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Records of the Office of the Chief of Staff (Reagan Administration)
James Cicconi's Subject Files
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WITHDRAWAL SHEET
Ronald Reagan Library
Collection: CICCONI, JAMES: Files
Archivist: ggc/rfw
File Folder: Pending
Box 9112 11
Date: 2/2/99
DOCUMENT
SUBJECT/TITLE
DATE
RESTRICTION
NO. AND TYPE
1. Memo
Ed Rollins to James Baker Re: personnel, 1p
3/17/82
R5, R6/F6
2. Memo
John Rogers to James Baker, Richard Darman Re:
2/27/82
R6/F6
OMB, 4p
RESTRICTION CODES
Presidential Records Act [44 U.S.C. 2204(a)]
Freedom of Information Act [5 U.S.C. 552(b)]
P-1 National security classified information [(a)(1) of the PRA].
F-1 National security classified information [(b)(1) of the FOIA].
P-2 Relating to appointment to Federal office [(a)(2) of the PRA].
F-2 Release could disclose internal personnel rules and practices of an agency [(b)(2) of the
P-3 Release would violate a Federal statute [(a)(3) of the PRA].
FOIA].
P-4 Release would disclose trade secrets or confidential commercial or financial information
F-3 Release would violate a Federal statue [(b)(3) of the FOIA].
[(a)(4) of the PRA].
F-4 Release would disclose trade secrets or confidential commercial or financial information
P-5 Release would disclose confidential advice between the President and his advisors, or
[(b)(4) of the FOIA].
between such advisors [(a)(5) of the PRA].
F-6 Release would constitute a clearly unwarranted invasion of personal privacy [(b)(6) of the
P-6 Release would constitute a clearly unwarranted invasion of personal privacy [(a)(6) of
FOIA].
the PRA].
F-7 Release would disclose information compiled for law enforcement purposes [(b)(7) of
the FOIA].
C. Closed in accordance with restrictions contained in donor's deed of gift.
F-8 Release would disclose information concerning the regulation of financial institutions
[(b)(8) of the FOIA].
F-9 Release would disclose geological or geophysical information concerning wells ((b)(9) of
the FOIA].
RONALD W. REAGAN LIBRARY
THIS FORM MARKS THE FILE LOCATION OF ITEM NUMBER
I
LISTED ON THE
WITHDRAW AL SHEET AT THE FRONT OF THIS FOLDER.
RONALD W. REAGAN LIBRARY
THIS FORM MARKS THE FILE LOCATION OF ITEM NUMBER
2
LISTED ON THE
WITHDRAWAL SHEET AT THE FRONT OF THIS FOLDER.
ATTACHMENT II
ENT
EXECUTIVE OFFICE OF THE PRESIDENT
STATE / EXECUTIVE UNITED and OFFICE
OFFICE OF MANAGEMENT AND BUDGET
WASHINGTON, D.C. 20503
February 23, 1982
MEMORANDUM FOR: Linda Smith
FROM:
for Edwin Harper by E.Ruch
SUBJECT:
OMB's Personnel Management Needs
In response to your February 8 memorandum on this subject, I
spoke with John Rogers. Rogers indicated that he would shortly
be appointing a new Director of OA Personnel who was very
experienced in Federal personnel management. He also indicated
his dedication to make sure that OMB was properly served. Along
these lines, he indicated that if, after sixty days or so, the
approach he is implementing was not found to be satisfactory,
he would be glad to discuss it further with you.
CC: John Rogers
THE WHITE HOUSE
WASHINGTON
January 15, 1982
MEMORANDUM FOR EDWIN L. HARPER
FROM:
Jim Cicconi jim
SUBJECT:
Letter from Derek Bok
and William Bowen
JAB asked that OMB take a look at
the attached letter on student finan-
cial aid and, if you would, draft a
response to the points it lays out.
An interim response has been sent.
The draft would be for Baker's signature,
and if it is routed back to me I'll
take care of getting it out.
Thank you for your help.
HARVARD UNIVERSITY
OFFICE OF THE PRESIDENT
MASSACHUSETTS HALL
CAMBRIDGE, MASSACHUSETTS 02138
December 14, 1981
Dear Mr. Baker:
Thank you so much for being willing to talk with us at such a
busy time. Because of the demands on your schedule, we thought
that it might be helpful to leave with you this letter summa-
rizing our concerns over the proposed FY 83 reductions in student
aid, as reported in the public press. In our view, these
proposals go far beyond what one might expect from short-term
austerity measures and threaten to have serious long-term
consequences for students, for educational institutions, and for
the nation as a whole.
In assisting some 3.5 million young people every year,
federal student aid programs serve two important public purposes.
First, at a time when the costs of undergraduate education
average $4,500 a year for four-year public institutions and
$7,000 to $9,000 for private colleges and universities, federal
grants and loans have made it possible for millions of poor and
middle-class students to have access to higher education and thus
to prepare themselves for careers and opportunities commensurate
with their abilities. Second, by providing such opportunities,
the government has done much to develop the productive talents of
all young people and to provide the country with the new ideas,
trained personnel, and educated leadership that our society
requires.
The reported FY 83 proposals would have effects on student
assistance that can only be described as extremely severe. Apart
from their substantial impact on the guaranteed student loan pro-
gram, these new proposals in conjunction with budget measures
already taken or proposed for FY 82 would bring student
assistance (other than guaranteed student loans) more than 60
percent below the level of the summer reconciliation bill.
Moreover, these reductions would come on top of an earlier
decision to eliminate $2 billion per year in social security
benefits for education (affecting 750,000 students).
The proposed reductions for FY 83 would have the following
effects:
1. Undergraduate education. The current proposals would not
merely reduce federal expenditures but would effectively dis-
mantle a bipartisan federal program built up over the past decade
to make educational opportunities available to deserving young
Page 2
December 14, 1981
Americans. Today, basic opportunity grants plus guaranteed loans
make it possible for poor students to secure a college education.
At the same time, supplemental opportunity grants, work-study
programs, and federally guaranteed loans allow students from low
and moderate income families to choose among various institutions
and select the college best suited to their particular needs and
talents.
Under the new proposals, we understand that basic grants will
be cut from $2.3 billion to $1 billion; supplemental grants and
National Direct Student Loans will be completely eliminated; and
interest rates on Guaranteed Student Loans will rise to market
levels within two years after graduation. If these measures are
enacted, an estimated 1.9 million students will lose their basic
opportunity grants; 600,000 students will be deprived of supple-
mental grants; and 300,000 students will no longer receive
National Direct Student Loans. We also estimate that a quarter-
million students will be eliminated from work-study programs and
that approximately 2 million students will face increases of more
than 30 percent at current market rates in the annual cost of
repaying federally guaranteed loans.
If these proposals are adopted, many students (probably in
the hundreds of thousands) will no longer be able to afford to
continue their undergraduate education. Many more will have to
interrupt their college careers and transfer to lower-cost
institutions. Large numbers of poor and moderate income students
will find repayment costs on student loans so high as to cause
them to forgo plans for graduate and professional education,
especially in less remunerative fields, such as teaching,
nursing, and the ministry, and in careers, such as medicine and
research, that require extended periods of training.
These effects are not likely to be temporary but will cause a
long-term loss of able people for a number of important occu-
pations and professions. As you know, the country already faces
serious shortages of talented individuals willing to enter
careers in engineering and scientific research. Other important
callings are likewise experiencing difficulty in attracting able
people; for example, students seeking careers in public school
teaching now have college board scores substantially below the
national median. The proposed reductions will seriously
aggravate these problems while also creating serious budgetary
problems for a great many state-supported institutions and
threatening the survival of scores of independent colleges that
are already hard-pressed financially.
2. Graduate and Professional Education. Beyond the college
level, the proposed reductions would severely damage the loan
Page 3
December 14, 1981
programs that currently support approximately 700,000 graduate
students (70 percent of all graduate students) in preparing
themselves for careers in science, medicine, teaching, and other
important professions. At present, the principal form of
assistance for these students is the federally guaranteed loan
program that permits banks to offer each borrower up to $3,000
per year, repayable after graduation at an interest charge of
nine percent. Under the current proposals, these guaranteed
loans would no longer be offered to graduate students. Instead,
the only federal assistance available to such students would be a
$3,000 loan program (intended mainly for parents) at an interest
rate of 14 percent with no deferral of repayment while the
student remains in school.
The financial effects of this proposal will be twofold.
First, annual repayment charges for the parent loans will be
approximately 25 percent above the charges under the current
guaranteed student loans, and students will face repayment
obligations while still in school. Second, in the absence of
federal guarantees, most banks will be unwilling to extend loans
to graduate students to cover annual expenses beyond the $3,000
maximum parent loan. Few, if any, universities have the
resources to replace these losses in bank credit. Even if the
$3,000 limit were increased, it is unlikely that graduate
students could afford to borrow substantially increased amounts
under the terms of the parent loan program.
The human consequences are clear. First, many students from
poor families will be unable to pursue graduate education at all,
thus depriving the nation of many talented individuals who might
otherwise pursue careers in important fields that require
advanced training. Moreover, many middle-income students will be
forced to avoid careers in fields that provide relatively low
compensation or that require many years of preparation. Finally,
many of the nation's most talented students will no longer be
able to afford the best available training but will be forced
instead to settle for the least expensive.
Here again, the results will not be temporary; talented
students who cannot afford to become scientists, school teachers,
or engineers in their youth are not likely to enter those pro-
fessions in later life. To forestall such consequences, any
federal program must provide, at a minimum, access to guaranteed
loan funds sufficient to insure enough bank credit to cover
education costs plus provisions to allow students to defer
interest payments until they graduate and enter productive
employment.
In conclusion, the current budget proposals will not merely
reduce expenditures; they will profoundly alter an entire
Page 4
December 14, 1981
structure of student aid that has been built up over many years
and will not be easily reconstructed once it has been
disassembled. The effect of this action will be to endanger many
institutions and disrupt the education of hundreds of thousands
of young people. Most important, the proposed reductions will
have adverse effects for the country by keeping many talented
students from entering occupations that are important to the
nation's welfare while preventing many more from obtaining the
best possible preparation for demanding careers. In our
judgment, these consequences would be destructive of values that
most Americans support and would be clearly out of proportion to
any fiscal benefits that such drastic actions may provide.
Again, thank you very much for meeting with us,
Sincerely,
Dearh Boh
Derek C. Bok
President
Harvard University
William G. Bowen
President
Princeton University
Mr. James A. Baker III
The White House
1600 Pennsylvania Avenue, N. W.
Washington, D.C. 20500
Effect =
&
many will not go
2
really hurt privates
would drop out &
GSL at Grad Level
go to public
colleges
check on where this
is - -
talking about a subst l
downgrading of educ
quality # availability
1 base GSL prog
only on need
now can get $3,000 &
below $30,000,
cannot cut 50-60%
changes for loans OK
reductions in Pell, etc have
already been subit'l
CR off 20% from 81 ?
Pres.- Wm. BOWEN - -
12/11
Pres. - DEREK Bok I
8:30 AM Twes
I
MDT:
Bob Durkee from Princeton University called you. He is trying to
set up a meeting between Mr. Bowen (president of PU) and JAB.
He will be in his office in the a.m. tomorrow and asked that you
please call:
609/924-8699 (H)
609/452-6428 (0)
fundy for higher edecation -
KC
rep. Om. Cremil an Education
Bhw of
P.S. Darman told MG that if the presidents of Princeton or Harvard
(I think) called, that JAB should talk to them. He did not
Bend -
give any detail, so you might want to check with Darman if
you don't know what this is about.
THE WHITE HOUSE
WASHINGTON
January 13, 1982
MEMORANDUM FOR CRAIG FULLER
FROM:
Jim Cicconi
G.
SUBJECT: "Take-Over" Loans
In a letter to Jim Baker, Paul Volcker mentioned the
concern in Congress about "take-over" loans (roughly,
loans used by large firms to acquire small firms).
Volcker enclosed a list (attached) of legislation in-
troduced to limit such loans, and said he expects the
subject to be a "continuing problem."
I spoke with Roger Porter, and he indicated that the
subject has only been discussed peripherally in the
Cabinet Council, although he feels that Don Regan may
have discussed it with Volcker. Roger offered to
check out this latter point.
JAB's question is whether the subject should perhaps
be put on the CCEA agenda.
Legislation to Limit Loans for Speculative or Unproductive Purposes
-Chiles Amendment to
-
It is the sense of the Senate that
Tax Bill
"the Board of Governors of the Federal
Reserve System should exercise its regu-
Passed Senate 100-0
latory powers to require that loans be
July 28, 1981
made for productive economic purposes,
Dropped in Conference
rather than to enable large firms to
Committee
acquire smaller firms. "
-Chiles Resolution later -
To require the President "to limit the
turned into an Amendment
diversion of credit to non-productive
to Export Administration
uses, such as conglomerate mergers and
Bill--35 Democratic Co-
corporate takeovers" and "to assure an
Sponsors
adequate flow of credit to small bor-
rowers at affordable prices
such
Rejected when a harmless
actions shall include voluntary guide-
substitute was approved
lines appropriate to regions of the
50-35 on Nov. 12, 1981
country and types of borrowers."
-Kennedy Amendment to
-
"The President shall take appropriate
Export Administration Bill
actions to encourage banking or other
financial institutions to exercise on
Passed Senate 77-12
a voluntary basis restraint in extending
Nov. 12, 1981
credit for the purpose of unproductive
large scale corporate takeovers. Such
action shall include consultation and
cooperation with the Board of Governors
of the Federal Reserve System."
--Bentsen Resolution
-
Calling on the Federal Reserve to under-
(Many Co-Sponsors,
take an aggressive campaign to encourage
20 or so)
banks to stop providing loans for unpro-
ductive and speculative purposes, and
(Also has been introduced
to increase loans for productive purposes.
by several House members
including Pickle and
Rinaldo)
Introduced Sept. 1981
No action.
--Sasser Resolution
-
"It is the sense of Congress that poli-
cies to prevent additional increases in
Defeated 57-37
interest rates and also to restrain
May 13, 1981
nonessential credit growth are necessary. "
Required that a study be done to, among
other things, investigate "the feasibility
of implementing a dual prime rate to chan-
nel credit to those sectors of the economy
that have suffered from chronic credit
shortages.'
-2-
--Chiles Resolution
-
To create a Committee on Interest Rates
S.J. Res. 112
and the Availability of Credit: (1) to
publish voluntary guidelines to limit
Introduced Sept. 1981
the large scale diversion of credit to
nonproductive uses such as conglomerate
Co-sponsored by Boren,
takeovers and mergers, and (2) to pub-
Nunn, Johnston and
lish voluntary guidelines to assure an
Pryor.
adequate flow of credit to small bor-
rowers at affordable prices.
No action.
-Cong. Jeffords Resolu-
-
That the Federal Reserve "shall take
tion H. Res. 227
prompt and effective action to discourage,
during periods of high interest rates,
Introduced Sept. 1981
the establishment of large lines of
credit which may be used by large cor-
13 Co-sponsors-- 7 of
porations for purposes of acquiring
them Republicans
other corporations."
- Reuss, St Germain,
-
That the President and the Federal
Fauntroy Resolution
Reserve shall immediately undertake
"an aggressive campaign designed to
Introduced Nov. 20, 1981
encourage banks to cease providing
loans on lines of credit for unpro-
Hearings scheduled
ductive takeovers and speculative
Dec. 9, 1981
purposes, so as to increase the supply
of credit available for productive uses."
-- H. Con. Res. 160
-
Among other things, said that "the
Administration and Congress should en-
Sponsored by Reuss,
courage the banking system to concen-
St Germain and
trate available credit on those uses
Fauntroy
which contribute most to long-term
productivity, improvement and inflation
Passed House 403-17
fighting.'
July 27, 1981
OF
JO.BOARD
COMMISSIONS
BOARD OF GOVERNORS
OF THE
OF
FEDERAL RESERVE SYSTEM
THE
SYSTEM
WASHINGTON, D.C. 20551
FEDERAL
RESERVE
PAUL A. VOLCKER
CHAIRMAN
November 25, 1981
12/1 Howhandle
Dear Jim:
I am attaching a description of desirable characteristics
for the next Fed Governor from our point of view, as we
discussed.
I am also enclosing a listing of legislative initiatives
in the Congress relative to the appointment. There is another
list that reflects the concern in the Congress about take-over
loans, I must have dozens of letters from Senators on the
latter subject, and I suspect it is going to be a continuing
problem. The "Kennedy amendment" on the list will be in
conference between the House and Senate shortly, and as
you will note it is directed to the "President" taking
appropriate action.
Sincerely,
Paul
12/15/81
Jc:
Should the math
The Honorable James A. Baker, III
1 take over loans
Chief of Staff and
Assistant to the President
be puln a Cat.
The White House
Washington, D. C 20500
Commit aguida?
Attachments
JABE
MDT.- The attachment ve
mc-plan
characteristic of the Fed.
then walt Coccern 12/14
selution we have to wahe 12/14/81 should
mot
go to fee. Mhe
DO mg
November 25, 1981
Desirable Characteristics of Federal Reserve Vice Chairman
Apart from presiding at Board meetings in the absence
of the Chairman (but not the Open Market Committee meetings,
for which there is a Committee-elected Vice Chairman), the
Vice Chairman of the Federal Reserve Board has no specific
responsibilities other than those designated by the Chairman
or full Board. In fact, the role has varied widely, depending
upon the inclination of the incumbent. But the Board will
function best with at least one member -- and most obviously
the Vice Chairman -- who can comfortably speak for and
represent the Board in public, with the press, with the
management and directors of the 12 Federal Reserve Banks,
and in Congressional contacts as a substitute for the Chairman.
Beyond that special consideration in the choice of a
Vice Chairman, there are strong reasons -- internal, external,
and "political" -- that overlap and coincide in looking to
certain qualifications for the next Board appointment. These
assume particular importance in the light of the backgrounds
of current Board Members -- all essentially professional
economists and largely drawn from the Boston-New York-Washington
axis.
1. In conducting both monetary and regulatory
policy, the perspective of a person who has
been on the financial firing line is highly
desirable. A banker, a businessman with
financial understanding, or a financial
executive fit the bill.
2. In terms of "external" relations, the person
should be able to communicate well with affected
constituencies -- not just bankers, but other
financial institutions, homebuilders, small
businessmen, farmers, etc. This points to
practical experience as well.
-2-
3. Internally, a person with some administrative
experience or bent is highly desirable -- we
have to manage a big professional staff in
Washington and supervise 12 semi-autonomous
Federal Reserve Banks.
4. We need, and the Congress may insist on,
geographical dispersion -- the West, Southwest,
or possibly South (where Fred Schultz is from).
5. Consistent with the above, some education and
certainly continuing interest in economics and
economic policy, even though a "professional"
economist is not needed. Governmental and/or
political experience is a definite plus.
The Senate Banking Committee, and particularly Senator
Garn, reluctantly accepted the last economist appointment, and
made the point that the next appointment should be sensitive
to the requirements in the Federal Reserve Act for geographic
and occupational density. There are resolutions in both the
House and Senate (Jepsen-Garn with 22 co-sponsors). Robert Byrd
and others would more specifically require a "small businessman,"
and some trade associations are pressing the same line. President
Reagan, in his first appointment, may well be able to achieve
confirmation of anyone he wants, but you should be aware of
Congressional resistance and a possible fight over a pure
economist, particularly if not from the West or Southwest.
Legislation to Limit Loans for Speculative or Unproductive Purposes
-Chiles Amendment to
-
It is the sense of the Senate that
Tax Bill
"the Board of Governors of the Federal
Reserve System should exercise its regu-
Passed Senate 100-0
latory powers to require that loans be
July 28, 1981
made for productive economic purposes,
Dropped in Conference
rather than to enable large firms to
Committee
acquire smaller firms."
--Chiles Resolution later -
To require the President "to limit the
turned into an Amendment
diversion of credit to non-productive
to Export Administration
uses, such as conglomerate mergers and
Bill--35 Democratic Co-
corporate takeovers" and "to assure an
Sponsors
adequate flow of credit to small bor-
rowers at affordable prices
such
Rejected when a harmless
actions shall include voluntary guide-
substitute was approved
lines appropriate to regions of the
50-35 on Nov. 12, 1981
country and types of borrowers. "
--Kennedy Amendment to
-
"The President shall take appropriate
Export Administration Bill.
actions to encourage banking or other
financial institutions to exercise on
Passed Senate 77-12
a voluntary basis restraint in extending
Nov. 12, 1981
credit for the purpose of unproductive
large scale corporate takeovers. Such
action shall include consultation and
cooperation with the Board of Governors
of the Federal Reserve System."
--Bentsen Resolution
-
Calling on the Federal Reserve to under-
(Many Co-Sponsors,
take an aggressive campaign to encourage
20 or so)
banks to stop providing loans for unpro-
ductive and speculative purposes, and
(Also has been introduced
to increase loans for productive purposes.
by several House members
including Pickle and
Rinaldo)
Introduced Sept. 1981
No action.
-Sasser Resolution
-
"It is the sense of Congress that poli-
cies to prevent additional increases in
Defeated 57-37
interest rates and also to restrain
May 13, 1981
nonessential credit growth are necessary. "
Required that a study be done to, among
other things, investigate "the feasibility
of implementing a dual prime rate to chan-
nel credit to those sectors of the economy
that have suffered from chronic credit
shortages.
"
-2-
--Chiles Resolution
-
To create a Committee on Interest Rates
S.J. Res. 112
and the Availability of Credit: (1) to
publish voluntary guidelines to limit
Introduced Sept. 1981
the large scale diversion of credit to
nonproductive uses such as conglomerate
Co-sponsored by Boren,
takeovers and mergers, and (2) to pub-
Nunn, Johnston and
lish voluntary guidelines to assure an
Pryor.
adequate flow of credit to small bor-
rowers at affordable prices.
No action,
Cong. Jeffords Resolu-
-
That the Federal Reserve "shall take
tion H. Res. 227
prompt and effective action to discourage,
during periods of high interest rates,
Introduced Sept. 1981
the establishment of large lines of
credit which may be used by large cor-
13 Co-sponsors-- 7 of
porations for purposes of acquiring
them Republicans
other corporations. "
-- Reuss, St Germain,
-
That the President and the Federal
Fauntroy Resolution
Reserve shall immediately undertake
"an aggressive campaign designed to
Introduced Nov. 20, 1981
encourage banks to cease providing
loans on lines of credit for unpro-
Hearings scheduled
ductive takeovers and speculative
Dec. 9, 1981
purposes, so as to increase the supply
of credit available for productive uses."
-- H. Con. Res. 160
-
Among other things, said that "the
Administration and Congress should en-
Sponsored by Reuss,
courage the banking system to concen-
St Germain and
trate available credit on those uses
Fauntroy
which contribute most to long-term
productivity, improvement and inflation
Passed House 403-17
fighting.'
July 27, 1981
Legislation to Require Certain Types of
Representation on the Board of Governors
Senate
Jepsen & Garn Resolution
-- That the President and the
S. Res. 209 (22 cosponsors)
Senate should assure that the
specific provisions of the Federal
Reserve Act are followed providing
for agricultural, commercial
(including small business), and
broad regional representation on
the Board.
Burdick Resolution
-- That the President should fill the
next vacancy on the Board with a
person of substantial small
business or farming experience.
Pressler Bill
-- Requiring that at least one member
(3 cosponsors)
of the Board have demonstrable
experience in agriculture and one
in small business; that two members
of Congress be added to the Board,
one by the Speaker of the House,
the other by the President of the
Senate.
Byrd Bill--S. 1787
--
That the deficit will not exceed
(At least 13 cosponsors)
$43 billion in 1982, $22.9 in
1983, be balanced in 1984 and that
the next vacancy on the Board will
be filled by a person representing
small business.
Weicker Resolution
-- "That the next vacancy on the Board
S. Res. 247 (Introduced 11/23)
should be filled by an individual
who has substantial small business
experience."
Hawkins-Metzenbaum Bill
-- Among other things, increases the
(Introduced October 1981)
size of the Board from seven members
to nine "to make it possible for
representatives from many different
economic sectors to participate in
decisions."
House
H.J. Res. 365 by
-- Among other things, resolves that
St Germain, Reuss, Fauntroy,
"the President shall select
& D'Amours (Hearings scheduled
individuals for nomination to
Dec. 9)
vacancies on the Board in accor-
dance with Section 10 of the Federal
Reserve Act so that this nation's
agricultural and commercial
interests, including housing and
small business, will no longer be
underrepresented on the Board. "
Watkins Bill--H.R. 2333
-- To require that no less than 3
members of the Board shall come
from "the agricultural sector,
the industrial sector, the com-
mercial sector or financial
institutions with assets of less
than $150 million."
Skelton Resolution
-- That the President should nominate
H. Con. Res. 217
for appointment to the Board "an
(Introduced November 1981)
individual who fulfills the require-
ment of Sec. 10 of the Federal
Reserve Act which requires that
agricultural and commercial com-
munities of the U.S. including
farms and small businesses be
fairly represented on the Board. "
D'Amours Resolution
-- That the President "should appoint
H. Con. Res. 196
one individual with extensive
(Introduced October 1981)
background and experience in
housing and one individual with
extensive background and experience
in small business to the first two
vacancies on the Board. "
Dorgan Resolution
-- That the President "should fill
H. Con. Res. 195
the 1982 vacancy on the Board
(Introduced October 1981)
with a person of substantial
small business or farming
experience who can genuinely
represent the interests and needs
of independent businesses and
producers
"
Jim Wright, Majority Leader
-- In speech called for appointment
of one small businessman to the
Board.
The
Conservative
Caucus. Inc.
National Headquarters 450 Maple Avenue East, Vienna, Virginia 22180
(703) 893-1550
Project Office 47 West Street, Boston, Massachusetts 02111
(617) 426-7188
Administrative Office 7777 Leesburg Pike, Falls Church, Virginia 22043
(703) 893-1550
January 6, 1982
Hon. James A. Baker, III
Assistant to the President
1/16
Ciccority
?
Chief of Staff
The White House 20500
Dear Jim:
her you hands JAB
I believe it would be a great mistake for the President to
recommend the substitution of an independent national
pecil from
education foundation for the Department of Education.
KC 1.25 I
Both the Legal Services Corporation and the Corporation for
Public Broadcasting are examples of the liberal ideal of
Janking
insulating Federal decision making from politics. That is a
ask MA to
nice way of disguising the insulation of Federal policy
setting from accountability to the voters and taxpayers whom
the government is established to serve.
them me.
The President was right the first time when he proposed
7-2
eliminating categorical educational programs at the Federal
level. The block grant approach provides a reasonable
to
transition.
Instead of conceding an important public policy question to
the liberals, insist on what is right and achieve it by the
exercise of the veto over appropriations and authorizations
in conflict with your proposal.
Many thanks for your consideration.
With personal best wishes, I am
Sincerely,
Hand Howard Phillips
National Director
HP:kas
Board of Directors
National Director
National Field Director
Presidential Policy Project
Publications
Howard Phillips, Chairman
Howard Phillips
Peter J. Thomas
Brig. Gen. Albion Knight, USA (Ret.)
Senate Issues Yearbook
Peter J. Thomas, Secretary
Director
Senate Report
Lawrence J. Straw, Jr., Treasurer
Executive Director
Director of Field
Dwight Bratcher
Grass Roots
Richard Derham
F. Andy Messing, Jr.
Coordination
Assistant Director
Member's Report
J. Alan MacKay
Eric Bleicken
Administrative Vice Chairman
Media Director/Special Projects
Charles Orndorff
Director of Research
Larry A. Woldt
and Publications
Susan E. Phillips
THE WHITE HOUSE
WASHINGTON
January 19, 1982
TO: Michael Horowitz, OMB
RE: Legal Services Corporation
The attached is typical of JAB's
discussions with Howard Phillips
on the issue of Legal Services
Corporation.
We have talked to Phillips in the
interim and told him we were looking
into the matter and would respond to
him in more detail after the Holidays.
If you could expedite a draft response
for JAB signature (as we discussed),
I'd appreciate it.
Jim Jim Cicconi
THE WHITE HOUSE
WASHINGTON
Pending
at
omBr
The
Mike U.
Conservative
Fielding
Ellinged
Caucus,
OMB
National Headquarters 422 Maple Avenue East, Vienna, Virginia 22180 (703) 893-1550
Project Office 47 West Street, Boston, Massachusetts 02111 (617) 426-7188
Administrative Office 7777 Leesburg Pike, Falls Church, Virginia 22043 (703) 893-1550
November 25, 1981
12/1 How handle?
To Rich W. or Mortan Blackwell
Hon. James A. Baker
for draft?
Chief of Staff and
Assistant to the President
The White House
Ciccone DRAFT
PLEASE JAB
RESPONSE
Washington, D.C. 20500
FOR
Dear Jim:
12/8 moT
Thank you very much for taking the time to meet
yesterday with me, Ron Godwin, Richard Viguerie, and
Paul Weyrich.
If I could summarize in a sentence my message, it would
be: "Decide what is needed, not what is politically
possible, and fight for what is needed, recognizing
that a) the President can govern by veto with one third
of either branch of Congress, and b) that, even if he
is overridden or defeated in Congress, by setting forth
what needs to be done, he can give the voters the
opportunity to judge by that standard in November of
1982."
The issue of number one importance to the 400,000
supporters of The Conservative Caucus, and most of the
organizations with which we work, is the elimination of
the Legal Services Corporation. It is entirely up to
President Reagan whether the Legal Services Corporation
shall continue. If he makes clear that he will approve
no authorization, appropriation, or continuing
resolution which extends Legal Services beyond a date
certain for its elimination, that will be the end of
it.
On the other hand, if he fails to stake out a firm
position, the program will continue well beyond his
Presidency. It is not enough to name Reaganites to the
Board of Directors
National Director
National Field Director
Presidential Policy Project
Publications
Howard Phillips, Chairman
Howard Phillips
Peter J. Thomas
Brig. Gen. Albion Knight, USA (Ret.)
Senate Issues Yearbook
Peter J. Thomas, Secretary
Director
Senate Report
Lawrence J. Straw, Jr., Treasurer
Executive Director
Director of Field
Dwight Bratcher
Grass Roots
Richard Derham
F. Andy Messing, Jr.
Coordination
Assistant Director
Member's Report
J. Alan MacKay
Eric Bleicken
Administrative Vice Chairman
Media Director/Special Projects
Charles Orndorff
Director of Research
Larry A. Woldt
and Publications
Susan E. Phillips
Page 2
Board of the Corporation. Federal funding and
authority for it must be completely eliminated.
It is my solemn prayer that you and your colleagues
will act courageously and decisively on this issue
between now and the expiration of the continuing
resolution on December 15.
Once again I am grateful to you for your consideration.
Sincerely,
Havad Phillips
National Director
HP:kas
P.S. I am also grateful for the fact that David
Stockman continues in office as Director of OMB.
While I have not agreed with all of Dave's
positions on the issues, noone has done more to
bind conservatives to this Administration than
Dave Stockman. His courage in fighting for
spending cuts is something we deeply appreciate.
2/10 2c.
JAB
Decision
MEMO
THE WHITE HOUSE
Incument w/em MB
art Graig Thanks to Dene 13/"
2/2/2017 MOT
WASHINGTON
JC
FOR BICFAST
February 2, 1982
2/8. Thany
Em
MEMORANDUM FOR JAMES A. BAKER, III
MBa
PS. a Give Done
FROM:
Jim Cicconi
SUBJECT:
Haitian Refugees
de
The seriousness of the problem surrounding detention of
Haitian refugees has already been discussed in senior
staff and other meetings. You had suggested that the
problem should probably be the first with which the new
Ad Hoc Group on Minorities and Women grapples.
In the meantime, though, I think it important that we
lay the groundwork (i.e. Grand that we have a written report
to consider in the Council) Thus, I suggest that DOJ
be asked to prepare a paper on refugee policy in general,
and our Haitian (or "economic refugee") policy in
particular. This would be more comprehensive than the
shorter, more specific paper I have suggested on Cuban
stowaway policy.
Among other points they consider relevant, DOJ could be
asked for a statement of facts on:
1.
current refugee policy;
2.
long-term intentions/goals of that policy;
3.
policy standards currently applied to Haitian
refugees; and
4.
short and long-term intentions regarding Haitians
currently being detained, including circumstances
of detention and timetable for resolution of law-
suits.
Decision: If you agree with the above, suggest you pass
this on to Ed Meese at breakfast in the form of a
suggestion.
AGREE DISAGREE AND WILL PASS ON
SEE ME
jim
THE VICE PRESIDENT
WASHINGTON
Name No in fucts
Ken Cribb
to check 11
Chase:
DOI will
got back on
Pete McCloskey gave me this.
it.
He wants to head off a confron-
tation such as envisaged in page
2 of this letter.
Please write it up for JAB III
and give to Cicconi.
GB 2-7-82
DRAFT
February 2,
1982 fets been sid has
The Honorable Ronald Reagan
The White House
Washington, D. C. 20500
pun
Dear Mr. President:
We want to make you aware of a serious confrontation which
is developing between the Executive Branch and Congress as a
result of Secretary Watt's position on a relatively-minor matter,
the acquisition of roughly 1,060 acres on Sweeney Ridge, Cali-
fornia, surrounding the Portola Discovery Site of San Francisco
Bay.
In the Fiscal 1982 Appropriations Act signed by you into
law on December 23, 1981 (P.L.-97100), $107.7 million is spe-
cifically earmarked for "Land Acquisition and State Assistance;" "
and the committee report language (House Appropriations Com-
mittee Report 97-163) specifically sets $10 million aside for
the purchase of Sweeney Ridge.
This amount was subsequently reduced, in accordance with
your request for an across-the-board four-percent cut, to
$9.6 million.
The Trust for Public Land, a private, non-profit corporation,
has obtained an option for the purchase of Sweeney Ridge in the
sum of $9.6 million; but such option expires on February 14, 1982,
-2-
at which time the Trust can renew the option, but only for an
additional $2 million, which will put the option price over
the $9.6 million appropriated figure.
Secretary Watt, upon the recommendation of the National
Park Service, has stated flatly and unequivocally that he
will refuse to purchase Sweeney Ridge and instead will ask
that the $9.6 million be re-programmed to apply to some $46
million in deficiencies on other properties in the process of
being acquired by the Service.
We can assure you that Congress does not intend to approve
such re-programming. We have authorized and appropriated the
$9.6 million specifically for Sweeney Ridge and believe that
you should direct Secretary Watt to acquire the property on or
before the February 14 deadline.
To fail to do this could bring on the first confrontation
since the Nixon years involving the refusal of the Executive
Branch to carry out a specific Act of Congress, signed and ap-
proved by the President.
In view of the cooperation which you have requested of the
Congress in the many issues which face us, we hope you will
overrule Secretary Watt in this matter where we earnestly
solicit your cooperation in executing the Act of Congress which
you have signed into law.
Respectfully,
PNMcC
THE WHITE HOUSE
WASHINGTON
2-16-82
TO: ELIZABETH DOLE
The attached is forwarded to
you per Jim Baker's request
(please see JAB note on cover
page) .
Thank you.
Jim Cicconi
MEMORANDUM
UNITED STATES DEPARTMENT OF EDUCATION
WASHINGTON, D.C. 20202
PERSONAL
TO
: Mr. James A. Baker, III
Chief of Staff
DATE: FED $ 1980
Tom
FROM : Thomas P. Melady
Assistant Secretary for Postsecondary Education
SUBJECT: Formal Expression of Support for the Nation's
Women's Colleges
1. The attached proposal will be very well received
by the women's colleges -- over half are Catholic
connected. These institutions are particularly
important to ethnics and families of first generation
college students.
2. The leadership of the women's colleges is predom-
inantly mainsteam America and centrist in their
File
philosophy. In my opinion, the political aspects
of this proposal would be extremely positive.
JAB 2/2/82 READING
K2'
MDJ
2/15
gr Phi to Doh.
Would this h worthwhile convenince. Jeds
discuss of her Thanks
9AB
MEMORANDUM
UNITED STATES DEPARTMENT OF EDUCATION
WASHINGTON, D.C. 20202
TO
:
The Secretary
DATE:
THROUGH: US
JAN 281982
ES
FROM : Thomas P. Melady
Trimuly
Assistant Secretary for Postsecondary Education
SUBJECT: Follow-up to my Memorandum of January 11, 1982, "Formal
Expression of Support for the Nation's Women's Colleges"
With your concurrance and assistance, I would like to propose
to the President that he invite the Executive Committee of the
Women's College Coalition to the White House. On this occasion
we would encourage him to issue a Presidential Memorandum
congratulating them on behalf of their member colleges, for
outstanding achievements and supporting the 114 undergraduate
colleges for women in the United States.
Late Spring would be an opportune time since most institutions'
commencements occur at this time of year. Hopefully the First
Lady, a graduate of a women's college, and Mrs. Bush, who
attended a women's college, would be in attendance.
Partial rationale for my proposal is the following:
1. Women's colleges are a significant part of the
diversity of American higher education. They
account for 7% of all private colleges and are
an important part of what must be tenaciously
preserved if American higher education is to retain
the richness and quality that is so important to
the Nation.
2. Women's colleges are consistant with this
Administration's commitment to voluntarism, and to
private sector initiatives. Founded mostly in the
19th Century, today they have the best record in higher
education on the issues that are critical to women's
advancement - the numbers of women in teaching and
administrative posts, women majors in mathematics,
economics, etc. Importantly, these colleges have done
all this voluntarily, without regulatory pressures,
without the infusion of Federal demonstration funds.
Page 2 - The Secretary
3. Women's colleges bring quality education to an
important diverse group of women undergraduates.
In addition to the extraordinary role of the
"Seven Sisters" other nationally known women's
colleges have played a significant role, parti-
cularly those connected with the Catholic Church.
These women's colleges have raised the expectation
of countless first generation and ethnic background
students. In recent years these colleges have
extended their opportunities to include older women
not only "traditional aged.
4. Graduates of women's colleges include, Nancy Reagan,
Nancy Reynolds and Muffie Brandon. Margaret Mead,
Pearl Buck, Helen Keller, Barbara Walters, Leslie Stahl,
Elizabeth Drew, Mary Wells Lawrence, Katherine Hepburn,
Meryl Streep, Tammy Grimes, Barbara Tuckman,
Edna St. Vincent Millay and seven of the current 20
women members of Congress are women's college graduates.
5. Women's colleges are prime examples of men and women
working together on behalf of women. Two-thirds of
the presidents are female. Faculty and Boards of
Trustees are about 50-50 male and female.
See attached background on the Women's College Coalition which
includes membership and the current members of the Executive
Committee.
Attachment
WOMEN'S COLLEGE COALITION
Suite 1003 1725 K Street. N.W. Washington, D.C. 20006 (202) 466-5430
BACKGROUND ON THE WOMEN'S COLLEGE COALITION
The Women's College Coalition is a voluntary organization
of 70 women's colleges nationwide. Members come from 24 states
and the District of Columbia, and include public and private,
independent and Church-related, and two and four-year colleges.
They also represent an extraordinary diversity of institu-
tions -- from Smith, Wellesley, Mount Holyoke, and the other
Seven Sister institutions for women; to west coast Mills and
southern Sweet Briar; to Texas Woman's University, a public in-
stitution and the largest university for women in the world;
to traditionally Catholic colleges like the College of New
Rochelle, Saint Mary-of-the-Woods College, and the College of
Saint Catherine, which have done so much to make quality under-
graduate education available to first-generation, often ethnic,
young women; to Spelman College in Georgia, an institution pri-
marily for black women; to the two-year Bay Path Junior College.
The Women's College Coalition exists as a spokesperson and
information resource for women's colleges. It collects data
and materials on the particular contribution of these colleges
to the personal and professional development of women students;
maintains liaison with the higher education community and with
women's organizations; sponsors conferences on educational is-
sues of concern to women; and works in all of its activities to
generate media and other attention highlighting the importance
of the single-sex colleges for women.
The Coalition does not function as a policy making body,
and does not take public policy stands. It does, however, seek
to maintain relationships with education officials in the pub-
lic sector, and with other leaders who play a significant role
in shaping educational programs. Representatives of the Coali-
tion met, in 1979, with then-Sccretary of the Department of
Health, Education and Welfare Joseph A. Califano, and women's
college presidents subsequently participated in a conference
convened by HEW Secretary Patricia Roberts Harris in September
1979, "The Secretary's Conference on Women's Colleges."
In April 1981, representatives of the Coalition had the
opportunity to continue their conversations with education of-
ficials through a meeting with Department of Education Secretary
Terrel Bell.
-- A Project in Cooperation with the Association of American Colleges
-2-
The Women's College Coalition was founded in 1972, as a
project of the Association of American Colleges. Its work is
still done in cooperation with the AAC, a higher education as-
sociation with a national membership of approximately 600 col-
leges and universities. The Coalition is funded through the
contributions of the member colleges, and governed by a nine-
member executive committee of member presidents. Those cur-
rently on the Executive Committee are:
Sister Dorothy Ann Kelly, (Chair), President, College of
New Rochelle (NY)
Alberta Arthurs, President, Chatham College (PA)
John Chandler, President, Scripps College (CA)
Alice Emerson, President, Wheaton College (MA)
Sister Therese Higgins, President, Regis College (MA)
Elizabeth Kennan, President, Mount Holyoke College (MA)
Sister Catherine McNamee, President, College of Saint
Catherine (MN)
Mary Patterson McPherson, President, Bryn Mawr College (PA)
Robert Spivey, President, Randolph-Macon Woman's College (VA)
The Coalition's offices are in Washington; Marcia K. Sharp
is the Executive Director.
WOMED : VITA
List
CALIFORNIA
Mills College
Meunt St. Mary's College
Scripps College
-AMBEHIRE
inthy-Sawyer College
COLORADO
Fivier College
Colorado Women's College
JERSEY
CONNECTICUT
Titall College
Albertus Magnus College
Tollege cf Saint Elizabeth
Saint Joseph College
Couplass College, Putgers Univ.
Georgian Court College
DISTRICT OF COLUMBIA
Mount Vernon College
IN YORK
Trinity College
Earnard College, Columbia Univ.
College cf SEX Pottelle
GEORGIA
Tenke College
Agnes Scott College
Maria Regina College
Spelman College
Marypount College
Marymount Marhattan College
ILLINOIS
Molloy College
Earat College
Pussell Sage College
Mundelein College
Wells College
William Smith College
INDIANA
Saint Mary-of-the-Woods Criters
NAME CAROLINA
Saint Mary's College
Salem College
:-
KANSAS
Saint Mary College
College of Mount St. Joseph on the
Ohio
LOUISIANA
Newcomb College, Tulane Inc.
:
ANSYLVANIA
Bryn Have College
MARYLAND
Carlow College
College of Notre Dame of THE
Cedar Crest College
Goucher College
Chather College
Bood College
Moore College of Art
Rosement College
MASSACHUSETTS
Villa Maria College
Bay Path Junior College
Wilson College
College of Our Lady of the Elm
Emmanuel College
SOUTH CARCLINA
Mount Holyoke College
Converse College
Pine Manor College
Radcliffe College
TEXAS
Texas Woman's University
Regis College
Simmons College
Smith College
TERMONT
Wellesley College
Trinity College
Wheaton College
SIRGINIA
Hollins College
MINNESOTA
College of St. Benedict
Mary Balówin College
College of St. Catherine
Marypount College of Virginia
College of St. Teresa
Fandolph-Macco Fomen's College
Sweet Briar College
MISSISSIPPI
Mississippi University := ==
WISCONSIN
Alverno College
November 1951
U.S. DEPARTMENT OF EDUCATION
MEMORANDUM
TO
: The Secretary
DATE: January 11, 1982
Through: U
ES
FROM
: Thomas P.
Melady
Assistant Secretary for Postsecondary Education
SUBJECT: Formal Expression of Support for the Nations Women's Colleges
As an expression of support for the achievements of the Nations
women's colleges, it would seem appropriate and justified to note
the contributions of these institutions to the Nation. It would
also be reinforcing to these institutions in their efforts to
remain single sex, solvent, and viable educationally if they were
to receive a public expression of the important role they play
in the higher education enterprise. The continued existence of
these women's colleges is a positive example of this Nation's and
this Administration's commitment to pluralism and independence.
I would encourage the President to make a positive statement in
support of women's colleges. An Executive Memorandum may be the
appropriate vehicle.
The following supporting facts were gleaned from a study by the
Women's College Coalition entitled, Profile II, A Second Profile
of Women Colleges, determined that:
There are 116 women's colleges in the United States.
In 1979-80, total enrollment was approximately 125,000.
Sixty-seven percent of all women's college presidents are
women. Compared to 8% nationally.
Freshmen at women's colleges tend to have higher educational
aspirations than freshmen in general.
Women's colleges comprise approximately 4% of all reported
institutions of higher education and educate 2% of the Nation's
female undergraduates. Their leadership is predominantly
female.
Women support their institutions with the highest percentage
of giving that exists anywhere in higher education.
Women are present in significant proportions throughout the
power, reward, and prestige systems of women's colleges --
accounting, for example, for 60% of undergraduate headcount
faculty, 50% of tenured faculty, 48% of board members, 71%
of all presidents and more than 50% of all distinguished
lecturers, honorary degree recipients, and commencement
speakers over the last five years at women's colleges.
Page 2 - The Secretary
O
These colleges, of which approximately half were founded
before 1900, and slightly more than 10% have been founded
since World Was 11. It is estimated that the total living
alumnae of these 116 institutions number roughly one million.
O
These colleges provide a supportive atmosphere for women,
encouraging women to take leadership roles, develop self-
confidence and self-respect, and fight stereotypes.
Diple
THE WHITE HOUSE
WASHINGTON
February 16, 1982
MEMORANDUM FOR JAMES A. BAKER III
ASSISTANT TO THE PRESIDENT
FROM:
FRED F. FIELDING )
I recommend for your consideration that we review
the pros and cons of dedicating an "unknown" for
the Vietnam conflict to add to the crypts at
Arlington Cemetery. We should get the views of
DOD, VA, Veteran's groups, Congress, private
groups, etc., so we have developed a position
Fuller?
.N
when this issue is raised or if it appears to be
a worthwhile initiative.
EM have
problem? ?
check him. of wt study Bides
ok, Then check
Dole.
THE WHITE HOUSE
WASHINGTON
March 18, 1982
TO: CRAIG FULLER
RE: Honoring Unknown Soldier from the
Vietnam War
Attached is a memo from Fred Fielding
suggesting that we add an unknown soldier
from the Vietnam War to the crypts at
Arlington Cemetery.
Also attached is a memo I prepared with
a suggested implementation process (to
speed things along). Yesterday I re-
ceived word that it was okay with EM
to proceed on this.
Could you take a look at #1 on the
memo (highlighted) and see if you agree
that it is the next appropriate step?
Thanks.
Jim Cicconi
THE WHITE HOUSE
1 9FEB 1982
WASHINGTON
February 19, 1982
MEMORANDUM FOR KENNETH CRIBB
FROM:
Jim Cicconi
G.
SUBJECT:
Honoring an Unknown Soldier from the Vietnam War
of of to proceed
Per our conversation, and at JAB's request, would you please see
if Meese has any problem with further exploring the attached idea.
If okay, would suggest you return to me for preliminary check with
Elizabeth Dole. After that, I would suggest the following sequence
of actions for EM comment:
1.
Craig Fuller would request a detailed proposal and comments
from DOD; then the proposal would be circulated for comment
to VA and other affected agencies.
2.
If reaction is positive from the agencies, Elizabeth Dole
should then consult with veterans and other private groups.
3.
Proposal would then be circulated to WH staff for comment; at
the same time, Ken Duberstein would consult with the
appropriate congressional figures.
4.
Decision on proposal.
If reaction to the proposal is positive, and a decision is made to
go forward, suggest that Memorial Day, May 30, might be an
appropriate date for announcement.
Dole
THE WHITE HOUSE
WASHINGTON
February 16, 1982
MEMORANDUM FOR JAMES A. BAKER III
ASSISTANT TO THE PRESIDENT
FROM:
FRED F. FIELDING )-2-
I recommend for your consideration that we review
the pros and cons of dedicating an "unknown" for
the Vietnam conflict to add to the crypts at
Arlington Cemetery. We should get the views of
DOD, VA, Veteran's groups, Congress, private
groups, etc., so we have developed a position
Fuller?
when this issue is raised or if it appears to be
a worthwhile initiative.
EM have
problem? ?
check him. ck, Then of w/ study check of 9)
Dola.
THE WHITE HOUSE
WASHINGTON
March 24, 1982
TO: BUD McFARLANE
RE: Radio Marti
Attached letter from Congressman Jim
Leach was sent to President with copy
to JAB and Judge Clark (among others).
Could you please check the points he
raises thru USICA to see if they were
considered? The point he raises about
station WHO in Des Moines may be of
psrticular interest to the President.
JAB would appreciate it if you could
let him know (or let me know, if you
prefer) both your thoughts and USICA's
on the merits of his arguments.
Thanks.
Jun Jim Cicconi
COMMITTEE
March 8, 1982
KING. FINANCE AND URE AN AFT AIRS
JIM LEACH
FOREIGN AFFAIRS
MEMBER OF CONGRESS
Dear time,
1'd appriciate your guring This
same your personal attention. it
President rither severely in and a
health patential of empassassing the
and a surrounding states.
Test,
Marti and
sincerely hope that the reservations expressed by some in Congress
regarding the desirability of broadcasting the truth directly to
Cuba will not stand in the way of this important initiative.
I did want to bring to your attention, however, important technical
problems that could arise if the project goes ahead as currently
planned. The frequency chosen for Radio Marti is 1040 Kilohertz -
precisely the channel used by WHO of Des Moines for its clear-channel
broadcasts which reach much of the nation during evening hours. I
understand that this frequency was chosen because the signals emitted
by Radio Marti itself would cause relatively little interference with
private broadcasting in the United States. It is my understanding,
however, that the Government survey that led to this conclusion did
not take into account the effects of likely Cuba jamming to prevent
Radio Marti from reaching its audience in Cuba.
Fidel Castro's threat to jam Radio Marti with a 500 kilowatt transmitter
beamed at the United States from Cuba should not be taken lightly.
If this threat were carried out, the effect on WHO, as well as on a
host of other stations in the United States, would be devastating. The
effective nighttime range of WHO, which now sends a clear signal from
Minnesota to Louisiana and from Wyoming to Pennsylvania, would be
reduced to about a thirty-mile radius around Des Moines.
102 S. CLINTON STREET
OFFICES:
306 F AND M BANK BUILDING
THIRD AND JEFFERSON STREETS
322 WEST THIRD STREET
ROOM 505
1406 LONGWORTH HOUSE OFFICE BUILDING
BURLINGTON, IOWA 52601
DAVENPORT, IOWA 52801
IOWA CITY. IOWA 52240
WASHINGTON, D.C. 20515
(319) 326-1841
(319) 351-0062
1910) 752-4584
BANKING FINANCE AND AREAIRS
FOREIGN AFFAIRS
CONGRESS OF THE UNITED STATES
March 8, 1982
The President
The White House
Washington, D.C. 20500
Dear Mr. President:
I am a strong supporter of the establishment of Radio Marti and
sincerely hope that the reservations expressed by some in Congress
regarding the desirability of broadcasting the truth directly to
Cuba will not stand in the way of this important initiative.
I did want to bring to your attention, however, important technical
problems that could arise if the project goes ahead as currently
planned. The frequency chosen for Radio Marti is 1040 Kilohertz -
precisely the channel used by WHO of Des Moines for its clear-channel
broadcasts which reach much of the nation during evening hours. I
understand that this frequency was chosen because the signals emitted
by Radio Marti itself would cause relatively little interference with
private broadcasting in the United States. It is my understanding,
however, that the Government survey that led to this conclusion did
not take into account the effects of likely Cuba jamming to prevent
Radio Marti from reaching its audience in Cuba.
Fidel Castro's threat to jam Radio Marti with a 500 kilowatt transmitter
beamed at the United States from Cuba should not be taken lightly.
If this threat were carried out, the effect on WHO, as well as on a
host of other stations in the United States, would be devastating. The
effective nighttime range of WHO, which now sends a clear signal from
Minnesota to Louisiana and from Wyoming to Pennsylvania, would be
reduced to about a thirty-mile radius around Des Moines.
OFFICES:
102 S. CLINTON STREET
306 F AND M BANK BUILDING
THIRD AND JETTERSON STREETS
322 WEST THIRD STREET
ROOM 505
1406 LONGWORTH HOUSE OFFICE BUILDING
BURLINGTON IOWA 52601
DAVENPORT, IOWA 52801
IOWA CITY, IOWA 52240
WASHINGTON, D.C. 20515
(319) 752-4584
(319) 326-1841
(319) 351-0062
Page 2.
Given the very real danger that Castro will seek to jam Radio Marti,
I urge that careful consideration be given to alternatives to the use
of the 1040 frequency for AM broadcasting. At least four alternatives
have come to my attention, all of which would appear preferable to
current plans:
A. Use of the facility already owned by Voice of America at Marathon,
Florida. This would permit Radio Marti to be in operation almost
immediately and would eliminate any necessity to create an entirely
new facility. I understand that Radio Marathon, which broadcasts
at 1180 KHz, is presently used only a few hours a day. While
I recognize that Voice of America and Radio Marti will have
entirely different purposes, would it not be preferable to
use a facility already owned by the U.S. government than to
create an entirely new one on an important frequency that is
likely to be jammed. Radio Marathon's facilities could be
leased to Radio Marti with control over all programming and
operations retained by Radio Marti.
B. Use of Mexican clear-channel frequency. This option might require
Mexican permission under the terms of the Rio Agreement, but I
understand that some frequencies currently allocated to Mexico
are unused.
C. Use of 1200 Kilohertz. This clear-channel frequency is currently
used by a station in San Antonio. I am told, however, that
interference from Cuban jamming would be less severe on this
frequency, in part because higher frequencies are less affected
by atmosphere interference.
D. The use of a flexible FM signal. In the view of many broadcasting
experts, a primitive system has been chosen for Radio Marti,
whereas a more sophisticated system would have greater chances
of reaching the intended audience without risking interference
with domestic signals in the United States. Specifically, they
suggest that an FM signal which would switch daily along a range
of frequencies would be far harder to jam than a fixed-frequency
AM signal.
Other possibilities worth considering include broadcasting from a ship at
sea or, conceivably, from an aircraft using the FM service.
Page 3
As I stated at the outset, I have no desire to complicate the
establishment of Radio Marti, but I would hope that more sophisticated
arrangements can be made to ensure that this important project does
not result in severe damage to American broadcasting. As an alumnus
of WHO, no one could be more aware than you of the important role
that WHO plays in American life. Known as the "Voice of the Midwest,"
WHO might better be characterized as the "Voice of Rural America."
It would be tragic if our very worthy effort to convey the truth to
the Cuban public should rob the American farmer of one of his most
important sources of information. I respectfully urge you to consider
all possible alternatives before going ahead with current plans for
Radio Marti.
Sincerely,
Jim Johnson Leach
Member of Congress
cc: FCC Chairman Mark Fowler
Mr. Kenneth R. Giddens
Honorable Charles Wick
Mr. James B. Conkling
Mr. F. Clifton White
Honorable Thomas O. Enders
Honorable James Baker III,
Honorable Edwin Meese III
Honorable Michael K. Deaver
Honorable Lee Atwater
Mr. Bill Clark
Mr. Robert Harter
Mr. Michael McCarthy
JL:tha
3/19 JC - NS
THE WHITE HOUSE
WASHINGTON
in
-
March 19, 1982
FF will notify
re DOJ decisions.
3/20
JAB can then call
Jowhy appeal
MEMORANDUM FOR JAMES A. BAKER I:
Symms of Nickled
EDWIN MEESE III
FROM:
FRED F. FIELDING
gc
5/24
SUBJECT:
Lord V. Local 20
Supreme Court No
The Supreme Court has asked the United States
FF FF Job A EM then AG
to file an amicus brief on the Petition for
Certiorari in the above-captioned case,
which presents the question of whether a
state's right-to-work law is applicable to
federal enclaves over which the United States
has exclusive jurisdiction. A brief analysis
90,
of the issues is set forth in the attached
memorandum.
AVC
The Department of Defense and the Federal Labor
Relations Authority have expressed the view that
state right-to-work laws should not apply, and
therefore have recommended that the government
express opposition to Supreme Court granting
certiorari in this case. The Department of Labor
has taken no position. We are advised that the
Solicitor General plans to meet with the "right-
to-work" side next week before making his final
recommendation as to the Government's position.
As this is a controversial issue, please let me
know if you would like additional information
or further follow-up with the Department of
of Justice.
/Attachment
MEMORANDUM
Robert B. Lord, et al. V. Local Union No. 2088, IBEW, et al.
(S.Ct. No. 81-806)
This case, pending before the Supreme Court on petition for
writ of certiorari, presents the question whether a state's
right-to-work law is applicable to federal enclaves over
which the United States has exclusive jurisdiction. The
Supreme Court has asked the United States to file a brief
expressing its view as to whether or not the Court should
review the case.
Suit was brought by employees of RCA International
Service Corporation against RCA and the International
Brotherhood of Electrical Workers local which represents
them for labor-management relations purposes. The employees'
work sites are Patrick Air Force Base, Florida, and Cape
Canaveral Air Force Station, Florida. Exclusive legislative
jurisdiction over both of these installations was ceded by
Florida to the United States and accepted by it. Jurisdic-
tion over Patrick was ceded and accepted prior to the time
Florida had a right-to-work law, and jurisdiction over Canaveral
was ceded and accepted after Florida enacted a right-to-work
law.
In March, 1979, RCA and the Union agreed to an agency
shop provision in their collective bargaining agreement
which required the plaintiffs, as a condition of their
continued employment, to join the Union or to pay the equiva-
lent monthly dues to the Union. Following implementation of
the agreement, plaintiffs brought suit in the U.S. District
Court for the Middle District of Florida alleging that the
agreement is prohibited by Florida's right-to-work laws.
The district court held that state law applies on a
federal enclave unless that law was not in existence at the
time of cession or unless the law is inconsistent with
federal law or policy. Since Patrick was ceded before the
Florida right-to-work law was enacted, the district court
determined that that law could not be applied on Patrick.
However, the court found no conflict between the Florida
right-to-work law and federal law and therefore held that
the Florida statute was applicable to Canaveral.
A divided Fifth Circuit panel affirmed the district
court with regard to the law applicable at Patrick, but
reversed as to the law applicable at Canaveral. The court
- 2 -
of appeals agreed with the general principles of law applied
by the district court, but held that there is a conflict
between Florida's right-to-work law and federal labor law
and that nothing in the National Labor Relations Act grants
power to the State of Florida to enact a right-to-work law
that is applicable within a federal enclave. Judge Roney,
dissenting in part, would have affirmed the district court
in all respects.
In their petition for writ of certiorari, the employees
argue that the plain language of Section 14 (b) of the
National Labor Relations Act grants the states the power to
pass right-to-work laws which are effective at any place
within the states' geographic borders, including federal
enclaves. That statute provides:
Nothing in this subchapter shall be construed as
authorizing the execution or application of agree-
ments requiring membership in a labor organization
as a condition of employment in any State or
Territory in which such execution or application
is prohibited by State or Territorial law. (emphasis
supplied)
The employees also argue that even if the lower courts were
correct in holding that Florida's right-to-work law was not
applicable at Patrick, the law should be applied at Canaveral
because it cannot be said to conflict with federal law
which, in Section 14 (b), explicitly permits states to enact
right-to-work laws.
The Union and RCA have filed briefs supporting the
court of appeals' decision and its rationale. The court of
appeals noted that several Supreme Court decisions (Retail
Clerks Local 1625 V. Schermerhorn, 375 U.S. 96, 103 (1963)
and Oil Chemical and Atomic Workers V. Mobil Oil Corp., 426
U.S. 407, 417 (1976)) have stated that right-to-work laws
conflict with Section 8 (a) (3) of the National Labor Relations
Act which expressly permits union security provisions (such
as agency shop provisions) Under these decisions, Section
14 (b) is construed as a provision which simply removes the
preemptive effect on state law which Section 8 (a) (3) might
otherwise be interpreted to have. The court of appeals
reasoned that a provision which merely removes the preemptive
effect of another provision in the same law cannot be construed
as an expression of congressional intent to extend state law
into a federal enclave. See United States V. State Tax Commission,
412 U.S. 363 (1973) (respecting the effect of state liquor
laws on federal enclaves). Therefore the court of appeals
rejected the employees' argument that the existence of the
enclave within state boundaries subjects the enclave to
state law.
ORRIN G. HATCH. UTAH, CHAIRMAN
ROBERT T. STAFFORD, VT.
EDWARD M. KENNEDY. MASS.
DAN QUAYLE. IND.
JENNINGS RANDOLPH. W, VA.
PAULA HAWKINS, FLA.
HARRISON A. WILLIAMS, JR., N.J.
BON NICKLE OKLA,
CLAIBORNE PELL, R.I.
LOWELL P. WEICKER, JR., CONN.
THOMAS F. EAGLETON, MO.
GORDON J. HUMPHREY, N.H.
DONALD W. RIEGLE, JR., MICH.
United States Senate
JEREMIAH DENTON, ALA,
HOWARD M. METZENBAUM, OHIO
JOHN P. EAST, N.C.
COMMITTEE ON LABOR AND
GEORGE W. PRITTS, JR., CHIEF COUNSEL
HUMAN RESOURCES
RENN M. PATCH, STAFF DIRECTOR AND GENERAL COUNSEL
LAWRENCE C. HOROWITZ, M.D.. MINORITY STAFF DIRECTOR
WASHINGTON, D.C. 20510
March 4, 1982
The Honorable Raymond Donovan
Secretary of Labor
200 Constitution Avenue N. W.
Washington, D.C. 20210
Dear Mr. Secretary:
The Solicitor General of the United States recently asked the Department
of Labor to give its views on whether the Supreme Court of the United States
should grant certiorari in Lord V. IBEW. Therein, the Fifth Circuit Court
of Appeals has held that Florida's Right to Work Law does not preclude
compulsory union dues provisions in collective bargaining agreements covering
employees working at a federal enclave. The Supreme Court has asked the
Solicitor General to file an amicus curaie brief expressing the position of
the Administration on this issue. We urge you to advise the Solicitor General
to seek reversal of the Court of Appeals by supporting the petition for
certiorari.
Collective bargaining agreements that compel the payment of union dues
as a condition of employment cannot be reconciled with basic and fundamental
First Amendment principles of free association. Like any other private
organization, membership in a union should be based upon the voluntary decision
of the individual member. Individuals should not be forced by federal law
to pay union dues against their wishes. Recent judicial determinations indicate
that union dues are primarily used for purposes not directly related to
negotiating contracts and processing grievances. Large portions of coerced
dues are used to support political candidates and causes that many employees
would not voluntarily support. Given these circumstances, the Administration
should advocate a position consistent with its more general policy in
support of voluntarism.
A logical reading of Sections 8(a) (3) and (b) of the National Labor
Relations Act necessarily leads to the conclusion that the NLRA is at a minimum
neutral on complusory dues arrangements. States have been given the authority
by federal law to ban private sector compulsory dues provisions within their
territorial boundaries. It would be anomalous for employees to lose freedoms
guaranteed by their state's Right to Work Law solely because they were technically
employed on a federal enclave.
Compulsory dues provisions are prohibited by the Civil Service Reform
Act of 1978. Federal government employees thus cannot be compelled to financially
support union activities. If the Court of Appeals decision is affirmed, petitioners
will be denied basic freedoms available not only to those private sector
See
Fielding memo
The Honorable Raymond Donovan
Page 2
employees employed elsewhere in Florida, but also to those federal employees
employed on the federal enclave in question. In the face of this double-
anomaly, common sense dictates that the protection of a state's Right to Work
Law should be available to all private sector employees within that state,
including those employed on federal enclaves.
Despite the fact that the legislatures of our respective states have
chosen not to enact Right to Work legislation, we believe that Section 14(b)
of the NLRA is a vital ingredient to the success of any new Federalism plan.
Reversal of the Court of Appeals in Lord will result in significant progress
towards restoring legitimate state sovereignty and renewing a more balanced
federalism.
Shave Symms
Sincerely,
Steven D. Symms
Don Nickles
U.S. Senator
Chairman
Subcommittee on Labor
CC: Honorable William French Smith
Edwin Meese, III
James A. Baker, III
Michael K. Deaver
To JAB memo R.F.
f
3/31 JC JC-NS INS
JAB
of you agree w/ Rich's
last paragraph, we need
to ask that Fred convey
our concern to the AG.
MEMORANDUM FOR JAMES
gc
FROM:
EDWIN RICHA 4/29 IC. Jagnee Think
SUBJECT:
UNITA]
I've almody noted this mimo. on
mother copy this like
On March 3, 1982, the Cabinet Council on Economic Affairs determined
that the Administration would not take a position on legislation re-
lating to the unitary tax until it had completed further study of the
issue and undertaken extensive consultations with interested parties.
Earlier this year, at the request of the Department of the Treasury,
the Department of Justice filed an Amicus Curiae brief in the Chicago
Bridge and Iron Company Case pending before the U.S. Supreme Court.
The Solicitor General's Office petitioned the Supreme Court for an op-
portunity to make an oral argument in this case. Oral argument has
been tenatively approved for April 19, 1982.
As a result of the Cabinet Council decision mentioned above, Assistant
Secretary John Chapoton contacted the Solicitor General's Office to
suggest they not make an oral argument in the Chicago Bridge and Iron
Company Case. Chapoton has not received a response to his request.
White House Intergovernmental Affairs received a substantial number
of critical comments from the National Governors' Association, and
Republican Governors in particular, at the time the Department of
Justice originally filed the Amicus Curiae brief. The Governors
argued that it was inconsistent with the President's New Federalism
for the Federal government, through the Justice Department, to be
arguing against a state's right to impose the unitary tax on cor-
porations doing business within that state.
It is my information the Solicitor General's Office has indicated
to Treasury that to withdraw the request for oral argument would
be an embarrassment to the Solicitor General's Office. I suggest
that to proceed with oral argument, prior to an Administration
decision being made by the Cabinet Council on Economic Affairs,
will undercut the Administration's credibility both on the unitary
tax issue and on the Federalism Initiative. I believe the
Solicitor General's Office should be made aware of this situation.
CC: Fred Fielding
Richard G. Darman
5/4 Jim Medan will call
Craig L. Fuller
Done
mike cutting will report s/s to ~
of
THE WHITE HOUSE
WASHINGTON
CABINET AFFAIRS STAFFING MEMORANDUM
DATE:
March 4, 1982
NUMBER: 050174CA
DUE BY:
CABINET COUNCIL ON ECONOMIC AFFAIRS -- Minutes
SUBJECT:
ACTION FYI
ACTION FYI
ALL CABINET MEMBERS
Baker
Deaver
Vice President
State
Anderson
Treasury
Clark
Defense
Darman (For WH Staffing)
Attorney General
Interior
Jenkins
Agriculture
Gray
Commerce
Beal
Labor
HHS
Mike Wheeler
HUD
Larry Kudlow
Transportation
Energy
Education
Counsellor
OMB
CIA
UN
USTR
CCNRE/Boggs
CEA
CCHR/Carleson
CEQ
CCCT/Kass
OSTP
CCFA/McClaughry
CCEA/Porter
REMARKS:
Attached for your information are the minutes of the
February 23, March 1, and March 3 meetings of the
Cabinet Council on Economic Affairs.
RETURN TO:
Craig L. Fuller
Assistant to the President
for Cabinet Affairs
456-2823
MINUTES
CABINET COUNCIL ON ECONOMIC AFFAIRS
February 23, 1982
8:45 a.m.
Roosevelt Room
Attendees: The Vice President, Messrs. Regan, Block, Donovan,
Weidenbaum, Brock, Porter, Darman, Wright, Sprinkel,
Savas, Gray, Jordan, Mehle, Dederick, Beech, Childs,
Cicconi, Garrett, Hopkins, Hudson, Kudlow, Stanley,
Applegarth, Bledsoe, Hemel, Ms. Constable, Ms. Small,
and Ms. McLaughlin.
1. Report of the Working Group on the Commodity Futures Trading
Commission.
The Council considered a paper, prepared by the Working
Group on the Commodity Futures Trading Commission, includ-
ing their recommendations concerning reauthorization of the
CFTC.
Mr. Mehle reviewed the Cabinet Council's discussion of the
CFTC at its February 11 meeting and four issues requiring
the Cabinet Council's decision: (1) whether to support
reauthorizing the CFTC indefinitely or for a specified
number of years; (2) whether the administration should
support modifying the Commodity Futures Trading Commission
Act to replace the commission form of governance with a
single administrator; (3) whether the industry should be
required to pay user fees to both the CFTC and the National
Futures Association, a self-regulatory body registered by
the CFTC; and (4) the appropriate role of state regulatory
agencies vis-a-vis the CFTC.
The Council's discussion focused on the recent GAO report
on the CFTC, the value of sunset provisions for regulatory
agencies, the relative state and federal roles with regard
to commodities pools regulation, the Federal Reserve Board's
authority to set margin requirements on commodity futures
transactions, and the user fee proposal in the CFTC's pro-
posed legislation and its consistency with the administra-
tions' user fee proposals in the FY 1983 budget.
Decisions
The Council approved supporting extending the reauthorization
of the Commodity Futures Trading Commission for a fixed
period of at least four years.
Cabinet Council on Economic Affairs
Minutes
February 23, 1982
Page Two
The Council supported maintaining the present structure of
commission governance.
The Council endorsed the CFTC approach of fees to offset the
costs of both the CFTC and the National Futures Association
(NFA).
The Council approved supporting the CFTC bill retaining to
the CFTC exclusive regulatory jurisdiction over national
exchange trading and the operations of pool operators. The
bill would also allow the CFTC to share information with
state authorities in connection with legal actions or in-
vestigations conducted by states.
2. Financial Market Developments
The Council reviewed a series of charts, prepared by the
Department of the Treasury, illustrating recent developments
in financial markets.
Mr. Sprinkel's presentation focused on trends in long and
short-term interest rates, the differences between actual
growth in M-1 during the last year and the Federal Reserve's
monetary targets, quarterly rates of growth of the monetary
base and the money supply, the relationship between monetary
growth and growth in the Gross National Product (GNP), and
the relationship between M-1 growth and changes in yields
on three-month certificates of deposits.
Mr. Sprinkel also discussed the surge in M-1 growth between
last October and January, discussions with the Federal
Reserve Board on measures to reduce volatility, and the
threat that high interest rates pose to the success of the
President's economic recovery program.
The Council's discussion of financial market developments
centered on the effects of week-to-week M-1 changes on
interest rates, the effect of Eurodollar shifts on interest
rates and the money supply in the U.S., and the impact on
interest rates from OPEC's shift from a net surplus to a
net deficit position.
The Council also discussed congressional developments
regarding the administration's fiscal year 1983 budget
proposals, the likely effect of the upcoming debt extension
legislation on budget related issues, and the relative impacts
of fiscal and monetary policies on current interest rates.
RBP
MINUTES
CABINET COUNCIL ON ECONOMIC AFFAIRS
March 3, 1982
10:00 a.m.
Roosevelt Room
Attendees: The Vice President, Messrs. Regan, Lewis, Weidenbaum,
Harper, Porter, Williamson, MacDonald, Lyng, Khedouri,
Shasteen, Dederick, Lesher, Chapoton, Garrett, Gray,
Hemel, Anderson, Balabanis, Medas, Johnston, Cribb,
Cicconi, Baroody, and Ms. McLaughlin.
1. Agricultural Commodity Options
The Council reviewed a report from the Working Group on
Agricultural Commodity Options. Mr. Lesher's presentation
focused on the origins of the 1936 ban on trading in agri-
cultural commodity options, the present impetus for removing
the ban, and the arguments for and against it.
The discussion centered on the effects of removing the ban:
whether prices would be more volatile, to what extent an
options market would reduce the volume of futures contracts,
whether or not the Commodity Futures Trading Commission
(CFTC) could adequately regulate trading in agricultural com-
modity options, and what impact repeal of the ban would have
on the government's commodity price support programs.
The Council also considered the Working Group's recommenda-
tion that the ban on options trading in agricultural commod-
ities be lifted subject to the understanding that trading in
these contracts would not start until after the CFTC and the
commodity exchanges have completed a pilot program with option
trading in a few selected commodities.
Decision
The Council agreed to recommend that the Department of Ag-
riculture testify in support of lifting the ban on options
trading in agricultural commodities.
2. Unitary Taxation
The Council reviewed a paper prepared by the Department of
the Treasury on the subject of unitary taxation by the states.
Mr. Chapoton's presentation centered on the concept of unitary
Minutes
Cabinet Council on Economic Affairs
March 3, 1982
Page Two
taxation, the extent of its use by the states, the argu-
ments of proponents and opponents of unitary taxation, the
Treasury Department's on-going study of the issue, and cur-
rent judicial and legislative activities that are the focus
of the present debate.
The discussion focused on the importance of unitary taxation
as a revenue source to the states, its relationship to the
President's New Federalism initiatives, its impact on foreign
commercial relationships, its effect on the efficiency of in-
ternational capital markets, its bearing on the federal gov-
ernment's ability to negotiate international tax treaties,
and its impact on corporations.
Decision
The Council agreed that unitary taxation was a complex is-
sue involving a difficult choice between competing values
and determined that the administration would not take a po-
sition on legislation relating to the unitary tax until it
has completed further study of the issue and undertaken ex-
tensive consultations with interested parties.
RBP
MINUTES
CABINET COUNCIL ON ECONOMIC AFFAIRS
March 1, 1982
10:30 a.m.
Roosevelt Room
Attendees: The Vice President, Messrs. Regan, Baldrige, Stock-
man, Brock, Weidenbaum, Harper, Porter, Darman,
Duberstein, Rollins, Trent, Pratt, Mehle, Jenkins,
Cicconi, Cribb, Gray, Bailey, and Ms. McLaughlin.
1. Conditions in the Thrift Industry
Mr. Richard Pratt, Chairman of the Federal Home Loan Bank
Board, briefed the Council on his view of the financial
condition and projected outlook for the savings and loan
industry.
He noted that during 1981 the savings and loan industry
lost nearly $5 billion, or about 15 percent of its net
worth, and that during the fourth quarter of the year losses
were at a $9 billion annualized rate. As in other indus-
tries, there are wide variations in the health of indivi-
dual institutions. He reported the FHLBB's projections
for the number of institutions that will exhaust their
capital within the next two years.
He also reviewed savings flows in commercial banks and
thrift institutions during the past year relative to other
non regulated savings alternatives as well as the ability
of the savings and loan industry to compete effectively
with commercial banks for retail deposits.
He reported on the estimates of FSLIC expenditures for 1982
through 1986 under three interest rate alternative scenarios,
the rate of failures thus far in 1982, and reviewed alterna-
tive ways of addressing the short-term difficulties of the
industry.
The Council's discussion focused on the 25 basis point dif-
ferential between savings and loan institutions and commer-
cials banks on small savers certificates and its effect on
the flow of savings, the reasons why finding merger partners
for failing institutions may be more difficult in 1982 than
last year, the need for a definitive study of the sources
of the growth in money market funds, and the FSLIC's ability
to successfully conserve their funds.
The Council also discussed alternative actions designed to
maintain public confidence in the financial stability of
thrift institutions and the range of proposals currently
Cabinet Council on Economic Affairs
Minutes
March 1, 1982
Page Two
being advanced including additional legislation relating to
guarantees for FSLIC-insured accounts, transaction/sweep
accounts, the thrift institutions restructuring act, the
home mortgage capital stability act (St. Germain Bill), and
mortgage warehousing plans.
Much of the discussion focused on the fundamental objectives
of government actions relating to the thrift industry:
protecting depositors with minimum cost to the budget and
minimum disruption to the nation's financial structure.
There was general agreement that there was no certain way
to quickly reduce and keep interest rates down and that
there was a need to promptly review a series of measures
to address the industry's short-term and long-term problems.
Decisions
The Council requested that the Thrift Industry Working Group
work closely with representatives of the FHLBB in analyzing
alternative ways of: (1) maintaining and enhancing public
confidence in the thrift industry; (2) increasing the flow
of savings to thrift institutions; and (3) providing the
flexibility needed to facilitate mergers and acquisitions.
The Council also requested the Working Group to evaluate
the range of initiatives being advanced by thrift industry
representatives and groups.
RBP