has now been cut in half.
-- There are 2. 5 million more civilian jobs now than there
were a year ago.
The unemployment rate has declined from about 6 percent
to 5-1/2 percent.
-- Our economy is growing at a rate of about 9 percent a year,
the highest since 1965.
-- Industrial production is reaching record levels, and, for
August, was 8.2 percent above that of a year ago.
-- Workers' real weekly spendable earnings have risen 4 percent
in the last year, three times the average rate from 1960 to 1968.
-- And, we have led the world on the path toward international
financial and trade reform which will substantially improve
our international competitive position as well as helping other
countries strengthen their economies.
-4-
These are the facts. They refute the wild claims of the demagogues.
Their only alternative would be a policy which is the same as the
one that caused inflation in the first place.
And the American people won't buy that.
Take the issue of Federal spending.
Senator McGovern seems to suffer from the illusion that the
Government can provide for massive new programs costing billions
and billions of dollars without causing more inflation or increasing taxes.
Leaving aside the McGovern income redistribution plan - - the bogus
$1,000 a person grant and its successors the Senator has proposed
programs which would increase the Federal budget by more than
$150 billion a year. This is in addition to the $250 billion current
fiscal year budget.
How does the Senator propose to pay for these new programs ?
Simple, he says. Cut the defense budget by $32 billion, and raise
taxes on the corporations and the wealthy.
Well, it's not that simple.
I don't think I have to go into much detail to suggest that defense
cuts of the kind McGovern proposes would open this Nation to a security
gap that no responsible electorate could tolerate. The Democratic-
controlled Congress has already decisively demonstrated its abhorrence
of such a move by rejecting a McGovern-proposed $4 billion Defense
appropriation cut-back.
-5-
As for increased taxes on corporations and the rich, the McGovern
proposal is a delusion.
The largest part of his revenue, he says would be a $17 billion
increased tax on corporations.
But the way he proposes to raise this amount is to revoke action
taken by the Kennedy and Nixon Administrations which stimulated
business investment.
This type of investment is a proven method of speeding up the
growth of productivity, which, in the long run, is the surest route to
higher real incomes for the average American. It means more jobs
and more wages for working Americans:
Whatever increased revenues which would come from this proposal,
will be paid for by the consumer in higher prices, and by the worker
in fewer jobs and lower real wages. That is not progress; that is
disaster.
In any case, it would not yield the $17 billion Senator McGovern
claims - - and in the long run, it would produce more unemployment
and higher welfare rolls.
And speaking of welfare rolls, the McGovern economists have
a strange compulsion -- they want to put everyone on welfare, all of us.
The Senator's income redistribution program, which began as a
$1000-a-head joke, would, according to the Senator, cost an additional
-6-
$27 billion a year. That would be on top of the $150 billion in additional
costs for his other proposals.
Later, when prominent economists, including Ways and Means
Committee Chairman Wilbur Mills, said the welfare plan would cost
between $43 to $76 billion, the Senator backed off.
But he did not back away from the idea behind the plan. He still
wants to replace our American work ethic with an alien welfare ethic.
That is, he still wants to greatly increase taxes on working people to
lavish tax dollars on those who don't work.
He says he will just take it from the rich. But, even with the
most extreme, confiscatory taxation of the wealthy, the revenue
would not be anywhere near enough.
The truth is it would have to come from greatly increasing taxes
on middle and lower income working people, removing the incentive
among the great majority of American workers to work harder, to
compete, to save, and to get ahead.
In fact, if the McGovern spending and tax programs were enacted
as a whole, achievement and success would be penalized. Private
enterprise would be stifled.
And those millions of American workers, both white and black,
who have developed a sense of pride in the achievements of their hard
work, who support their families and are saving for new homes and a
-7-
better future will be the first called on to pay the price of a McGovern
in the White House.
The McGovern economics are not the new economics, they are
the old, worn-out, warmed-over failures of the past, jazzed up to
look new and appealing. And the welfare schemes he bandies about
are discredited, unworkable failures dug up from the New Deal of
the thirties and from alien welfare States.
There is no such thing as something for nothing. In the real world,
everything has its price. And the American people are too smart to
be taken by by this charade.
Senator McGovern pays elaborate lip-service to tax reform, but
the only real "reform" he proposes is increased taxes.
In sharp contrast, it is President Nixon who, by keeping control
of expenditures, has made real tax reform possible, who has lightened
the tax burden of millions of average Americans.
Do you realize that in 1973 individuals will be paying $22 billion
less in income taxes than they would be paying under the tax rates in
effect when President Nixon took Office ?
For example, a married couple with two children and an income
of $5,000 from wages pays 66 percent less Federal income tax in 1972
than it did in 1969. For a wage income of $15,000, the reduction has
been 20 percent.
-8-
Earlier this year, Senator McGovern admitted to an interviewer
that "it is true that I find the monetary and economic issues difficult. 11
Well, this may explain the foolish inconsistency of the McGovernomics.
But it doesn't excuse it. Not in a candidate for the highest office in the
land.
Now I ask you: do we want to support the proven leadership of the
President in this crucial area, or do we want to take our chances with
the misguided, outdated, confused and contradictory economic schemes
conjured up by George McGovern and his economic elitists ?
The choice is clear.
I am convinced that the American people will overwhelmingly
reject the irresponsibility of George McGovern and give the responsible,
workable policy of President Nixon a resounding vote of confidence.
##
SPEECH INSERT -- McGovern Tax Increases
George McGovern would not like me to tell you this, of course, but I will anyway:
every citizen who enters the voting booth on November 7 and votes for George McGovern
will be voting for higher federal taxes.
The question is not, Will Sen. McGovern mean higher taxes? The question is only,
How much higher will those taxes be?
I offer you two estimates. The first is Senator Hubert Humphrey's estimate of what
George McGovern's $1,000 per person welfare proposal alone would cost a single
secretary making $8,500 per year. Sen. Humphrey's estimate is more than $500 in
federal income taxes.
Second, I offer an estimate by an economic study group.
Their calculations
conclude that if George McGovern were successful in putting into law every spending
proposal he has made in this campaign, the taxes on a family of four earning $12,500
per year would be increased by $1,038 a year. That would neatly double what that
family pays in federal taxes today.
I am not sure which estimate to recommend to you since I am not sure which of his
spending proposals Sen. McGovern has back-tracked on in the last 24 hours. A lot
depends on what states he has been in and what audience he has spoken to. Neither am
I sure what new spending promises the Senator may have offered since I checked last.
But let US be moderate and accept Sen. Humphrey's estimate of more than $500.
That, at the minimum, is what George McGovern would mean to the working people of
this country.
The reason for these estimates of huge tax increases is quite clear. If we add up all
the spending promises George McGovern has made and subtract from that figure the
TAXES
2-2-2-2
massive defense cuts which Senator McGovern proposes, we find that his budget is in
the red by $99 billion. Somewhere, somehow, George McGovern would have to find
$99 billion. Somewhere, somehow, George McGovern would have to find $99 billion
to pay off his promises if he became President.
He would like US to believe that he will get it from the rich. But no serious economist
I have ever read suggests that even if we confiscated every penny from people who make
more than $100,000 we would come close to paying off that $99 billion. So it is quite
clear where that money will come from. It will come from the only source available --
the paychecks of working men and women of this country.
Unless, of course, Sen. McGovern proposes to go ahead and run a $99 billion
deficit. Such a deficit as the people know full wel! - would send inflation soaring
out of sight. It would destroy the hard won gains produced by President Nixon's anti-
inflation policies. Through four years of tough, decisive leadership, President Nixon
has reduced the annual rate of inflation from 6.1 per cent to 2.4 per cent based on last
month's reports from the Department of Labor.
Inflation, of course, is not a direct tax -- it is an indirect tax. And just like a
direct tax, it would be paid by America's working families.
In his first four years, Richard Nixon has signed into legislation or otherwise created
actions which have reduced the taxes paid by consumers by $22 billion. Men and women
in the lowest income tax bracket have seen their federal taxed reduced by better than
80 per cent under President Nixon.
And four more years of Nixon leadership will continue and consolidate that progress.
But the frightening truth is that four years of a McGovern Administration would destroy
that progress and break the backs of every working family in America.
SPEECH INSERT -- McGovern Welfore Programs
Senator McGovern has taken so many positions on so many of the major issues in this
campaign that it is often very difficult to keep track of him long enough to discuss his
proposals. But since he first decided that he would like to be President of the United
States, Senator McGovern has become identified - and properly so - with massive
programs of welfare spending.
The most famous McGovern proposal, of course, is his suggestion that the way to
approach welfare in America is to put every man, woman and child in the country on
t he welfare rolls at $1,000 a head. Sen. McGovern has since tried to wriggle out of
that one, of course, first by camouflaging it in a speech in New York City as an
"employment" program; and second, through the extraordinary step of sending his
runningmate out to California to deny that George McGovern ever advocated putting
the entire country on welfare.
But the American people heard Sen. Humphrey attack the McGovern $1,000 per
person program during the Humphrey-McGovern debates preceding the California
primary. And, what's more, they heard Sen. McGovern defend his schemes. No amount
of camouflage will hide the fact that George McGovern wants to take this country down
the road to massive welfare spending
and no amount of dissembling by Sargent Shriver
will convince the American people that they didn't hear what they in fact did hear.
The choice, as the President has repeatedly said, is clear.' This November, the
American voter will be asked to choose between the McGovern policy of putting more
and more people on welfare and the Nixon program of putting more and more people to
work. We will be asked to support the Nixon policies which have created more than
WELFARE
2-2-2-2
two and one-half million new jobs in the past year alone or the McGovern programs
which could put as many as 12 million more Americans on the welfare rolls almost
overnight.
We will be asked to decide the direction we want our country to take: do we want
to create a steadily-increasing welfare class supported at the expense of a steadily-
decreasing work force?
or do we want to begin the process of shrinking welfare
rolls and increasing the number of productive citizens earning their own way in society?
For two years now, President Nixon has had before the Congress of the United States
a bill which would help break the welfare cycle which would reward welfare
recipients who found jobs and enable them to work their way off welfare. Sen. McGovern
and his Democratic colleagues in the Congress have persistently and stubbornly refused
to vote that bill up or down. Earlier this summer, I challenged Sen. McGovern to come
home to the United States Senate and help us bring the President's bill to a vote. At
that time, I suggested that he could test public support for his $1,000 per person scheme
by offering an amendment to that bill from the floor of the Senate.
So for, Sen. McGovern has not shown up. And frankly, I don't believe he ever will
show up with a piece of legislation which would accomplish what he has so often said
he wanted to accomplish - to multiply welfare recipients and welfare spending. I think
he will hide out somewhere hoping that the public will forget what his welfare proposals
are -- in the desperate hope that somehow he can capture the Presidency and suddenly
re-discover his sackful of $1,000 bills.
WELFARE
3-3-3-3
But the people will not forget -- and those of US who have the responsibility for
political leadership will not let the people forget. For the welfare ethic espoused by
Sen. McGovern would tear down our economy, destroy opportunity and divide America
permanently into a welfare class and a working class. And such a development would
be a calamity for US and for every generation to follow.
SPEECH INSERT -- McGovern-Shriver Smear Campaign
The McGovern-Shriven team -- to quote their fellow Democrat, Congressman Jerome
Waldie of California -- has lately "gotten into the gutter" with an increasing barrage of
smears, slurs and slanderous epithets. The so-called "New Politics" of the McGovernites --
the politics they claimed would be freshening and enlightening, the politics they said would
avoid inflammatory rhetoric and address the issues -- this "New Politics" as practiced by
McGovern and Shriver has turned out to be a vicious brand of personal vilification and
character assassination which would be the envy of the worst demagogues of our political
history.
Last May, Senator McGovern said -- and I quote -- "I have sought not to whip up
emotions, but to appeal to humanity and reason. = [Washington Post, May 17, 1972]
Consider, then, what the candidacy of this "decent" man, this "gentle" Professor
from the Plains, has contributed to the campaign since that time:
-- On at least two occasions McGovern has compared the President to Adolph
Hitler. [Associated Press, June 30, 1972; NBC "Evening News,' August 15, 1972]
-- Shriver prefers to call the President the "number one warmaker" and the'humber
one bomber of all time [Associated Press, August 25, 1972; Washington
Evening Star and Daily News, September 19, 1972]
-- In Baltimore, McGovern says the President is a liar on the prisoner of war
question [New York Times, October 1, 1972]
-- In El Paso Shriver refers to the President as a "psychiatric case 11 [Washington
Post, September 14, 1972]
-- McGovern calls the President a "fraud" and says his Administration is the "most
corrupt" in history. [New York Times, October 4, 1972]
-- And Shriver likens the President to a "reformed drunk. II [Washington Post,
September 8, 1972]
- 2
Or consider the "decent, "gentle" words of key advisers to the McGovern . - Shriver
ticket:
-- McGovern's political director, Frank Mankiewicz, calls the President a "shifty
politician.' [Newhouse News Service in the Long Island Press, July 25, 1972]
-- His chief pollster, Pat Cadell, calls him "an evil man. [Long Island Press as above]
-- And Fred Dutton, one of his top aides, simply says that the President of the United
States is "a son of a bitch." [Long Island Press as above]
These are the McGovernites' "appeal to humanity and reason " This is the way they
avoid "whipping up emotions." But mere attacks on the President and on his Administration --
vicious as they may be --- aren't enough for George McGovern. Most recently he has
expanded the scope of his attack to include the Republican Party, which he compares to
the Ku Klux Klan. [Washington Post, October 7, 1972]
But don't think that you've escaped McGovern's vitriolic smears if you happen to be
a Democrat or Independent. If, for example, you are a working man and you support
the President's re-election, George McGovern has said that you ought to have your head
examined. [Associated Press, September 6, 1972] And, if you are a young person and you
support the President's re-election, he says you are "too confused to know which end is
up." [Associated Press, September 10, 1972]
That's what Senator McGovern says of the 61% of Americans under the age of 30
who George Gallup tells US support the President. And that's what he says of the 64% of
American working men and women who Mr. Gallup tells US also support the President.
[Associated Press, September 10, 1972]
-3-
And if you are a Democrat, but neither a young person nor a working man or
woman, and you support the President, well, McGovern still has a word for you -- he
compares you to a deserter -- to a soldier who, quote, "runs away from his country."
[Associated Press, August 24, 1972]
Of course, even if you don't support the President -- even if you just happen to
oppose McGovern because you are offended by his shabby purge of Senator Eagleton
from his ticket - then George McGovern will tell you -- and I quote the very words
he used in mid-October in Kansas City -- he will tell you that you are "betraying the
national interest. [Associated Press, October 7, 1972]
How many people are left in this country whom McGovern has not compared to
Hitler or a Klansman; whose mental capacities he has not questioned; whom he has not
suggested must be traitors or deserters because they don't support him? How many
people are left who have not been slandered and smeared by McGovern's vituperativeness?
Well, there are probably more now than there will be by election day. Because
just as George McGovern's desperation -- his anger and frustration over the fact that
the American people reject him,his philosophy and his policies -- just as this desperation
grows, the broader and more vicious his attacks become. If George McGovern ever had
an honest claim as a "gentle," and "decent" candidate, as the candidate of "humanity
and reason," he has forfeited that claim. And along with it he has forfeited all claims
on the American electorate as a serious, responsible candidate for this Nation's highest
office.
Committee for the Re-election of the President
MEMORANDUM
MEMORANDUM FOR: STATE CHAIRMEN
STATE PUBLICITY DIRECTORS
ETC.
FROM:
CLARK MacGREGOR, CAMPAIGN DIRECTOR
SUBJECT:
THE ECONOMY, SPENDING, TAXES, AND WELFARE
The materials attached focus on the issues of government spending,
welfare, tax reform, wage-price controls, and revenue sharing.
Included among them is a sample stump speech on these issues for
your use.
It is hoped that Surrogates and other spokesmen for the President
will avail themselves of the opportunity to speak to these issues
during the week beginning Sunday, October 8, 1972.
They key points follow:
GENERAL ECONOMY
-- When President Nixon took office the U.S. had the
highest rate of inflation. of any major industrial nation
in the world -- today it has the lowest. The U.S. rate
has been cut in half.
-- The U.S. presently has the highest economic growth rate
of any nation in the world including Japan thanks to
President Nixon's New Economic Policy.
-- Under President Nixon, for the first time in 6 years,
workers' real earnings have risen sharly by more than 4%.
-- The American economy is strong and growing stronger.
At the present rate of growth, this year's increase in the
American economy will be equal to the entire GNP of the
Soviet Union.
-- More Americans are working today, earning more money
and saving more than ever before in history.
-- The job market is increasing at the fastest rate in 20
years -- 2.5 million new jobs in the past twelve months.
-2-
WAGE-PRICE CONTROLS
-- The overwhelming majority of Americans (75% according
to Gallup) favor either continuing present controls or
making them stricter. Senator McGovern has promised to
eliminate them within 90 days of his election.
-- The President's policies have cut the inflation rate
in half --- 6.1% in 1969 VS. 2.9% in 1972.
-- Wage-price controls have benefitted the American worker
by increasing his real spendable earning power 4% during
the past year alone. By contrast, from 1966-1970, real
earnings did not increase at all despite record wage in-
creases. Those increases were eaten up by inflation.
-- The President has ordered the Cost of Living Council to
take whatever steps are necessary to stop the rise in food
prices. Although food prices have been rising, they have
gone up much more slowly since wage-price controls were
implemented (5.0% V. 3.8% before and after the freeze)
Moreover, Americans pay a smaller portion of their earnings
for food than any other nation in the world. McGovern's
farm parity proposals (90%) and his ending of controls
would send food prices soaring.
GOVERNMENT SPENDING
-- Senator McGovern's budget proposals and welfare scheme
would increase federal expenditures by $100 billion dollars.
This would double the present tax bill of the average
American. A family of four earning $12,500 pér year would
pay an additional $1,038 in taxes if the Senator's pro-
posals are implemented.
-- Senator McGovern's $30 billion slash in the defense
budget would not only emasculate the Armed Forces of the
United States but would also result in the loss of 1.8
million jobs, including the loss of 850,000 industrial
jobs nation-wide.
-- The President is determined to hold the line on govern-
ment spending and to avoid new taxes. He has asked the
Congress to set an upper limit of $250 billion on federal
spending to achieve that goal.
-3-
WELFARE REFORM AND TAXES
-- On January 19, 1972, Senator McGovern promised that
if elected he'd give every man, woman and child in
America $1,000 per year with no strings attached. In
a major economic speech to the New York Society of
Securities Analysts last month, Senator McGovern made
no mention of his welfare proposal.
-- Senator McGovern's tax reform proposals, as in-
dicated above, would hit the average American family
hardest and not the very rich. Moreover, his announced
intention to increases taxes on American corporations
would put hundreds of thousands of people out of work
by making American products too expensive to compete
in world markets.
-- Senator McGovern's call for the repeal of the invest-
ment tax credit, depreciation rules, and other corporate
tax "loopholes" is political hypocrisy. He himself voted
for all of these only last year by casting a yes vote for
the Senate bill which resulted in enactment of the Revenue
Act of 1971.
-- Putting it in its simplest terms, the McGovern budget
coupled with his announced promise to eliminate wage-price
controls within 90 days, would mean higher taxes, higher
inflation, higher government spending and reduced earning
power for all Americans.
TABLE OF CONTENTS
I
Achievements of the New Economic Policy
A SENATOR MCGOVERN ON THE ECONOMY
1. Senator McGovern - Does He Understand Economics
2. Economists View McGovern as Bad for the Economy
3. Shriver Admits Democratic Guilt on Inflation
4. McGovernomics
5. Report on McGovernomics - Evans and Novak
6. The New McGovernomics Still Doesn't Add Up
B
THE MCGOVERN BUDGET
1. Senator McGovern's Economic Policies - A Surefire
Prescription for Unemployment
2. McGovern's Budget Proposals
3. Issues and Answers
C
WAGE-PRICE CONTROLS
1. Wage and Price Controls
2. McGovernomics - (Or Can You Top This ?)
D
WELFARE & TAX REFORM
1. Senator McGovern's Welfare Calamity
2. Senator McGovern Flip-Flops on Tax Reform
E KEY POINTS ON THE ADMINISTRATION'S ECONOMIC
POLICIES
1. Key Facts on Tax Reform
2. Issues and Answers
3. Key Facts on Property Tax Relief
4. Excerpts from the Remarks of Herbert Stein -
American Political Science Association Convention
ACHIEVEMENTS OF THE NEW ECONOMIC POLICY
PRICES
Over the past 12 months:
-- CPI rose 2. 9% as compared with 3. 8% before the freeze;
6% during 1969-1970.
-- Food prices increased 3. 8%/ it increased 5. 0% in the 8
months before the freeze.
-- Commodities other than food increased at a rate of 2. 0%/
it was 2:9% during the 8 months before the freeze.
-- Services increased at a rate of 3. 4% / it was 4. 6% before
the freeze.
-- WPI increased 4. 4% / 5.2% before the freeze.
REAL EARNINGS
-- real spendable earnings increased 4. 2% during Phase II.
-- There was no increase at all between 1965-1970.
GROSS NATIONAL PRODUCT
-- grew 9. 4% -- the highest rate since the 4th quarter, 1965.
EMPLOYMENT
-- In August total civilian employment was 2. 5 M higher than
a year ago; this is the highest rate of adding jobs since 1955!
UNEMPLOYMENT
-- has averaged 5. 5% - down 5. 9% from the preceding 3-mo.
period.
RETAIL SALES
-- in August were 9. 7% above the level of a year earlier.
CONSUMER PRICE INDEX
-- Rose at an annual rate of only 2. 9%, continuing the declining
trend since 1969. INFLATION HAS BEEN CUT IN HALF!
SENATOR MCGOVERN -
DOES HE UNDERSTAND ECONOMICS?
General
"I've spent more time trying to broaden my understanding of
economics than any other field But it is true that I
find the monetary and economic issues difficult."
AP
June 30, 1972
11
the American people want economic policies that work
more than once every four years. 11
AP
June 30, 1972
President Nixon's Handling of the Economy
"I haven't really looked into it carefully enough to
answer that. It's a complicated subject. I think the pressure
on the dollar has come largely from our overextension in
Vietnam and in other overseas concerns, and we've got to
cut back in that area. We've got to cut back on military
outlays. In my opinion that'll do more to strengthen the
dollar and reduce the inflationary fires than anything else
we can do. I think the trouble the dollar is in stems from
misplaced priorities both in foreign policy and here at home."
Chicago Tribune
July 23, 1972
ECONOMISTS VIEW MCGOVERN AN BAD NEWS FOR THE ECONOMY
350 economists from business, the financial and academic communities, and government, indicated
quite clearly what they think of Senator McGovern's economic policies in a survey conducted by the
National Association of Business Economists. The results of the survey were reported on Septem-
box 6, 1972, at the annual convention of NABE. They show that the economists feel President Nixon's
economic performance would far exceed Senator McGovern's, as would the Republican Party's over
the Democrats.
UNDER WHICH ADMINISTRATION ARE WE LIKELY TO SEE THE FOLLOWING DEVELOPMENTS?
In 1973
*
In 1976
Nixon
McGoyern
Republicans
Democrats
(Pavorable to the President/Re-
publicans)
Higher Roal GNP
48%
11%
49%
26%
Migher Consumer Price Index
5
56
6
73
higher Interest Rates
21
40
20
46
Figher Housing Starts
24
20
22
27
Higher Effective Tax Rate
-12
56
12
68
Higher Fed. Gov't. Spending
8
70
3
85
Higher Stock Prices
76
9
51
20
(Favorable to McGovern/Dem-
ocrats)
Ugher Unemployment Rate
41
20
49
20
*
Figures are rounded off.
SHRIVER ADMITS DEMOCRATIC GUILT ON INFLATION
"We've got inflation that is out of control. Now, let's
admit it, I do certainly, that the inflation began under
the Democrats. It began under President Johnson in
1966. I argued at that time for taxes to pay for the war
in Vietnam but the decision was made against that. And
instead, we started financing the war in Vietnam on cred-
it. And that was the beginning of inflation. 11
Sargent Shriver
Speech, Scranton, Pa.
September 15, 1970
MCGOVERNOMICS
INTRODUCTION
"I've spent more time trying to broaden my understanding
of economics than any other field. I really feel that I know
the foreign-policy and national defense issues, tax re-
form questions, quite well. But it is true that I find the
monetary and economic issues difficult."
George McGovern
AP
June 30, 1972
As a result of George McGovern's economic ignorance, his economic
program is a set of obscure and radically simplistic proposals,
full of contradictions and inaccuracies. This program has been
continuously modified and sometimes reversed as critical analysis
of "McGovernomics," in the light of economic realities, has increas-
ingly forced McGovern to retreat toward the responsible and effective
economic accomplishments of the Nixon Administration.
Senator Hubert Humphrey has called McGovern's economic
conversion program "d lot of bunk," (New York Times, May 23, 1972)-
an impression echoed by countless Democrats and non-partisan economists.
Under McGovern's economic program, the already strained level of
Federal expenditures would be increased enormously. Additionally,
McGovern consciously advocates unfathomable budget deficits that
have been estimated at over $100 billion annually, yet does not
pretend to suggest an adequate source of increased revenues that
would be required to finance his programs. Instead, McGovern naively
asserts:
"No American whose income comes from wages and salaries
would pay one penny more in federal taxes than he does
now."
Speech
New York Society of Security
Analysts
New York, New York
August 29, 1972
42
How, then, does McGovern propose to raise the necessary revenue
to finance his lavish schemes? To date, this remains the best kept
of secrets, if indeed a solution is possible at all. Sadly, one
is presented only with sloppy figures, obscure programs, unrealizable
promises, and catchy campaign "soak the rich" rhetoric without
responsible substantiation of the means of securing the needed
funds or the consequences for the American consumer, worker, bus-
inessman and investor.
PRESIDENT NIXON'S ECONOMIC INHERITANCE
When President Nixon took office early in 1969, he inherited the
consequences of years of Democratic mismanagement, including:
-an artificial prosperity dependent upon large outlays
for the Vietnam war;
-rising wages completely eroded by raging inflation;
-irresponsible full employment budget deficits exceeding
$25 billion in 1968, thereby guaranteeing strong inflation-
ary pressure for the coming years, forcing President
Nixon to face the overwhelming task of restoring fiscal
responsibility and to minimize the disastrous consequences
of Democrat "spend now-pay later," "guns and butter policies.
FISCAL AND BUDGETARY POLICY
"I firmly believe
that our Nation cannot continue to live
beyond its means, year after year, and not expect to
face painful consequences. No country in the world can
continually add to its national debt without undercutting
its economic stability and inviting inflation.
"It seems to me that we, as Members of Congress, have a
solemn constitutional duty to protect the solvency of our
nation The time has come for us to start exercising more
fiscal responsibility.
George McGovern
Congressional Record
March 20, 1967
"if my budget were adopted, inflation would end immed-
iately, unemployment would be decreased, and the federal
budget would be balanced.'
George McGovern
Press Release
January 24, 1972
Although McGovern claims to support balanced budgets and criticizes
the Nixon Administration's fiscal policy, a close examination
of the Senator's own proposals reveals conscious advocation of
enormous, highly inflationary budget deficits in drastic contrast
to the Nixon Administration's record of fiscal responsibility.
Prior to McGovern's August 29 speech modifying or dropping many
of his earlier proposals, McGovern had advocated Federal expendi-
ture increases totaling more than $130 billion during the course
of his two year campaign. His major proposals included:
-$7.2 billion for child development;
-$19 billion for equalization and one-third Federal financing
of public education;
-$9 billion for public service employment;
-$59 billion for national health insurance;
-$4 billion for urban redevelopment;
-$4 billion for pollution control;
-nearly $6 billion for rural development and agriculture.
McGovern's proposed expenditure reductions of $37 billion (largely
for defense cutbacks) would still leave a net expenditure increase
of more than $93 billion.
A report from the Republican House Conference entitled "The
McGovern Budget" (released August 16, 1972) revealed the absurdity
of McGovern's proposals. The report indicated that:
-the underfinancing of McGovern's old $1,000 per person welfare
proposal combined with the adjustments he would make in per-
sonal income taxes would yield $70.5 billion less revenue
than the current individual income tax; even when the addi-
tional revenue, estimated at $23 billion, derived from
McGovern's personal, business, gift and estate tax reforms
and from his proposed doubling of payroll taxes are applied,
McGovern is still lacking $15 billion in needed federal revenues;
.
44
-McGovern's total tax and spending program would result
in a $126 billion deficit in FY 1974 if fully. implemented.
McGovern claims he could balance the budget, yet as the House
Republican Conference notes, to balance his budget McGovern would
place an especially severe burden on single individuals and
small families:
-families with an annual income of $12,000 or more would
have their taxes increased by from 46 percent to 100 percent;
-a husband and wife whose combined earnings totaled
$18,000 would experience a 73 percent tax increase;
-a single person earning $8,000 would have a 155 percent
tax increase.
On August 29, 1972, Senator McGovern announced his latest weltare
reform proposal, essentially the third since he began campaigning.
Although his "National Income Insurance" proposal involves much
greater federal expenditures than does the President's, the
format of McGovern's plan is based on H.R. 1.,
WELFARE PROPOSAL NUMBER THREE
The major features of McGovern's latest welfare proposal are:
-a guaranteed annual income of $4,000 per year to a
family of four that would involve spending 40 percent more
per person on welfare than the President's "workfare" and
would leave unguarded the potential for gross inflation;
-an implementation cost of approximately $14 billion (though
exact estimates are still unavailable) in comparison to an
implementation cost of $5.6 billion for H.R. 1 (the
President's program). The yearly cost of operating McGovern's
program has yet to be determined;
-the retention of the food stamp program--one of the fed-
eral government's largest welfare complicators. In contrast,
H.R. 1 would incorporate jurisdiction of the food stamp
program under the Department of HEW.
Most striking about McGovern's program, however, is not what it
proposes, so much as what it fails to delineate. As an analysis
by the Associated Press (September 1, 1972) indicates, in many
instances the specifics of McGovern's program are "still to be
determined" or "have not been worked out. This presents a strong
contrast to the President's proposal, already passed by the House,
employing specific eligibility requirements with strictly regulated,
but fair, work requirements and a comprehensive "Opportunities for
Families" program that would provide manpower training, child care,
and other services to registered families.
SOCIAL SECURITY
McGovern's proposal for a $3 billion increase in social security
benefits is a bit late in coming. Evidently he failed to note that
the President has just signed into law (with some reluctance for
inflationary reasons) a 20 percent raise in social security benefits.
SOMETHING OLD, SOMETHING NEW, SOMETHING BORROWED
Any consideration of the McGovern economic program should reveal
46
that:
-McGovern would retain much of the old welfare "mess,"
whereas the President believes that total reform is an
absolute necessity. Not only would McGovern retain the
current social security and food stamp inequities, he
would add an additional $16 billion for a subsidized job
program, with no attempt to employ resources of existing
programs in this area.
TAX REFORM
"Nixon has
increased the tax burden on the average family.
"While the family budget is being squeezed, the corporate
coffers are getting fatter. Last year alone, Mr. Nixon gave
away 5.7 billion dollars in tax treats to big business
"But even this 'New Economic Policy' featured a lot of the
old medicine: $6.8 billion in estimated 1973 tax relief
for corporations, compared with a $3.5 billion cut in individual
income taxes
11
McGovern Press Release
August 6, 1972
ADMINISTRATION RECORD
Contrary to McGovern's irresponsible charges, the facts show that
during the Nixon Administration, individual taxes have been
dramatically reduced while corporate taxes have increased.
For the four calendar years, 1969-1972, a comparison of tax rates
when the Nixon Administration took office with reformed rates
accomplished in the Tax Reform Act of 1969 and the Revenue Act
of 1971 shows that:
-corporate income taxes will have increased by a total
of $4.9 billion;
-individual income taxes will have decreased by $18.9
billion; persons in the lowest tax bracket will pay 82
percent less this year than they would have paid if the Tax
Reform Acts of 1969 and 1971 were not in effect; persons
with adjusted gross income in the $10,000-$15,000 range
will pay 13 percent less; and persons with incomes over
$100,000 will pay 7 1/2 percent more;
-excise taxes, mostly on individuals, will have decreased
about $3.5 billion.
MCGOVERN PROGRAM
In contrast, McGovern's tax reform proposals, however nebulous
and contradictory, would erode the solid economic progress accom-
plished for all Americans during the Nixon Administration and
would stifle the strong job-creating economic expansion that the
Nixon Administration has brought about.
While McGovern has campaigned widely on the theme of tax reform,
he has generally been quite imprecise as ic which of the multitude
of current tax preferences he would eliminate. In fact, the rev-
enue gain from the specific loopholes that he has explicitly
advocated closing would be considerably smaller than his rhetoric
implies.
Just what does George McGovern mean when he speaks of tax reform?
48
For corporations, McGovern wants:
-a $13 billion tax hike (down from his original estimate
of $17 billion when he discovered this higher amount re-
quired a return to the 52 percent corporate tax rate that
prevailed prior to 1962); a careful search of the record
reveals, however, that even this $13 billion figure is too
high.
For Americans filing personal income tax returns, McGovern would:
-expand their taxable income base, though he himself
is not sure how; McGovern speaks of closing loopholes, most
of which have the backing of powerful constituencies and
could not easily be closed; yet somehow McGovern would derive
an additional $14 billion in revenue from these sources.
And from the paychecks of all Americans, McGovern would have to
extract:
-a large new payroll tax hike to finance the McGovern-
sponsored Kennedy. National Health Insurance Plan that would
cost, according to HEW estimates, $81.2 billion if fully
effective in FY 1974; one of the provisions of the Kennedy
plan provides that half its total cost, or $40.6 billion,
be financed through new payroll taxes; since the current
Hospital Insurance (HI) payroll tax is expected to yield
$8.4 billion in FY 1974, a net increase of $32.2 billion
in payroll taxes, or nearly double their current level,
would be needed to finance this program.
In an August 29, 1972 speech, McGovern modified or abandoned many
or his earlier proposals. His latest "specific" reforms included:
-inclusion of capital gains in income;
-taxation of capital gains at death;
-taxation of municipal bonds;
-elimination of tax preferences for oil, gas, and other
natural resources;
-reduction of depreciation allowances;
-revision of the investment credit;
-elimination of real estate investment tax shelters and
special amortization provisions;
-repeal of special treatment for income earned abroad;
-elimination of "tax shelter" farm losses;
-strengthening of the excess investment interest provision;
-revision of death and gift taxes.
Clearly, many of these so-called "loopholes" that McGovern attacks
have a positive aim and became law for a variety of socio-economic
reasons in an effort of positive improvement. Yet tax reform
is an emotionally attractive issue--the idea that someone else's
taxes will be reformed will always be popular.
However, as McGovern's "soak the rich" campaign rhetoric has
been increasingly scrutinized, it reveals gross inaccuracy,
incompleteness, irrationality and confusion.
McGovern's tax reform proposals ignore the basic economic fact
that strong investment is a prerequisite for a prosperous, job-
creating economy. In addition, the Senator's proposals to dis-
courage investment ignores the fact that the United States already
has the highest capital gains tax rate in the world and an in-
creasingly challenging international trade position as other nations
become more productive and competitive.
Yet, almost incredibly, McGovern would discourage capital in-
vestment by raising corporate taxes by $17 billion. In short,
the probable result of McGovern's tax reforms would be lower pro-
ductivity and capital investment, or economic stagnation, or a re-
cession, or an enormous balance of payments deficit--all of which
would mean far fewer jobs.
REACTION TO PLAN NUMBER THREE
The following comments are characteristic of the national response
to McGovern's more moderate economic proposals of August 29, 1972
(a drastic departure from the Senator's earlier more radical pro-
posals in his campaign for the Democratic nomination):
"The new plan merely enlarges the area of inconstancy
and uncertainty which surrounds the McGovern campaign
without giving the average taxpayer even the slightest
hope for
relief
11
Richard Wilson
Baltimore Sun
September 2, 1972
50
"In essence, this is a kind of prairie populism at
best and undiluted socialism at its worst.'
John S. Knight
Philadelphia Inquirer
September 3, 1972
"By most reckoning, even wholesale confiscation from the
rich wouldn't produce the kind of money McGovern is talking
about; one way or another, the broad middle class would wind
up paying the bulk of the bill. 11
Editorial
Chicago Daily News
August 31, 1972
"Which is THE McGovern program? There are three the one
he used to get nominated, the party platform he helped dic-
tate, and now his latest issued this week in New York
"The voters now may simply be confused on where McGovern
stands Not too hard when he keeps shifting.
Kiplinger Washington Letter
September 1, 1972
ECONOMIC STABILIZATION
"Under Richard Nixon's dismal game plan, we were supposed to
slow growth and thereby slow inflation. Instead we reduced
growth to a snail's pace and let inflation run away like
a rabbit."
George McGovern
Speech-Executive Committee of
the Amalgated Clothing
Workers Union
August 7, 1972
In addition to Senator McGovern's inaccuracy concerning productive
growth, inflation and purchasing power during the Nixon Administra-
tion, he also fails to cite the effects of years of Democratic economic
mismanagement which had led to economic chaos by the time President
Nixon took office.
NIXON ADMINISTRATION
In contrast, President Nixon has restored fiscal responsibility,
drastically reduced the rate of budget increases, and brought about
a sustainable peacetime prosperity. Consider these facts:
-today, the United States has the fastest, highest rate
of economic growth of any major industrial nation in
the world, including Japan;
-the rate of inflation has been reduced from over 6 per-
cent to an annual rate of 2.9 percent less than half the
rate at the time the Nixon Administration took office;
-the purchasing power of the average American worker's
paycheck showed the highest June-to-June yearly gain on
record as reported July 21 by the Bureau of Labor Sta-
tistics. Over the first year of the President's New
Economic Policy, real earnings have increased almost 5 per-
cent-over three times more than the average rate during
the previous eight years of Democrat Administrations;
-the average paycheck increased $7.82 or 6.1 percent over
the past year;
-on July 21, the Department of Commerce reported that
Gross National Product--the market value of output of the
nation's goods and services--surged to an 8.9 percent annual
rate of expansion in the second quarter, representing the
largest gain since the fourth quarter of 1965. The increase
is in "real" terms, meaning inflation has been taken into
account to show how the economy is really performing. This
indicator, which showed significant improvement, is con-
sidered the most comprehensive measurement of the state of
the economy. The Department of Commerce said GNP in
terms of current dollars increased by $29.9 billion in the
second quarter, an actual gain of 11.2 percent to a seas-
onally adjusted annual rate of $1.139 trillion.
McGovern's rhetoric is irresponsible, his facts erroneous. In con-
trast to McGovern's desperate oratory, the Nixon Administration
has pursued policies which are rewarding all Americans, as worker,
farmer, consumer, and businessman.
JOBS
"Senator George McGovern is committed to preserving the
well-being of the American working man and his family."
"McGovern on the Issues"
1972
"The number one economic issue before America today is:
jobs and more jobs. I would guarantee a job for every man
and woman who wants to work
11
McGovern Campaign Literature
While the Senator has talked about "guaranteeing" jobs, he has
consistently opposed programs which provide mployment. McGovern's
supposed "commitment" to the working man and to the trade union
movement is hardly evident from his voting record. He has repeatedly
cast votes that labor clearly views as harmful to their interests.
-In 1960 McGovern voted against a raise of the minimum wage
to $1.15 and extension of its coverage to 1.4 million retail
workers.
-In 1966 McGovern voted to deny minimum wage coverage to
some 1,000,000 workers in retail and service firms with
gross sales of less than $500,000 annually (this proposal
was offered by the late Senator Everett Dirksen).
-In 1966 McGovern voted against a Long amendment requiring
states to provide eligible workers a minimum of 26 weeks
unemployment compensation coverage for 20 weeks of employment.
-In 1968 McGovern voted to table a Javits amendment that
would have provided $52.1 million to the Labor Department
for summer jobs.
-McGovern voted to eliminate funds for the building of the
Supersonic Transport (SST). Testifying before the Senate
Appropriations Committee on March 10, 1977, AFL-CIO President
George Meany said that 42,000 jobs would be available immediately
if the SST prototype were funded, and 150,000 would be created
if the SST were mass produced. (This figure includes jobs in
industry indirectly related to the building of the SST.)
-McGovern voted to kill the loan to the Lockheed Aircraft
Corporation. On July 13, 1971 Lockheed's Chairman of the
Board, Daniel J. Haughton, stated before the House Banking
and Currency Committee that Lockheed would go bankrupt
without the loan and "bankruptcy would result in the loss
of 60,000 jobs."
-Overall, McGovern proposes a cut in the defense budget
of approximately $32 billion. The Bureau of Labor Statistics
estimates that for every $1 billion of purchases (or cuts),
62,700 jobs are affected. Simple math reveals that McGovern's
proposed defense cuts could put approximately 2,000,000
people out of work.
So, as the record reveals, McGovern publicly supports jobs while
continuing to vote against them no small feat for a presidential
nominee.
ECONOMIC CONVERSION
"I would make economic conversion a top priority of the
administration. I've already called for a new Federal
investment of approximately 10 billion dollars that would
assist in applying aerospace and defense capacity to new
challenges that face this country."
George McGovern
Meeting with NASA Engineers
Houston, Texas
September 7, 1972
When George McGovern appears before audiences whose employment
has been jeopardized by Federal budget cuts, he bemoans the loss
of jobs these. cuts have created. Of course he carefully fails to
mention that he was in the vanguard of those Senators who voted
to initiate those cuts. So, to compensate for his crusade to un-
employ thousands of military personnel and civilian employees
in defense-related industries, McGovern has offered a grand
scheme of economic conversion which gets less and less grand
as its details become apparent.
Perhaps the most outrageous aspect of McGovern's economic con-
version program is its provision for continued unemployment.
54
MCGOVERN PROGRAM
As McGoyern admitted during the California primary campaign:
II
there will be a period of 10 to 12 months when
some of our people will be out of work.
"I propose a full year of unemployment benefits at a rate
not less than 80 percent of the present benefits."
Los Angeles Times
May 21, 1972
As McGovern's fellow Democrat, Senator Hubert Humphrey, noted
in response to this:
"People don't want welfare. They want jobs. J-0-B-S.
They don't want all that nonsense that ways wait a little
while. They, the McGovern camp, say two years' transition,
and we'll give you unemployment compensation. That's a
lot of bunk."
Washington Post
May 23, 1972
And as Democrat Congressman Peter Kyros of Maine has indicated,
the McGovern program vis a vis his defense cuts is hardly a
program of employment. Kyros says:
"If George McGovern gets his way, the Boston and Phil-
adelphia Navy Yards would be closed down almost immediately
McGovern recommends cutting back the Navy fleet by 365
ships. As a result, there would be almost no new Navy ship-
building contracts In fact, the only new ship building
would be 15 nuclear submarines. II
Boston Herald Traveler
April 19, 1972
When the President announced his New Economic Policy and the job
creation program within it, McGovern said:
"What we have heard tonight is economic madness."
McGovern Press Release
August 15, 1972
ADMINISTRATION RECORD
Yet, at a glance, the Administration's record reveals other-
wise. In contrast to McGovern's contradictory pledges, the Nixon
Administration has acted to boost employment and to minimize the
burden of peacetime conversion. The Nixon Administration record
includes the following accomplishments:
-proposed and signed into law the Job Development In-
vestment Credit, thereby boosting employment by encouraging
increased investment and expansion;
-improved U.S. competitiveness in international trade
through devaluation of the dollar and efforts to boost
productivity thus increasing employment;
-established a national network of computerized job banks
to match job seekers with job openings;
-proposed $2 billion for Manpower Revenue Sharing;
-proposed $3.9 billion for FY 1973 for manpower training
and employment services;
-provided record summer job opportunities for 1,201,400
youths in a joint Federal and private voluntary effort with
$377.6 million in Federal funds;
-directed special efforts in aiding veterans through the
Jobs for Veterans program, employment preferences, and
other programs;
-directed special efforts at boosting minority employment
through:
establishment of the Office of Minority Business
Enterprise (OMBE)
a 250 percent increase in funding assistance to
minority business enterprise
achieving 50 percent enrollment of minorities in
total manpower program;
-proposed responsible expansionary job-creating budgets.
56
INTERNATIONAL ECONOMIC POLICY
"I make no claim to having the expertise in such matters
[international monetary crisis] as have several members
of the Congress and academic and business economists.
But I submit that the situation has become [so] threaten-
ing We must seek to come to terms with this situation. 11
McGovern Press Release
May 13, 1971
As President, McGovern would: "impose a capital equal-
ization tax which will discourage American firms from
setting up plants abroad to flood the American market. In
a McGovern Administration there will be no trade deficit."
McGovern Press Release
January 27, 1972
NIXON ADMINISTRATION
In the field of international economics, as in other areas of
economic policy, McGovern has shown a striking lack of basic
understanding and a near absence of specific proposals. In sharp
contrast, the Nixon Administration has confronted intensifying
challenges in international trade and monetary affairs with bold
and effective action that has produced impressive economic results
as well as contributed to the improvement and success of other
aspects of foreign policy.
While McGovern naively states that in his administration there
would be "no trade deficit" and calls for a simplistic trade
policy, the Nixon Administration has acted to remove the complex
root causes of the deteriorating trade and payments situation it
inherited. The Nixon Administration has acted to:
-curb inflation at home and realign exchange rates,
thereby increasing the competitiveness of American products;
-seek removal of specific barriers to U.S. exports and
establish a "Doctrine of Fairness" in international trade
through improved enforcement of existing statues;
-set up an Office of Tariff and Trade Affairs to deal
specifically with trade discrimination;
-strengthen the competitiveness of American industry by
favorable tax treatment and efforts to boost productivity;
57
-facilitate adjustment of domestic industries to the
pressures of excessively rapid import increases;
-broaden and increase opportunities for trade with Com-
munist countries to increase U.S. exports, improve the
trade balance, and increase domestic employment;
-coordinate International Trade policies by activating
the Council on International Economic Policy (CIEP).
In addition the Nixon Administration has negotiated a wide
ranging program designed to promote American trade interests
abroad and boost exports by:
-permitting the Export-Import Bank to expand its program
and thereby provide increased assistance in financing U.S.
exports;
-a negotiated voluntary textile restraint agreement with
the four major textile exporters in the Far East;
-invoking the multilateral Long-Term Arrangement on
Cotton Textiles where necèssary to restrain rapid growth
in imports of those products;
-a negotiated extension and improvement of the Voluntary
Steel Arrangements in order to limit exports of steel
mill products from Japar and members of the European
Community to the U.S. over the next three years;
-relaxing currency controls and transportation restrictions
to permit increased trade with the People's Republic of
China and also increasing the range of products permitted
for export;
-a negotiated grain sale to the Soviet Union of over
$750 million;
-a recent agreement with Japan to improve the U.S. trade
balance by $1 billion.
58
CONCLUSION
"I pledge that when I say something it will be what I
really believe
you can count on that. II
George McGovern
Buffalo Evening News
March 13, 1971
McGovern has based the crucial test of his credibility and fitness
to be President on "telling it like it is." As a prophet of the
"New Politics," McGovern has promised integrity and candor; he
has presented himself as a man different unto any other.
As McGovern's promise and performance indicate, he has not only
failed to meet the test he alone established, he has shown a
total lack of responsibility.
McGovern's radical, inaccurate, contradictory, and unrealistic
economic proposals have evoked protest and opposition throughout
the country--especially from other Democrats.
As Senator Hubert Humphrey has indicated, McGovern's
old welfare proposal would not overburden the wealthy but tax
middle income people to pay a $1,000 per person national
payment:
"Those with incomes under $8,000 would get some help, but
when you start to raise taxes of those getting $8,000 to
$20,000 a year, I do not believe that's what you call tax
reform. When you start socking it to them, that's
middle income. 11
Washington Post
May 21, 1972
And Democrat Senator William Proxmire said of this program:
"I think this is going too far I think our whole system
of rewarding people for unusual effort and unusual work
would be reduced with that kind of drastic modification. "
Press Release
May 20, 1972
When the McGovern record is viewed, it reveals:
-expenditure increases totalling more than $130 billion;
-huge inflationary budget deficits of more than $100 billion
annually;
-an income redistribution program that is underfinanced
by $70 billion even after allowing for McGovern's pro-
posal to nearly double payroll taxes;
-enormous spending that could only be financed by huge
tax increases (from 46 to 100 percent) that would fall
most heavily on single individuals, small families and
middle income earners;
-defense cuts of $30 billion that would greatly increase
unemployment;
-tax reforms that would severely undermine domestic in-
vestment, economic expansion, and U.S. competitiveness
abroad.
By contrast, the Nixon Administration economic record is one of
continuing improvement and proven success. As evidence, consider
these confirmed accomplishments during the Nixon Administration:
-inflation has been cut by more than half;
-employment, already at record levels of 82 million, is grow-
ing rapidly and the unemployment rate decreasing;
-real spendable earnings, the purchasing power of the average
worker, are increasing three times faster than the average
for the previous eight years of Democrat rule;
-work stoppages are unusually few;
-international trade has been greatly expanded;
-devaluation of the dollar makes American exports more com-
petitive;
-in spite of the enormous difficulties of conversion to
peacetime, sustainable and job-creating economic expansion
is a reality;
60
-the rate of budget increases has been cut from 17 percent
to 4 to 5 percent;
-the largest tax cuts in U.S. history have returned power
to the people in the most fundamental sense, particularly
in the lowest income brackets, while taxes for corporations
and the wealthy have increased.
With these accomplishments on record and others to follow in the
future, the striking difference between McGovern's ill-advised
proposal and the President's program is readily seen. As the
President has said:
"As we move into a generation of peace, as we blaze the trail
toward the new prosperity, I say to every American: Let us
raise our spirits. Let us raise our sights. Let all of
us contribute all we can to the great and good country
that has contributed SO much to the progress of man-
kind. Let us invest in our nation's future; and let us
revitalize that faith in ourselves that built a great
nation in the past, and will shape the world of the
future.
11
Richard Nixon
August 15, 1971
WP
Rowland Evans and Robert Novak
8/30/72
Report on McGovernomics
THE FIRST comprehen-
Govern economic proposals
tal Investment The current
pact on the American econ-
sive survey of business atti
as they apply to capital CX-
boom now pushing the ccon-
omy."
tudes toward a McGovern
penditures would lower such
omy to record highs is being
Rinfret has impressive cre-
presidency predicts that If expenditures by about 5.5
fueled by those two tax con-
dentials in forceasting all-
Congress enacted the three pcr cent or $5 billion in
important capital expendi-
cessions.
tures. Since 1932 his regular
major-items in Sen. Goorge:)
1973." That would be the
Rinfret's July 21 survey
autumn survey for the fol-
McGovern's economic pro-
first decline in dollar capital
asked this question: "As-
lowing year has been within
gram, the result would be "a
expenditures since 1961 and
sume that your 1973 spend-
a point or two of the Securi-
severe recession" before the
the third-largest since World
ing plans were initially pro.
ties and Exhange Commis-
end of 1973.
War II.
granuned at the same level
sion's spring survey of busi-
The private was
as 1072 (capital) expendi-
ness spending During those
tures. What change, if any,
20 years, his only serious
made by the New York con-
RINFRETS SPECIAL
survey, sent out July 21
would you make in these
misses came in 1939 and
suiting firm of Binfret
plans if Sen. McGovern's
1971 (in 1971 he predicted an
after McGovern's nomina-
ton Associates: headed by
Dr. Pierre Rinfret. Demo.
tion for President, posed
proposals were implemented
8.6 per cent increase 25
this hypothesis: congres-
by mid-1973?'
against an actual (2 per
crats will surely attack this
cent).
sional approval of Mc-
as the work of a highly
THE RESULTS: 57 per
Govern's major proposals
The colorful, iconoclastic
prejudiced scurce in view of
cont of his respondents said
for dealing with capital ex-
Rinfrct - named on Aug.
Rinfret's role as President
their plans would not
penditutes. These are repeal
18 to his Nixon campaign
Nixon's "princial economic
change at all. The balance
of the investment tax credit,
post-has not pulled his
spokesman" for the 1972
replied they would lower
climination of accelerated
punches against the Nixon
campaign. Nevertheless, his
their. capital expenditures.
depreciation allowances, and
administration. IIc sent his
business survey of the ef-
The aggregate decline, Rin-
abolition of depletion allow-
clients a celebrated "We Ac-
feets of McGovervomics on
frot has informed his
ances on oil and other min-
cuse" critique of Nixenom-
a a 1 investment-and
clients. would be 5.5 per cent
crals.
ics in July, 1989, concluding
hence the overall economy
in current dollars. When
with the words: "We accuse
Even if McGovern were
-cannot be lightly brushed
adjusted for inflation, which
the adminstration of incom-
off.
elected, Congress would be
Rinfret estimates at 5.5 per
petence."
unlikely totally to repeal the
The reason: Riufret's rec-
cent in capital goods, the ac-
investment tax credit or the
Rinfret's alatming report
tual decline in the volume
ord of excellence in fore.
22 per cent oil depletion al-
of business reaction to Mc-
of real capital expenditures
casting capital expenditures
lowance. As for accelerated
Governomics could not take
from estimates made by
would be about 11 per cent.
depreciation, Pr esid n t
into account the senator's
Says Rinfret's private J.C.
more than 600 major busi-
McGovern could eliminate
latest economic program an-
port:
noss firms on an annual-
that without congressional
nouneed in New York yes-
and highly confidential-ba-
"To the extent that indus-
sanction.
terday. It is doubtful, how-
sis.
try does what it indicated it
ever. whether McGovern's
The tax credit and accel-
Using his regular business
will do in this survey, a se-
partial hedge on repealing
crated depreciation (the
vere recession would affect
respondents, the flamboyent
the investment tax credit
cove of President Nixon's
the 1973 economy: It is not
Rinfret has now informed
would much change the
New Economic Plan in All.
his elients in n private "spe-
possible to have (such) a de.
grim prophecy of Rinfret's
gust 1971) give tax breaks to
cial report" that "the Me-
cline in capital spending
survey,
business to encourage cant-
without having a severe im-
Hall
THE NEW "MCGOVERNOMICS' STILL DOESN'T ADD UP
The following are excerpts from leading editorials on Senator
McGovern's new economic proposals:
"It is human nature to want something for nothing, and politicians
have been catering to this trait for as long as anyone remembers.
Senator George S. McGovern's speech to the New York Society of
Security Analysts was, unfortunately, in this mold.'
"The trouble comes with McGovern's insistence that he can do all
this
11
"As a practical matter, it isn't possible, and the South Dakotan is
being disingenuous when he leads the American people to think that
it'is. 11
"In real life, therefore, a McGovern Administration would be faced
with the necessity of either raising everybody's taxes or abandon-
ing its national income insurance plan. 11
-- Los Angeles Times
August 31, 1972
"Senator McGovern's somewhat elusive tax and welfare program
has alighted again, like a mosquito in the summer twilight, and de-
serves a couple of slaps before it takes off into the shadows to change
shape and alight somewhere else. 11
"But Mr. McGovern's plans are still riddled with old flaws and have
picked up some new ones. For instance, he now favors treating all
capital gains as ordinary income something he said only last May
that he did not propose to do. "
"But if Mr. McGovern were to confine himself to what is fair and
sensible, he could not begin to conjure up, even on paper, the vast
amounts of money he needs to finance promises he has made. "
-- Chicago Tribune
August 31, 1972
-2-
"The new McGovernomics still doesn't add up. 11
11
now the senator is back from the drawing boards of some
new advisers with the latest version of McGovernomics. Latest
but not necessarily last, if figures which'don't add up are going
to determine the longevity of the nominee's plans for tax reform
and income redistribution. 11
"On the most controversial part of his earlier plan - the propo-
sal to give everybody in the country $1,000 -- it is still difficult
to tell just what Mr. McGovern has in mind, if indeed he or any-
body else knows. 11
"Mr. McGovern makes it all sound deceptively simple, but it was
that way with his first plan, too
But he continues to confirm the
conclusion of his friendly biographer, Robert Sam Anson, that 'gen-
erally his friends, not to mention his critics, cite economics as
McGovern's weakest point, both politically and intellectually. "
-- The Philadelphia Inquirer
August 31, 1972
"McGovern appeared to have
rid himself of a piece of baggage
from his program that has weighed him down; he offered new pro-
posals that were taken seriously by both economists and politicians,
at least for the moment;
11
"With 10 weeks left until Election Day, Mr. McGovern finds him-
self in the worst shape of any Democratic Presidential candidate
since Alfred E. Smith 44 years ago. 11
-- The New York Times
August 31, 1972
"The first comprehensive survey of business attitudes toward a Mc-
Govern presidency predicts that if Congress enacted the three maj-
or items in Senator George McGovern's economic program, the re-
sult would be 'a severe recession' before the end of 1973.' (The
private survey was made by the New York consulting firm of Rinfret-
Boston Associates)
-3-
"Rinfret's alarming report of business reaction to McGovernomics
could not take into account the senator's latest economic program
announced in New York yesterday. It is doubtful, however, whe-
ther McGovern's partial hedge on repealing the investment tax
credit would much change the grim prophecy of Rinfret's survey. 11
-- Evans and Novak
The Washington Post
August 30, 1972
"For Americans who are concerned about inflation, about swollen
federal spending, about the increase in governmental power -- and
about the continued growth of a productive economy -- Mr. Mc-
Govern presents, all in all, a discouraging picture. 11
-- Baltimore Sun
August 31, 1972
"The best that can be said for Senator McGovern's revised tax-
reform and welfare proposals is that they approach the outer fringes
of plausibility. 11
"And yet the new McGovern program remains flawed to a degree
that surprises, considering the size and stature of the group of
Democratic economists that for more than a month has labored
to make the Senator's original proposals more rational and saleable. 11
"Moreover, McGovern has hit upon some out-and-out tax dodges
that cannot be justified
No realistic reform plan
is likely
to produce the $22 billion a year McGovern suggests. "
"The Senator's welfare plan, at least as it appeared this week,
stands little chance of commanding serious attention. 11
"All this, it is said, might be clarified later. But then, that's the
way it has-been with the Senator's welfare ideas all year. 11
-- The Evening Star
August 31, 1972
TALKING PAPER
SENATOR MCGOVERN'S ECONOMIC POLICIES
A SUREFIRE PRESCRIPTION FOR UNEMPLOYMENT
-- At a time when more Americans are working, earning more income,
and saving more, than ever before in history;
-- At it time when a record 2.6 million new jobs have been created in
the United States over the past twelve months, the highest rate of in-
crease of jobs in twenty years;
Senator McGovern Falsely Charges the President with Creating Unemployment!
SENATOR MCGOVERN'S PRESCRIPTION FOR UNEMPLOYMENT
Higher Taxes: 1. Senator McGovern's tax proposals would stifle invest-
ment in new plants, equipment and industries. Without such capital in-
vestment, growth in the economy would slow down, or stop all together,
throwing millions out of work. A recent survey of 600 major business
firms which asked for an estimate of capital investment if President Mc-
Govern were elected, indicated an average decline of 5. 7% over current
levels. The impact on unemployment would be catastrophic!
2. Under the latest McGovern budget proposals, the Federal Government
would have to increase taxes by an additional $100 billion to pay for his
programs. For a family of four earning $12, 500 per year, this would
mean a tax increase of $1,038 -- or double its present payment. Higher
taxes for individuals and corporations mean higher unemployment.
Increased Welfare Rolls: 3. Under Senator McGoyern's third welfare
proposal ($4, 000 per year for a family of four), no provision is made
for the "working poor. 11
Although it is impossible to estimate exactly how many additional Amer-
icans would be added to the welfare rolls under the McGovern welfare
proposal, it is strikingly similar to one offered last year by Senator
Fred Harris of Oklahoma ($4, 000/year for a family of four) (S. 2747).
The Harris proposal would have increased the welfare rolls from 12
million at present to over 80 million in 19741
In view of the foregoing, it is appropriate to ask the Senator,
WHO WOULD CREATE UNEMPLOYMENT IN AMERICA?
McGOVERN BUDGET PROPOSALS
(In addition to present spending level)
PROGRAMS SENATOR McGOVERN ADVOCATES
National Health Insurance
$60.0B
(Health proposal expressly provides for increas-
ing the employees' payroll tax by $7.7B)
School spending equalizing within states
9.2
Expanded breakfast and lunch programs
4.7
Full funding of programs passed by Congress
to full authorization level
27.6
Lower retirement eligibility age to 60 in all
government pension programs
5.0
Aid to every college student
1.2
Increase Social Security retirement test
.5
Subsidized housing
.3
Federal operating subsidies for local transit
systems
.4
Additional staff in VA hospitals
.5
Full Federal support for qualified nursing homes
3.0
Aid to local schools for property tax relief
15.0
Welfare
Subsidy for jobs in private sector
10.0
Subsidy for jobs in public sector
6.0
Expand Social Security to 3M people
3. 0(low estimate)
Transfers to people outside Social
Security who will not be able
to work (AFDC)
5. (low estimate)
TOTAL OF NEW SPENDING
$151.4
Minus cut in military spending
-30.0
TOTAL NEW SPENDING MINUS DEFENSE CUTS
$121.4
Minus revenues from new tax proposals
-22.0
TOTAL SPENDING IN EXCESS OF CUTS AND TAX
INCREASES i.c. DEFICIT OR NEW, HIGHER TAXES
$99.4
PROPOSALS TOO VAGUE TO PRICE OUT
-Welfare proposal for working poor (without which
his plan makes it better to be on welfare than
to go to work)
-Bill of Rights for veterans and policemen
-Raise farm income to 100 percent of parity
-Aerospace and defense industry adjustment
assistance
*Approximately one half of this amount is accounted for by the
Department of Agriculture with significant amounts related to
programs within the departments of HEW, Interior, Commerce
and Justice. All other departments account for less than
it billion each in this approgate figure.
Issue:
Employment implications of the proposed McGovern defense budget.
Answer:
The McGovern proposals for 1975 have been compared to the
Administration's 1972 defense program. The question is, what
would the impact be if McGovern could instantaneously alter our
defense program to meet his objectives?
JOB REDUCTIONS
Industrial
Total, Including Govt.
Pacific
187 thousand
385 thousand
Middle Atlantic
157
223
South Atlantic
134
417
West South Central
93
221
East North Central
88
148
New England
81
112
East South Central
34
92
Mountain
22
88
West North Central
54
102
TOTAL
850
1,788
California
157
297
Texas
81
167
Indiana
23
30
Illinois
15
38
Ohio
28
46
Florida
25
61
Pennsylvania
30
52
New York
100
115
New Jersey
27
54
Wisconsin
9
9
Missouri
26
45
North Carolina
13
53
Virginia
39
76
Tennessee
10
17
TOTAL
583
1,060
- 2
This table is based on figures published by Senator George McGovern
in the document entitled: "Toward a More Secure America, An Alter-
native National Defense Posture. " McGovern's force levels and per-
sonnel levels were accepted but repriced to include future pay increases
for both military and civil service employees as prescribed by law.
All the data presented represent only direct employment impact.
Indirect or secondary employment impact is not estimated in this
paper. The secondary impact would be significant, however, par-
ticularly in view of the psychological effect of the direct unemploy-
ment of 1.8 million Americans. The analysis is consistently conducted
utilizing 1975 dollars.
Issue:
California employment impact of McGovern's defense budget.
Answer:
We have carefully examined the McGovern proposals for a $30 billion
reduction in defense spending, in particular the impact of these pro-
posals on the national economy and on the states that would be most
affected. No state would be affected more than California. Were
these proposals enacted today, there would be an immediate direct
unemployment of 1.8 million Americans, and 300,000 of these Ameri-
cans would be Californians. Of these 300,000 California jobs, 157,000
are industrial jobs and another 43,000 are civil service government
jobs -- a total displacement in the civilian sector in California of
200, 000 jobs.
TOTAL JOBS
National Impact
1,788,000 jobs
1
Regional Impact
385,000 jobs
California Impact
297,000 jobs
INDUSTRIAL JOBS
National Impact
850,000 jobs
Regional Impact
187,000 jobs
California Impact
157,000 jobs
McGovern's Voting Record
Program
Peak California Jobs
or Budget Recommendations
F-14
3,300
against
Phoenix
8,000
against
F-15
4,100
against
Minuteman III
9,000
against
Space Shuttle
25,000
against
1
Washington, Oregon, California, Alaska and Hawaii
WAGE AND PRICE CONTROLS
The American people want stricter controls while Senator Mc-
Govern promises to abolish them altogether within 90 days of
his inauguration.
GALLUP POLL
- The Washington Post
September 17, 1972
Do you think wage-price controls should be made more
strict, less strict, or kept about as they are now ?
More Strict
45%
Kept as Now
29%
Total
74%
Less Strict
15%
McGovern's Position :
"Senator George McGovern said yesterday that he would abolish
the present pervasive system of wage and price controls if elected
President
"
The Washington Post
September 16, 1972
.
"We're going to dump that Pay Board when we get in office, 11
he (Shriver) promised
11
UPI
September 27, 1972
"When the war is ended and waste is stopped, we can end wage and
price controls, and I think that can be done within 90 days of the in-
aguration. And I'm committed to that goal. "
Speech, Springfield, Illinois
August 15, 1972
MCGOVERNOMICS -- (OR CAN YOU TOP THIS?)
McGovern's latest so-called anti-inflation program is a prescription
for more disasterous inflation. Once again exhibiting the sloppy staff
work which made it famous in the Eagleton fiasco, the McGovern high
command labored mightily and brought forth a gnat.
And in what amounts to another chink out of McGovern's credibility
armour, he has brought forward a wage and price control program only
one short month after he promised he would "end wage and price controls"
and return to a free-market economy. On August 16, McGovern promised
a free economy and on September 15, he promised wage/price guidelines.
As McGovern proposals go, one month is not a bad lifetime.
Most troublesome is the McGovern turn to the discredited "wage/
price guidelines" of the 1960's to solve the economic problems of the
70's. This, after all the evidence that the Kennedy-Johnson wage/price
program was a disasterous failure. It was the same Walter Heller-
inspired guidelines which gave us the skyrocketing inflation of the 1960's
that George McGovern has reheated and served up to the American family.
McGovern's wage/price guidelines program is a sure guarantee
for a return to inflation. If the voting public wants higher prices, the
simple answer is to vote for George McGovern.
McGovern's latest proposal would arrogate to him near dictatorial
powers in setting prices and wages. It is a direct intrusion into the
free enterprise system and would give McGovern power to stifle economic
activity.
The McGovern plan, with its emphasis on detailed cost figures
and bureaucratic meddling, would require a vast new network of agencies
and red tape. It wouldn't take long for the McGovern red tape to turn
into red ink on the balance books of the working man and businesses
throughout the country.
The McGovern plan is to mix voluntary and mandatory controls
in a brew which would so confuse the American economy as to invite
fiscal chaos and financial disaster.
It speaks volumes of McGovern's range of wisdom that the best
he can come up with is a dusting off of old, ill-suited, discredited
programs that got America into the economic mess from which it
is now extricating itself.
SENATOR MCGOVERN'S WELFARE CALAMITY
His Famous $1,000 Giveaway
"I propose that every man, woman and child receive from
the federal government an annual payment
At the present
time a payment of almost $1,000 per person would be re-
quired. 11
Congressional Record
January 19, 1972
However, McGovern was forced to back off on his proposal shortly
after it became well-publicized and subject to analysis by econo-
mists.
By June of this year, McGovern was saying:
The $1, 000 per-person figure is only "one suggestion and
it may have been a mistake. 11
New York Times Interview
June 7, 1972
McGovern had also earlier proposed a $6500 welfare plan for a
family of four.
11
when I return to Washington this afternoon I am intro-
ducing HR 7257 (demanding a minimum income of $6500 for
a family of four), the bill introduced and fought for by the
Black Caucus and their supporters, a bill to provide an ade-
quate income for every American, on the floor of the United
States Senate
11
Congressional Record
July 29, 1971
Yet, when confronted with this proposal by Senator Humphrey, Mc-
Govern again reversed his position:
"The organization came to me after Senator McCarthy
left the Senate, and said there was no one that they
could get to introduce the bill. I told them there was
no chance to get a measure through the Senate that
-2-
would require a payment of $6500 to a family of four,
but I would introduce the bill so that at least it would
have a hearing. I did that
"The proposals that I have made have nothing to do
with that specific proposal of the Welfare Reights Or-
ganization. "
"Face the Nation"
May 28, 1972
"It was so complex that I don't think you could really
present it successfully in a campaign
You frighten
more people than you satisfy. 11
Newsweek
September 11, 1972
SENATOR MCGOVERN FLIP-FLOPS ON TAX REFORM
Minimum Income Tax
"I have not suggested the imposition of an income ceiling
at $50,000 or any other level.
Wall Street Journal
May 22, 1972
"I propose a minimum income tax SO that the rich could
not avoid their share of the tax burden no matter what
loopholes they used. One possible formula would be a
minimum income tax to apply to all those with total
incomes in excess of $50,000. The entire income of any
person in this range would be subject to payment of
taxes at a rate of 75 percent of the current nominal
rates.
11
Congressional Record
January 19, 1972
Depreciation and Depletion
"I have not suggested that the true economic costs of
physical depletion, depreciation, and obsolescence be
disregarded in measuring income.
"
Wall Street Journal
May 22, 1972
"Special loopholes, such as percentage depletion, need
to be phased out, but a broad balance also needs to be
established between taxable and untaxable earnings of
corporations. As it is, we have tipped that balance too
far in the direction of untaxable earnings."
Congressional Record
January 19, 1972
Corporate Taxes
"I have not suggested that the present corporate tax
rate of 48 percent be increased to the old rate of 52
percent."
Wall Street Journal
May 22, 1972
"I propose that the actual corporation income tax be
returned to its' 1960 [52 percent] level by the elimina-
tion of the special loopholes that have been opened since
then.
11
Congressional Record
January 19, 1972
Estate Taxes
"I do not suggest that a ceiling be placed on inheritances
at $500,000 or any other level.
II
Wall Street Journal
May 22, 1972
"This cumulative lifetime tax on recipients would mean
that we must set a ceiling on the amount that might be
received and then place a 100 percent tax on all gifts and
inheritances above that amount."
Congressional Record
January 19, 1972
Capital Gains
11 I have not suggested the climination of capital
gain limitations existing in the present code. 11
Wall Street Journal
May 22, 1972
"We must phase out the tax preference or loophole
for capital gains. 11
Speech
New York Society of
Securities Analysts
August 28, 1972
KEY FACTS ON TAX REFORM
I.
Senator McGovern's Federal spending proposals
would cost $100 billion more than he would
raise through his proposals for defense cuts and
tax reform and would double taxes for the average
American.
II.
The President will not increase taxes.
A. Ile will keep taxes down by cutting wasteful
spending programs from the budget.
B. He is pushing Congress for a $250 billion
ceiling on Federal spending.
III.
The President's track record is excellent - he
achieved substantial tax reform through the
Tax Reform Acts of 1969 and 1971.
A.
12 million low income Americans have been
dropped from the tax rolls.
B. Over the past 1 years, Federal taxes on
individuals down by $22 billion, and taxes
on corporations up by $5 billion.
C. Since 1969, taxes for the poor and middle-
income families have decreased:
Income
For Family
of Four
1969 Tax
1972 Tax
% Reduction
$ 5,000
$ 290
$
98
-66%
$10,000
$1,225
$ 905
-26%
$25,000
$4,853
$4,240
-13%
IV.
The President is committed to making our tax system
fairer and simpler and to the goal of reducing
residential property taxes.
THE ADMINISTRATION POSITION ON TAX REFORM
McGovern's Federal Spending
Proposals Would Double Taxes
McGovern's proposals for new Federal spending programs will
cost about $152 billion. This is a conservative estimate
which does not include those programs on which McGovern has
not yet put a price tag such as assistance for the working
poor or subsidies for the Defense workers his budget cuts
would put out of work. He has told us he will finance his
new programs by cutting defense spending by $32 billion and
by closing so-called tax loopholes which he says would raise
another $22 billion. Yet, after the Democratic candidate's
Defense cuts and tax reforms are subtracted from his proposed
spending programs, we are left with a $100 billion spending
deficit. That means that individual income tax revenues
would have to be doubled in order to pay for McGovern's
Federal spending proposals. For example, an average family
of four with a yearly income of $10,000 which now pays about
$1,000 in taxes would pay about $2,000 on that same income
under McGovern.
President Nixon Will not Seek a Tax Increase
President Nixon has pledged that he will not-seek a tax in-
crease if he wins a second term, but will instead keep taxes
down by cutting wasteful Federal spending programs from the
budget. The President is aware that Federal spending, which
is the primary determinant of Federal taxes, has a greater
effect on the average taxpayer's burden than do any of the
so-called tax "loopholes". Consequently, the President is
urging Congress to help him keep taxes down by enacting his
proposal for a $250 billion ceiling on Federal spending.
A recent study by the Brookings Institution underscored
the seriousness of this relationship between Federal spending
and tax increases. According to the Brookings Institution a
tax hike within the next four years will be necessary to
finance even existing programs. President Nixon will not
increase taxes but will instead cut spending on some of the
less productive social programs.
Administration Committed to Tax Reform
The President committed himself to tax reform in the 1968
campaign and within 90 days of his inauguration he proposed
major and instrumental tax reform. The tax facts disprove
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much of the current campaign rhetoric which would have people
believe that taxes on individuals are going up while the
corporations are avoiding taxes.
Individuals Pay Less While Corporations Pay More
For the four calendar years, 1969-1972:
-- Corporate income taxes will have increased by
a total of $4.9 billion.
--- Individual income taxes will have decreased by
$18.9 billion.
-- Excise taxes, mostly on individuals, will have
decreased by about $3.5 billion.
Lower and Middle Income Taxpayers Pay Less
Equally important is the fact that the greatest percentage
reductions have been made in the low income groups, substan-
tial reductions have been made in the middle income groups,
and significant increases have been made in the highest in-
come groups. For example, as a result of the President's
proposals, 12 million low income Americans have been dropped
from the tax rolls and persons in the lowest, income tax
bracket will pay this year 82 percent less. Persons with
adjusted gross income in the $10,000 to $15,000 range will pay
13 percent less. Persons with incomes over $100,000 will pay
7½ percent more. What these figures show is that in general
the wealthy are paying more than they were in 1968 while
others are paying less. Although these facts indicate that
the Administration has already achieved a significant amount
of tax reform there is a continuous effort to make our tax
system more fair and more simple for the average taxpayer.
Corporate Depreciation Makes U.S. Business
Competitive and Stimulates Economy
The recently approved Asset Depreciation Range System and Job
Development Credit have been portrayed on the current campaign
circuit as inequitable corporate tax "loopholes." Before the
depreciation and investment credit changes were made in 1971,
Treasury estimates showed that income tax laws made the capital
cost of U.S. business equipment higher than, that of any other
major industrialized nation in the Western World. The 1971
changes restored American business in this regard to a position
somewhat more favorable Unan Canada, France, and the Netherlands,
but still behind West Germany, Japan, the United Kingdom and
other of our principal competitors in Western markets.
- 3 -
A Department of Commerce-SEC Survey has revealed a very
encouraging 10½ percent rise in business expenditures
for plant and equipment for 1972 over 1971. A more recent
McGraw Hill survey shows a 14 percent rise. Thus, the
Asset Depreciation Range System and Job Development Investment
Credit are strong forces in the economic recovery and it would
seem to be too early to consider changing this successful
policy agreed upon only last year after so much careful
deliberation.
Property Tax Relief
The public clamor for tax reform is not only directed to
Federal income tax, but to a great extent it is addressed
at the local property tax. Many taxpayers equate tax reform
with some kind of property tax relief. A recent public
opinion poll commissioned by the Advisor Commission on
Intergovermmental Relations asked a representative nationwide
sample: "Which do you think is the worse tax today, that
is, the least fair tax?" Nineteen percent thought that
the Federal income tax was least fair, but almost two and
one-half times that number, 45 percent; said that they
believed local property taxes were least fair. The property
tax has more than doubled in the past 10 years, and it is
very regressive--placing the heaviest burden on senior citizens,
low income families, families with fixed incomes, and farmers.
The President is committed to help the States find ways to
relieve their property tax burden. He has requested the
Secretary of the Treasury and the bipartisan Advisory Com-
mission on Intergovernmental Relations (ACIR) with representa-
tives from Federal, State and local governments to study various
alternatives for achieving his stated goal of a reduction in
residential property taxes. Although there has been some
talk about substituting a Federal value added tax (VAT) for
the school property tax, this is only one of many alternatives
and does not appear to be one or the more promising approaches
now under consideration. The President will make his final
recommendations for property tax relief at the carliest possible
date.
ISSUE LINES
Topic:
The President tried to stifle the economy.
Response: The Administration has taken many effective fiscal and
budgetary steps to stimulate the economy. It is now
roaring with GNP, employment, profits, sales, housing
starts and industrial production, all at record levels. The
U.S. now enjoys a higher growth rate than any industrialized
Western country.
Attack:
McGovern would reverse this economic progress with measures
that would remove incentives. He would eliminate tax incentives
for new investment, thus reducing the jobs available tomorrow.
His welfare ethic would remove incentives to work. His
excessive spending proposals would increase taxes on the
average working man.
Issue:
How will wage and price controls be removed and how quickly?
Answer:
The basic premise of the price-wage control system is that
the 1970-1971 inflation resulted from expectations, contracts
and patterns of behavior built up during the carlier period,
beginning in 1965, when there was an inflationary excess of
demand for the nation's output. Since there is no longer overall
excessive demand, inflation will subside permanently when
expectations of inflation disappear. The control system is
intended to provide a period of enforced stability during which
inflationary expectations and behavior patterns will subside.
When this happens, the controls will no longer be necessary.
Because such a period of peace time inflation and controls
is unprecedented, the timing of decontrol actions cannot be
predicted. From time to time sectors of the economy may
be exempted from controls as conditions warrant. Such
actions will not portend a weakening of the system or its
early termination, since exclusion of sectors where controls
are unnecessary will permit concentration of administrative
effort on sectors where inflationary pressures remain high.
Opponents Arguments
A body of opinion holds that it will be impossible to completely
dispense with controls in the future because of structural
changes in the economy that have weakened its inherent
resistance to inflation.
Issue:
How can we possibly win the fight against inflation when govern-
ment deficit spending is in the $20 - to $40 billion range?
Answer:
None of us can be happy with these large deficits, but we do
believe that the budget has to be looked at in context.
The impact of the deficit on the economy is a function of the
current state of the economy. The larger part of the deficit in
fiscal 1972 -- and all of the deficit in fiscal 1973 -- comes about
because the economy is operating below the full employment level.
We all agree that a 6% level of unemployment is much too high and
that rate has to be brought down. The fiscal stimulus of the deficit
should be sufficient to reduce the unemployment rate to the neighbor-
hood of 5% by the end of the year.
Deficit (Billions of Dollars)
FY 1972
FY 1973
Unified Budget
-38.8
-25.5
Full Employment Unified Budget
-- 8.1
0.7
The deficit will not, however, seriously interfere with the stabiliza-
tion goal of a 2-3% inflation rate by the end of 1972. This view is
generally shared by economic analysts.
McGovern's budget on the other hand would be at least $100 billion
dollars in the red.
Issue:
Are prices increasing faster than wages?
Answer:
Definitely not. In fact just the opposite is true. Wages
are increasing more than twice as fast as prices.
For example, in the first quarter of 1972, compensation
per man-hour rose at an annual rate of around 9 percent
but consumer prices rose at an annual rate of only about
3 1/2 percent. The result was that the purchasing power
of the average earnings received for an hour's work went
up by more than 5 1/2 percent -- the largest quarterly
increase in real compensation in more than a decade. Of
course, the very large rise in the first quarter was partly
due to nonrecurring increases in social security contribu-
tions and retroactive wage payments. While we would not
anticipate a continued increase at that rapid rate, further
increases are expected this year. Compared to the first
quarter of 1971, real compensation per manhour was up a
bit less than 3 percent.
Another example is the March data when consumer prices did
not increase but wages rose at an annual rate of over 6 percent.
This increase extended the upward trend of "real" spendable
weekly earnings, which had been little changed from 1965 to
mid-1971.
Issue:
Although inflation is being curtailed, isn't this being accomplished
at the expense of the wage earner?
Answer:
The evidence on wage and price behavior under the New Economic
Program does not support such an allegation. While consumer prices
have increased at a 2.7 percent annual rate since the Program began
in August 1971, average weekly earnings have increased at a 7.3 percent
annual rate from August through June.
This has led to significant gains in the real purchasing power of workers.
In fact, real take-home pay of the typical rank and file worker in the
economy has increased at an annual rate of 4.5 percent since Phase II
began. This increase in take-home pay is in sharp contrast to the 0.7
percent reduction registered between 1969 and 1970, the 0.8 percent
increase between 1970 and 1971, and the 2. 1 percent increase during
the first eight months of 1971.
It is highly misleading to compare wage increases with the 16. 7 per-
cent rise in corporate profits during the first quarter of this year
compared to the same period a year ago. Corporate profits during
1970 and the early part of 1971 dipped to their lowest level in over
five years. When this period is compared to a period of substantial
economic recovery like the first quarter of 1972, profit increases are
bound to appear large. A more accurate comparison of profit increases
can be seen in statistics compiled by the Council of Economic Advisers.
From 1966 to 1971, corporate profits remained at about the same level
while employee compensation increased 50 percent.
KEY FACTS ON PROPERTY TAX RELIEF
I.
The President has long recognized people's problems
with the property tax:
1. This tax has more than doubled in the last
ten years.
2. It is regressive, with the heaviest burden
imposed on:
a. Senior citizens
b. Low-income families
C. Families with fixed income
d. Farmers
3. Due to complex assessment problems, people in
similar circumstances often pay property tax
bills which are very different.
4. Constitutionality of local school property taxes
as a means of financing schools has been put in
serious doubt by recent lower court cases.
II.
The President is committed to the goal of reducing
residential property taxes:
1. He has requested the bipartisan Advisory Commission
on Intergovernmental Relations (mayors, governors,
Federal and state legislators, Cabinet) to study
all aspects of proposals leading to property tax
relief.
2. After receiving the ACIR report, the President
will make his final recommendations for
property tax relief.
3. Although there has been some talk about sub-
stituting a Federal value added tax (VAT) for
the school property tax, this is only one of
many alternatives and does not now appear to
be one of the more promising approaches under
consideration.
EXCERPTS FROM THE REMARKS OF HERBERT STEIN
CHAIRMAN, COUNCIL OF ECONOMIC ADVISORS
BEFORE THE
AMERICAN POLITICAL SCIENCE ASSOCIATION CONVENTION
SEPTEMBER 8, 1972
"Food prices are a case in which the gulf between truth and percep-
tion is so great that one hesitates to tell the truth, for fear of being
considered either a fool or a scoundrel. 11
"The American people are better fed, and for a lower proportion of
their income, than ever before. 11
"The policies of the Government in the past three years, including
its farm policies, its import policies and its control policies, have
been a consistent package to hold consumers' food prices down,
given the variety of national objectives to be served.' 11
"Food prices in the past year have risen 3. 7 percent. It is less
than the average rate of increase in the period 1967 to 1971 when
food prices were not generally considered to be among our most
serious problems. "
"The rise of incomes in the past year has been much greater than
the rise of food prices. For example, after-tax weekly earnings
of nonfarm production workers rose by 7.2 percent, about twice as
much as food prices. The average worker's ability to buy food has
increased substantially in the past year. 11
"Nonfood items bought by consumers have risen by 2.9 percent in
the past year. These items accounted for 78 percent of the budget
of a typical urban worker a year ago. 11
"With food prices up 3. 7 percent, he could have bought 18 percent
more food. Of course, he didn't actually buy 18 percent more food,
but that was because he chose to buy more of other things. "
11
during the year from July to July prices of cereals and bakery
products, poultry, eggs and non-alcoholic beverages declined.
Prices of dairy products rose less than 1 percent. Prices of fruits
and vegetables rose less than 2 percent.
-2-
"From 1964 through 1971 the number of minutes of work required
to earn enough money to buy a pound of hamburger was never less
than 11. S and never more than 12. 7. In July 1972, the figure was
about 12. 4 minutes. In only 4 of the previous 8 years was the
amount of worktime required to buy a pound of hamburger smaller
than in July 1972, and never much smaller.
Moreover, the price of meat is coming down. In the past 7 weeks,
the wholesale price of beef has fallen 13 percent. 11
"But the basic fact is that food prices rose because consumers want-
ed to buy more than was available. There was no excess supply of
food. Unless there had been a way to increase supply or curtail
demand, there would have been shortages at lower prices. 11
"Per capita food consumption in the United States was at its all-time
high in 1971 and will be down less than one-half of one percent in
1972. 11
"Meat consumption per capita will be about 3 percent higher than in
that same year. 11
"From 1968 to the first part of this year, food prices rose substan-
tially in all the major industrial countries. The increase in the
United States was less than in the United Kingdom, France, Japan,
Norway, the Netherlands and Sweden, for example. 11
"Politicians who go through supermarkets squeezing packages of
hamburgers and blaming this Administration for the food prices
should consider whether they want to hold this Administration re-
sponsible also for record per capita incomes, record per capita
food consumption, and low increases of nonfood prices. 11
11
the policy of this Administration has been a policy to make
food a good buy for consumers. 11
"Senator McGovern has committed himself to raise farm prices to
90 percent of parity. This, of course, means higher food prices
to consumers. The Senator acknowledges this. "
"Well, 11 McGovern replied, "if grain prices go up, then beef prices
will go up too. 11
"That was surely the right answer. An increase of farm prices to
90 percent of parity would raise the farm cost of food by about 15
percent. 11