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    "ocrText": "The original documents are located in Box 4, folder \"Research on Ronald Reagan\" of the\nFoster Chanock Files at the Gerald R. Ford Presidential Library.\nCopyright Notice\nThe copyright law of the United States (Title 17, United States Code) governs the making of\nphotocopies or other reproductions of copyrighted material. Gerald R. Ford donated to the United\nStates of America his copyrights in all of his unpublished writings in National Archives collections.\nWorks prepared by U.S. Government employees as part of their official duties are in the public\ndomain. The copyrights to materials written by other individuals or organizations are presumed to\nremain with them. If you think any of the information displayed in the PDF is subject to a valid\ncopyright claim, please contact the Gerald R. Ford Presidential Library.\nSome items in this folder were not digitized because it contains copyrighted\nmaterials. Please contact the Gerald R. Ford Presidential Library for access to\nthese materials.\nMEMORANDUM\nTHE WHITE HOUSE\nWASHINGTON\nGERALD R. FORD LIBRABY\nNovember 24, 1975\nMEMORANDUM FOR:\nJERRY JONES\nFROM:\nDICK CHENEY\nD\nYou should be aware of the attached.\nAttachment\nNovember 3, 1975\nSERALD\nR.\nMEMORANDUM\nFORD\nThis is intended to be the report on my activities with\nreference to the project stated above which is underway\nby our mutual agreement. At the outset of my commitment\nI indicated my desire to make a report which would outline\nwhat I perceived to be the priorities of the research as\nthey emerged from the first months' sorting of available\ninformation and sources of information.\nI. The following seems to be the best priority for the\nresearch and I am proceeding on this basis unless either of\nyou have some radical objections:\n1. The Economy- I think we have all agreed that this\nis the area where the President will make it or\nbreak it nationally. In addition, it is the area\nwhere Reagan's \"record\" of the conservative philos-\nophy falls apart easiest. Examples:\nA. Statistics on the Reagan era budgets will\nshow that eight years of \"cut, squeeze and\ntrim\" yeilded a budget increase from\n4.6 Billion dollars to 10.2 Billion dollars.\nThat is hardly what a conservative should\nbe doing. In addition, it is good to use if\nhe attacks with the growth of the national\nbudget.\nB. While Governor Reagan was responsible for the\nlargest tax increase in California history.\nAgain, hardly \"cut, squeeze and trim.\"\nC. While trying to sell the public the concept\nthat tax reform had been accomplished the\nfacts show that only tax shifts occured while\nReagan was Governor.\nD. If the Ford Tax Cut program can be pushed through\nthe Congress or any reasonable compromise, then\nFord Project\nPage 2\nthe dicotomy of Reagan Tax increase\n(the biggest in California History) can\nbe made with the Ford Tax Cut--at a time\nwhen the economy needs the infusion of\ndollars that the tax cut will provide.\nE. The entire tax cut program is probably the\nR.\nBIALD\nFORD\nsingle most important thing on the legislative\nfront with large legislative/political impact.\nLou Harris says that 72% of the American\nCOUNTY\npublic says that they no longer get good\nvalue from their tax dollars. When the cut\nis successful, it would be well to emphasize\nthat it is an effort to help bring more value\nfor the dollars expended.\nF.\nIncluded in this entire area of the economy\nwill be the employment question. We believe\nthat statistics in California over the Reagan\nyears will have the effect of showing increased\nunemployment while Ford will be able to point\nto reduced unemployment while he has been Presi-\ndent.\nG. Reagan recently proposed a Federal Budget Reduc-\ntion of some $90 Billion. We believe that\nthis can be shown to be nothing short of a tax\nshift from the Federal Government to the\nState and Local governments at a time when\nlocal governments are already squeezed financially\nand a shift of this magnitude could force even\nmore bankruptcies with New York being the\ncurrent example and Illionois being a probable\nif such a massive shift were to take place.\n2. Crime--We are exploring the possibility that we can. charge\nReagan with being soft on crime specifically liberal on\nthe parole of felons.\nA.\nDuring the central period of the Reagan Administrati\n(1968 through 1972) the number of male felons\nin California prisons declined more than 7,000,\nfrom 23,405 to 16,061.\nB. While it is true that part of that drop can be\nattributed to the \"probation-subsidy\" program\nenacted by the 1965 Legislature to keep so called\nlesser criminals (burglars, check forgers, etc.)\nout of state prisons, Reagan's administration\ndeveloped a very liberal parole policy. The\nFord Project\nPage 3\nnumber of male felons on parole increased\nfrom 10,524 in 1968 to 14,533 in 1971.\nC. During that period of time the Reagan\nadministration praised itself for its many\ncorrections reforms.\nD. In 1973 Reagan's liberal parole policies came\nto and end largely due to pressure for change\nfrom law enforcement officials. Thus in\n1973 and 1974 the prison population in\nterms of male felons began to rise again\nto the point of 21,547 when Reagan left office.\nE. Going hand in hand with the above problem\nare the following statistics on felony arrest\ndispositions in California during the 1973\ntime frame:\nR.\n(1) Of the 233,000 persons arrested in\nGERALD\nFORD\n1973 for a felony only 186,000 had\na complaint filed against them and\nof those only 85,000 persons were\nprosecuted. Of those only 42,000\nwere convicted of a felony. Worse yet,\nof the 42,000 convicted felons only\n5,000 were sent to state prison with\nanother 1,000 being sent to the Youth\nAuthority. 14,000 were granted\nstraight probation and another 16,000\nwere granted probation and served less\nthan one year in a county jail. Thus,\nin California in 197,3 only 2.6% of\nthose arrested by the police for a\nfelony went to state prison.\n3. Welfare--The Reagan Administration trumpeted its Welfare\nReform measures around the nation as an unheralded break\nthrough in welfare costs. We believe that far from that\nthe decline in both welfare caseload and cost can be\ndircetly related to the drop in unemplovment which corres-\nponed almost directly with the drop in caseload and cost.\nA. In April 1971 unemployment in California was 7.4\n% adjusted seasonally and the welfare caseload\nwas 2,266,808. In September 1972 when the Reagan\ncrowing about reform was the loudest, the caseload\nwas 2,062,411 and the unemployment rate was only 5.9\nB. Moreover, those categories which most directly\nrelate to employment were the areas where the\ndrops were registered. The AFDC unemployed\nfather caseload in the same time frame as above\ndropped from 330,257 to 184,996. The general\nFord Project\nPage 4\nhome relief category was down in the same\ntime frame by 87,586 to 52,331. Thus, of the\ncaseload reduction of 204, 397 for the time frame\nexamined, 180,516 reductions are directly\nrelated to the improving economy.\nC. The political use of this can again be to show\nthe difference between what Reagan says he\ndid and what the fact actually was.\n4.\nEnergy-- I believe that this is a sleeper for the New\nHampshire primary since the state is so dependent on\nenergv to keep it moving through the severe winter months.\nA. Mv plan here is to explore the Reagan PUC\nappointments and their decisions. I beleive that\nwe can build a case for industry favoritism while\nthe consumer got screwed.\nDEPALD\nR.\nFORD\nB.\nPolitically, this could be used by saying that\nwhile Reagan mouthed the line on energy just\nlike everyone else, he was busy screwing the\nCalifornia consumer.\nC. I am anxious to get at the Unruh files on this\none. This is a prevalent view of the Unruh\ncampaign as I recall it now.\nD. In addition, I hope that we will have time to\nexplore the action or inaction of the State\nLands Commission where the Governor's Director\nof Finance was a member.\nE. The entire question of off-shore oil drilling\non state lands is a question which relates. to\nthe California energy scene and might yield some\nsurprising results which can be generalized into\nReagan's willingness to search for new petroleum\nsources.\nF. A review of the State Division of Oil and Gas\nmight turn up additional information of interest\nif it doesn't fall out the bottom of our project\non the basis of how rapidly we can cover higher\npriority items.\n5. New York City--Once a fuller analysis of the Reagan\nFederal Budget Reduction Proposal is available we may\nfind it useful to relate that analysis to New York by\nshowing how the proposal will only serve to worsen the\nproblem of State and Local entities by forcing more costs\non them without a corresponding increase in revenues.\nI should think that this line of logic would really sell\nin New Hampshire.\nFord Project\nPage 5\n6. Land Use and the environment-- This is a tough one\nbut may have some importance in New Hampshire. Reagan\nsigned legislation by Leo McCarthy in 1971 which made\nselling of unimproved property and subdividing very\nGERALD\nR.\nexpensive and difficult because it caused the private\nFORD\nowner to have to have prepared environmental reports\nand improvements not unlike public entities.\nLIBRARY\nA. There are questions of private property rights\nhere which might sell in the New Hampshire\nneck of the woods especially the northern\nparts of the state from what little I understand\nabout the demographics of the state.\n7. Reagan signed into. law Cal-OSHA which has really\ngotten the conservatives uptight over the last few years.\nSince one of the big things we hear people on both\nsides of the party fense saying these days is in essense\n\"government is regulating everything that I do and I don't\nlike that, \" maybe we could use this as an anti-regulation\nstand for Ford. (ie. the Federal law was bad enough but\nwhy did Reagan have to make it even tougher for California\nbusinessmen)\nII. Strategy Thoughts\n1. After discreet talks with a number of people ranging\nfrom Reagans former opponents to some of his friends\nit appears to me that the anti-Reagan attack with whatever\ninformation we eventually produce should be carried on\nas a second level campaign by those within the campaign\nstructure other than the President himself.\n2. The President should continue (with refinements) his\ncurrent ploy of \"As President I am doing these great\nthings\n\"\nand \"The Congress is failing to do\n\"\nHis should be the positive efforts with only allusions\nto past Reagan sins.\n3. A thought that strikes me with the size of New Hampshire\nis that maybe we ought to think small. Bv that I mean\nhandle the entire thing (other than personal swings by\nthe President) as though it were a Congressional campaign.\nAt least from the standpoint of maybe mail. I can\nforesee special interest mailings critical of Reagan\nor positive on Ford based on what is turned.\nIII. Questions\n1. Should we try to put togeter some of the famous Reagan\nquotations that drive some folks right up the tree? (i.e.\n\" A tree's a tree. How many more do you need to look at?\"\n2. Do we want to review all Reagan's budgets and the bills\nhe signed in order to prepare a list of horrors that he\nFord Project\nPage 6\nforced on the good citizens of the state of California?\nThis could be useful in three above. My own feeling is\nthat this is probably substantially down the road.\nIV. Sorry for the rough typing. I'm being so secretive about\nall this that I'm scaring myself coming around corners.\nSeriously, as you can tell, those areas that I feel are of\nhighest priority I have already pulled together enough things\nto draw a more elaborate picture of the possibilities. I'll\nlook for you guys to push or shove in different directions.\nAssuming funding I think our original time line is still OK.\nBERALD\nR.\nFORD\nLIBRARY GERALD R. FORD\nThe material which is assembled herein is a detailed\nfollowup of the first three issue areas outlined in my\nNov. 3, 1975, memo. In addition, we have presented other\ninformation which we felt we were able to put into a\nusable format.\nFor each issue area there are three specific categories\nof information provided.\nFirst, there is a quick sketch of what we perce ve\nis the popular concept of Ronald Reagan. Secondly,\nwe present Ronald Reagan quotations on the issue matter\nat hand. These are usually older quotes since we felt\nnewer ones are more readily available to the committee\nfrom other sources and because time would not allow a\ntotal search. Thirdly, we present research data which\nshow that reality was often at wide variance with what\nReagan expected to accomplish as governor.\nAs is always the case, the task of making large\nvolumes of material into smaller and more usable volumes\nis hazardous at best. However, we believe the material\npresented is in its most flexibly usable format accepting\nthe time constraints involved. Naturally, we stand\nwilling to update and help implement if and when you desire.\nWe have a file of all Unruh press releases from the 1970\ngubernatorial campaign which we have judged to be pertinent\nto issuses which the Ford Committee may wish to raise. My\nmaterial.\n2\nECONOMY\nBERALD FORD LIBRARY\nI. PERCEPTIONS\nReagan is perceived by many to have reduced spending.\nOthers believe, because Reagan said it to be true, that\nthe number of California state employees was reduced.\nA quotation from his first inaugural address that he\nwould \"cut, squeeze and trim\". is a philosophy which\nmany people believe was implemented. Reagan talked\na great deal about putting government on a sound business\nfooting and establishing a climate in which business\nand the free enterprise system could prosper. We believe\nthat it is possible with factual information to severely\ndamage the credibility of these popularly-held perceptions.\nII. RONALD REAGAN ON THE ISSUE\n\"There is only one cause of inflation -- the government. =\nSpeech, Detroit Economic Club\nDetroit News, March 29, 1966\n\"We are going to squeeze and cut and trim until we\nreduce the cost of government. 11\nInaugural Message\nJan. 5, 1967\n\"Outside of its legitimate function, government does nothing\nas well or economically as the private sector of the\neconomy.\"\nSacramento Bee, May 16, 1967\n3\n\"We must reduce the government's supply of money and\nFORD i GERALD LIBRARY\ndeny it the right to borrow.\"\nEncroaching Control in \"Vital Speeches\"\nPage 680.\n\"We have a government that is unfriendly to business. \"\nSan Diego Union, May 29, 1966\n\"As long as California continues to grow in population,\nand as long as federal policies keep us in an inflationary\nspiral with wages and prices going up, we will have a\nrecord breaking budget every year, meaning the budget will\nor should increase by an amount equal to the increase\nin population plus the percentage of increase in the cost\nof living --- and that is roughly eight percent.\nTV Report to the People,\nJuly 9, 1967\n\"This administration has been accused of being business-\noriented. It is, but not in the sense of offering\nspecial favor to any segment of society over others. It\nis business- oriented in the application of sound\nbusiness principles to the solution of public problems. \"\nSpeech, Governor's Conference\non Planning for Housing and Home\nOwnership luncheon,\nFebruary 1, 1968\n\"Q. How is it for a man who is so economy minded that you\nare about to spend more that any other governor in\nCalifornia history?\n\"A. Well, I don't think there is any way that any\n4\ngovernor -- I have said repeatedly, publicly and to all\nof you that every year so long as California increases\nFORD 2. DERALD LIBRARY\nits population and as long as inflation increases the\nprice we must pay for things we buy and the salaries we\nmust pay to our employees, there is going to be a record\nbudget for California.\"\nPress Conference, Sacramento\nFeb. 6, 1968\n(Re: Reagan's comment that he balanced California's budget\nwithout new taxes)\n\"We raised the old ones about $1 billion.\"\nGOP fund raising trip, Milwaukee\nLos Angeles Times,\nOct. 2, 1967\n\"We do not intend to balance future budgets by increasing taxes.\nInstead we intend to balance them by making governments\nmore economical, by streamlining it. Like this year,\nnext year ---- and the years following - will be years\nwhere we do not intend to spend one dollar more than\nnecessary of the people's money to conduct the people's\nbusiness. \"\nSpeech, California Republican Assembly\nLong Beach, April 1, 1967\n\"Funds needed to finance the deficit, state operations and\nthe continuing programs of assistance to local governments\nare still greater than I had anticipated. I wish the sum\ncould be smaller, but the responsibilities which we share\nfor sound financial management of this state's government\n5\ndemand that we confront and solve the fiscal problems\nnow.\nTax message to Legislature\nMarch 8, 1967\n\"Government, to start with, cannot compete in the market\nfor talent with private business, but there is a way that\ngovernment can compete and that is by asking private\nbusiness to take a hand in government. \"\nSpeech, National Automobile Dealers\nAssociation Convention, Las Vegas\nJan. 29, 1968\n\"California has some needs and some problems that are\ngreater than almost any other state and yet in every\ninstance where there is federal aid connected with these\nproblems, California is not only financing its own, even\nthough it comes by way of the federal government, but we\nare helping to finance lesser problems in other states. \"\nNews conference, Sacramento\nOct. 8, 1967\n\"Q. Do you support the idea of unemployment coverage for\ngovernmental workers?\n\"A.\nI don't think that we like a private employer are\nin a position of laying people off and telling them to\nwait at home until we tell them to come back to work again,\nwhich is usually considered with regard to unemployment\ninsurance. \"\nNews conference, Sacramento\nMarch 21, 1967\n6\n\"Once upon a time, it was easy for a teenager to get\na part-time job because it was easy for a merchant or a\nmanufacturer to hire him. But that's no longer true.\nRigid minimum wage laws, high union scales and the mass of\npaperwork involved in the withholding taxes, social\nsecurity, insurance and the rest make it difficult to\nhire anyone on a part-time basis. This is largely a\nGERALD R. FORD LIBRABA\nfederally-made problem and it's one we 11 be lucky if\nwe live long enough to see the federal government solve. \"\nSpeech, Merchants and Manufacturers\nAssociation, Los Angeles\nMay 16, 1967\n\"A big brother government can solve many problems for the\npeople, but it's doubtful that we'll like the price it\ncharges\nThe first order of business in Sacramento\nshould involve an all-out effort to utilize tax monies as\nefficiently as possible. 11\n1966 Campaign Speakers' Manual\n\"Our goal will be to cut the budget consistent with good\nbusiness practices. My purpose is to make government,\nonce again, a servant of the people at a cost the people\ncan afford to pay. 11\n1966 Campaign Speakers' Manual\n\"Local or state taxes should not be used to redistribute\nthe earnings of the citizenry. The federal government has\npre-empted that field. The state's concern should be to\nsee that each citizen pays the same percentage of his\n7\nincome in state and local taxes after payment of his\nfederal taxes. \"\nGERALD\nA.\nFORD\nState of the State Message\nJan. 8, 1968\nLISHAMA\n\"The entire (graduated income tax) structure was created\nby Karl Marx. It has no justification in getting in the\ngovernment needed revenue. \"\n\"A Time for Choosing,' speech before\nSecond General Session of the 71st\nAnnual Session of the US Savings and\nLoan League, San Francisco,\nJan. 7, 1963\n(Ronald Reagan sponsored a 1967 bill doubling, and in\nsome cases tripling, the state progressive income tax and\nmaking it even more progressive by narrowing the tax\nbrackets.)\n\"As Governor I will\nwork to increase the state's\ncontribution to local school districts, to relieve the\ngrowing burden on local property taxpayers\n\"\nMailer, published by Reagan for\nGovernor Committee, 1966\n(Reagan has presided over a reduction in the state\npercentage of school financial support from 38.4 percent\nin 1966 to 34.8 percent in 1970, thus increasing the pressure\non property taxpayers.)\nReagan promised he would consistently oppose any effort\nto provide for a withholding system for state income taxes.\n\"I think paying taxes should hurt.\"\nLos Angeles Chamber of Commerce and\nJunior Barristers Club, Los Angeles\nTimes, Oct. 25, 1966\n8\n(In 1970, Reagan endorsed withholding and included\nit as an integral part of his tax program.)\nBERALD\n&\nFORM\n\"Taxes in California have reached the breaking point.\nThey are the highest in the nation and $100 per person\nabove the national average.\"\n\"A Plan for Action, televised\nannouncement of candidacy,\nJan. 4, 1966\n(In 1967, Reagan sponsored and signed into law the\nlargest state tax increase in the nation's history,\ntotaling $1 billion.)\nReagan said that government is interfering in people's lives\nto the point that it has set limits on what businessmen\ncan deduct for gifts and other items when they pay their\nincome tax. \"Business should have said so long as we\nare legitimately spending the money in the belief that it\nis producing profit, it isn't any business of the\ngovernment how much we spend. \"\nSpeech, Chicago business leaders\nSan Francisco Chronicle,\nOct. 28, 1967\nRonald Reagan said Californians will not have to pay a\nbigger tax bill on the state level nest year if he is\nelected governor. \"I am convinced that I can say to you\nthere will be no new tax increase next year ... There will\nbe some efforts made at economies in the present running\nof this state. The total tax burden will not be increased.\"\nRally, Bakersfield, Los Angeles\nTimes, Sept. 18, 1966\n9\n\"We pledged local property tax relief and I intend to keep\nthat pledge. \"\nReport to the People, Sacramento\nMarch 31, 1968\n\"I'm the stingiest fiscal conservative you ever saw.\"\nNews conference, Sacramento\nBERALD A. FORD\nMarch 7, 1967\nLIBRARY\nIII. RESEARCH DATA\nA. State Employment\nThe California State Employees Association records\nshow that the following totals for the number of state\nemployees are accurate for Reagan's tenure as governor:\n1967 -- 113,779\n1968 - 114,036\n1969 ---- 116,562\n1970 --- 118,072\n1971 -- 117,372\n1972 -- 116,774\n1973 -- 120,299\n1974 --- 123,205\n1975 -- 127,929\nB. \"The Economic Report of the Governor for 1974,\"\ntransmitted to the California Legislature in March, 1974,\ncontains a number of Governor Reagan's own tables and charts\nwhich, when digested, show some interesting statistical\ninformation about changes in the California economy under\n10\nGERALD\nA\nFORD\nGovernor Reagan's leadership.\nLIBRARY\n1. General fund tax collections under Reagan jumped\nastronomically in his eight years in office compared to\nthe two previous administrations in California. The summary\nof state tax collections per $100 of personal income total\non page 84 of that report reveals that for the period from\n1953 to 1959 (former Gov. Goodwin Knight) tax collections\nper $100 or personal income rose from $2.99 to $3.14 ---\na 15-cent jump for six years.\nFor the period 1959 through 1967 (former Gov. Edmund\nBrown Sr.) the taxes rose from $3.14 to $3.73 -- a 59-cent\njump.\nFor the period 1967 through 1975 (former Gov. Ronald\nReagan) the taxes rose from $3.73 to $6.17 -- a $2.44\njump in Reagan's eight years.\n2. The same report shows that real spendable earnings\nfor a manufacturing worker with a family of three went from\n$114.39 per week in 1966 to $115.10 in 1973, or a 71-cent\nincrease per week in seven years. During the previous\nseven years, from 1960 through 1966, that same figure rose\nfrom $103.34 to $114.39, or an increase of $11.05 in spendable\nincome per week.\n3. Total state tax collections in California increased\nfrom $3.4 billion in 1967 to $8.9 billion in 1975. In\nthe previous administration the increases had been from\n$1.7 billion to $3.4 billion, a mere doubling of the\n11\ntotal collections. In the six years of the Knight administration,\ntotal tax collections for the state increased from $1.1\nto $1.7 billion. Interestingly enough, Reagan tries to\nGERALD A FORD\ncop out by saying that during his years as governor the\npopulation was higher than it had ever been. While that\nLIBRARY\nis true, the facts as outlined in charts of his own 1974\neconomic report show that during the 1953 to 1967 time\nframe California's growth per year on a percentage basis\nwas, in most years, three percent more. During the\nReagan years, that growth had slowed to the one percent\nlevel. (Figures attached.)\n4. Perhaps the most damning tax statistic is the\ncomparison of property tax levies on average dollars per\nassessed value basis when considering the Reagan years\nas opposed to the Brown Sr. and Knight years. During\nthe Reagan administration, the average tax rate per $100\nof assessed valuation rose from $8.84 in 1966-67 to\n$11.15 in 1973-74. The four highest percentage increases\nin these levies all occurred in the Reagan administration.\nBy contrast, the average tax rate in dollars per $100 of\nassessed value in the six years of the Knight administration\nincreased from $5.94 in 1953-54 to $6.96 per $100 in\n1958-59. And, in the Brown Sr. administration, from $6.96\nto $8.84 in fiscal year 1966-67.\n5. California's personal income tax as a percentage\nof the United States total income tax decreased during\nthe Reagan administration from 11.09 percent to 10.83 percent.\n12\nDuring the Knight and Brown Sr. administrations, the\npercentages had increased. While Knight was governor\nthey went from 9.37 percent in 1953 to 10.68 percent\nGERALD A. FORD\nin 1959. While Brown was governor they went from\n10.68 percent in 1959 to 11.09 percent in 1967.\nC. Unemployment\nAs shown by the Reagan unemployment insurance quotations\nin section II of this report, Reagan has a very low opinion\nof the priority for solving unemploymnet problems.\n1. According to statistics provided by the Department\nof Employment, the seasonally adjusted rate of California\nunemployment in January of 1967 when Reagan became\ngovernor was 5.6 percent. In January of 1975, the\nseasonally adjusted rate was 8.8 percent.\n2. While unemployment was rising, California under\nthe Reagan administration was reducing its spending for\nmanpower development programs from $15.1 million in 1967\nto $9.8 million in 1973. (This is the last year for\nwhich spending figures are currently available.)\nD. State Spending\nOverlaid against Reagan's 1966 campaign promise to\n\"cut the budget consistent with good business practices,\"\nis the fact that Department of Finance records show\nactual state expenditures rose every year of the Reagan\nadministration. The proposed state budgets for the\n13\nReagan years are as follows:\n1967-68 - $3.8 million\n1968-69 -- 5.6\n1969-70 -- 6.2\nBERALD\nA.\nFORD\n1970-71 -- 6.4\n1971-72 -- 6.7\n1972-73 --- 7.6\n1973-74 --- 9.2\n1974-75 -- 9.8\n1975-76 -- 10.1\nE. Business Climate\nBased on Reagan's quotations to put government on a\nmore business-like basis and to encourage the free\nenterprise system, the following information about how\nthe climate for business development and expansion changed\nin the State of California during his administration is\npertinent.\n1. According to the U.S. Department of Commerce,\nbetween 1969 and 1973 California ranked 44th of the 50\nstates in the percentage increase of non-farm income.\nHere is the toll of the statistics:\nCAL-TAX NEWS\nNOVEMBER 15, 1975\nCalifornia Nonfarm Income\nGrowth Is Below Average\nBERALD A. FORD\nTRUBTY\nOne of the major indices of the econ-\n1969-1973 NONFARM INCOME\nomy is growth in income, particularly in\n% INCREASE\nnonfarm income.\nCalifornia, in this respect, ranks 44th\n%\nof the 50 states, according to statistics\nState\nRank Increase\nfrom the United States Department of\nFast growing states:\nCommerce. During the four years from\nArizona\n1\n68.3\n1969 to 1973, California's non-farm in-\nFlorida\n2\n66.5\nSource: U.S. Department of Commerce\n15\n2. According to figures from Tax Foundation, Inc.,\nGERALD A. FORD\nas presented in the April, 1975, newsletter of the California\nLIBRARY\nTaxpayers Association, only two states in the country\nhave average statewide property taxes per person which are\nhigher than California's. Property tax levies per person\nrange from $46 to $358. California's average is $348.\nThe U.S. average is $216.\n3. \"The Economic Report of the Governor 1974'\nindicates that between 1966 and 1971 (last year for which\nstatistics are listed), net profits for California\ncorporations dropped from $5.6 billion to $4.8 billion.\nBy contrast, during the six years of Governor Knight's\nadministration, corporate profits rose from $2.5 billion\nto $3.6 billion (1953-59). In Governor Brown's\nadministration, corporate profits rose from $3.6 billion\nto $5.6 billion (1959-66).\n4. In May, 1975, the California Taxpayers Association\nreported that taxes per capita rose from $183.63 in the\nfirst year that Reagan came to office to $401.52 in 1975.\n5. The large California business inventory tax\n(50 percent) is still a major deterrent to many businesses\nlocating within California. In fact, many businesses\nmaintain warehouse locations in other states, such as\nNevada, in order to avoid bringing that business and those\njobs into California.\n6. Maurice Fenton, president of Fantus Company, a\n16\nFORDO is GERALE\nsubsidiary of Dun and Bradstreet, recently wrote an\narticle for Pacific Business Magazine entitled, \"Relocation\nWhy are Companies Rejecting California?\" His study shows\nthat California ranks dead last behind Utah, Idaho,\nArizona, Oregon, Washington and Nevada in terms of its\ntotal approach to attracting business. Among the 48\nmainland states, California ranks 47th.\nF. Inefficient Use of Government Dollars\nA number of Reagan quotations cited in this report\nindicate that as governor he could have been counted on\nto establish an efficient use of tax dollars and to work\ngenerally for an elimination of government waste. The\nfollowing are but some examples of why we believe that\ndid not take place.\n1. The Office of the Auditor General in California\nfunctions to research in a non-partisan manner questions\nof fiscal integrity put to it by the Joint Legislative\nAudit Committee. In an August, 1974, study entitled\n\"Department of General Services Report on Review of State\nOffice Space Leasing VS. Construction Costs,\" the Auditor\nGeneral found that \"by using $3.6 million of funds already\ncontained in the state's budget for leasing 535,000 square\nfeet of selected high cost office space, the state could\nfinance construction of office buildings containing comparable\nspace.\" The Auditor General then recommended that the\n17\nCORALD\nR.\nDepartment of General Services (headed by Reagan appointes\nFORD\nwith the governor as policy setter) request that monies\ncurrently appropriated on an annual basis in the state's\nbudget for leasing high cost office space be used instead\nto finance construction of office buildings. The report\nwent on to say that \"based on current lease rates in the\nsize of buildings discussed in this report, proper\nimplementation of this recommendation will result in\nestimated cash savings to the state of approximately\n$66 million over the remaining useful life of the buildings\nafter fulfillment of the construction and interest costs.\nFurther, the state will have full ownership of these\nbuildings.\"\nTherefore, by using money which currently is expended\nto lease property from private business, Governor Reagan\ncould have saved the taxpayers $66 million.\n2. The Auditor General also prepared a report in\nMarch of 1973 entitled \"Veterans Farm and Home Building\nFund Report on Review of Operations.\" The purpose of this\nfund is to make loans available to California veterans for\nthe purpose of purchasing homes or farms. In the 2½ years\nby the end of 1970 and 1972, there was a curtailment in\nthe number of loans available to veterans. This curtailment\nof loan funding produced the following results:\na. \"An excess amount of cash has been accumulated from\nbond sales loan repayments. From the year 1972, the balances\nincreased from a monthly average of $148 million compared\n18\nTOERALD\nR.\nto a $33 million average for the seven years prior ro 1971.\nFORD\nIn November, 1972, a high of $168 million had accumulated.\nLIBRARY\nThe June, 1973, balance was $129 million.\nb. \"Most of the excess cash was invested by the state\ntreasurer in the surplus money investment fund which\nrecently has yielded an average of 5.01 percent. A\nJuly of 1971 bond issue of $50 million was sold at an interest\nrate of 5.31 percent. Since July of 1971, investment of\nthis $50 million of excess cash has cost in excess of\nmore than $350,000.\nC. \"Proceeds from the sale of veterans bonds have not\nbeen used to finance Cal-Vet loans.\nd. \"Veterans have been required to delay purchases\nof new homes or obtain interim financing from commercial\nsources.\ne. \"Funds now available for loaning exceed the\ncapacity of the administration to process loans. \"\nCriticism here is that while governor and during the\ntime when a number of men were returning from Vietnam and\ndesiring to use their Cal-Vet home purchase benefits that\nGovernor Reagan's department of Veterans Affairs failed\nto use money from the sale of bonds to finance Cal-Vet\nloans. In failing to do this, veterans were required to\nnot purchase new homes or obtain interim financing from\ncommercial sources at higher rates. Is this any way to\ntreat the California veteran?\nIn October of 1974, the Auditor General's office issued\n19\nGERALD\nR.\nFORD\na report entitled \"Review of Operations of the Department\nof Corporations. \" The report found as follows:\n\"The Department of Corporations performs various\nfunctions which are similar to functions performed by\nthe Secretary of State and the Department of Consumer\nAffairs. This results in duplication, confusion to\nthe public and unnecessary expense.\n\"The fees charged by the department in administering\nthe Industrial Loan Law, Escrow Law, the Retirement\nSystems Disclosure Law, the Tax Sellers and Cashiers Law,\nFranchise Investment Law and the Trading Stamps Law have\nresulted in a deficit averaging $210,440 over the last\nfive years.\n\"Authorized staff of the Department of Corporations\nhas exceeded its staffing requirements by 22 positions.\nThe issue here is Governor Reagan's failure to act\nto reduce government expense, duplication and an overly\nlarge staff.\nd. In April of 1974, the Office of the Auditor\nGeneral prepared a report entitled \"Department of Health\nPre-Paid Health Plans\" which analyzed implementation\nof Ronald Reagan's pre-paid health plan delivery system\nfor the delivery of health care to Medi-Cal recipients.\nThe review of. the program was startling. Between Jan.\n1, 1971, and Dec. 1, 1973, the Department of Health made\npayments to 15 Pre-Paid Health Plan (PHP) contractors\nin the State of California totaling $56.5 million.\n20\nGERALD R. FORD\nOf this amount only an estimated $27.1 million or 48\npercent was expended for health care services for\nLIBRARY\nMedi-Cal recipients. The balance of $29.4 million, or\n52 percent, was expended by the PHP contractors and\nsub-contractors for administrative costs and resulted\nin net profits for these companies.\nAs one example of such administrative costs, a\nsalary of $120,000 plus expenses was paid by one PHP\ncontractor to a physician to serve as a plan administrator.\n\"The Auditor General has concluded that the Department\nof Health, in pouring out $56.5 million. to 15 PHP contractors\nand receiving only 48 percent of that amount. in actual\nhealth care services, has administered the PHP program\nin an ineffective manner.\n\"The Department of Health has not properly discharged\nits statutory authorities in instituting and requiring\nuniform accounting procedures, complete financial reporting\nand routine auditing of PHP contractors.\n\"Officers and directors of eight of the non-profit\nPHP contractors have formed firms or affiliated with\nprofit-making sub-contractors who derive certain services --\nincluding administration of health care -- for the PHP\ncontractors.\"\n(It is my understanding that Gov. Edmund Brown Jr. 's\nadministration plans to drop the PHP program as a means\nof delivering Medi-Cal benefits.)\ne. In June of 1973, the Auditor General developed a\n21\nBERALD\nR.\nreport on the California State Exposition and Fair.\nFORD\nPrior to Reagan's administration, it had been\ndetermined that the existing California State Fair facilities\nwere unsuited for expansion and that the State Fair did\nnot reflect the changes of interest of the people or the\neconomy of the state. In addition, it was thought that\nthe expenses at the old site were excessive. Therefore,\nin the early 1960s, it was decided to build a new\noperation which would promote the heritage, culture,\nindustry and resources of the State of California. In\naddition, it was determined the facility should be\nfinancially self-supporting. The operation of the facility\nwas to be the responsibility of a non-profit corporation.\nAfter the initial fair had been held in the new facility,\nthe California Exposition and Fair Executive Committee\nterminated the contract with the non-profit corporation\nin 1968. Subsequently, there were four years of direct\noperation by the executive committee. Currently the\ndirector of the Deaprtment of Parks and Recreation has\nbeen delegated the operational responsibility for Cal-Expo.\nWith that background, the Auditor General's report\nnoted:\na. \"The revenue derived from operations of Cal-Expo\nis less than realized at the old State Fair site.\nb. \"Provisions of the long term amusement, food and\nbeverage contracts are the primary cause for the revenue\ndecrease.\n22\nC. \"The long term contracts restrict the opportuni\nto improve operations.\nDERACOER FORD\nd. \"Both the state fair's operations and the ability of\n19VHB17\nthe state to resolve the Cal-Expo development question\nare adversely affected by a lack of stated obtainable\nobjectives.\ne. \"The state is losing from its general fund and\nits State Fair Fund over $2 million a year on the extravagance\nof Cal-Expo.\"\nWhat happened to all the talk about government on\na sound business footing?\nSome additional information:\n1. While Reagan was governor:\nA. State sales tax went from four cents on the\ndollar to 6 cents on the dollar\nB. The corporate income tax rate went from 5.9\npercent to 9 percent\nC. Top personal income tax levies went from\n7 percent to 11 percent\nD. The state budget more than doubled -- from\n$4.6 billion to $10.2 billion\n2. The Commerce Clearing House reports that California\nin 1974 had the fourth highest tax-burdened population of\nall fifty states.\nState and local\nState\ntaxes per capita\nNew York\n$952\nMassachusetts\n767\nHawaii\n765\nCalifornia\n739\nNational average\n618\n23\nno\nTABLE A-1\nGERALD\nR.\nPOPULATION a OF THE UNITED STATES AND CALIFORNIA, 1950-73\nFORD\nPercent change\nCalifornia\nYear\nas percent of\n(July 1)\nUnited States\nCalifornia\nUnited States\nUnited States\nCalifornia\n1950\nLIBRARY\n151.868.000\n10.543.000.\n7.0\n1.7\n3.0\n1951\n153,982,000\n11.130,000\n7.2\n1.4\n4.6\n1932\n156,393,000\n11,638,000\n7.4\n1.6\n4.6\n1953\n158,956,000\n12,101,000\n7.6\n1.6\n4.0\n1954\n161,881,000\n12,517,000\n7.7\n1.8\n3.4\n1955\n165,060,000\n13,004,000\n7.9\n2.0\n3.9\n1956\n168.088.000\n13,581,000\n8.1\n1.8\n4.4\n1957\n171,187,000\n14.177,000\n8.3\n1.8\n4.4\n1953\n174,149,000\n14,741,000\n8.5\n1.7\n4.0\n1959\n177,135,000\n15,258,000\n8.6\n1.7\n3.7\n1960\n179,979,000\n15,863,000\n8.8\n1.6\n3.8\n1961\n182.992.000\n16,366,000\n8.9\n1.7\n3.2\n1962\n185,771,000\n16,905,000\n0.1\n1.5\n3.3\n1963\n138,483,000\n17,515,000\n9.3\n1.5\n3.6\n1964\n191,141,000\n15.021,000\n9.4\n1.4\n2.9\n1965\n193,526,000\n18,491,000\n9.6\n1.2\n2.6\n1966\n195,576,000\n18,851,000\n9.6\n1.1\n1.9\n1967\n197.457,000\n19,034,000\n9.7\n1.0\n2.0\n1968\n199,399,000\n19.513,000\n9.8\n1.0\n1.5\n1969\n201,385,000\n10.819.000\n9.8\n1.0\n1.6\n1070\n203,810,000\n20,025,000\n9.8\n1.2\n1.0\n1971\n206,212,000\n20,206,000\n9.8\n1.2\n1.3\n1972\n208,230,000\n20,518,000\n9.9\n1.0\n1.1\n1973\n209,851,000\n20,711,000\n9.9\n0.8\n1.1\nIncludes members of the Armed Forces stationed in the area.\nSource: U.S. Bureau of the Census, Current Population Reports, Series P-25, No. 501 (August 1973), and Department\nof Finance estimates.\nTABLE A-2\nCOMPONENTS OF CHANGE IN CALIFORNIA'S CIVILIAN POPULATION, 1950-73\nYear\nCivilian\nNet\nNet\nNatural\nGains\n(July 1)\npopulation\nchange\nmigration\nincrease\nfrom military\n1950\n10,472,000\n311.000\n155,000\n146,000\n+10.000\n1951\n10,754,000\n282,000\n268.000\n149,000\n-135,000\n1952\n11,194,000\n440,000\n284,000\n163,000\n--7,000\n1953\n11,681,000\n487,000\n307,000\n181.000\n-1,000\n19:4\n12,177,000\n125.000\n289,000\n195,000\n+12.000\n1955\n12,668,000\n491,000\n273.000\n193.000\n+25,000\n1956\n13,247,000\n570.000\n361,000\n208.000\n+7.000\n1957\n13,818,000\n601.000\n388,000\n221,000\n-8,000\n1958\n14,410,000\n562,000\n325,000\n226,000\n+11.000\n1959\n14,964,000\n554,000\n329.000\n224,000\n+1,000\n1960\n15,567,000\n603,000\n368,000\n201,000\n+4,000\n1961\n16.076.000\n509.000\n259.000\n244,000\n+6.000\n1962\n16,598,000\n522.000\n302,000\n240.000\n1963\n-20,000\n17.198.000\n600.000\n357,000\n234,000\n+9.000\n1964\n17,714,000\n516.000\n315,000\n230,000\n-29,000\n1965\n18,182,000\n468,000\n263,000\n217,000\n-12,000\n1966\n18,499,000\n317,000\n180.000\n185,000\n1967\n-48,000\n18,871,000\n372,000\n233,000\n184,000\n-45.000\n1068\n19.147,000\n276,000\n128,000\n176,000\n-28,000\n1969\n19,458,000\n311,000\n121,000\n185,000\n+5,000\n1970\n19,689,000\n231,000\n16,000\n187,000\n1971\n+30.000\n19,972,000\n253,000\n57.000\n184,000\n1972\n+42.000\n20,218,000\n246.000\n46.000\n141,000\n1973\n+56,000\n20,441,000\n223,000\n79,000\n132,000\n+12,000\nSource: California Department of Finance.\n45\n24\nGERALD\nR.\nFORD\nTABLE A-11\nAVERAGE GROSS AND NET SPENDABLE WEEKLY EARNINGS OF PRODUCTION\nAND RELATED WORKERS IN MANUFACTURING, CALIFORNIA AND LOS\nANGELES-LONG BEACH, SAN FRANCISCO-OAKLAND, AND\nSAN DIEGO METROPOLITAN AREAS, 1960-73\nNet spendable earnings*\n\"Real\" net spendable earnings\n(current dollars)\n(1967 dollars)\nGross earnings\nWorker with\nWorker with\nWorker with\nArea and year\nWorker with\nweekly earnings\n3 dependents\nno dependents\n3 dependents\nno dependents\nCalifornia\n1960\n$104.28\n$91.15\n$82.43\n$103.34\n1961\n$93.46\n108.53\n94.60\n85.60\n105.94\n1962\n95.86\n112.44\n97.56\n88.31\n107.80\n1963\n97.58\n115.78\n09.71\n90.24\n108.50\n1964\n98.19\n119.29\n104.52\n95.15\n111.70\n1965\n101.76\n123.83\n109.16\n00.70\n114.42\n1966\n104.60\n128.93\n111.30\n101.64\n114.39\n1967\n104.46\n132.92\n114.44\n103.45\n114.44\n1968\n103.45\n138.63\n117.98\n106.02\n113.33\n1969\n101.84\n145.89\n122.54\n110.03\n112.11\n1970\n100.67\n150.48\n127.40\n114.73\n110.88\n1971\n99.85\n158.79\n135.52\n122.65\n113.79\n1972\n102.98\n170.02\n145.37\n131.72\n118.09\n1973\n107.00\n179.34\n151.08\n136.11\n116.01\n101.54\n1972: March\n166.40\n142.71\n129.31\n117.26\nJune\n106.25\n170.05\n145.30\n131.75\n118.69\nSeptember\n107.55\n173.26\n147.87\n134.01\n118.77\nDecember\n107.64\n177.02\n150.03\n136.82\n120.55\n109.28\n1973: March\n175.67\n148.32\n133.63\n116.42\nJune\n104.89\n179.34\n151.08\n136.11\n116.75\n105.19\nSeptember\n182.66\n153.57\n138.36\n115.73\n104.27\nDecember\n184.32\n154.81\n139.40\n115.10\n103.71\nLos Angeles-Long Beach\n1960\n103.31\n90.39\n81.73\n102.11\n92.35\n1961\n107.74\n93.96\n85.01\n104.87\n94.88\n1962\n111.93\n97.15\n87.93\n107.23\n97.05\n-\n1963\n113.93\n98.21\n88.86\n106.75\n96.59\n1954\n116.76\n102.43\n93.21\n109.32\n99.48\n1965\n121.99\n107.44\n98.18\n112.27\n102.59\n1966\n127.00\n109.70\n100.15\n112.51\n102.72\n1967\n131.78\n113.50\n102.50\n113.50\n102.59\n1968\n136.82\n116.60\n104.76\n112.22\n100.83\n1969\n142.51\n120.02\n107.79\n110.31\n00.07\n1970\n145.30\n123.46\n111.22\n108.01\n97.31\n1971\n153.64\n131.37\n118.87\n110.86-\n100.31\n1972\n164.02\n140.82\n127.60\n115.14\n104.33\n1973\n172.14\n145.07\n131.23\n112.75\n101.57\n1972: January\n158.00\n136.44\n123.69\n113.70\n103.08\nFebruary\n158.80\n137.05\n124.23\n113.92\n103.27\nMarch\n160.79\n138.55\n125.56\n114.41\n103.68\nApril\n162.81\n139.03\n126.79\n115.45\n104.61\nMay\n162.41\n139.63\n126.52\n115.11\n104.30\nJune\n164.03\n140.83\n127.60\n115.81\n104.93\nJuly\n162.80\n139.92\n126.78\n114.03\n103.33\nAugust\n164.01\n140.82\n127.59\n114.67\n103.90\nSeptember\n167.26\n143.24\n129.78\n115.70\n104.83\nOctober\n167.27\n143.25\n129.79\n115.62\n104.75\nNovember\n169.32\n144.83\n131.23\n116.52\n105.58\nDecember\n171.37\n146.41\n132.67\n117.69\n106.65\n1973: January\n168.04\n142.55\n128.41\n114.22\n102.50\nFebruary\n168.47\n142.88\n128.70\n113.85\n102.55\nMarch\n169.29\n143.50\n129.27\n113.53\n102.27\nApril\n170.53\n144.44\n130.12\n113.82\n102.54\nMay\n170.52\n144.44\n130.11\n113.38\n102.13\nJune\n172.14\n145.67\n131.23\n113.36\n102.12\nJuly\n171.70\n145.33\n130.92\n112.57\n101.41\nAugust\n172.13\n145.66\n131.22\n111.28\n100.24\nSeptember\n175.03\n147.84\n133.19\n112.68\n101.52\nOctober\n174.58\n147.51\n132.89\n111.56\n100.45\nNovember\n177.12\n149.41\n134.61\n111.83\n100.76\nDecember\n176.64\n149.05\n134.28\n111.15\n100.13\n57\n25\nGERALD\nR.\nFORD\nV\nTABLE A-14\nLIBRARY\nPERSONAL INCOME IN CALIFORNIA, TOTAL AND PER CAPITA, 1950-73\nTotal\nPer capita\nPercent\nAmount\nPercent\nPercent\nPercent\nof U.S.\nYear\n(In millions)\nchange\nof U.S.\nAmount\nchange\naverage\n1950\n$19,774\n10.6\n8.69\n$1,858\n7.1\n124.20\n1951\n22,756\n15.1\n8.90\n2,045\n10.1\n123.79\n1952\n25,214\n10.8\n9.25\n2,167\n6.0\n125.04\n1953\n27,002\n7.1\n9.37\n2,231\n3.0\n123.67\n1954\n27,682\n2.5\n9.54\n2,212\n-0.9\n123.92\n1955\n30,378\n9.7\n9.77\n2,336\n5.6\n124.52\n1956\n33,177\n9.2\n9.96\n2,413\n4.6\n123.70\n1957\n35,497\n7.0\n10.11\n2,504\n2.5\n122.44\n1958\n37,321\n5.1\n10.33\n2,532\n1.1\n122.44\n1959\n40,955\n9.7\n10.68\n2,679\n5.8\n123.97\n1960\n42,913\n4.8\n10.70\n2,705\n1.0\n122.07\n1961\n45.601\n6.3\n10.94\n2,786\n3.0\n123.00\n1962\n48,948\n7.3\n11.06\n2,895\n3.9\n122.15\n1963\n52,522\n7.3\n11.28\n2,998\n3.6\n121.97\n1964\n56.471\n7.5\n11.35\n3,134\n4.5\n121.00\n1965\n60.104\n6.4\n11.15\n3,250\n3.7\n117.33\n1966\n65,002\n8.1\n11.07\n3,448\n6.1\n115.43\n1967\n69,807\n7.4\n11.09\n3,629\n5.2\n114.48\n1968\n76,720\n9.9\n11.14\n3,932\n8.3\n114.44\n1969\n83,067\n8.3\n11.06\n4,191\n6.6\n113.03\n1970\n$9,312\n7.5\n11.12\n4.460\n6.4\n113.11\n1971\n94,412\n5.7\n11.00\n4,652\n4.3\n111.72\n1972\n102,099\n8.1\n10.92\n4,976\n6.9\n110.77\n1973 P\n112,000\n9.7\n10.83\n5,400\n8.5\n110.09\nPer capits figures derived using population estimates of the California Department of Finance.\nPreliminary.\nSource: U.S. Department of Commerce, Office of Business Economics, and California Department of Finance.\nTABLE A-15\nPERSONAL INCOME BY MAJOR SOURCES, CALIFORNIA, 1950-73\n(In millions)\nProprietorship\nLess: Social\nWages\nOther\ninsurance\nand\nlabor\nProperty\nTransfer\ncontri-\nYear\nTotal\nsalaries\nincome*\nFarm\nOtherb\nincome\npayments\nbutions\n1950\n$19,774\n$12,372\n$276\n$751\n$2,488\n$2,724\n$1,439\n$277\n1951\n22,756\n14,823\n355\n1.007\n2,708\n2,963\n1,232\n333\n1952\n25,214\n16,718\n414\n1,089\n2,846\n3,228\n1,298\n379\n1953\n27,002\n18,113\n471\n973\n2,931\n3.529\n1.402\n417\n1954\n27,682\n18,295\n518\n916\n2,918\n3.965\n1.559\n490\n1955\n30,378\n19,998\n614\n1.007\n3.291\n4,325\n1.703\n561\n1956\n33,177\n22.207\n732\n1.072\n3,452\n4.513\n1.840\n638\n1957\n35,497\n23,664\n846\n968\n3.622\n5,001\n2.141\n745\n1958\n37,321\n24,673\nSS2\n955\n3,722\n5,304\n2.600\n816\n1959\n40,955\n27,381\n1,026\n1,048\n4,070\n5,648\n2.727\n944\n1960\n42,913\n28,975\n1,103\n951\n3,049\n5,962\n3.073.\n1.100\n1961\n45.601\n30,535\n1,220\n894\n4.185\n6.405\n3,536\n1.173\n1962\n48,948\n32,978\n1,335\n954\n4,416\n6,883\n3,723\n1.291\n1963\n52,522\n35,355\n1,482\n913\n1,631\n7,566\n4,089\n1,513\n1964\n56.471\n37,908\n1,654\n1,063\n4,930\n8.133\n4,402\n1,619\n1965\n60.104\n40,353\n1,814\n940\n5,120\n8,719\n4.899\n1,742\n1966\n65,002\n41,370\n2,006\n1.018\n5,208\n9,258\n5,367\n2,257\n1967\n69,807\n47,491\n2,225\n964\n5,450\n9,865\n6,352\n2,540\n1968\n76,720\n52,196\n2.508\n1.159\n5,770\n10.569\n7,274\n2.758\n1969\n83,067\n56,996\n2,791\n1,089\n5,879\n11,411\n8.127\n3,226\n1970\n89,312\n60,142\n3,161\n999\n5,725\n12,908\n9,822\n3,445\n1971\n94,412\n62,664\n3,502\n1.055\n5,782\n13.522\n11.493\n3,607\n1972\n102,009\n68,410\n3,877\n1,341\n5,968\n14.118\n12,421\n4.067\n1973P\n112,000\n75,570\n4,330\n1,460\n6,350\n15,525\n13,655\n4,990\nEmployer contributions to private pensions, pay of military reservists. directors' fees, etc.\nIncome of unincorporated businesses and professions.\nInterest. dividends, rents and rovalties.\nRetirement programs, unemployment insurance. disability payments, public relief. etc.\nPreliminary.\nSource: U.S. Department of Commerce, Office of Business Economics, and California Department of Finance.\n60\n26\nTABLE A-30\nCORPORATE PROFITS FROM CALIFORNIA OPERATIONS, 1950-1971\nNet profits\nNumber of corporations*\n(in millions)\nWith\nWith\nNo income\nNet\nNet\nYearb\nTotal\nnet income\nnet loss\nor loss\nTotal\nincome\nloss\n50\n42,377\n21,987\n11,560\n8,830\n$2,264\n$2,432\n-$168\n51\n44,583\n24,538\n11,008\n9,037\n2,598\n2,766\n167\n52\n47,864\n25,646\n12,385\n9.830\n2,284\n2,522\n-238\n53\n52,041\n27,561\n13,718\n10,762\n2,519\n2,758\n-239\n54\n56,652\n29,489\n15,910\n11,253\n2,551\n2,892\n-341\n55\n65,345\n35,020\n16.365\n13,960\n3,162\n3,430\n-267\n56\n74,260\n40,713\n17,418\n16.129\n3,331\n3.657\n-326\n57\n81,150\n44,527\n20,313\n16,310\n3,286\n3,664\n-377\n58\n87,577\n46,414\n24,235\n16,927\n3,168\n3,630\n-461\n59\n94,161\n53,456\n24,069\n16,637\n3,634\n4,155\n-522\n60\n101,081\n56,987\n28,843\n15,351\n3,517\n4,182\n-665\n61\n105,645\n59,746\n31,802\n14,097\n3,718\n4.509\n-792\n62\n110,294\n63,400\n31,954\n14,940\n3,970\n4,754\n-784\n63\n114,667\n66,496\n33,667\n14,504\n4,283\n5,092\n-809\n64\n118,860\n69,555\n34,254\n15,051\n4,626\n5,526\n-900\n65\n122,399\n71,484\n35,625\n15,290\n5,126\n6.007\n-881\n66\n124,690\n73,076\n35,664\n15.950\n5,643\n6,638\n-995\n67\n125,677\n73,433\n38,188\n14,056\n5,252\n6,456\n-1,203\n68\n128,505\n77,238\n36,754\n14,513\n6,003\n7,255\n-1,251\n69\n136,695\n80,348\n38,627\n17,720\n5,643\n7,477\n-1,834\n70\n145,352\n81,340\n44,318\n19.694\n4,386\n6.711\n-2,326\n71\n151,216\n83,664\n47,621\n19,931\n4,804\n7,249\n-2,445\nIncludes a slight amount of duplication as a result of mergers. consolidations. changes in corporate names and changes\nof income year which necessitated filing more than one state franchise tax return during the year. In 1961 this dupli-\ncation amounted to approximately 205, or 0.5 percent of the total.\nIncludes corporations with fiscal years ending in the calendar year shown.\nSource: California Franchise Tax Board.\n27\nGERALD\nR.\nFORD\nTABLE A-48\nSAVINGS CAPITAL OF INSURED CALIFORNIA ASSOCIATIONS\nBY TYPE OF ASSOCIATION, 1972 AND 1973\nLIBRARY\n(Amounts in million:\nAll\nState\nFederally\ninsured associations\nchartered associations\nchartered associations\nAmount\nAmount\nAmount*\nPercent\nMonth\n1972\n1973\nchange\n1972\n1973\n1972\n1973\nJanuary\n30,652.8\n36,161.3\n18.0\n20,156.1\n24,382.1\n10,496.7\nFebruary\n11.779.2\n31.116.2\n36,389.0\n16.9\n20,498.6\n24,528.8\nMarch\n10,652.6\n11,860.2\n31,910.9\n36,969.6\n15.9\n20,987.3\n24,921.8\n10,923.6\n12,017.8\nApril\n32,092.9\n36,935.7\n15.1\n21,110.5\n24,886.2\n10,982.4\nMay\n12,049.5\n32,512.1\n37,231.7\n14.5\n21,384.0\n25,067.1\n11.128.1\nJune\n12.164.6\n33,177.0\n37,698.8\n13.6\n22,360.9\n25,362.0\n10,816.1\n12,336.8\nJuly\n33,595.0\n37,505.9\n11.6\n22,643.9\n25,228.5\n10.951.1\nAugust\n12,277.4\n33,916.6\n37,110.5\n9.4\n22,861.1\n24,963.6\n11,055.5\nSeptember\n12,146.9\n34,592.8\n37,330.3\n7.9\n23,321.7\n25,123.1\n11,271.1\n12,207.2\nOctober\n34,980.7\n37,378.4\n6.9\n23,576.5\n25,122.1\n11,404.2\nNovember\n12,256.0\n35,257.5\n37,493.5\n6.3\n23,767.6\n25,194.0\n11,489.9\nDecember\n12,299.0\n35,659.6\n37,836.0\n6.1\n24,049.3\n25,425.2\n11,610.3\nP12,410.2\nCommencing with the month of June 1972 dollar values shown reflect the conversion of 3 Federally Chartered Asso-\nciation (with savings capital of $523.5 million as of May 31, 1972) to a State Chartered Association. Accordingly.\ncomparative data shown commencing with the month of June 1972 are not indicative of growth rates for type of\nassociations shown.\nD\nPreliminary.\nSource: Federal Home Loan Bank of San Francisco.\nTABLE A-49\nSUMMARY OF STATE TAX COLLECTIONS, 1950-75\n(Excluding departmental, interest and miscellaneous revenue)\nTaxes per $100\nState tax collections\nTaxes per capita\nof personal income\nGeneral\nSpecial\nfund\nfunds\nTotal\nGeneral\nSpecial\nGeneral\nSpecial\nFiscal year\n(thousands)\n(thousands)\n(thousands)\nfund\nfunds\nTotal\nfund\nfunds\nTotal\nCash Basis\n1950\n$524,423\n$268,177\n$792,605\n$49.99\n$25.57\n$75.56\n$2.94\n$1.50\n1951\n$1.41\n647,992\n295,542\n943,534\n50.52\n27.15\n$6.67\n3.28\n1952\n1.49\n4.77\n709.245\n322,699\n1,031,944\n62.30\n28.35\n90.65\n3.12\n1.42\n1953\n4.53\n754,048\n346,480\n1,100,528\n63.53\n29.10\n92.72\n2.99\n1.37\n1954\n4.36\n772,250\n442,538\n1,214,755\n62.74\n35.95\n95.60\n2.56\n1.64\n4.50\n1955\n831,899\n467,814\n1,200,713\n65.20\n36.66\n101.86\n3.01\n1.69\n1956\n4.70\n972,828\n524,765\n1,497,593\n73.18\n39.45\n112.67\n3.20\n1.73\n1957\n4.93\n1.042.773\n554,713\n1,597,485\n75.13\n39.97\n115.10\n3.14\n1.67\n1958\n4.82\n1,069,809\n572,490\n1.642,299\n73.99\n39.59\n113.58\n23.01\n1.61\n1959\n4.63\n1,170,590\n594,587\n1,765,477\n77.99\n39.60\n117.69\n3.14\n1.59\n4.73\n1960\n1,443,296\n633.492\n2,076,758\n92.66\n40.67\n133.33\n3.52\n1.55\n5.07\n1961\n1,537,347\n656,815\n2,194,162\n95.40\n40.76\n136.16\n3.58\n1.53\n5.11\n1962\n1,645,300\n669,267\n2,314,567\n98.00\n40.23\n130.13\n3.01\n1.47\n5.08\n1963\n1,791,038\n711,185\n2,502,223\n104.06\n41.32\n145.35\n3.66\n1.45\n5.11\n1964\n2,057,962\n813,937\n2,871,900\n115.81\n45.80\n161.62\n3.92\n1.55\n5.47\n1965\n2,161,157\n931,958\n3,003,115\n118.38\n51.05\n169.43\n3.83\n1.65\n5.48\n1966\n2,398,958\n971,625\n3,370,552\n128.49\n52.04\n150.52\n:3.99\n1.62\n1967\n5.61\n2,422,275\n993,277\n3,415,551\n127.21\n52.16\n179.37\n3.73\n1.53\n5.25\nAccrual Basis'\n1967\n2,746,858\n1,091,387\n3,835,275\n144.25\n57.31\n201.57\n4.23\n1.68\n5.90\n1968\n3,557,610\n1,118,311\n4,675,921\n183.63\n57.72\n241.35\n5.10\n1.60\n6.70\n1969\n3,962,520\n1,210,229\n5,172,748\n201.49\n61.54\n263.03\n5.16\n1.58\n6.74\n1970\n4,125,607\n1,283,258\n5,408,565\n207.09\n64.41\n271.50\n4.97\n1.54\n6.51\n1971\n4,290,263\n1,308,150\n5,595,413\n212.80\n64.89\n277.69\n4.80\n1.47\n6.27\n1972\n5,212,693\n1,385,863\n6,598,555\n255.44\n67.91\n323.35\n5.52\n1.47\n6.99\n1973\n5,758,206\n1,470,905\n7,229,171\n250.64\n71.69\n352.33\n5.64\n1.44\n7.08\n1974\n6,157,127\n1,490,198\n7.647.325\n296.86\n71.85\n368.71\n5.50\n1.33\n1975\n6.83\n7,408,395\n1,503,715\n8,912,110\n353.52\n71.76\n425.28\n6.17\n1.25\n7.43\nEstimated.\nSource: Department of Finance.\n84\n28\nGERALD\nR.\nTABLE A-51\nFORD\nASSESSED VALUE OF TANGIBLE PROPERTY, TANGIBLE PROPERTY TAX LEVIES\nAND AVERAGE TAX RATE IN CALIFORNIA, 1951-1974\nLISHARY\nAssessed value\nTax levies*\nAverage tax rate\nPercent\nPercent\nDollars\nPercent\nchange from\nchange from\nper $100\nchange from\nAmount\npreceding\nAmount\npreceding\nassessed\npreceding\nYear\n(in thousands)\nyear\n(in thousands)\nyear\nvalue\nyear\n1950-51\n$13,618,915\n$791,353\n$5.81\n1951-52\n14,736,439\n8.2\n845.750\n6.9\n5.74\n-1.2\n1952-53\n16,107,000\n9.3\n933,253\n10.3\n5.79\n0.9\n1953-54\n17,170,270\n6.6\n1,019,956\n9.3\n5.94\n2.6\n1954-55\n18,228,961\n6.2\n1,121,911\n10.0\n6.15\n3.5\n1955-56\n19,093,440\n9.7\n1,253,243\n11.7\n6.27\n2.0\n1956-57\n21,819,002\n9.1\n1,416,225\n13.0\n6.49\n3.5\n1957-58\n24.308.207\n11.4\n1,634,413\n15.4\n6.72\n3.5\n1958-59\n25,966,688\n6.8\n1,807,932\n10.6\n6.96\n3.6\n1959-60\n27,431,577\n5.7\n1,990,498\n10.1\n7.26\n4.3\n1960-61\n29,600,832\n7.9\n2,195,588\n10.3\n7.42\n2.2\n1961-62\n31,549,530\n6.6\n2,414,617\n10.0\n7.65\n3.1\n1962-63\n33,326,914\n5.6\n2,605,131\n7.9\n7.82\n2.2\n1963-64\n35,066,088\n5.2\n2,805,152\n7.6\n8.00\n2.3\n1961-65\n36,743,364\n4.8\n3,058,579\n9.0\n8.32\n4.0\n1965-66\n39,464,013\n7.4\n3,367,736\n10.1\n8.53\n2.5\n1966-67\n42,522,355\n7.7\n3,760,508\n11.7\n8.84\n3.6\n1967-68\n46,186,881\n8.6\n4,110,742\n9.3\n$.90\n0.7\n1968-69\n48,653,400\n5.3\n4,569,986\n11.2\n9.39\n5.5\n1969-70\n$52,115,409\n7.1\n4,935,475\n8.0\n9.92\n5.6\n1970-71\n$55,550,735\n6.6\n5,716,550\n15.8\n10.85\n9.4\n1971-72\n58,785,243\n5.8\n6,372,331\n11.5\n11.43\n5.3\n1972-73\n62,790,656\n6.8\n6,819,509\n7.0\n11.44\n0.1\n1973-74\n$67,277,649\n7.1\n*6,645,000\n-2.6\n11.15\n-2.5\nExcludes special assessments levied on limited categories of property to finance activities from which such properties\nderive special benefits. In 1973-74 these assessments totaled approximately $165 million.\nBecause the State reimburses counties for the loss of revenue from the homeowners' and businessinventory exemptions\nand tax rates are set on assessed values which include the values of these exemptions. they have been included in\nassessed valuations. This treatment maintains the comparability of data in this series. Since the inception of these\nexemptions their aggregate values have been:\nAssessed value\nHomeowners'\nBusiness inventory\n1969\n$1,909,789,000 (at $750)\n$475,375,000 (at 15%)\n1970\n1.910.243,000 (at $750)\n905.503.000 (at 30%)\n1971\n1,955,217,000 (at.$750)\n1,056,891,000 (at 30%)\n1972\n2,051,275,000 (at $750)\n1,125,908,000 (at 30%)\n1973\n5,737,738,000 (at $1750)\n1,923,315,000 (at 45%)\nEstimated.\nSource: California Board of Equalization.\n86\n29\nTABLE A-57\nMANPOWER DEVELOPMENT AND TRAINING ACTIVITIES a IN CALIFORNIA\n1967 THROUGH DECEMBER 1973\nActivity\n1967\n1968\n1969\n1970\n1971\n1972\n1973\nInitially enrolled\n32,436\n32,093\n20,128\n19,737\n21,373\n21,727\n12,171\nYouth 16 to 22 years\n*12,422\n11,956\n7,824\n7,489\n6,719\n6,588\n3,924\nPublic assistance recipients\n3,888\n4,757\n3,291\n4,019\n4,154\n3,805\n2,296\nU.I. claimants\n4.631\n4,517\n3,424\n2,968\n3,079\n2,300\n1,191\nCompleted occupational training\n18,970\n16,188\n12,304\n10,226\n12,875'\n15,140\n10,312\nYouth 16 to 22 years\n6,652\n5,314\n4,481\n3,632\n3,822\n4,480\n3,615\nContacted following trainingᵇ\n14,160\n10,882\n6,381\n5,417\n5,299\n5,881\n4,715\nEmployed-training related jobs\n10,814\n7,901\n3,966\n2,989\n2,934\n3,34\n2,735\nEmployed-nontraining related jobs\n1,013\n908\n731\n647\n550\n650\n578\nDetermined entitled to training allowances\nd\n17,713\n21,938\n20,071\n23,437\n23,049\n17,423\n12,175\nWeeks of training compensated\n269,156\n339,490\n251,891\n256,815\n201,941\n278,538\n185,963\nAmount of training payments\n$15,170,401\n$17,580,060\n$12,792,426\n$13,051,981\n$14,676,656\n$14,014,963\n$9,841,461\nFirst institutional training course approved August 27, 1962. First on-the-job training course approved August 21, 1963. Jobs Optional and Displaced Worker Programs became operational and were\nreported in 1971. These figures do not include Technology Mobilization and Reemployment Program activities, comparable data not available.\nNumber of trainees in completed classes for which at least one follow-up has been made.\nThese categories are not applicable to the Displaced Worker or Jobs Optional on-the-job training programs which began reporting January, 1971.\nd\nCannot be directly compared to number of enrollments during month because of lag in computation and payment of allowances.\nRevised.\nSource: California Employment Development Department.\n16\n30\nWELFARE REFORM\nI. PERCEPTIONS\nChances are when a citizen is asked to respond to why\nhe thinks Ronald Reagan is a potentially viable candidate\nfor the presidency one of the two or three things he\nwould cite is that \"Reagan did something about the welfare\nmess. \" Or he might be so bold as to suggest that where\nReagan actually reduced the welfare rolls. Still others\nmight boldly suggest that Reagan put into effect programs\nwhich caused welfare recipients to actually go to work.\nReagan has fostered this with continual talk about the\nfact that he reduced the welfare rolls in California.\nII. RONALD REAGAN SPEAKING TO THE ISSUES OF HEALTH AND\nWELFARE\n\"My position has always been this, very simply, that no\none in this country should be denied medical care because\nof a lack of funds\n\"\nNews conference, Sacramento\nMay 2, 1967\nReagan said if be becomes governor \"there will be no\nwelfare for the able-bodied unless they accept job training\nthat would fit them to take their places as productive\nmembers of society.\"\nSpeech, Orange County\nLos Angeles Times, Sept. 30, 1966\n31\nGERALD\nA.\n\"A variety of (poverty) programs have deluded private\nFORD\nproperty rights so that the public interest is anything\nLIBRARY\nthe planners decide it should be.\"\nSpeech, New Haven, Sept. 28, 1965\n\"Let's stop being our brother's keeper and start being\nour brother's brother. Let him start keeping himself.\"\nSpeech, GOP fund raiser, Des Moines\nSan Francisco Chronicle, Oct. 26, 1967\n\"We must take care of those who are unable to care for themselves\nbut the able-bodied should be given a choice of earning a\npaycheck rather than a dole by working in public facilities\nor enrolling in a job-training program to make them\nemployable. They should not sit on their porch and get\na check for doing nothing.\"\nSan Francisco Examiner\nOct. 9, 1966\n32\nIII. WHAT DID REAGAN'S WELFARE REFORM PROGRAM AS\nFINALLY ADOPTED CONSIST OF?\nPrincipal Provisions of the 1971 Welfare Reform Act\n1. AFDC grant schedule. Eliminated confusing\ntributions collected from absent parents. Required that\n\"maximum participating base\" and set up a flat grant\na wife's community property interest in her husband's\nschedule adjusted to family size. with provision for\nincome be used to support her children by a previous\nannual cost-of-living increases beginning 1973-74. The\nmarriage, but deducted his prior support liability and\nnew schedule raised grants to recipients with no other\n$300 per month before determining her interest. (Par-\nincome and reduced grants to those with other income.\ntially in effect.)\n(In effect.)\n9. Eligibility elheck Permitted Director of Social\n2. Gross income limit. Subject to federal approval.\nWelfare to examine employment tax reports to verify\nmade any AFDC applicant with gross income equal to\nentitlements of employed grant recipients and to re-,\n150 percent of the need standard ineligible for assist-\nlease lists of applicants and recipients to other public\nance. (Approval has not been received.)\nagencies to verify eligibility. (In effect.)\n3. Work expenses. Set a ceiling of $50. plus neces-\n10. livent shering Provided that the state and\nsary child care costs, on allowable income exemptions\ncounties share aid to the disabled payments equally and\nfor work-related expenses of employed AFDC recip-\nthat. effective July 1. 1972. the state take over full cost\nients. (Awaiting final court action.)\nof all other \"adult\" assistance categories (OAS, AB.\n1. Special needs. Eliminated state payments for\nAPSB).\nspecial needs that are not common to the majority of\n11. sharing. Required state to\nwelfare recipients. (In effect.)\npay 50 percent of administrative costs for eligibility\n5. Verification of eligibility. Verification of eligibil-\nand grant level determinations. and transferred all re-\nity of applicants for immediate assistance must be\nsponsibility for these functions to the state. allowing\nmade within five working days; if not. the county must\nthe state to contract with the counties to carry them\nbear the full cost of the payment to the applicant. (In\nout.\neffect)\n12. Employment \"It progrems. Appropriated $2 mil-\n6. Exemption. Set maximum values for personal\nlion to increase WIN public service jobs and S7 million\nproperty exempted in determining an applicant's eligi-\nto enable the State Personnel Board to increase job op-\nbility. Reduced exemptions that can be claimed for\nportunities in state and local government. Provided for\n\"lump-sum\" income and \"casual and inconsequential\"\nthe termination of AFDC grants to employable recip-\nincome. (In effect.)\nients who refuse to siccept work. work training. or par-\nT. Responsible relatives. Substantially increased re-\nticipation in a community work force.\nquired contributions of relatives of OAS beneficiaries.\n13. Day Appropriated $3 million to expand\nsubject to administrative reduction by Social Welfare\nchild care services and required every county to es-\nDirector. (Awaiting final court action.)\ntablish a day care center.\n8: Absent fathers and stepfathers Authorized at-\n11. Femila vien Appropriated $1 million to\ntachment of wages and property liens against absent\nassure provision of family planning services to all for-\nparents of AFDC children and provided for payment\nmer. present. and potential AFDC recipients of child-\nto counties of part of state's share of delinquent con-\nbearing age.\n33\nWhile it is possible to show that welfare rolls declined\nGERALD\nA.\nfor a period of time, it is important to examine that decline\nFORD\nby welfare category and then overlay the increase in employment\nduring the period Reagan contends welfare rolls declined.\nI\nLIBRARY\nsubmit that once this examination is made it is clearly evident\nthat the reduction in unemployment had a larger effect on checking\nthe rise of welfare caseloads than did any other single factor.\nConsider the following:\nA. In April 1971 unemployment in California was 7.4%\nseasonally adjusted and the welfare caseload was\n2,266,808. In September 1972 when the Reagan\ncrowing about reform was loudest, the caseload\nwas 2,062,411 and the unemployment rate was only 5.9%\nB. Those categories which most directly relate to\nemployment were the areas where the drops were\nregistered. The AFDC-U (Aid for Dependent Children-\nUnemployed father) caseload in the same time frame\nas above dropped from 330,257 to 184,996. The\ngeneral home relief category was also down in the same\ntime frame from 87,586 to 52,331. Thus, of the\ncaseload reduction of 204, 397 for the time frame\nexamined, 180,516 reductions are directly related\nto the improving economy.\n34\nThe following table from the December 1972 California Journal\noutlines the statistical data presented above:\nPUBLIC ASSISTANCE CASELOAD BY MAJOR CATEGORIES\nGeneral\nOAS\nATD\nAFDC-FG\nAFDC-U\nHome Relief\nTotal Caseload\n1970\nOct\n319,557\n181,962\n1,210.027\n242.357\n96,525\n2,088,214\nNov\n319,838\n182.409\n1,219,247\n261,178\n97.545\n2,127,778\n221,712\n101.000\n1.000.400\nPAGE 376\nDecember 1972\nCALIFORNIA JOURNAL\nWe have estimated statistics from the Department of Welfare\nwhich if and when they become confirmed may indicate that\nthe total caseload did continue to drop even when the rate\nof unemployment began to increase substantially. We point this\nout only to indicate that it is probably too early to make a\ndefinitive judgement as to the total effect of the Reagan Welfare\nReforms.\n35\nIV. OTHER EXAMPLES OF REAGAN ADMINISTRATION WELFARE\nINEFFECTIVENESS, INEFFICIENCY AND GENERALY POOR\nADMINISTRATION\nA. One of the big points of Governor Reagan's welfare\nGERALD R. FORD LIBRANTY\nMedi-Cal reform program was to develop the so-called\npre-paid health plans as an alternative to delivery plans\nfor Medi-Cal health services. The plan was operationalized\nin California. The office of the Auditor General in a\nreport to the Joint Legislative Audit Committee entitled\n\"Department of Health --Prepaid Health Plans\" outlined\na number of failures and inefficiencies of the worst\norder not to mention taxpayer abuse. The report said,\nin part:\n\"Total payments by the Department of Health from\nJanuary 1, 1971 through December 31, 1973 to the 15\nPHP (Pre-Paid Health Plan) contractors, 14 of whom\nprovide services in Los Angeles County, amounted to\n$56.5 million. Of this amount, only an estimated $27.1\nmillion or 48 percent was expended for health care\nservices for Medi-Cal recipients. The balance of $29.4\nmillion or 52 percent was expended by the PHP contractors\nand their affiliated subcontractors for administrative\ncosts or resulted in net profits to these companies.\n\"As one example of such administrative costs, a salary\nof $120,000 plus expenses was paid by a PHP contractor\nto a physician to serve as a plan administrator.\n36\n\"The Auditor General has concluded that the Department\nof Health, in paying out $56.5 million to 15 PHP contractors\nand, in return, receiving only 48 percent of that amount,\nor $27.1 million in actual health care services, has\nadministered the PHP program in an ineffective manner.\n\"The Department of Health has not properly discharged\nits statutory authority and responsibility of instituting\nand requiring uniform accounting procedures, complete\nfinancial reporting and routine auditing of PHP contractors\nand their affiliated subcontractors. Therefore, the\nAuditor General has recommended that legislation be\nenacted to transfer such authority and responsibility\nfrom the Department of Health to the Department of Finance.\n\"Officers and directors of eight of the nonprofit\nPHP contractors have formed firms of affiliated profit-\nmaking subcontractors who provide various services,\nincluding administration and health care, for the PHP\ncontractors. The complex relationship of the contractors\nwith the subcontractors makes it more difficult to determine\nhow much of the Department of Health payments is actually\nexpended for health care services. \"\nFurther, the report concludes the department (the\nReagan administration) could have taken steps to correct\nthese problems. On page eight of the Auditor General's\nreport, the following statement is made:\n\"While there is nothing in the law regulating PHP\n37\ncontracts with the Department of Health which establishes\nGERALD\nR.\na specific statutory limit on administrative expenses, or\nFORD\na specific statutory minimum percentage to be spent on\nhealth care services, it is clear that the Department of\nLISERAY\nHealth, under its broad authority to determine the terms\nof the PHP contracts, could have imposed a limit on such\nexpenses or a minimum percentage which must be expended for\nhealth care services.\"\nB. In July of 1974, the Auditor General prepared a\nreport for the Joint Legislative Audit Committee entitled\n\"Department of Health Pre-Paid Health Plans\" which\nconcluded the administration had had inadequate controls\nto preclude duplicate payments for Medi-Cal services\nrendered to Medi-Cal recipients enrolled in pre-paid\nhealth plans. These inadequate controls had resulted\nin approximately $4.2 million in duplicate payments by\nthe state -- wasted taxpayer dollars. In addition, the\nreport indicated the administration's Department of Health\npaid approximately $960,000 on a fee for service basis\nfor dental services for Medi-Cal recipients enrolld by\nFoundation Community Health Plan (FCHP), a PHP contractor,\nwhen the services should have been provided by FCHP at\nno additional cost.\nFurther, the report indicated that the Department\npolicy of repayment to PHP members had been inconsistent\nand was not in conformance with statutory requirements.\n38\nThis is another example of waste, inefficiency\nand poor management of the administration of Ronald Reagan.\nC. One of Reagan's big cries which was incorporated\nin the California Welfare Reform Act of 1971 was the need\nto establish the so-called Community Work Experience\nProgram (CWEP) for aid to families with dependent children\n(AFDC) welfare recipients. The Legislature intended that\nthis California state program operate as a demonstration\nprogram to provide for development of employability of\nAFDC recipients through actual work experience.\nIn May of 1974, the Auditor General reported to the\nJoint Legislative Audit Committee in a report entitled\n\"California Work Experience Program (CWEP) 11 The report\nstates, in part:\n\"The stated goals of CWEP include a reduction of\nAFDC recipients on welfare and, therefore, a reduction in\nwelfare costs. As of March 1974, CWEP was involved in 34\nCalifornia counties with a total of 603 participants.\n\"The Auditor General found that only 1,134 participants,\nor less than four percent of the program's expected first-year\nlevel of participation of 30,000 perticipants, were placed\nin CWEP in fiscal year 1972-73. Further, EDD (Employment\nDevelopment Department) lowered the expected level of\nparticipation for the second year by 82 percent and\nachieved less than 25 percent placement of this sharply\nreduced expected level of participation.\n39\n\"In EDD's April 73 CWEP Evaluation Status Report, the\nreport stated\nthe volume of CWEP activity is not\nsufficient to cause significant impact on AFDC caseloads.\nThe volume of data should increase as individual county\nproblems are resolved and the program is more fully\nimplemented.' At that time, the ratio of monthly CWEP\nplacements to total AFDC caseloads was one-half of one\npercent. In fact, this ratio in February 1974 was\none-tenth of one percent and never exceeded six tenths\nof one percent between April 1973 and March 1974.\n\"Although CWEP was authorized as a demonstration\nproject to test the hypothesis that a program providing job\ntraining and work experience for welfare recipients would\nreduce welfare costs, the program has not been implemented\nin a manner which would allow its effect on welfare costs\nto be determined. This results from inadequate experimental\ncontrols, inadequate reporting, inaccurate and inadequate\ncost accounting.\n\"The Auditor General also reported that EDD has overstated,\nin its 1973 annual report, by at least 56 percent the\nnumber of individuals placed in the CWEP program. Further,\nEDD understated the costs in this report of state and\nlocal agencies for implementing CWEP. While EDD's annual\nreport stated that CWEP had 1,540 participants, based on\nfield investigation by the Auditor General's staff, the\nmaximum number of participants was 1,005. On the basis of\n40\nthe Auditor General's projected sample, the number of\nparticipants could have been as low as 550. As one example\nof the understated costs, county welfare staff time devoted\nto CWEP fair-hearing activities was entirely excluded from\nGERALD\nR.\nEDD's 1973 annual report.\"\nFORD\nThe program is considered a total failure.\nLIBRARY\nD. On Oct. 9, 1971, Carl Ingram, a reporter for\nUnited Press International, broke a story which said,\n\"state reports apparent fraud rate of 41 percent in dependent\nchild aid program.\" The article further said, \"Reagan\nadministration officials report their controversial new\ndouble check of welfare recipient earnings show the 41\npercent rate of apparent fraud in the needy children's\nprogram.\"\nThe Auditor General issued a report entitled\n\"Department of Social Welfare -- Review of the Alleged\n41 Percent Rate of Welfare Fraud in the Aid to Families\nwith Dependent Children Program.\" The report covers\nthe Oct. 1,1971, to Nov. 31, 1971, time period. It\nstates, in part:\nthat the computation of 'apparent fraud' was\nbased solely on the discrepancy between the amount of\nreported earnings obtained from HRD (Human Resources\nD velopment) and the amount of earnings as shown in the\nrecipients' case files. The cases classified as 'apparent\nfraud' by SDSW (State Department of Social Welfare) did not\n41\ntake into consideration the element of recipient intent\nwhich is an important part of the definition of fraud as\nstated in the department's Manual of Policies and Procedures.\n\"\nwithout investigating each case where a discrepancy\nis indicated, a finding that fraud has been committed is\na premature conclusion.\"\nWhen the Auditor General examined the figures for the\nCounty of Sacramento which placed each of their cases\ncase-by-case in the 64 cases examined, only eight were\nsubsequently found sufficiently worth referral for\nconsideration of criminal complaints.\nTherefore, it would seem that this was another in\na series of Reagan grabs for headlines.\nD. In March of 1973, the Auditor General prepared a\nreport for the Joint Legislative Audit Committee entitled\n\"Department of Health Care Services -- Review of Medi-Cal\nManagement System.\" This report found, among other things,\nthat:\n1. \"Payments for claims are being duplicated, paid to\nwrong providers, and are being made in excess of allowable\namounts.\n2. \"Procedures have been developed which encourage\nimproper disbursement of funds.\n3. \"Clerical personnel have excessive latitude in\noverriding computer controls.\n4. \"Adequate accounting controls are not being\n42\nmaintained for claims processing.\n5. \"The state has prematurely accepted and made\nfinal payments for the development of the Medi-Cal\nmanagement system in the amount of $545,101.\"\nAgain, clear evidence is shown here of Reagan's poor\nmanagement in the welfare area and his poor stewardship\nFORD & GERALD LIBRARY\nin administration of efficiency and cost control in\nstate business.\nF. WIN Program Cuts by Reagan\nIn 1966 Reagan promised in his campaign, \"there will\nbe no welfare for the able-bodied unless they accept a\njob. \"\nIn July of 1970 Reagan cut the WIN (Work Incentive\nProgram) which is designed to put welfare recipients back\nto work by nearly 50 percent of its state dollars (reduced\nthe state share from 2.1 to 1.1 million dollars).\nIn 18 months of California WIN 9,000 welfare\nrecipients were put to work at a saving of $20 million\nto the state in welfare dollars not paid. With that one\nfell swoop of the pen Reagan cut 7,560 of 16,800 WIN\nslots in California.\nIs that what Republican welfare reformers should do?\nG. Inefficient Reorganization of the Department of Health\nIn March, 1975, the Auditor General in a report to\nthe Joint Legislative Audit Committee indicated that the\n43\n20-month old reorganization of the $3 billion Department\nof Health has not lived up to expectations. Here's what\nthe report said\"\n\"More time, money and effort are required to do the\nsame work.\n\"Federal funding for the Social Services Program\ncould be in jeopardy.\n\"Excessive staff shuffling (46 percent of the 93 top\nadministrators have switched jobs five or more times\nsince July 1970) has persisted. =\nIs this any way for a governor committed to\nefficiency to run this massive department?\n44\nCRIME\nBERALD R. FORD\nI. PERCEPTIONS\nEver since he became governor, Reagan has done an\nLIBRARY\noutstanding job on this issue by using a great deal\nof rhetoric to create the image of the original super cop.\nThe image is one of working hard to lock up all criminals\nso as to keep the streets safe for all the good citizens.\nII. RONALD REAGAN ON THE CRIME ISSUE\n\"As governor I will support and work for a plan to take the\nappointment of judges out of politics.\"\nReagan for Governor Committee\ncampaign literature, 1966\n(Reagan as governor has appointed Republicans to\n76 percent of the judicial vacancies he has filled. Reagan\nappointed his own former executive secretary and a 1966\ncampaign aide, Bill Clark, to a Ventura County Superior\nCourt vacancy, without clearing the appointment through\nthe county bar association. Reagan's judicial \"reform\"\nplan would have taken the appointment of judges out of the\nlimelight of gubernatorial appointments and turned the matter\nover to the backroom politics of local bar associations.)\n\"As Governor\nit will be my purpose to see that\nCalifornia's streets and neighborhoods become safe again.\"\n\"Ronald Reagan Speaks to the Issues,\"\nReagan for Governor Committee, 1966\n45\n(California streets and neighborhoods are not safe\nagain. --- crime in California during the first Reagan\nadministration increased 39 percent. He has failed to\nmake this promise good.)\n\"As Governor I will seek legislation setting up a modern\nstate police academy and crime laboratory to assure out\npeople the best law enforcement possible.\"\n\"The Candidates and the Issues,\"\nSan Francisco Examiner, Nov. 4, 1966\n(Reagan never proposed legislation to establish a\nmodern state police academy. California has had for\nyears a modern crime laboratory in the Department of Justice.)\n\"California needs the kind of academy that will bring\nbetter training to all our law officers.\" He said he\nenvisions a crime laboratory that goes \"far beyond\" the\nsmall lab now operated by the State Criminal Investigation\nand Identification Bureau. He said that as governor he\nwould create a state-operated police training academy.\nCopley News Service, Los Angeles,\nAug. 20, 1966\n\"The only thing that's going up more than spending is\ncrime. Our city streets are jungle paths after dark\nwith more crimes of violence than New York, Pennsylvania\nand Massachusetts combined.\"\nTelevised talk, Los Angeles,\nReported by the Associated Press,\nJan. 5, 1966\n46\nReagan said the state's prisons, hospitals and correctional\ninstitutions can be run more efficiently. He added: \"These\ninstitutions are the biggest hotel chain in California.\"\nNews conference, San Francisco,\nThe Sacramento Bee, April 6, 1967\nReagan said the \"biggest hindrance to law enforcement is\nthe way that this state has preempted the right of local\ngovernment to enact their own criminal law.\"\nRepublican rally, Manhattan Beach,\nLos Angeles Times, Oct. 21, 1966\n\"It is important to recognize that unless both local and\nstate law enforcement agencies meet their responsibilities,\nwe may find them usurped by the federal government or ceded\nto it by default. When this happens we will have, in\neffect, a national police force. And we will have taken\nsteps to abolish crime only at the risk of our freedom.\nSpeech, National Sheriffs Association,\nLas Vegas, June 19, 1967\n\"Public information and community relation programs are no\nlonger luxuries for law enforcement agencies. They must\nbecome essential parts of day-to-day operations. \"\nSpeech, National Sheriffs Association,\nLas Vegas, June 19, 1967\n\"In the world's richest nation we are told we could reduce\nthe highest crime rate by eliminating poverty. Let us say\ninstead the criminal -- not society -- is responsible for\n47\nhis misdeeds and punishment of the guilty should be swift\nand certain.\"\nSpeech, Young Republicans Convention\nOmaha, June 22, 1967\n\"I'm opposed (to police review boards). I think this\nis an unnecessary interference. I think that where those\ncommunities that have tried it have found that it has\ninterferred with law enforcement and has unnecessarily\nLIBRARY GERALD R. FORD\nrestricted the police and I believe that we have a fine\npolice department here. \"\nPress conference, Jan. 4, 1966\nQ. \"Could you state for me the official position on\ncapital punishment of your administration.\"\nA. \"Yes. As expressed by myself on a number of occasions,\nI believe that capital punishment is necessary and should\nbe maintained. This is a personal view. I have been\non both sides of the fence with regard to this, but I\nfeel and believe that it is essential in the preservation\nof law and order. I believe it is a preventative.\"\nNews conference, Sacramento\nSept. 5, 1967\n(Reagan) believes some control of mail-order gun sales\nwould be in order.\nNews conference, Los Angeles,\nLos Angeles Times, Aug. 3, 1966\n48\nReagan said he was in agreement with Lynch's proposal for\nlegislation further restricting the sale and use of heavy\nfirearms.\n\"I don't want to look out of the window and see that my\nneighbor has given the kids some bazookas\n11\nNews conference, Sacramento,\nThe Sacramento Bee, Dec. 1, 1966\n\"\nI think those (racial) disturbances are a terrible thing\nand I think there is only one way to handle them. I think\nthey have to be met and controlled and whatever force is\nnecessary to preserve law and order must be exerted. \"\nNews conference, Sacramento,\nMay 16, 1967\nQ. \"Do you endorse the concept that every man ought to\nhave a gun in his own home in order to defend himself\n?\"\nA.\n\" I am not in favor of much of the proposed gun\nlegislation. The idea either of registration or further\nrestrictions. I think there are things that can be\ntightened up with regard to interstate shipment of arms,\nso that you should have more control of who couldn't buy.\nI don't think -- you know, people kill people; guns don't\nkill them. And a very small percentage ...\nof our crimes\nof violence are committed with a gun.\n\"I like the idea that the law-abiding can have protection\nin their homes. I would be opposed to anything that\nwould make it more difficult for the law-abiding to have\nthat protection. \"\nNews conference, Sacramento,\nMay 9, 1967\n49\n\"There is talk these days that punishment is not a deterrent,\nand I believe that talk is partly responsible for our\nincrease in crime. As punishment becomes more difficult\nto mete out, those who should be deterred by its threat\nfeel freer to resort to crime and acts of violence.\"\nSpeech, National Sheriffs Association,\nLas Vegas, June 19, 1967\n\"If I could ever have it proven to my satisfaction that\nthe death penalty is not a deterrent, that in other words it\nis only punishment, then I would be opposed\n\"\nNews conference, Statler Hilton,\nLos Angeles, Jan. 4, 1966\n\"If Negroes don't cool it, Martin Luther King will have\ndied in vain. \"\nSan Francisco Examiner\nApril 4, 1968\n\"We will continue to seek laws to protect our young people\nfrom pornography. A series of decisions by the United States\nSupreme Court in recent years has extablished guidelines\nfor regulating obscenity; we will ask for measures to\nstiffen California's laws in this regard, while keeping\nwithin those guidelines and avoiding any taint of\ncensorship.\"\nState of the State Message\nJan. 8, 1968\nQ. \"If a bill were to pass abolishing capital punishment\n50\nwould that go across your desk?\"\nA. \"Well I wouldn't want to make a commitment until\nI knew whether it reflected the will of the people. The\npeople of California have at several times made it\nunmistakably plain that they supported the death penalty.\nI would assume that if and when such a bill ever did\narrive, that it would be because the people had changed\ntheir minds about it.\"\nNews conference, Sacramento\nMarch 14, 1967\n\"I think in legislation, when hearings have been held and it\nfinally reaches a vote, you have a pretty good indication\nas to whether the Legislature is expressing the will of the\npeople. Believing that, if they had done that (passed\na bill to abolish capital punishment) I certainly wouldn't\nstand in their way. \"\nNews conference, Sacramento\nApril 11, 1967\nIII. RONALD REAGAN'S RECORD ON CRIME IN CALIFORNIA\nHere I think the most important thing strategically\nis that we cannot go charging into Reagan on the same old\nbasis that crime is up by X percentage in California and\ntherefore he was a failure on the crime issue. Not\nincluded in these statistics is the reference to violent\ncrime on the increase. My theory here is two-fold:\n1. It can always be shown that crime is on the rise.\n51\nAs such, that would not give Ford an edge over Reagan.\n2. More importantly, I think there are several\nissues that will make a point better with reference to\nReagan's position on crime. I refer to original comments\non the initial memo:\nWe are exploring the possibility that we can charge\nReagan with being soft on crime specifically liberal on\nthe parole of felons.\nA. During the central period of the Reagan Administration\n(1968 through 1972) the number of male felons in\nCalifornia prisons declined more than 7,000, from\n23,405 to 16,061.\nB/ While it is true that part of that drop can be\nattributed to the \"probation-subsidy\" program enacted\nby the 1965 Legislature to keep so-called lesser\ncriminals (burglars, check forgers, etc.) out of state\nprisons, Reagan's administration developed a very\nliberal parole policy. The number of male felons on\nparole increased from 10,524 in 1968 to 14,533 in 1971.\nC. During that period of time the Reagan administration\npraised itself for its many corrections reforms.\nD. In 1973 Reagan's liberal parole policies came to\nan end largely due to pressure for change from law\nenforcement officials. Thus in 1973 and 1974 the\nprison population in terms of male felons began to rise\nagain to the point of 21,547 when Reagan left office.\nE. Going hand in hand with the above problem are the\n52\nfollowing statistics on felony arrest dispositions\nin California during the 1973 time frame:\nOf the 233,000 persons arrested in 1973 for a\nfelony, only 186,000 had a complaint filed against\nthem and of those, only 85,000 persons were\nprosecuted. Of those, only 42,000 were convicted\nof a felony. Worse yet, of the 42,000 convicted\nfelons, only 5,000 were sent to state prison with\nanother 1,000 being sent to the Youth Authority.\n14,000 were granted straight probation and another\n16,000 were granted probation and served less\nthan one year in a county jail. Thus, in California\nin 1973, only 2.6 percent of those arrested by\nthe police for a felony went to state prison.\nCorresponding with this drop in the number of male felons\nin prison is a skyrocketing increase in active adult\nperversion caseload. The total below shows that over the\nlast 11 years, five of the highest percentage increases in\nthe perversion caseload occurred during the Reagan\nadministration and there is definitly a positive correlation\nwith reference to this increased perversion caseload and\nthe decrease in the number of male felons in prison.\nTABLE A\n53\nACTIVE ADULT PROBATION CASELOAD ON DECEMBER 31, 1963 - 1973\nYear by Type of Court\nMunicipal\nPercent superior\nPercent\nSuperior\nand justice\ncourt to total\nYear\nTotal\nchange\ncourt\ncourts\ncaseload\n1963\n71,839\n9.5\n30,833\n41,006\n42.9\n75,545\n52\n31.074\n43.571\n493\nSource:\nCalifornia Department\nof Justice -- Division\nof Law Enforcement --\nBureau of Criminal\nStatistics\n\"Adult Probation in\nCalifornia -- 1973\n3\n54\nThe budget act of 1972 appropriated $600,000 to the\nDepartment of Corrections \"for additional training for\nprison personnel including correctional officers, correctional\nprogram supervisors, correctional counselors, parole\nagents, middle managers, administrators, and parole board\nmembers and representatives\nThis $600,000 was\nappropriated as a separate item in the budget act, and was\nin addition to approximately $657,000 in the department's\noperational budget to finance its in-service training\nprograms.\nThe Auditor General in a report to the Joint\nLegislative Audit Committee entitled \"Review of the\nDepartment of Corrections Use of a Special $600,000\nAppropriation Relating to Training of Correctional Officers\"\nin 1974 said, in part:\n\"The special appropriation is being used to finance\na training course to maintain peace officer's status for\ncorrectional officers. In the judgement of the Auditor\nGeneral, this is not the intent for which these monies\nwere appropriated. \"\nFurther, the report says, \"twenty-five percent of the\ntraining course covers laws of arrest which are seldom\nexperienced in correctional institutions. In fact, the\njob description for correctional officers does not even\ninclude arrest functions.\"\nStill further, the report says, \"the Auditor General\nrecommends that the Department of Corrections discontinue\n55\nthe financing of peace officer training requirements from\nthe special training. Implementation of this recommendation\nwill free the balance of funds for training to upgrade\nthe performance of correctional personnel in their duties. \"\nAnd, lastly, the report indicates \"the department has\nnot maintained a formal set or account of records for the\nappropriation and, therefore, was unable to provide a\ndetailed breakdown of the expenditures charged to it.\nThe Auditor General recommends that the department immediately\nestablish a proper set of records.\nGERALD\nR.\nFORD\nLIBRARY\n56\nREGULATION OF PUBLIC UTILITIES\nI. REAGAN ON PUBLIC UTILITIES\n\"I don't know if the government has proven it is better\nable to provide power. \"\nSpeech, Telephone Company\nApril, 1966\n\"\nthere is indication that they (the Public Utilities\nCommission) have been unduly restrictive on the telephone\ncompany.\n\"\nNews conference, Sacramento\nMay 16, 1967\n\" the phone company here in California has been in great\ndifficulty because of some of the actions of the Public\nUtilities Commission, and I think that hearings might develop\nthat there is this problem (rate increases) and where they\nhave the expansion to keep up with the state's growth\n...\nthe PUC is going to have to be more realistic in its\napproach to the phone company. \"\nNews conference, Sacramento\nMay 16, 1967\nII. HOW WELL DID REAGAN ACT IN THE CONSUMER INTEREST\nTO REGULATE UTILITIES IN CALIFORNIA?\nIn his announcement of candidacy for the presidency, he\ntalked about how terrible business was. Perhaps big utilities\nneed to mentioned in this light and Reagan's helpful treatment\n57\nof them in California.\nIn 1972, the Auditor General prepared for the Joint\nLegislative Audit Committee a report on the state Public\nUtilities Commission. The audit was to determine whether\nor not the commission complied with the intent of the\nLegislature and had served the needs of the public in an\neconomic and efficient manner in the regulation of utility\nrates.\nThe report may be summarized by quoting from it.\n\"The commission authorized rate increases of $784\nmillion during the five-year period through June 30, 1972,\ncompared with a rate decrease of $34 million during the\npreceding five-year period. This unprecedented increase\nof $784 million raises a serious question as to whether or\nnot the commission has met the needs of the public in\nassuring that the public utilities shall furnish adequate\nservices at reasonable rates. \"\nThe report further points out the following as some\nof the reasons for the increases.\n\"The authorized rate increases are attributable to\nan overall increase in the cost of living and a combination\nof the following factors which are directly controllable\nby the commission.\nA. \"The raising of authorized rates of return for the\nregulated utilities during the last three years.\nB. \"Change in an established rate setting policy for\nthe state's largest utility company allowing the firm's rates\n58\nto include incurred income tax expenses.\nC. \"Allowing the excess profits of an affiliated\ncompany to be passed on in the form of higher rates to its\nconsumers.\nD. \"Failure to consider some relevant factors which\nwould limit the amount of rate increases such as operations\nof affiliated companies, major costs claimed in support to\noffset rate increases and the operations of regulated companies\nlocated out of state.\nE. \"Failure to provide incentives that will promote\nefficient utility operation. \"\nAnd, further, the report can be summarized by saying,\n\"present policies and procedures practiced by the commission\ntend to prevent the efficient and effective regulation of\nutilities. These include the following:\nA. \"Assignment of commission hearings to individual\ncommissioners.\nB. \"Commission preventing its legal staff from taking\npositions independently different from other commission\nstaff.\nC. \"Review lacks verification of earnings, plant and\nequipment costs and other services.\nD. \"Formal organization of utilities division is over\nspecialized and results in conflicts of authority among\nsupervisory staff.\nE. \"Two divisions duplicate each other's efforts\nin determining the reasonableness of a utility's request\nfor rate increases.\"\n59\nThe issue here seems to me to be that the governor\nappoints the PUC commissioners and if he appoints\ncommissioners to act in favor of utility companies, rates\nhave a larger chance to increase, If on the other hand,\nhe appoints commissioners who attempt to act in the\nconsumer's interest, rates have less of a chance to\nincrease. Further, my thinking is that New Hampshire,\nwhere utilities, questions of energy, etc., are of great\nimportance, we find the way to either expand on this\ninformation or use it elsewhere.\nCERALD\nR.\nFORD\nLIBRARY\n60\nThe report presents the following totals to illustrate\nthe rate increases and decreases over the 10-year period\nit examined.\nTable 1\nPublic Utilities Commission Utility Rate Changes Authorized\nComparison of Five Fiscal Year Periods\n1967-68 Through 1971-72 With\n1962-63 Through 1966-67\nGERALD R. FORD LIBRANA\nFiscal Year\nAmount\nFiscal Year\nAmount\n1967-68\n$ 3,976,677\n1962-63\n$ 969,105\n1968-69\n82,899,917\n1963-64\n(50,374,021)\n1969-70\n152,145,710\n1964-65\n2,492,928\n1970-71\n100,867,299\n1965-66\n1,921,448\n1971-72\n443,613,982\n1966-67\n11,459,340\n$783,503,585\n$(33,531,200)\nSource: Annual reports of Public Utilities Commission.\nComparing the total rate changes for the two five-year periods shows\nthat the changes during the most current five-year period, exceeded those of the\nprior five-year period by $817,034,785.\n61\nGERALD R. FORD\nPROPOSITION ONE\nLIBRARY\nI.\nAs part of his cost-cutting image, Ronald Reagan placed\nbefore the voters in the State of California a ballot\nmeasure which was ostensibly a tax limitation initiative.\nPerhaps one of the most interesting and politically usable\nfactors about this is that it was defeated. That in combination\nwith Reagan's massive mandate when he defeated Pat Brown\nand substantially lessened support when he defeated Jess\nUnruh and his defeat on Proposition One could argue for\nsome political rhetoric which says that Reagan's popularity\nwent downhill substantially over eight years culminating\nwith the defeat in 1973. At least, that is something to\nplay with.\nII.\nRather than have us do a summary of Proposition One,\nI have included an analysis prepared by the California\nJournal.\n62\nAnalysis of key provisions in Proposition 1\nHere are the principal provisions of the tax lim-\nernment taxes would remain subject to change by\nitation initiative on the November 6th statewide\nmajority vote.\nspecial election ballot:\nPro\nTax rate limits would be estab-\nExpenditime \" celling At the heart of the measure\nlished for cities, counties and special districts similar\nPAGE 8\nCALIFORNIA JOURNAL\n63\nIII.\nWhen running for election in 1966, Reagan was quoted\nas praising A. Alan Post, the California Legislative\nAnalyst. At that time Reagan said:\n\"I've turned to the most competent authority I could find\non this budget, a man employed by the state to analyze\nthe budget. He's been doing it for 15 years. His duty\nto be fair and objective is spelled out by law. I refer\nto Mr. A. Alan Post, a legislative analyst. I've taken\na long hard look at this budget but I couldn't possibly\nmatch his comprehensive findings.\"\nHowever, with reference to Proposition One, Post took\non Reagan by saying in a California Journal article in\nSeptember, 1973:\n\"This measure does not appeal to me as good public\neconomics. It may well constitute an overreach of the\nstate into the private economy, and it may well end up as\na threat on the part of the state from the development\nof sound fiscal relationships and responsibilities with\nrespect to local government. It may well add to the\ntotal administrative cost of government in California\nwhere functions being carried out by the wrong level of\ngovernment, using the wrong kinds of taxes, and in a\nbureaucratic and costly manner.\"\n64\nGERALD R. FORD\nMALIBU RANCH DEAL\nThe attached is a copy of a report prepared for the Unruh\nfor Governor Committee in 1970 when Jess Unruh was the Democrat\nnominee against Reagan in the California General Election for Gover-\nnor. We have not attempted to review it for accuracy but feel\nit should be presented as early as possible in order to give\nthe committee the chance to determine whether or not it warrants\nfurther checking.\nIt is potentially damaging, but appears to me to need a\ngreat deal of additional work.\nAs you can see, there are two memos. The second was evidently\nprepared to answer questions raised by the first.\n65\nTO:\nJess Unruh For Governor Committee\nFROM:\nMarvin S. Shapiro\nGRALD R. FORD\nDATE:\nOctober 16, 1970\nThis memo is intended as a summary of the various\ndocuments and items of information I have examined with\nregard to property in Malibu formerly owned by Ronald\nReagan. There are two parcels of property involved in\nthis discussion: (1) a parcel consisting of 236.39\nacres south of Mulholland Highway (the \"236-Acre Parcel\"),\nand (2) a 54.44 acre parcel north of Mulholland Highway\n(the \"54-Acre Parcel\"). These two parcels, as well as\nthe rough boundaries of a contiguous 2,500 acre ranch\nowned by Fox Realty Corporation of California (\"Fox\"),\nare outlined in the attached map (Exhibit A). The border\nmarked with x's reflects the 2,300 acres Fox acquired in\nMarch 1946. The dates of the other acquisitions by Fox\nare also indicated. Also attached is a contour map of\nthe area (Exhibit B).\nOn March 27, 1951, Ronald Reagan, an unmarried man,\nacquired the 236-Acre Parcel and about 50 acres on the\nThis may\nnorth side of Mulholland (including 14.44 acres of the\n54-Acre Parcel). The stamps on the deed* indicate\nnot be\na\npurchase price of $65,000 Apparently, Reagan acquired\naccurate\nthe other 40 acres of the 54-Acre Parcel at another time\nSince Reg.\nand disposed of about 35 acres north of Mulholland at another may have\ntime.\nassumed\nIn December, 1966, Reagan conveyed to Fox by grant\na pre-\ndeed* the 236-Acre Parcel and granted to Fox an option*\nto purchase the 54-Acre Parcel. The option to purchase\nexisting\nwas exercisable between January 1, 1967 and December\n31, 1973. The option price is $8,000 per acre, all cash.\nmortgage\nThe Transcript of the Assessment Appeals Board proceedings\nin January 1968 discussed below records that Reagan's\nattorney, Mr. Endicott of Gibson, Dunn & Crutcher, stated\nthat the purchase price for the 236-Acre Parcel and the\noption was $1,930,000 (Tr. p. 296). Since the recorded\ntrust deed given by Fox* indicates that it secures a\nnote in the amount of $1,391,167, one may infer that a\nbalance of $539,000 was paid in cash. Mr. Endicott\nstated that the promissory note was for a one-year term\nand that it was in fact paid (Tr. p. 255). Prior to\n*Indicates that I have a copy of the document.\n66\nTO:\nJess Unruh. For Governor Committee\nFROM:\nMarvin S. Shapiro\nDATE:\nOctober 16, 1970\nPAGE: 2\npayment of the note, it was assigned by an assignment*\nrecorded February 15, 1967, to Jules Stein, William\nFrench Smith and Robert Shuman, as trustees under the\nRonald Reagan 1966 Declaration of Trust. The deed of\ntrust was reconveyed on February 19, 1968.\nto whom\nBy deed dated June 18, 1968*, Reagan conveyed the\n54-Acre Parcel to Santa Rosa Ranches, a Kaiser-Aetna entity.\nThe stamps on the deed indicate that the value of the\nconsideration received was $3,000 per acre. Since there\nwas no trust deed, one might infer that there was an all\ncash deal. However, Bryan Stevens informs me that the 54-Acre\nParcel served as the down payment by Reagan for about 700\nacres in Riverside County. Also, Santa Rosa Ranches may\nhave had a right to compel Reagan to repurchase the property.\nFox has never given up its option interest in the 54-Acre\nParcel. By deed recorded September 11, 1969*, Santa Rosa\nRanches conveyed the 54-Acre Parcel to Fifty-Seventh Madison\nCorporation, a real estate company, which was represented by\nRosenfeld, Meyer & Susman, which also represents MCA. The\ndeed indicates that the address of the buyer is 598 Madison\nW\nasses.\nAvenue, New York City, attention: Morris Berman, and that\n$3,000 per acre was paid.\nThe assessment of Phil Watson, the County Assessor,\nfor fiscal year 1967-68, based on values as of March 1967,\nindicate his conclusion that the 236-Acre Parcel was worth\n$916,800 and that the 54-Acre Parcel was worth $30,000.\nBryan Stevens, a teacher who is active in Democratic\npolitics, appealed the conclusion of the Assessor. The\nAppeals Board, after a hearing reflected in a transcript\nof over 1,000 pages, ruled that the value of the 236-Acre\nParcel was $1,459,200, and that the value of the 54-Acre\nParcel was $216,400. The Transcript may be examined in\nRoom 265 in the Los Angeles Hall of Administration. Both\nReagan (still the owner of the 54-Acre Parcel at that\ntime) and Fox filed suits in the Los Angeles Superior\nCourt contesting the Appeals Board decision. Superior\nCourt Nos. 940504 and 940643. FOX dismissed its suit\nafter taking no other action for a year. There is nothing\nfiled in Reagan's suit except his complaint. The Reagan\ncomplaint, which was verified by Endicott, states that the\nfull cash value of the 54-Acre Parcel was $30,000.\n67\nTO:\nJess Unruh For Governor Committee\nFROM:\nMarvin S. Shapiro\nDATE:\nOctober 16, 1970\nPAGE: 3\nThe position of Fox reflected in the Transcript\nwas that the Assessor's determination of value at\n$916,800 was correct, notwithstanding the fact that it\npaid approximately $1,000,000 more than that value for the\n236-Acre Parcel and the option. Fox and Reagan stated\nthat there was no allocation of consideration between the\n236-Acre Parcel and the option. However, it would be\ndifficult to assert that the $8,000 per acre option had\nany significant value when thereafter Reagan somehow\nsold the 54-Acre Parcel for consideration worth $3,000\nper acre -- the $3,000 per acre value being consistent\nwith Reagan's position before the Appeals Board that\nthe 54-Acre Parcel had even worse topography than the\n236-Acre Parcel (Tr. p. 53).\nFox's counsel's position was consistent with\ntestimony of Alan Altman, Watson's special assistant\nin charge of the appraisal, that \"Fox was expanding\ntheir properties in that area in order to accommodate\ntheir motion picture production business which had been\nforced out of the 20th Century lot in West Los Angeles\nby their sale to Alcoa, and as a result they needed to\ndevelop this area in such a way that it would protect\ntheir future expansion for movie purposes. \" Mr. Altman\nthen went on to indicate that there was concern that the\nuse of the 236-Acre Parcel for purposes other than ranching\nor semi-agricultural uses would adversely affect the use\nof Fox's contiguous 2,500-acre parcel for motion picture\nproduction purposes (Tr. p. 978). Mention was made of the\npossible adverse effect of development of the 236-Acre\nParcel on the background scenery for movie making on the\n2,300 acre parcel. This appears unfounded because of\nridges on the properties.\nTO:\nJess Unruh For Governor Committee\n68\nFROM:\nMarvin S. Shapiro\nDATE:\nOctober 16, 1970\nPAGE:\n4\nFox's counsel also stated that Fox needed the\nproperty because of flooding of their 2,500-acre parcel\nby the Malibu Creek and because of their need for\nalternative access routes (Tr. pp. 314, 428, 1020).\nMr. Culver testified that the 236-Acre Parcel has no\nserious flood hazard and that it was therefore desired\nas a place to locate sets which would not be threatened\n(Tr. p. 510) Culver also stressed the importance of\naccess for the western portion of the Fox ranch to\nMulholland through the 236-Acre Parcel via a road through\na pass in the southeasterly portion of the 236-Acre Parcel\n(Tr. p. 516).\nMr. Ferguson, an officer of Fox, testified that\nFox was concerned that telephone poles or power lines on\nthe southern portion of the 236-Acre Parcel would adversely\naffect the shooting of scenes in the western part of the\nFox ranch.\nFerguson stated that Fox was informed in November\n1966 that the Reagan properties were for sale. (Mr.\nAltman of the Assessor's office testified that there had\nbeen no listing or advertising of the Reagan property.\nTr. p. 982.) Ferguson stated that Fox wanted the option\non the 54-Acre Parcel because it wished to assure that it\nwould continue to have frontage on Mulholland even if\nthere was a realignment of the road (Tr. pp. 648-649).\nFox's counsel said that Fox had acquired the 120-acre\nHunter parcel to protect Fox's entrance via Waycross (Tr.\np. 177). That transaction closed on November 1, 1966, and\ninvolved a price of about $15,000 per acre and a retention by\nseller of a life interest in seven of the acres sold. The total\npurchase price of $1,650,000 included a note secured by a\ntrust deed* for $1,200,000. (The deed of trust indicates\nthat the Fox-Hunter transaction was pursuant to an agreement\nof sale dated August 1, 1966. That agreement probably\nreflects an obligation of Fox to pay an additional sum of\n$105,000 for the seven acres when the seller dies.) Thus,\napproximately the same percentage of the total purchase\nprice (27%) was paid in cash to Reagan and Hunter. But\nthe terms of the trust deed notes were strikingly different:\nReagan received a one-year note, virtually the equivalent of\ncash; the sellers of the Hunter parcel received a note with the\nfollowing terms: 25 equal annual installments of $48,000\neach, commencing November 1, 1967; interest payable annually\nat 5% until November 1971; 5 1/2% to November 1976, and 6%\nfor the balance of the term. That note clearly did not have a\ncash value approaching the face amount of the note.\n69\nTO:\nJess Unruh For Governor Committee\nFROM: Marvin S. Shapiro\nDATE: October 16, 1970\nPAGE:\n5\nThe Assessor has determined that the fair market value of\nthe 120-acre Hunter parcel was approximately $1,000,000\nin March 1970, $1,250,000 in March 1969, and $925,000 in\nMarch 1968. Mr. Culver, the expert witness of Fox and\nReagan, stated that most of the Hunter parcel could be\ndeveloped, and that the Hunter parcel had a greater value\nto Fox than to any other person (Tr. pp. 406-408).\nIn October 1964, Fox acquired 35 acres abutting\nLas Virgenes Canyon Road from Edgar Shafer. The deed\nindicates a price of $450,000, or $12,850 per acre. In\nAugust 1963, Fox acquired 14 acres abutting Las Virgenes\nfrom Lowell Hoff. The deed indicates a price of $175,000,\nor $12,500 per acre.\nMr. Sapiro, Stevens' counsel, denied the need for\naccess by Fox because they, in fact, already had access\nto the property via Waycross Drive, which leads to Las\nVirgenes. Also, Fox can build a road to a portion of\nMulholland Highway abutting their 2,500-acre property.\nAmong other arguments made by Fox's counsel was\nthat better property in the area sold for less than the\nAssessor's valuation. That statement seems supported\nby the evidence, notwithstanding Stevens' position to\nthe contrary. Stevens' position was based on sales made\nat about the same time in the same general area. However,\nStevens' focused exclusively on the purchase price and\ndid not consider at all the terms extended the buyer.\nAlmost invariably, the terms involved the payment of\nrelatively little cash, consisting primarily of prepaid\ninterest, with long term purchase money notes for the\nbalance. Discounts were applied by Mr. Altman, which\nseem reasonable, indicating that these \"comparable sales\"\nwere generally made at about $4,000 per acre or less.\nIn any event, this was the position of the expert witness\nof Fox and Reagan.\n70\nTO:\nJess Unruh For Governor Committee\nFROM: Marvin S. Shapiro\nDATE: October 16, 1970\nPAGE: 6\nRebuttal to any suggestion that the $1,000,000\npremium paid by Fox was related to the needs of their\n2,500-acre property should include the following\nreasoning: (1) Fox sold their Century City properties\nto Alcoa long before 1966, i.e., in 1961 (April 1969\nFox SEC Registration Statement, p. 11); ; and (2) it is\nmore than a coincidence that Fox perceived its needs\nshortly after it perceived that Reagan was to be the\nnext Governor -- the transaction apparently started in\nNovember 1966 and closed in December 1966. Fox\nacquired virtually all of its 2,500 acres in the area\nin 1946.\nThe Transcript suggests three possible reasons\nfor the $1,000,000 premium: (1) additional access to\nMulholland, (2) concern that development of the 236-Acre\nParcel could adversely affect the background for outdoor\nscenes, and (3) to provide a location for their production\nfacilities which would not be threatened by floods. Further\nexamination of the area with an expert on land acquisition\nindicates the following:\n(1) Only the 236-Acre Parcel or the western portion\nof the Fox ranch could benefit. from the Mulholland access\nwhich was available from the 236-Acre Parcel. (The western\nportion was not used often -- virtually all of the production\nfacilities are in the eastern, level portion, which already\nhad excellent access.)\n(2) If power poles existed on the southerly portion\nof the 236-Acre Parcel, they could be seen from the western\npart of the Fox ranch. But it is unlikely that that portion\nof the 236-Acre Parcel -- the most rugged portion -- will be\ndeveloped in the foreseeable future. (Tr. p. 715.) Develop-\nments on the relatively developable part of the 236-Acre\nParcel could not be seen from Fox's 2,500 acres. It is\npossible that two or three single family dwellings could be\nbuilt on the top of ridges which are visible from Fox's\nproduction facilities, but one such observable dwelling already\nexists on one of the three small parcels abutting Mulholland,\nwhich neither Reagan nor Fox owned. In any event, poles or\nadditional dwellings could be edited out of any scenes if they\nwere filmed inadvertently.\n71\nR.\nTO:\nJess Unruh For Governor Committee\nFORD\nFROM:\nMarvin S. Shapiro\nDATE:\nOctober 16, 1970\nPAGE:\n7\n(3) It is clear that the Malibu Creek overflows\nfrom time to time. However, we saw no evidence of any\nmotion picture production facilities on the \"safe\" 236-\nAcre Parcel.\nWe are informed that a stockholder's suit has been\nfiled against 20th Century Fox in New York, asserting that\nFox should not have entered into the Reagan transaction.\nCourt files in Manhattan have been checked without turning\nup anything.\nIn 1968, Watson again determined that the value of\nthe property was $916,800. Stevens again appealed that\ndetermination and was in the process of obtaining a\nreview by the Appeals Board when that Board concluded\nthat Stevens' attorney could not control the course of\nthe presentation of evidence against the Assessor's\ndetermination. Stevens obtained an order from the\nSuperior Court in November 1969, reversing that determination.\nSuperior Court No. 944756. Fox has appealed that decision.\nWatson's determinations of fair market value have\nbeen as follows:\n236\n54\nMarch 1970\n$1,105,000\n$115,000\nMarch 1969\n1,488,000\n115,000\nMarch 1968\n916,800\n115,000\nMarch 1967\n916,800\n30,000\nMarch 1966\n---\n30,000\nMarch 1965\n-------\n10,000\n107\nSEE\nMAP\nA\nB\nC\nFor:\nD\nm\n13.\n107\nI\nRD\nCORNEL\nLiberty\nB-Circle-Y\nno 10 (904)\n1\nIDELLANTY\nN\nRanch\nS\n+\n54\ncyn\nVirgenes\n2\nMALID:,\n2\n6\n(1)\n12/66\nMALID LAKE\n%\nHWY\nSTONED \\CYN RD\nx\nX\n3\nMALIEU DR\nCRAFF\n3\nEXHIBIT A\nAirstrip\nMAP\n&\nA\nL\nNEXLAYS\nMAP\nS\nTriunio\nOidWickland\nX\n10\n11\nMTY\n12\nRench\nSEE\n7.\nCyn\n2300 Acre Fox Ranch\nCENTURY\n11/1/16\n1:2AC\n4\nHunter\nCyn\n229\nof:\nSalvation Army\nX\nComp\nDOROTHY\nOF\n% McCRATER SALORA a\n5\n30\n:\nRD\n*\nTopic\n5\n08\nx\nA5\nX\nX\n13\nPILICE\nE:C\nMESA\nPEAK\nX\nRD\n6\n6\n72\n10019\n/\nMTX\nPEAK\n/\nI\nA\nB\nC\n0\nP.1\nF\nSEE\nMAP\n950\nG\nALVD\n900\nDM854\n1017\nAgoura\nEXHIBIT B\nMalibu Junction\n892\nE\nS\nMalib6\nFire Sta\nPOAD\nCORNELL\nCanyon\n4\n060 000 FEELING\n34\nLiberty\nIn S\nHOXUED\n800\n835\n1289\n3\nMalibood Like\n3\nMtn Club\nLake\nMalibu\nvaliting In\n1270\n10Triunfo\nBUTTES\n11\nC\nSchott\n74\nTO:\nJess Unruh For Governor Committee\nFROM:\nMarvin S. Shapiro\nDATE:\nOctober 21, 1970\nI have ascertained the following additional facts:\nThe seller of the 236-Acre Parcel to Ronald Reagan\ndid not have a mortgage on the property at the time of\nsale. Therefore, the total amount of the purchase price\npaid by Reagan was $65,000. The $65,000 consisted of a\nR.\nfirst trust deed note for $50,000 and $15,000 cash. Reagan\nFORD\npaid off the note in 1958, and at the same time borrowed\nagainst the property, giving a new mortgage for $35,000\nThat new mortgage was paid off in December 1966.\nLIBRATE\nIn response to the statements made by Reagan to the\ncharge that there had been a million dollar bonus, I\nsuggest that the following questions be asked:\nIf your property was worth $1,000,000 more than the\n$1,930,000 price you charged Fox, why did your expert\nwitness, David Culver, say that your property was worth\nonly $944,000?\nDid you ever list your property with any broker or\nadvertise it for sale? Did you ever get an offer from\nanyone other than Fox? If so, how much was the offer,\nwho made it, and what were the terms of the offer?\nIf your property was worth as much as you suggest,\nwhy did you complain that your property was being over-\nassessed by the County Assessor?\nWhat type of land development project did Fox have\nplanned for your property when they bought it? If the\nresponse indicates that Fox had in mind anything other\nthan usage in connection with its motion picture activities,\nit should be pointed out that Mr. Culver and Mr. Ferguson,\nan officer of Fox, testified that the reason that Fox\nwanted the property was exclusively in connection with its\nmotion picture activities, and that Culver testified that\nthe best use of the property was holding it for future\nresidential development and that it was worth $944,000\nbased on that type of usage.\nWhat has Fox done with the land since 1966?\n75\nTO:\nJess Unruh For Governor Committee\nFROM:\nMarvin S. Shapiro\nDATE:\nOctober 21, 1970\nPAGE: 2\nDo you have a lease on the property? HOW much\nrent are you paying?\nHow is it that you were able to sell the 54-Acre\nParcel that you owned on the north side of Mulholland\nHighway when Fox had an option to buy that land for\n$8,000 per acre?\nWhy did you file a suit in the Los Angeles\nSuperior Court claiming that the 54-Acre Parcel was\nworth $30,000 when you were able to sell it for $165,000?\n76\nSource of quotations of Reagan's attorney, Twentieth Century Fox's attorney\nand the appraiser hired by Twentieth Century Fox and Reagan.\nMENT\n1. State 1 that the purchase price was $1,930,000. Made by Mr. Endicott,\nReagan's lawyer, at page 296 of the transcript of an Assessment\nAppeals Board hearing in January, 1968.\n2. The statement by the appraiser representing Twentieth Century Fox\nand Reagan, Mr. Culver, that the fair market value of the land was\n$944,000. (Page 413 of the transcript.)\n3. Statement by the attorney for Twentieth Century Fox, George C.\nHadley, that the assessor's valuation of $916, 000 was \"on the nose.\n11\n(Page 310 of the transcript. )\nFORD 'y OFFICE\n77\nRONALD REAGAN ON SOCIAL SECURITY\nSocial security has \"changed from an insurance concept\nDERALD\nA.\nFORD\nwhen it started to a welfare concept now. It should be\nLIBRARY\nmade voluntary. 11\nLos Angeles Times, Jan. 22, 1965\n\"The flagship of the liberal cause is social security,\"\n\"Social security dues are a tax for the general use of\nthe government and payment of that yax does not automatically\nentitle anyone to the receipt of. the benefits. The benefits\nare a welfare program which can be cancelled or curtailed\nby Congress at any time. \"\nSpeech, Amarillo, Texas\nMarch 2, 1964\n\"Do not exchange freedom for the soup kitchen of compulsory\ninsurance.\"\nArizona Republic, May 23, 1964\n\"I think social security's a fact of life. It's here to\nstay and it's a good fact. I think it is not only a\ngreat benefit to the recipients but I think at the same\ntime it serves all of us to the extent that it probably\ntends to level off economic ups and downs by keeping the\npruchasing power among the people. However, I've reserved\nthe right and have on many occasions criticized flaws and\nfaults which I think endanger the program, and faults\nwhich could only be termed as fiscal irresponsibility in\n78\nthe administering and running of this program.\"\nNews conference, Jan. 4, 1966\n\"At the same time, can't we introduce voluntary features\nthat would permit a citizen to do better on his own, to be\nexcused upon presentation of evidence that he had made\nprovisions for the non-earning years?\"\nA Time for Choosing, television\nspeech for Goldwater, November, 1964\nReagan said he had never favored social security being\nvoluntary but had favored \"excusing an individual from\ncontributing to social security if he proved he had made\nadequate provision for his retirement years. \"\nCampaign tour, Fresno,\nSacramento Bee, Oct. 16, 1966\nReagan says he supports social security, but \"I am critical\nof some aspects. For example, you cannot name your\nbeneficiaries as you want to. Also, I think we could\nexplore the idea, perhaps to permit those who want to go on\nprivate plans to do so, provided they submit a record\neach year of such participation.\"\nKNX Firing Line call-in show,\nLos Angeles Herald-Examiner,\nOct. 25, 1966\n\"I still believe we could explore whether a man who could\ndo better on his own\" should be allowed to purchase a\nvoluntary private retirement plan in lieu of the federal\ncompulsory program.\nKNX Firing Line call-in show,\nLos Angeles Times, Oct. 25, 1966"
}