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President Ford Committee Leadership Mailings, 4/12/76 - Reagan's TV Address (2)
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President Ford Committee Leadership Mailings, 4/12/76 - Reagan's TV Address (2)
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The original documents are located in Box H50, folder "President Ford Committee
Leadership Mailings, 4/12/1976 - Reagan's TV Address (2)" of the President Ford
Committee Campaign Records at the Gerald R. Ford Presidential Library.
Copyright Notice
The copyright law of the United States (Title 17, United States Code) governs the making of
photocopies or other reproductions of copyrighted material. Gerald R. Ford donated to the United
States of America his copyrights in all of his unpublished writings in National Archives collections.
Works prepared by U.S. Government employees as part of their official duties are in the public
domain. The copyrights to materials written by other individuals or organizations are presumed to
remain with them. If you think any of the information displayed in the PDF is subject to a valid
copyright claim, please contact the Gerald R. Ford Presidential Library.
THE WHITE HOUSE
WASHINGTON
April 1, 1976
RTY
MEMORANDUM FOR ROBERT T. HARTMANN
FROM:
GWEN ANDERSON Ga
SUBJECT:
REAGAN SPEECH
In response to your request for the quickest possible
research check on the speech by former Governor Reagan,
we checked the drafts of the candidate's speech for factual
accuracy. See attached.
In checking any changes in the pre-released text as com-
pared to the speech as it was actually delivered on TV,
there were 28 minor changes, according to Bruce Wagner of
Campaign '76 (833-8950). Of the 28 changes, however, there
was only one factual change on page 11. That changed the
figure from 45% to 43%.
This preliminary report has been compiled by three of our
five research staff members headed by Agnes Waldron. The
other two researchers have been handling the President's
speech texts for Wisconsin. We have been assisted by the
NSC, FEA, OMB, and PFC staff members cited as sources.
The economic section, despite some data provided by CEA,
is obviously incomplete, but the material promised by Mr.
Seidman is not yet available at this writing (4 p.m.)
Scidman paper attached at the
back of this package
FORD & GERALD LIBRARY
-1-
ERRORS IN CANDIDATE REAGAN'S
SPEECH OF MARCH 31, 1976
Page 1 - paragraph 3 - Reagan Statement
In this election season the White House is telling us a solid
economic recovery is taking place. It claims a slight drop in
unemployment. It says that prices aren't going up as fast,
but they are still going up, and that the stock market has shown
some gains. But, in fact, things seem just about as they were
back in the 1972 election year. Remember, we were also
coming out of a recession then. Inflation has been running
at around 6%. Unemployment about 7. Remember, too, the upsurge
and the optimism lasted through the election year and into 1973.
And then, the roof fell in. Once again we had unemployment.
Only this time not 7%, more than 10. And inflation -- wasn't
6%, it was 12%.
RESPONSE -- The peak of unemployment -- 8.9% -- was reached
in May, 1975. Latest unemployment figures -- February, MaRCH 1976 --
show the rate was 7,5%. But Mr. Reagan in depricating these
figures failed to note that total employment has returned to the
pre-recession now peak of July 1974 with 86.7 million at workawhich is
excells the our
a 2.6 million gain since march 1975
Prices are not going up as fast. Inflation in 1974 was at an
annual rate of 12.2%. Today it is at 6.3%.
In 1972 we were further into recovery than we are today. But
Mr. Reagan has his statistical facts concerning 1973-74 comewhat
askew. The peak unemployment figure was reached in May 1975 at
8.9%. It never reached 10% as he states.
Source John Davies, CEA
- -2-
Page 2 - paragraph 2
Now, in this election year 1976, we're told we're coming out
of this recession. Just because inflation and unemployment rates
have fallen, to what they were at the worst of the previous
recession. If history repeats itself will we be talking recovery
four years from now merely because we've reduced inflation from
25% to 12%.
RESPONSE -- All of the figures -- retail sales, GNP, durable
goods, housing, personal income, etc. clearly show we are
moving out of the recession -- the Administration's statements
are not based merely on improved unemployment and cost-of-living
statistics as Mr. Reagan implies.
-3- -
Page 2 - paragraph 3
The fact is, we'll never build a lasting economic recovery by
going deeper into debt at a faster rate than we éver have before.
It took this nation 166 years -- until the middle of World War II --
to finally accumulate a debt of $95 billion. It took this
administration just the last 12 months to add $95 billion to the
debt. And this administration has run up almost one-fourth of
our total national debt in just these short nineteen months.
RESPONSE -- The national debt reached $72 billion in 1942.
The current estimated deficit for FY 1976 is $76.19 billion.
Gross federal debt for FY 1976 is estimated at $634 billion.
Thus the administration's share of the national debt is 15.6¢
not 25%.
- 4
Page 2 - paragraph 4
Inflation is the cause of recession and unemployment. And
we're not going to have real prosperity or recovery until we
stop fighting the symptoms and start fighting the disease.
There's only one cause for inflation -- government spending
more than government takes in. The cure is a balanced budget.
Ah, but they tell us, 80% of the budget is uncontrollable. It's
fixed by laws passed by Congress.
RESPONSE -- The President has offered specific plans for a
balanced budget. But a large part of the cause of the current
recession is the result of past fiscal policies, rapid increases
in federal expenditures. There is no quick fix for problems
created a decade or more ago. A rapid return to a balanced
budget as Mr. Reagan calls for would provide faster progress
on inflation, but at the same time, it would mean a long delay
in recovery and much longer period of high unemployment.
The budget for FY 1977 estimates that 77.1% of the budget is
uncontrollable.
-5-
Page 3 - last 2 sentences of top paragraph
But laws passed by Congress can be repealed by Congress.
And, if Congress is unwilling to do this, then isn't it time we
elect a Congress that will?
RESPONSE -- The open-ended or uncontrollable program caol
for outlays of $383.1 billion in FY 1977 (plus the third quarter)
$236.8 billion is allocated to payments for individuals. Doe
Mr. Reagan want to repeal the following:
Social Security and Railroad Retirement -- $108.0 billion
Federal Employees Retirement benefits -- $22.9 billion
Veterans Benefits -- $16.3 billion
Medicare and Medicaid -- $38.4 billion
Public Assistance programs -- $26.0 billion
- -6-
Page 3 - paragraph 2
Soon after he took office, Mr. Ford promised he would end
inflation. Indeed, he declared war on inflation. And, we all
donned thos WIN buttons to "Whip Inflation Now." Unfortunately,
the war -- it is ever really started -- was soon over. Mr.
Ford, without WIN button, appeared on TV, and promised he
absolutely would not allow the Federal deficit to exceed $60
billion (which incidentally was $5 billion more than the biggest
previous deficit we'd ever had). Later he told us it might
be as much as $70 billion. Now we learn it's $80 billion or
more.
RESPONSE -- The President did draw a line at a deficit of
$60 billion on March 29, 1975 in a televised address. The
largest single year deficit occurred in 1943 -- $57.4 billion.
The difference between 57.4 and 60 billion is of course $3.6
billion. The current estimated deficit for FY 76 is not $80
billion or more, it is $76.9 billion.
-7-
Page 3 - paragraph 3
Then came a White House proposal for a $28 billion tax cut,
to be matched by a $28 billion cut in the proposed spending --
not in the present spending, but in the proposed spending in
the new budget. Well, my question then and my question now
is, if there was $28 billion in the new budget that could be
cut, what was it doing there in the first place?
RESPONSE -- The proposed $28 billion cut was not a cut in the
budget as suggested in the next to last line, it was a $28 billion
cut in Federal expenditures in programs already in place.
The President's proposal was an effort to prevent further
increases in spending.
SOURCE: John Davies, CEA
-8-
Page 4 - paragraph 1
It would have been nice if they'd thought of some arrangement
like that for the rest of us. They could, for example, correct
a great unfairness that now exists in our tax system. Today,
when you get a cost of living pay raise -- one that just keeps
you even with purchasing power -- it often moves you up into
a higher tax bracket. This means you pay a higher percentage
in tax, but you reduce your purchasing power. Last year,
because of this inequity, the government took in $ 7 billion in
undeserved profit in the income tax alone, and this year they'll
do even better. Now isn't it time that Congress looked after
your welfare as well as its own?
RESPONSE -- Inflation does indeed increase taxes. The
President has recognized this and has been successful in
reducing the inflation rate by 50%. He has also proposed
curbing the rise in expenditures and matched this with a
comparable tax cut.
SOURCE: John Davies, CEA
- -9- -
Page 5 - paragraph 3
Ending inflation is the only long range and lasting answer to
the problem of unemployment. The Washington Establishment
is not the answer. It's the problem. Its tax policies, its
harassing regulations, its confiscation of investment capital to
pay for its deficits keeps business and industry from expanding
to meet your needs and to provide the jobs we all need.
RESPONSE -- The President's economic policies are anti-
inflationary. That is why he has vetoed 46 bills and saved
the taxpayers $13 billion.
SOURCE: Pete Modelin, OMB
-10-
Page 6 - paragraph 2
At the time we were only importing a small percentage of our
oil. Yet, the Arab boycott caused half a million Americans
to lose their jobs when plants closed down for lack of fuel.
Today, it's almost three years later and "Project Independence"
has become "Project Dependence. 11 Congress has adopted an
energy bill so bad we were led to believe Mr. Ford would
veto it. Instead he signed it. And, almost instantly, drilling
rigs all over our land started shutting down. Now, for the
first time in our history, we are importing more oil than we
produce. How many Americans will be laid off if there is
another boycott? The energy bill is a disaster that never should
have been signed.
RESPONSE -- Candidate Reagan stated we were only importing
a small percentage of our oil actually 35%. When he stated
it's almost three years -- in fact -- it is only two years
March, 1974 to the present. The amount of oil that we imported
during 1975 was 6.0 bm/d, and we produced 8.4 mb/d.
SOURCE: FEA, Bruce Pasternak and Jim Peterson
-11-
SOURCE: CHRIS RATHKOPH/FRANK ZARB
FEA -- Administrator's Office
Page 6
Paragraph 2
Reagan Statement:
Today, it's almost three years later and "Project In-
dependence" has become "Project Dependence." Congress
has adopted an energy bill SO bad we were led to believe
Mr. Ford. would veto it. Instead he signed it.
RESPONSE:
The Energy Policy and Conservation Act passed by
the Congress in December signaled an end to the year long
debate between the Congress and the Administration on oil
pricing policy and opens the way to an orderly phasing out
of controls on domestic oil over forty months, thereby
stimulating our own oil production. Over time, this legis-
lation, by removing controls, should give industry sufficient
incentive to explore, develop and produce new fields in the
outer continental shelf, Alaska, and potential new reserves
in the lower forty-eight states. Removal of these controls
at the end of forty months should increase domestic pro-
duction by more than one million barrels per day by 1985
and reduce imports by about three million barrels per day.
More importantly, this bill enables the United States
to meet a substantial portion of the mid-term goals for
-12-
energy independence set forth over a year ago. Incor-
porated in this are authorities for a strategic storage
system, conversion of oil and gas-fired utility and in-
dustrial plants to coal, energy efficiency labeling,
emergency authorities for use in the event of another
embargo, and the authority we need to fulfill our inter-
national agreements with other oil consuming nations.
These provisions will directly reduce the nation's de-
pendency on foreign oil by almost two million barrels per
day by 1985. The strategic storage system and the stand-by
authority will enable the United States to withstand a
future embargo of about four million barrels per day.
-13-
Page 7 - paragraph 3
Page 9 - paragraph 2
California was faced with insolvency and on the verge of
bankruptcy. We had to increase taxes. Well, this came very
hard for me because I felt taxes were already too great a
burden. I told the people the increase, in my mind, was
temporary and that, as soon as we could, we'd return their
money to them.
This was government-by-the-people proving that it works when
the people work at it. When we ended our eight years, we
turned over to the incoming administration a balance budget.
A $500 million surplus. And, virtually the same number of
employees we'd started with eight years before. Even though
the increase in population had given some departments a
two-thirds increase in work load.
RESPONSE -- The number of state employees increased from
113, 779 in 1967 to 127, 929 in 1975. Under Reagan, there were
three huge tax increases totalling more than $2 billion in 1967.
In 1967, there was an increase of $967 million, the largest state
tax hike in the nation's history. Of this, $2280 million went
for one-time deficit payment and state property tax relief. In
1971, the increase was $488 million with $150 million for property
tax relief. In 1972, an increase of $682 million with $650 million for
property tax relief. Much of this property tax relief was short
term, but the overall tax increases were permanent.
State personal income tax revenues went from $500 million
to $2.5 billion, a 500% increase. Taxable bracket levies were
increased from 7% to 11%. The size of the brackets was
reduced so that taxpayers reached the highest bracket more
quickly and personal exemptions were reduced. Finally, after
he adamantly denied that he would ever do so, the Governor
agreed to a system of withholding state income taxes.
Bank and corporation taxes went up 100%. The state sales
tax rose from 4% to 6%. The tax on cigarettes went up 7
cents a pack and the liquor tax rose 50 cents per gallon.
Inheritance tax rates were increased and collections more than
doubled.
Page 7 - paragraph 3
-14-
Page 9 - paragraph 2
continued
Under Reagan, the average tax rate for each $100 of assessed
valuation rose from $8.84 to $11.15. Under predecessor Pat
Brown, the increase was much less in dollars and. percentage --
from $6.96 to $8.84, and in the six years of Republican
Knight's administration, it was still less -- from $5.94 to
$6.96. One reason for the big increase under Reagan - - from
$3.7 billion to $8.3 billion -- is that the state paid a statutory
formulated percentage of the school costs - - one of the biggest
reasons for local property taxes.
Despite periodic efforts to provide relief there has been a
substantial increase in the burden carried by most property owners.
Inflation and high assessments have helped wipe out any savings.
Only $855 million of the record $10.2 billion budget in Reagan's
final year was for tax relief for homeowners and renters.
SOURCE: Peter Kaye, PFC
-15-
Page 10 - paragraph 4
And in less than three years we reduced the rolls by more
than 300,000 people. Saved the taxpayers $2 billion.
RESPONSE -- Substitute for 300,000 and $2 billion the following:
1. Drop by 20,000 persons in rolls due to correction in
accounting procedures in largest county, Los Angeles.
2. Migratory rate of unemployed into California declined
from 233,000 in 1967 to 44,000 in 1971.
3. 110,000 decline in rolls attributed to Reagan even
though his welfare had not gone into effect when
decline occurred.
4. Rolls for welfare families increased in 8 years of
Reagan's Governorship from 729,357 to 1,384,400
and the cost went from $32.3 million to $104.4 million.
SOURCE: Peter Kaye, PFC
-16-
Page 11 - top sentence
And, increased the grants to the truly deserving needy by an
average of 43%. We also carried out a successful experiment
whichI believe is an answer to much of the welfare problem in
the nation. We put able-bodied welfare recipients to work at
useful community projects in return for their welfare grants.
RESPONSE -- The program never touched more than 6/10th
of 1% of welfare recipients. Also, the program designed to
have 59,000 participants in 1st year in 35 counties, but program
managed 1,100 participants in 10 counties in mostly rural farm
areas.
SOURCE: Peter Kaye, PFC
-17-
Page 12 - paragraph 4
Independent business people, shopkeepers and farmers file
billions of reports every year required of them by 'Washington.
It amounts to some 10 billion pieces of paper each year and it
adds $50 billion a year to the cost of doing business.
Washington has been loud in its promise to do something about
this blizzard of paperwork. And they made good. Last year
they increased it by 20%.
RESPONSE -- The figures 10 billion and 50 billion are
guestimates. No one has counted the number of pages in all
of these reports. Moreover, if it is liberally estimated that
it costs $100 an hour to work on these forms, the total
cost to business would be $4.3 billion.
Between December, 1974 and December, 1975, the number of
reports from the Executive branch agencies excluding IRS,
banking and regulatory agencies declined by 5%. However, the
number of hours of burden associated with filling out the reports
increased by 8%. One reason for that increase is reports
required by the Congress, i.e., the Real Estate Settlements Act
which requires information to be filed when house was sold added
4 million manhours of reporting burden last year. In the
absence of that report the reporting burden would have declined.
There are other reports mandated by Congress which have added
to this burden.
Dr. Duncan can see no reason for the increase of 20% that
candidate Reagan was talking about. It is also virtually
impossible to estimate cost to business in completing the forms.
SOURCE: Dr. Duncan, OMB, and Roy Lawry of OMB
-18-
SOURCE: BUD MCFARLAND, NSC
Page 13
Paragraph 3
Reagan Statement:
We gave just enough support to one side in Angola to
encourage it to fight and die but too little to give it a chance of
winning.
Response:
The U.S. objective in supporting the FNLA/UNITA forces
in Angola was to assist them, and through them all of black Africa,
to defend against Soviet and Cuban intervention. Despite massive
Soviet aid and the presenve of Cuban troops, we were on the road to
success in Angola until December 19 when Congress adopted the
Tunney Amendment cutting off further U.S. aid to the FNLA and UNITA.
Page 13
Paragraph 3
Reagan Statement:
Mr. Ford's new Ambassador to the United Nations attacks
our long time ally Israel.
Response:
Governor Scranton not only did not attack Israel, his
veto blocked an unbalanced Security Council Resolution critical of
-19-
SOURCE: Bud McFarland, NSC
Israel -- a resolution that every other member of the Security
Council voted for. In his March 23 speech in the United Nations
Security Council Gov. Scranton was simply reiterating long-standing
U. S. policy -- a policy articulated by every Administration since
1967 -- on Israel's obligations as an occupying power under international
law with regard to the territories under its occupation.
Page 13
Paragraph 3
Reagan Statement:
In Asia our new relationship with mainland China can have
practical benefits with both sides. But that doesn't mean it should
include yielding to demands by them as the Administration has, to
reduce our military presence on Taiwan where we have a long-time
friend and ally, the Republic of China.
Response:
We have not reduced our forces on Taiwan as a result of
Peking's demands. Instead, our reductions stem from our own
assessment of U.S. political and security interests. We have drawn
our forces down because the Vietnam conflict has ended and because
the lessening of tension in the area brought about by our new relation-
ship with the People's Republic of China has made it possible.
-20-
SOURCE: Bud McFarland, NSC
Page 13-14
Paragraph 3
Reagan Statement:
And, it is also revealed now that we seek to establish
friendly relations with Hanoi. To make it more palatable, we are
told this might help us learn the fate of the men still listed as
Missing in Action.
Response:
The Congress, reflecting the views of the American people
and the Administration, has called for an accounting of our Missing in
Action and the return of the bodies of dead servicemen still held by
Hanoi. The Administration, in keeping with this Congressional mandate,
has offered to discuss with Hanoi the significant outstanding issues
between us. We have not said we "seek to establish friendly relations
with Hanoi. 11 Such an assertion is totally false.
Page 14
Paragraph 2
Reagan Statement:
In the last few days, Mr. Ford and Dr. Kissinger have taken
us from hinting at invasion of Cuba to laughing it off a ridiculous idea.
Except, that it was their ridiculous idea. No one else suggested it.
Once again -- what is their policy? During this last year, they carried
-21-
SOURCE: Bud McFarland, NSC
on a campaign to befriend Castro. They persuaded the Organization
of American States to lift its trade embargo, lifted some U.S. trade
restrictions, they engaged in culture exchanges. And then on the eve
of the Florida primary election, Mr. Ford went to Florida, called
Castro an outlaw and said he'd never recognize him. But he hasn't
asked our Latin American neighbors to reimpose a single sanction, nor
has he taken any action himself. Meanwhile, Castro continues to export
revolution to Puerto Rico, to Angola, and who knows where else ?
Response:
We did not persuade the OAS to lift the sanctions against
Cuba. At Quito in the fall of 1974 we did not support a motion in the
OAS to do so. At San Jose last summer the U.S. voted in favor of an
OAS resolution which left to each country freedom of action with regard
to the sanctions. We did so because a majority of the OAS members
had already unilaterally lifted their sanctions against Cuba, and because
the resolution was supported by a majority of the organization members.
Since that resolution passed, no additional Latin American country has
established relations with Cuba.
The U.S. did not lift its own sanctions against Cuba, did not
enter into any agreements with Cuba, and did not trade with Cuba. We
did not engage in cultural exchanges. We validated some passports
for U.S. Congressmen and their staffs, for some scholars and for
-22-
SOURCE: Bud McFarland, NSC
some religious leaders to visit Cuba. We issued a few select visas
to Cubans to visit the U.S. These minimal steps were taken to test
whether there was a mutual interest in ending the hostile nature of our
relations. This policy waś consistent with the traditional American
interest in supporting the free flow of ideas and people. We have,
since the Cuban adventure in Angola, concluded that the Cubans are
not interested in changing their ways. We have resumed our highly
restrictive policies toward Cuban travel. With regard to Cuban efforts
to interfere in Puerto Rican affairs, we have made it emphatically clear
in the UN and bilaterally to the Cubans and other nations that the U.S.
will not tolerate any interference in its internal affairs.
Page 15
Paragraph 2
Reagan Statement:
The Canal Zone is not a colonial possession. It is not a
long-term lease. It is sovereign U.S. territory every bit the same as
Alaska and all the states that were carved from the Louisiana Purchase.
We should end those negotiations (on the Panama Canal) and tell the
General: We bought it, we paid for it, we built it and we intend to keep
it.
-23-
SOURCE: Bud McFarland, NSC
Response:
Negotiations between the United States and Panama on the
Canal have been pursued by three successive American Presidents.
The purpose of these negotiations is to protect our national security,
not diminish it.
Finally, Governor Reagan's view that the Canal Zone is
"sovereign U.S. territory every bit the same as Alaska and all the
states that were carved from the Louisiana Purchase" is incorrect.
Legal Scholars have been clear on this for three-quarters of a century.
Unlike children born in the United States, for example, children born
in the Canal Zone are not automatically citizens of the United States.
Page 16
Paragraph 2
Reagan Statement:
Why did the President travel halfway 'round the world to
sign the Helsinki Pact, putting our stamp of approval on Russia's
enslavement of the captive nations ?
We gave away the freedom of millions of people -- freedom
that was not ours to give.
Response:
The President did not go to Helsinki to put the stamp of
approval on Soviet domination of Eastern Europe. On the contrary,
-24-
SOURCE: Bud McFarland, NSC
he went to Helsinki along with the Chiefs of State or heads of
government of all our Western allies and, among others, a Papal
Representative, to sign a document which contains Soviet commit-
ments to greater respect for human rights, self determination of
peoples, and expanded exchanges and communication throughout
Europe. Basket three of the Act calls for a freer flow of people
and ideas among all the European nations.
The Helsinki Act, for the first time, specifically provides
for the possibility of peaceful change of borders when that would
correspond to the wishes of the peoples concerned. With regard to
the particular case of the Baltic States, President Ford stated
clearly on July 25 that "the United States has never recognized that
Soviet incorporation of Lithuania, Latvia and Estonia and is not doing
so now. Our official policy of non-recognition is not affected by the
results of the European Security Conference. 11 in fact, the Helsinki
document itslef states that no occupation or acquisition of territory by
force will be recognized as legal.
Page 16
Paragraph 3
Reagan Statement:
Now we must ask if someone is giving away our own freedom.
Dr. Kissinger is quoted as saying that he thinks of the U.S. as Athens
-25-
SOURCE: Bud McFarland, NSC
and the Soviet Union as Sparta. "The day of the U.S. is past and
today is the day of the Soviet Union. 11 And he added, My job
as Secretary of State is to negotiate the most acceptable second-
best position available. 11
Response:
Governor Reagan's so-called quotes from Secretary Kissinger
are a total and irresponsible fabrication. He has never said what the
Governor attributes to him, or anything like it. In fact, at a March 23,
1976 press conference in Dallas Secretary Kissinger said: "I do not
believe that the United States will be defeated. I do not believe that the
United States is on the decline. I do not believe that the United States
must get the best deal it can.
I believe that the United States is essential to preserve the
security of the free world and for any progress in the world that exists.
In a period of great national difficulty, of the Viet-Nam war,
of Watergate, of endless investigations, we have tried to preserve the
role of the United States as that major factor. And I believe that to
explain to the American people that the policy is complex, that our
involvement is permanent, and that our problems are nevertheless
soluble, is a sign of optimism and of confidence in the American people,
rather than the opposite. 11
-26-
SOURCE: Bud McFarland, NSC
Page 17
Paragraph 2
Reagan Statement:
Now we learn that another high official of the State
Department, Helmut Sonnenfeldt, whom Dr. Kissinger refers to as
his "Kissinger", has expressed the belief that, in effect, the captive
nations should give up any claim of national sovereignty and simply
become a part of the Soviet Union. He says, "Their desire to break
out of the Soviet straightjacket' threatens us with World War III.
In other words, slaves should accept their fate. 11
Response:
It is wholly inaccurate, and a gross distortion of fact,
to ascribe such views to Mr. Sonnenfeldt or to this Administration.
Neither he nor anyone else in the Administration has ever expressed
any such belief. The Administration view on this issue was expressed
by Secretary Kissinger before the House International Relations
Committee on March 29 as follows:
"As far as the U.S. is concerned, we do not
accept a sphere of influence of any country, anywhere
and emphatically we reject a Soviet sphere of influence
in Eastern Europe.
-27-
SOURCE: Bud McFarland, NSC
"Two Presidents have visited in Eastern
Europe; there have been two visits to Poland and
Romania and Yugoslavia, by Presidents. I have made
repeated visits to Eastern Europe, on every trip to
symbolize and to make clear to these countries that we
are interested in working with them and that we do not
accept or act upon the exclusive dominance of any one
country in that area.
"At the same time, we do not want to give
encouragement to an uprising that might lead to enormous
suffering. But in terms of the basic position of the
United States, we do not accept the dominance of any one
country anywhere.
"Yugoslavia was mentioned, for example. We
would emphatically consider it a very grave matter if out-
side forces were to attempt to intervene in the domestic
affairs of Yugoslavia. We welcome Eastern European
countries developing more in accordance with their national
traditions, and we will cooperate with them. This is the
policy of the United States, and there is no Sonnenfeldt
doctrine. 11
-28-
SOURCE: BUD McFARLANE, NSC
Page 16
Paragraph 1
Reagan Statement:
The Soviet Army outnumbers ours more than two-to-one
and in reserves four-to-one. They out-spend us on weapons
by 50%. Their Navy outnumbers ours in surface ships and
submarines two-to-one. We are outgunned in artillery
three-to-one and their tanks outnumber ours four-to-one.
Their strategic nuclear missiles are larger, more powerful
and more numerous than ours. The evidence mounts that we
are Number Two in a world where it is dangerous, if not fatal,
to be second best.
RESPONSE:
Our nation is not "in danger," but it is damaging
to the interests of this country when a politician declares
to our adversaries and our friends abroad --- completely
falsely -- that we are in second place. Such statements
are both irresponsible and dangerous. They alarm our people
and confuse our allies.
-- It is meaningless to say the Soviet Army may
now be twice the size of the US Army! Considering that
about half of the Soviet Army is deployed on the Chinese
border, that isn't all that surprising. I suppose that if
-29-
we had to defend our borders and thus doubled our forces
to do it, Mr. Reagan would be happier. Simplistic rhetoric
such as this reflects a disturbingly shallow grasp of what
true balance is all about.
-- For example, Mr. Reagan conveniently neglects to
point out that our strátegic forces are superior to Soviet
forces. Our missiles are far more accurate and survivable.
We have over twice as many missile warheads and, after all,
it is the warheads which actually reach the target. Our lead
in this area has been increasing over the past several years.
Mr. Reagan likewise ignores our vast superiority in strategic
bombers.
In short, if Mr. Reagan wants to alarm with use of
numbers he can; but it only portrays his superficial under-
standing of these matters and by inflaming opinion -- at home
and abroad -- falsely, does not serve the public interest.
--- Let's look at actions as opposed to words. President
Ford is the one who reversed the trend of shrinking defense
budgets. His last two defense budgets are the highest peace-
time budgets in the nation's history. Mr. Reagan should speak
to the Democratic Congress about its $32 billion cuts in
defense over the past six years.
Let's examine the question of America's strength.
First, we must dispose of the numbers game. National
defense is not bookkeeping.
-30-
If it were, we could point out that our missile
warheads have tripled, that we lead the Soviet Union by more
than two to one. We would point out that we have over a
three to one lead in strategic bombers. We could point out
that our missiles are twice as accurate as the Soviet Union's.
We would point out that the Soviet Army -- which the
Governor says is twice the size of ours - has the problem
of guarding a long border with China with a million men, and
that our borders with Mexico and Canada are peaceful.
But it is a confusing disservice to the American
people to dazzle them with numbers. If we were isolated in
a fortress America, then it might be important to compare
numbers. But we stand at the head of a great Alliance system
in Europe and are firmly tied to the strongest economic power
in Asia. We have friendly relations with most of the nations
of the world. These are the valuable accomplishments of all
of our previous Administrations since President Truman. We
cannot insult our friends and allies by pretending they do
not count.
Second, we cannot ignore that whatever might be the
balance of power today, it is not fixed. And in our military
programs, our defense budgets, we are indeed looking to the
future, to guarantee that this nation will never be in danger.
Consider our defense programs.
-31-
-- We are proceeding with the development and pro-
duction of the world's most modern strategic bomber, the B-1.
-- We are proceeding with the development and pro-
duction of the world's most modern and lethal missile launch-
ing submarine, the Trident.
- - We are developing a new large ICBM.
- -We are producing three new fighters.
--We are. planning the production of 15 new fighting
ships, including two carriers.
It is true that you can cite a figure that the Soviets
have more ships, but it is a trick to equate Soviet destroyers
with our modern nuclear powered aircraft carriers.
Unfortunately, the money we have put into defense
over the past several years has been inadequate. But the
responsibility for slashing $40 billion dollars must rest
with the Congress.
Fortunately, under the prodding of President Ford
the Congress has begun to awaken to the risks of constantly
reducing our defense spending.
When the budget he proposed this year passes, then
the trend will have been reversed.
So, we are in fact number one, and unless we falter,
or give way to panic, we will remain number one.
The Reagan Speech and The Facts - State Dept.release
1. Statement:
We gave just enough support to one side in Angola to
encourage it to fight and die but too little to give it a
chance of winning.
The Facts
The U.S. objective in supporting the FNLA/UNITA
forces in Angola was to assist them, and through them
all of black Africa, to defend against a minority group
armed by the Soviet Union, and Cuban intervention. Despite
massive Soviet aid and the presence of Cuban troops, there
was every possibility of an acceptable outcome until
December 19 when Congress adopted the Tunney Amendment
cutting off further U.S. aid to the FNLA and UNITA.
2. Statement:
Mr. Ford's new Ambassador to the United Nations attacks
our long time ally Israel.
The Facts
Governor Scranton not only did not attack Israel, his
veto blocked Security Council resolution critical of Israel ---
a resolution that every other member of the Security Council
voted for. In his March 23 speech in the United Nations Security
FORD is LIBRARY 9ERALD
- 2 -
Council Gov. Scranton was simply reiterating long-
standing U. S. policy -- a policy articulated by every
Administration since 1967 -- on Israel's obligations
as an occupying power under international law with
regard to the territories under its occupation.
3. Statement:
In Asia our new relationship with mainland China can
have practical benefits with both sides. But that doesn't
mean it should include yielding to demands by them as the
Administration has, to reduce our military presence on
Taiwan where we have a long-time friend and ally, the
Republic of Chian.
The Facts:
We have not in any way reduced our forces on Taiwan
as a result of Peking's demands. Our reductions stem from
our own assessment of U.S. political and security interests.
We have drawn our forces down because the Vietnam conflict
has ended and because the lessening of tension in the area
brought about by our new relationship with the People's
Republic of China has made it possible.
- 3 -
4. Statement:
And, it is also revealed now that we seek to
establish friendly relations with Hanoi. To make it
more palatable, we are told this might help us learn
the fate of the men still listed as Missing in Action.
The Facts:
The Congress has urged the Administration to make
a positive gesture toward Hanoi in an effort to obtain
further information relating to our Missing in Action,
and the return of the bodies of dead servicemen still held
by Hanoi. The Administration, in response, has offered to
discuss with Hanoi the significant outstanding issues
between us. Our policy toward Hanoi was clearly set forth
by the President last December in Hawaii and does not include
to "seek to establish friendly relations with Hanoi." Such
an assertion is totally false.
5. Statement:
In the last few days, Mr. Ford and Dr. Kissinger have
taken us from hinting at invasion of Cuba to laughing
it off a ridiculous idea. Except, that it was their
ridiculous idea. No one else suggested it. Once again --
what is their policy? During this last year, they carried
on a campaign to befriend Castro. They persuaded the
Organization of American States to lift its trade embargo,
- 4 -
lifted some U.S. trade restrictions, they engaged in
cultural exchanges. And then on the eve of the Florida
primary election, Mr. Ford went to Florida, called.
Castro an outlaw and said he'd never recognize him.
But he hasn't asked our Latin American neighbors to
reimpose a single sanction, nor has he taken any action
himself. Meanwhile, Castro continues to export revolution
to Puerto Rico, to Angola, and who knows where else?
The Facts:
We did not persuade the OAS to lift the sanctions
against Cuba. At Quito in the fall of 1974 we did not
support a motion in the OAS to do so. At San Jose last
summer the U.S. voted in favor of an OAS resolution
which left to each country freedom of action with
regard to the sanctions. We did so because a majority
of the OAS members had already unilaterally lifted their
sanctions against Cuba, and because the resolution was
supported by a majority of the organization members.
Since that resolution passed, no additional Latin
American country has established relations with Cuba or
lifted sanctions.
The U.S. has not lifted its own sanctions against Cuba,
has not entered into any agreements with Cuba, and has not
traded with Cuba. We have not engaged in cultural exchanges.
We validated some passports for U.S. Congressmen
and their staffs, for some scholars and for
-5-
some religious leaders to visit Cuba. We issued a
few select visas to Cubans to visit the United States.
These minimal steps were taken to test whether there
was a mutual interest in ending the hostile nature of our
relations. This policy was consistent with the traditional
American interest in supporting the free flow of ideas
and people. We have, since the Cuban adventure in
Angola, concluded that the Cubans are not interested in
changing their ways. We have resumed our highly restrictive
policies toward Cuban travel. With regard to Cuban
efforts to interfere in Puerto Rican affairs, we have
made it emphatically clear in the UN and bilaterally to
the Cubans and other nations that the United States
will not tolerate any interference in its internal affairs.
We have not hinted at invasion of Cuba. What we
have done is to warn Cuba that we would not tolerate
further military adventures. We mean it.
6. Statement:
The Canal Zone is not a colonial possession. It is
not a long-term lease. It is sovereign U. S. territory
every bit the same as Alaska and all the states that
were carved from the Louisiana Purchase. We should
end those negotiations (on the Panama Canal) and tell
the General: We bought it, we paid for it, we built it
and we intend to keep it.
-6-
The Facts:
Negotiations between the United States and Panama
on the Canal have been pursued by three successive
American Presidents. The purpose of these negotiations
is to protect our national security, not diminish it.
The issue is not between us and Torrijos. It is between
us and all other Western Hemisphere nations -- without
exception. No responsible American can ignore the voices
of: the Latin American states.
Governor Reagan's view that the Canal Zone is
"sovereign U. S. territory every bit the same as Alaska
and all the states that were carved from the Louisiana
Purchase is totally wrong. The Canal Zone is not and
never has been "sovereign U. S. territory." Legal scholars
have been clear on this for three-quarters of a century.
Unlike children born in the United States, for example,
children born in the Canal Zone are not automatically
citizens of the United States.
7. Statement:
Why did the President travel halfway 'round the
world to sign the Helsinki Pact, putting our stamp of
approval on Russia's enslavement of the captive nations?
We gave away the freedom of millions of people --
freedom that was not ours to give.
The Facts:
The President went to Helsinki along with the Chiefs
of State or heads of government of all our Western allies,
- 7 -
and, among others, a Papal Representative, to sign a
document which contains Soviet commitments to greater
respect for human rights, self determination of
peoples, and expanded exchanges and communication
throughout Europe. Basket three of the Act calls for
a freer flow of people and ideas among all the European
nations.
The Helsinki Act, for the first time, specifically
provides for the possibility of peaceful change of
borders. With regard to the particular case of the
Baltic States, President Ford stated clearly on July 25
that "the United States has never recognized that
Soviet incorporation of Lithuania, Latvia and Estonia
and is not doing so now. Our official policy of non-
recognition is not affected by the results of the
European Security Conference." In fact, the Helsinki
document itself states that no occupation or acquisition
of territory by force will be recognized as legal.
8. Statement:
Now we must ask if someone is giving away our own
freedom. Dr. Kissinger is quoted as saying that he
thinks of the U. S. as Athens and the Soviet Union as
-8-
Sparta. "The day of the U.S. is past and today is
the day of the Soviet Union." And he added, My
job as Secretary of State is to negotiate the most
acceptable second-best position available."
The Facts:
Governor Reagan's so-called quotes from Secretary
Kissinger are a total and irresponsible fabrication.
The Secretary has never said what the Governor attributes
to him, or anything like it. In fact, at a March 23, 1976
press conference in Dallas Secretary Kissinger said: "I do
not believe that the United States will be defeated.
I do not believe that the United States is on the
decline. I do not believe that the United States must
get the best deal it can.
I believe that the United States is essential to
preserve the security of the free world and for any
progress in the world that exists.
In a period of great national difficulty, of the
Viet-Nam war, of Watergate, of endless investigations,
we have tried to preserve the role of the United States
as that major factor. And I believe that to explain to
the American people that the policy is complex, that our
involvement is permanent, and that our problems are
nevertheless soluble, is a sign of optimism and of
confidence in the American people, rather than the opposite."
- 9 -
9.
Statement:
Now we learn that another high official of the State
Department, Helmut Sonnenfeldt, whom Dr. Kissinger
refers to as his "Kissinger", has expressed the belief
that, in effect, the captive nations should give up any
claim of national sovereignty and simply become a part
of the Soviet Union. He says, 'Their desire to break
out of the Soviet straightjacket' threatnes us with
World War III. In other words, slaves should accept
their fate. "
The Facts:
It is wholly inaccurate, and a gross distortion of
fact, to ascribe such views to Mr. Sonnenfeldt or to this
Administration. Neither he nor anyone else in the
Administration has ever expressed any such belief. The
Administration view on this issue was expressed by Secretary
Kissinger before the House International Relations Committee
on March 29 as follows:
"As far as the U.S. is concerned, we do not
accept a sphere of influence of any country, anywhere,
and emphatically we reject a Soviet sphere of influence
in Eastern Europe.
"Two Presidents have visited in Eastern
Europe; there have been two visits to Poland and
Romania and Yugoslavia, by Presidents. I have made
-10-
repeated visits to Eastern Europe, on every trip
to symbolize and to make clear to these countries
that we are interested in working with them and that
we do not accept or act upon the exclusive dominance
of any one country in that area.
"At the same time, we do not want to give
encouragement to an uprising that might lead to
enormous suffering. But in terms of the basic
position of the United States, we do not accept
the dominance of any one country anywhere.
"Yugoslavia was mentioned, for example. We
would emphatically consider it a very grave matter
if outside forces were to attempt to intervene
in the domestic affairs of Yugoslavia. We welcome
Eastern European countries developing more in
accordance with their national traditions, and we
will cooperate with them. This is the policy of
the United States, and there is no Sonnenfeldt doctrine. "
THE WHITE HOUSE
WASHINGTON
April 1, 1976
MEMORANDUM FOR THE PRESIDENT
FROM:
L. WILLIAM SEIDMAN
BURTON G. MALKIEL
SUBJECT:
Governor Reagan's March 31 Address
Governor Reagan's speech of March 31 is almost pure demagog-
ery. His facts are often wrong and his characterization of
present policies is grossly misleading. The major implica-
tion of the speech is that we are excessively stimulating
the economy for political purposes, just as was ostensibly
done in 1972, and the result will be more inflation and an
economic collapse. The analogy is completely unfair for the
following reasons:
(1) Just the opposite is true. Our policies are moderate,
balanced and geared to producing a solid and sustainable re-
covery and a reduction of inflation.
(a) The President's vetoes during 1975 and 1976
have saved the taxpayers $13 billion.
(b) Monetary expansion is now far more restrained
than in 1972. Over the last six months -- that
is, from September 1975 to March 1976 -- the
broadly defined money supply (M₂) has grown at
an 8.6 percent annual rate. In the comparable
September 1971 - March 1972 period, it grew at
a 14.6 percent rate. It should also be pointed
out that a 14.6 percent rate is well above the
10-1/2 percent upper limit of the Federal Reserve's
present target range for the growth rate of the
broadly defined money supply.
(2) It is true that we are running a larger deficit now
than in 1972. However, the following points should be made:
(a) The unemployment rate is considerably higher now
and therefore so are the payments under automatic
stabilizing programs such as unemployment compen-
sation. Does Governor Reagan suggest we should
reduce or eliminate these programs?
FORD is LIBRARY
-2-
(b) Capacity utilization was 70.8 percent in the
4th quarter of 1975 versus 78.6 percent during
1972. There is far more room for expansionary
policies to increase real output without simply
generating inflation.
(c) The inflation of 1973 and 1974 was not wholly the
result of government deficits. It was also in-
fluenced by monetary policy and by unusual shocks
such as the quintupling of international oil
prices and a world wide food shortage.
The Reagan speech does not acknoweldge the considerable progress
made by the Administration in reducing inflation. Wholesale
prices increased 12.5 percent from March 1974 to March 1975.
In the twelve months through March 1976 the wholesale price
index increased only 5-1/2 percent. Inflation in the CPI was
also at double digit rates during the 12 months ending March
1975. Over the last 12 months the CPI has increased at an
annual rate of just over 6 percent.
The President's program of matching expenditure cuts with tax
relief is ridiculed by Reagan. "If there was $28 billion in
the new budget that could be cut, what was it doing there in
the first place?" The whole point is that the President did
not put the $28 billion in his budget. The $28 billion was
measured from a projected current service budget, i.e. a budget
assuming the continuance of programs Congress already legisla-
ted.
Indeed the President's program is based upon the very premises
which Governor Reagan would cite for himself. The President
has stated repeatedly that an enduring solution to the unemploy-
ment program must go hand in hand with a reduction in inflation.
TO argue otherwise is dishonest. The President has proposed a
radical reordering of budget priorities so as to improve the
operation of many federal programs and to slow the rapid rise
in federal outlays for the transfer and grant programs. These
proposals, if adopted, would enable the budget to swing back
into surplus as the recovery carries the economy back toward
full employment.
These proposals will also enable a reversal in the long decline
in real military outlays, and some modest further reductions
in taxes. The President's proposals will leave the incomes
of the American people for individuals themselves to spend,
-3-
rather than transferring it to the Federal Government. These
proposals, if adopted, will enable the transition in the
Federal budget which was not made in 1972-73. The President
has exercised his veto power 46 times in the past year to
insure that the transition is made.
To advocate an immediate balanced budget would be both irre-
sponsible and dishonest. Part of the deficit is due to the
recession and the reduced level of Federal revenues. Part
of the deficit is due to the explosion of Federal outlays for
transfers and grants. It took a decade and more to create
these problems. They cannot be solved overnight without im-
posing intolerable costs upon the American people. They can-
not be solved without a solid sustainable recovery, an endur-
ing reduction in inflation and the reordering of budget prior-
ities which the President has proposed.
An immediate balance in the federal deficit would require
either a large tax increase or a large expenditure reduction.
Such measures would shock the recovery and probably bring it
to a halt. The only way to achieve our goals is to follow a
prudent and disciplined budget policy, or reorder our budget
priorities, to curb the rapid rise in Federal outlays. Other-
wise, instead of overshooting the mark as we did in 1972-1973,
we will undershoot it -- and the American people will again
pay the dual price of recession and inflation.
There were also a number of factual errors in Governor Rea-
gan's speech. Among them are:
(1) Governor Reagan stated the unemployment rate was over
10 percent at some point during the recession. In
fact, it peaked at 8.9 percent in May 1975.
(2) Governor Reagan stated the FY 1976 budget deficit will
be over $80 billion. I n fact, our best estimate is
$76 billion.
(3) Governor Reagan stated that the maximum social secur-
ity benefit "today buys 80 fewer loaves of bread than
it did when the maximum payment was only $85 a month.'
This would imply the average benefit in terms of dol-
lars of constant purchasing power has declined sub-
stantially. In fact, the average benefit in terms of
constant purchasing power has almost triplied since
1940 when the maximum benefit was $85.
(4) Governor Reagan indicated that since the energy bill
was enacted "almost instantly, drilling rigs all over
our land started shutting down." In fact, there were
-4- - -
1660 drilling rigs operating in 1975, the highest
number in a decade. Through mid-March 1976 there were
as many rigs operating as were operating in the com-
parable period during 1975.
April 13, 1976
TO:
STU SPENCER
FROM:
FRED SLIGHT
SUBJECT:
PFC Leadership
Mailings
Attached for your information is
a mailing which has been sent to
campaign leadership throughout
the country this week.
(1)
BUSING
The Reagan Rhetoric
"Nothing has created more bitterness for example than
forced busing to achieve racial balance. It was born
of a hope that we could increase understanding and
reduce prejudice and antagonism. I'm sure we all
approved of that goal. But busing has failed to
achieve the goal.
Page 11, paragraph 3
The Ford Record
Candidate Reagan's statement implies that neither the President
nor his Administration is either aware of this problem or
concerned enough to do something about it. On the President's
12th day in office, he signed an education bill with the
following provisions:
--Prohibits the use of all Federal funds (except Impact
Aid) for busing activities.
--Allows the courts to terminate busing orders on a
finding that the school district has and will
continue to comply with the fifth and fourteenth
amendments.
--Prohibits any new order to bus past the next
nearest school.
--Prohibits orders to bus except at the start of an
academic year.
--Prohibits busing across district lines or altering
district lines unless, as a result of discriminatory
actions in both school districts, the lines caused
segregation.
FORD & LIBRARY 038870
--Provides school districts a reasonable time to
develop voluntary plans before a court order can be
executed.
The President has also directed the Secretary of Health, Education,
and Welfare, the Attorney General, and members of the White House
staff to review the ramifications of busing and to develop better
methods to achieve quality education within an integrated environ-
ment for all school children.
(2)
CALIFORNIA GOVERNMENT GROWTH
The Reagan Rhetoric
"When I became Governor, I inherited a state government
that was in almost the same situation as New York City.
The state payroll had been growing for a dozen years at
a rate of from 5 to 7,000 new employees each year. State
government was spending from a million to a million and
a half dollars more each day than it was taking in.
Page 7, paragraph 2
The Reagen Record
The California state budget under then Governor Reagan more than
doubled, increasing from $4.6 billion in 1967 to $10.2 billion
in 1973.
In addition, the state payroll continued to increase, from a
total of 113,779 persons in 1967 to 127,929 persons in 1973.
As for the $4 billion bonded indebtedness of California, there is
little basis for comparison of the state with the current multitude
of problems facing the City of New York.
(3)
CALIFORNIA STATE TAXES
The Reagan Rhetoric
"California was faced with insolvency and on the verge
of bankruptcy. We had to increase taxes. Well, this
came very hard for me becaue I felt taxes were already
too great a burden. I told the people the increase, in
my mind, was temporary and that, as soon as we could,
we'd return their money to them."
Page 7, paragraph 3
The Reagan Record
Under Ponald Reagan, there were three huge state tax increases
which totaled more than $2 billion.
In 1967, there was an increase of $967 million, the largest state
tax hike'in the nation's history. Of this, $280 million went for
a one-time deficit payment and state property tax relief. In 1971
the increase was $488 million, with $150 million going to property
tax relief. In 1972, there was a final increase of $682 million,
with $650 million going for property tax relief. While much of the
property tax relief was short-term, the huge tax increases were
permanent.
State personal income tax revenues went from $500 million to $2.5
billion, a 500% increase. Taxable bracket levies were increased from
7% to 11%. The range of the brackets was reduced so that taxpayers
reached the highest taxable bracket more quickly and personal
exemptions were reduced. Finally, after he adamantly denied that he
would ever do so, then Governor Reagan agreed to a system of withholding
state income taxes.
Bank and corporation taxes went up 100%. The state sales tax rose
from 4% to 6%. The tax on cigarettes increased 7 cents a pack and
the liquor tax rose 50 cents per gallon. Inheritance tax rates were
increased and collections more than doubled.
Under Governor Reagan, the average tax rate for each $100 of assessed
valuation rose from $8.84 to $11.15. Under his predecessor, Pat
Brown, the increase was much less in dollars and percentage--from $6.96
to $8.34. And in the six years of Republican Governor Knight's admin-
istration, it was still less--from $5.94 to $6.96. One reason for the
big increase under Mr. Reagan--from $3.7 billion to $8.3 billion--is
that the state paid a steadily smaller percentage of the school costs--
one of the biggest reasons for local property taxes.
Despite periodic efforts to provide relief, there has been a substantial
increase in the burden carried by most property owners. Inflation
and high assessments have helped wipe out any savings. Only $855 millio
of the record $10.2 billion budget in Reagan's final year was for tax
relief for homeowners and renters.
(4)
CALIFORNIA WELFARE REFORM
The Reagan Rhetoric
"After a few years of trying to control this runaway program
(welfare) and being frustrated by bureaucrats here in
California and in Washington, we turned again to a citizens'
task force. The result was the most comprehensive welfare
reform ever attempted.
And in less than three years we reduced the rolls by more
than 300,000 people. Saved the taxpayers $2 billion".
Page 10, paragraph 2-3
"And, increased the grants to the truly deserving needy by
an average of 43%. We also carried out a successful experi-
ment which I believe is an answer to much of the welfare
problem in the nation. We put able-bodied welfare recipients
to work at useful community projects in return for their
welfare grants."
Page 11, paragraph 1
The Reagan Record
One reduction of 20,000 persons was due to a correction in ac-
counting procedures in the state's largest county, Los Angeles.
Candidate Reagan also has taken credit for a drop of 110,000 cases
which in fact, had occurred before his program had gone into effect.
Moreover, a reduction in unemployment in California from 7.4%
in April, 1971 to 5.9% in September, 1972 had as large an effect
on checking the rise of welfare cases as any other single factor.
In addition, the migratory rate of unemployed persons into California
declined from 233,000 in 1967 to 44,000 in 1971, reducing potential
welfare roll increases.
Rolls for welfare families increased in the eight years of Mr.
Reagan's governorship from 729,357 to 1,384,400, and the cost of
the program went from $32.3 million to $104.4 million.
With regard to increasing grants to the deserving and putting
"Able-bodied welfare recipients" to work, the Reagan program never
touched more than 6/10th of 1% of welfare recipients. Although
the program was designed to have 59,000 participants in its first
year in 35 counties, it managed only 1,100 participants in 10
counties, mostly rural farm areas.
(5)
ECONOMIC RECOVERY
The Reagan Rhetoric
"In this election season the White House is telling
us a solid economic recovery is taking place. It
claims a slight drop in unemployment. It says that
prices aren't going up as fast, but they are still
going up, and that the stock market has shown some
gains. But, in fact, things seem just about as they
were back in the 1972 election year. Remember, we
were also coming out of a recession then. Inflation
has been running at around 6%. Unemployment about
7. Remember, too, the upsurge and the optimism
lasted through the election year and into 1973. And
then, the roof fell in. Once again we had unemploy-
ment. Only this time not 7%, more than 10. And
inflation--wasn't 6%, it was 12%."
Page 1, paragraph 3
"Now, in this election year 1976, we're told we're
coming out of this recession. Just because inflation
and unemployment rates have fallen to what they were
at the worst of the previous recession. If history
repeats itself we will be talking recovery four years
from now merely because we've reduced inflation from
25% to 12%."
Page 2, paragraph 2
The Ford Record
There are now 2.6 million more people at work today than there
were just a year ago. Total employment is at its highest point
in history.
Unemployment reached its peak in May, 1975 at 8.9%--not "more than
10%". March, 1976 figures show that this rate has been reduced to
7.5%, and that it continues to decline.
Prices are not going up as fast. In 1974, inflation stood at an
annualizedrate of 12.2%. Inflation today is down to 6.3%--cut
nearly in half.
This recovery has taken place on a broad and lasting front. In
addition to a decrease in both unemployment and inflation, major
gains have been posted in retail sales, GNP, durable goods, housing
and personal income. This Administration's statements are based on
more than just the unemployment and cost-of-living statistics that
candidate Reagan implies.
(6)
EDUCATION
The Reagan Rhetoric
"Schools. In America, we created at the local level and
administered at the local level for many years the greatest
public school system in the world. Now through something
called federal aid to education, we have something called
federal interference and education has been the loser.
Quality has declined as federal intervention has increased."
Page 11, paragraph 2
The Ford Record
The Federal governme t supports only 7% of the total cost of
elementary and secondary education. The bulk of this support is
distributed through the states to local governments to meet the
specific educational needs of each community.
President Ford has recognized that "since Abraham Lincoln signed
the Act creating the land grant colleges, Nederal encouragement
and assistance to education has been an essential part of the
American system. In ahandon it now would be to ignore the past
and threaten the future."
The very first wajor piece of legislation the President signed
was an omnibus education bill. it irproved the distribution of
Federal education funds and the E inistration of Federal programs.
On March 1 of this year, Ir sidem Ford sent an education message
to Congress which combined 24 cate brical grant programs into one
grant program of $0 3 billion so that state and local school systems
would have far greater flexibility in the use of these funds.
This action insured continuing, appropriate Federal support for
education, while minimizing the intensive rules and regulations
which are unrelated to the development of quality education.
(7)
ENERGY
The Reagan Rhetoric
"Only a short time ago we were lined up at the gas
station. We turned our thermostats down as Washington
announced 'Project Independence.' We were going to
become self-sufficient, able to provide for our own
energy needs.
At the time we were only importing a small percentage
of our oil. Yet, the Arab boycott caused half a mil-
lion Americans to lose their jobs when plants closed
down for lack of fuel. Today, it's almost three years
later and 'Project Independence' has become 'Project
Dependence.' Congress has adopted an energy bill so
bad we were led to believe Mr. Ford would veto it.
Instead he signed it. And, almost instantly, drilling
rigs all over our land started shutting down. Now, for
the first time in our history, we are importing more oil
than we produce. How- many Americans will be laid off
if there is another boycott? The energy bill is a
disaster that never should have been signed."
Page 6, paragraphs 1-2
The Ford Record
Candidate Reagan seems to have missed the whole point of having a
national energy policy. Two years ago (not the three that he
claims), at the time of the March, 1974 announcement of Project
Independence, the United States was importing 35% of its oil--
not the "insignificant" amount that Mr. Reagan seems to recall.
It was for this reason that President Ford called for a comprehen-
sive national energy policy to achieve, by 1985, national energy
independence. Oil rigs did not begin shutting down after the
passage of the EPCA. There were an average of 1,662 drilling rigs
operating last year, the highest number in a decade. Figures for
January 1976--just this week released--show that 1,710 rotary
rigs were in operation one full month after passage of EPCA.
And, preliminary estimates indicate that 1976 investments by the
petroleum industry in production and development activities will
exceed those of 1975.
The Energy Policy and Conservation Act passed by the Congress and
signed by President Ford in December ended a difficult, year-long
debate between the Congress and the Administration on oil pricing
policy; opening the way to an orderly phasing out of controls on
domestic oil over forty months, thereby stimulating our own oil
production.
(8)
By removing controls, this legislation should give
industry sufficient incentive over a period of time to
explore, develop and produce new fields in the outer
continental shelf, Alaska, and potential new reserves
in the lower forty-eight states. Removal of these
controls at the end of forty months should increase
domestic production by more than one million barrels
per day by 1985 and reduce imports by about three million
barrels per day.
More importantly, this bill enables the United States to
meet a substantial portion of the mid-term goals for energy
independence set forth over a year ago. Incorporated in
this are authorities for:
-- a strategic storage system
-- conversion of oil and gas-fired utility and in-
dustrial plants to coal
-- energy efficiency labeling
-- emergency authorities for use in the event of
another embargo
-- and the authority we need to fulfill our inter-
national agreements with other oil consuming nations.
These provisions will directly reduce the nation's
dependence on foreign oil by almost two million barrels
per day by 1985. The strategic storage system and the
stand-by authority will enable the United States to
withstand a future embargo of about four million barrels
per day.
The EPCA didn't give President Ford everything that he
wanted, but it was a step in the right direction.
Most importantly, it recognized the need and provided
the means for gradual decontrol of oil.
President Ford has already put these authorities to good use--
his Administration recently announced the decontrol of heavy fuel
oil, and will shortly follow suit with decontrol of other products
as provided under the law.
Finally, candidate Reagan seems to have conveniently forgotten that
President Ford long ago called for the decontrol of natural gas,
production from national petroleum reserves, measures to stimulate
more effective conservation, the development of new energy sources,
and the development of more and cleaner energy from our vast coal
resources.
Perhaps the question which should be asked is, "Does Mr. Reagan even
have a policy?"
FEDERAL SPENDING
The Reagan Rhetoric
"The fact is, we'll never build a lasting economic
recovery by going deeper into debt at a faster rate
than we ever have before. It took this nation 166
years--until the middle of World War II--to finally
accumulate a debt of $95 billion. It took this
administration just the last 12 months to add $95
billion to the debt. And this administration has
run up almost one-fourth of our total national
debt in just these short nineteen months."
"Inflation is the cause of recession and unemployment.
And we're not going to have real prosperity or recovery
until we stop fighting the symptoms and start fighting
the disease. There's only one cause for inflation--
government spending more than government takes in. The
cure is a balanced budget. Ah, but they tell us, 80%
of the budget is uncontrollable. It's fixed by laws
passed by Congress."
Page 2, paragraphs 3-4
"But laws passed by Congress can be repealed by
Congress. And, if Congress. is unwilling to do this,
then isn't it time we elect a Congress that will?"
"Soon after he took office, Mr. Ford promised he would
end inflation. Indeed, he declared war on inflation.
And, we all donned those WIN buttons to "Whip Inflation
Now.". Unfortunately, the war--if it ever really started--
was soon over. Mr. Ford, without WIN button, appeared
on TV, and promised he absolutely would not allow the
Federal deficit to exceed $60 billion (which incidentally
was $5 billion more than the biggest previous deficit
we'd ever had). Later he told us it might be as much
as $70 billion. Now we learn it's $80 billion or more."
Page 3, paragraphs 1-2
The Ford Record
The national debt reached $72 billion in 1942. The estimated
deficit for FY '76 is $76.9 billion. The gross Federal debt up
through FY '76 is estimated at $634 billion. Thus, the Adminis-
tration's share of the national debt is 15.6%, not the 25%
declared by candidate Reagan.
President Ford's economic policy has been designed to:
1. Create sustained economic recovery and growth without
inflation;
2. Reach a balanced Federal budget by 1979; and,
3. Provide jobs for all who seek work.
(10)
President Ford has offered specific plans for achieving a balanced
budget; but, a large part of the cause of the current recession is
the result of past fiscal policies, especially rapid increases in
Federal expenditures. There is no quick remedy for the problems
created a decade ago.
A precipitous return to a balanced budget, as candidate Reagan
would like, would fuel inflation, halt the recovery, and mean a
sustained period of high unemployment.
Some 77.1% of the federal budget for FY '77 is in "uncontrollable"
or "open-ended" expenditures. Approximately $236.8 billion of
this is allocated to payments to individuals. In order to achieve
candidate Reagan's "balanced" budget as quickly as he suggests,
we would have to terminate all of some, or part of several, of
the following expenditures:
$108.0 billion
Social Security and Railroad Retirement
38.4 billion
Medicare and Medicaid
26.0 billion
Public Assistance Programs
22.9 billion
Federal Retirement Funds
16.3 billion
Veterans Benefits
About 26 cents out of every Federal tax dollar in 1977 will go to
defense ($101.2 billion). Revenue sharing and grants to states
and localities-- funds returned for use at the local level--take up
another 15 cents out of every Federal dollar spent. This too,
leaves little room for immediate, massive Federal cuts.
In March, 1975, President Ford literally "drew the line" at a deficit
of $60 billion. To meet that goal, the President vetoed some 47 bills
sent to him by the Congress at an attempted cost savings to the
American taxpayer of $26 billion. The Congress overrode only 7 of
these vetoes, but at a cost to the taxpayer of another $13 billion
added to the Federal deficit.
Thus, the estimated deficit for FY 76 will be $76.9 billion. The
largest previous yearly deficit occurred in 1943--$54.8 billion.
Gross national debt for FY 76 is estimated to be $634 billion--of
which $76.9 billion, or 15.6% occurred during a year in which a
Ford budget was in effect.
The President's proposed budget for FY 1977 cuts the rate of growth
of Federal spending in half, down to 5.5%. The estimated deficit
for FY 77 is $43 billion or $33 billion less than the previous year
and some $26 billion less than projected expenditures had government
continued to grow at the same pace as it had during the last decade.
President Ford has set a balanced budget as his goal for 1979.
FOREIGN AFFAIRS
(11)
ANGOLA
The Reagan Rhetoric
"We gave just enough support to one side of Angola to
encourage it to fight and die but too little to give it
a chance of winning."
Page 13, paragraph 2
The Ford Record
The U.S. objective in supporting the FNLA/UNITA forces in Angola
was to assist them, and through them all of black Africa, to
defend against a minority faction supported by Soviet arms and
Cuban intervention. Despite massive Soviet aid and the presence of
Cuban troops, we were on the road to success in Angola until December
19 when Congress adopted the Tunney Amendment cutting off further
U.S. aid to the FNLA and UNITA. President Ford severely rebuked
the Congress for that action.
CHINA
The Reagan Rhetoric
"In Asia our new relationship with mainland China can have
practical benefits with both sides. But that doesn't mean
it should include yielding to demands by them as the
Administration has to reduce our military presence on Taiwan
where we have a long-time friend and ally, the Republic
of China."
Page 13, paragraph 3
The Ford Record
We have not reduced our forces on Taiwan as a result of Peking's
demands. Our reductions stem from our own assessment of U.S.
political and security interests. The ending of the Vietnam conflic
and the lessening of tension in the area brought about by our new
relationship with the People's Republic of China has made this
drawdown possible.
(12)
FOREIGN AFFAIRS
ISRAEL
The Reagan Rhetoric
"Mr. Ford's new Ambassador to the United Nations attacks
our long time ally Israel.'
Page 13, paragraph 3
The Ford Record
Candidate Reagan has grossly distorted the facts. William Scranton
did not attack Israel. His veto blocked an unbalanced Security
Council Resolution critical of Israel-- a resolution that every
other member of the Security Council voted for. In a March 23
speech in the United Nations Security Council, Ambassador Scranton
reiterated long-standing U.S. policy--a policy articulated by
every Administration--and every U.S. Representative to the United
Nations since 1967--on Israel's obligations as an occupying power
under international law with regard to the territories under its
occupation.
Far from attacking our long-time ally, Israel, President Ford's
Administration seized an historic opportunity to help the area
move towards a secure, just and comprehensive peace settlement.
During the Spring of 1975, the President held an extensive series
of meetings with important leaders in the area. A second, in-
terim agreement was reached shortly thereafter between Israel
and Egypt.
This agreement reaffirmed and strengthened the ceasefire, widened
the buffer zone, and committed both sides to settle the Middle
East conflict by peaceful means, refraining from use of force.
For the first time in years, the Suez Canal was opened to Israel for
non-military shipping.
VIETNAM
The Reagan Rhetoric
"And, it is also revealed now that we seek to establish
friendly relations with Hanoi. To make it more palatable,
FOREIGN AFFAIRS
(13)
we are told this might help us learn the fate of the men
still listed as Missing in Action.'
Page 13-14, paragraph 3
The Ford Record
Neither President Ford nor his Administration spokesman have said
we "seek to establish friendly relations with Hanoi. Such an
assertion is totally false.
The Congress, reflecting the views of the American people and
the Ford Administration, has called for an accounting of our Mis-
sing in Action and the return of the bodies of dead servicemen
still held by Hanoi.
The Ford Administration, in keeping with this Congressional man-
date, has offered to discuss with Hanoi the significant outstand-
ing issues between us.
CUBA
The Reagan Rhetoric
"In the last few days, Mr. Ford and Dr. Kissinger have
taken us from hinting at invasion of Cuba to laughing it
off as a ridiculous idea. Except, that it was their
ridiculous idea. No one else suggested it. Once again --
what is their policy? During this last year, they carried
on a campaign to befriend Castro. They persuaded the
Organization of American States to lift its trade embargo,
lifted some U.S. trade restrictions, they engaged in culture
exchanges. And then on the eve of the Florida primary
election, Mr. Ford went to Florida, called Castro an outlaw
and said he'd never recognize him. But he hasn't asked our
Latin American neighbors to reimpose a single sanction, nor
has he taken any action himself. Meanwhile, Castro continues
to export revolution to Puerto Rico, to Angola, and who
knows where else?
Page 14, paragraph 2
FOREIGN AFFAIRS
(14)
The Ford Record
Neither President Ford nor his representative stated -- or hinted-
at an "invasion of Cuba." Nor did the United States persuade
the OAS to lift the sanctions against Cuba.
At San Jose last summer, the U.S. voted in favor of an OAS resolution
which left to each country freedom of action with regard to the
sanctions. The U.S. did so because a majority of the OAS members
had already unilaterally lifted their sanctions against Cuba,
and because the resolution was supported by a majority of the
organization members. Since that resolution passed. no additional
Latin American country has established relations with Cuba.
The U.S. has not lifted its own sanctions against Cuba. It
did not enter into any agreements with Cuba. and did not trade
with Cuba. We did not engage in cultural exchanges.
The U.S. did validate a number of passports for U.S. Congressmen
and their staffs, for some scholars and for some religious leaders
to visit Cuba. And the U.S. issued a few select visas to Cubans
to visit the U.S.
These minimal steps were taken to test whether there was a mutual
interest in ending the hostile nature of our relations. This
policy was consistent with the traditional American interest in
supporting the free flow of ideas and people. Since the Cuban
adventure in Angola, the Ford Administration has concluded that the
Cubans are not interested in changing their ways. The U.S. has
resumed it's highly restrictive policies toward Cuban travel.
With regard to Cuban efforts to interfere in Puerto Rican affairs,
the U.S. has made it emphatically clear in the UN and bilaterally
to the Cubans and other nations that the U.S. will not tolerate
any interference in its internal affairs.
Mr. Reagan's criticism is particularly interesting when compared
to the following comment he made last August in a release for his
weekly editorial column.
"Recent conciliatory gestures by Castro, including
the return of $2 million ransom money he had impounded
in connection with a U.S. airliner hijacking, indicates
that he is ready to talk turkey with the United States.
Since we can accomplish both humanitarian and national
objectives in the process, it's time for the Washington
establishment to lift its Cuban dialogue above the
level of that advertising slogan, 'Since we're neighbors,
let's be friends.
(15)
FOREIGN AFFAIRS
EASTERN EUROPE
The Reagan Rhetoric
"Now we learn that another high official of the State
Department, Helmut Sonnenfeldt, whom Dr. Kissinger refers
to as his "Kissinger", has expressed the belief that, in
effect, the captive nations should give up any claim of
national sovereignty and simply become a part of the
Soviet Union. He says, 'Their desire to break out of the
Soviet straightjacket' threatens us with World War III.
In other words, slaves should accept their fate."
Page 17, paragraph 2
The Ford Record
The Reagan statement is wholly inaccurate. It is a gross distortion
of fact, to ascribe such views to Mr. Sonnenfeldt or to the Ford
Administration. Not a single person in the Ford Administration has
ever expressed any such belief.
The U.S. does not accept a sphere of influence of any country,
anywhere, and emphatically rejects a Soviet sphere of influence
in Eastern Europe.
Two Presidents have visited in Eastern Europe; there have been
two visits to Poland and Romania and Yugoslavia, by Presidents.
Administration officials have made repeated visits to Eastern
Europe, on every trip to symbolize and to make clear to these
countries that the U.S. is interested in working with them and
that it does not accept or act upon the exclusive dominance of
any one country in that area.
At the same time, the U.S. does not want to give encouragement
to an uprising that might lead to enormous suffering. The United
States does not accept the dominance of any one country anywhere.
Yugoslavia was mentioned, for example. The Ford Administration
would emphatically consider it a very grave matter if outside
forces were to attempt to intervene in the domestic affairs of
Yugoslavia. The U.S. welcomes Eastern European countries
developing more in accordance with their national traditions,
and we will cooperate with them. This is the policy of the United
States, and there is no "Sonnenfeldt" doctrine.
(16)
FOREIGN AFFAIRS
THE HELSINKI PACT
The Reagan Rhetoric
"Why did the President travel halfway 'round the world to
sign the Helsinki Pact, putting our stamp of approval on
Russia's enslavement of the captive nations?
We gave away the freedom of millions of people -- freedom
that was not ours to give."
Page 16, paragraph 2
The Ford Record
Again, candidate Reagan has distorted the facts for emotional
impact. President Ford stated clearly on July 25 that "the United
States has never recognized the Soviet incorporation of Lithuania,
Latvia and Estonia and is not doing so now. Our offical policy of
non-recognition is not affected by the results of the European
Security Conference."
"----ident Ford went to Helsinki along with the Chiefs of State or
heads or Europment of all our Western allies and, among others,
& Papal Representat ve, to sign a document which contains Soviet
commitments to greater respect for human rights, self-determination
of peoples, and expanded exchanges and communication throughout
Europe. Dashet three of the Act calls for a freer flow of people
and ideas among all the European nations.
The Holsinki Act, for the first time, specifically provides for the
possibility of peaceful change of borders when that would correspond
to the wishes of the peoples concerned.
And the Helsinki document itself states that no occupation or
acquisition of territory by force will be recognized as legal.
(17)
FOREIGN AFFAIRS
PANAMA CANAL
The Reagan Rhetoric
"The Canal Zone is not a colonial possession. It is not
a long-term lease. It is sovereign U.S. territory every
bit the same as Alaska and all the states that were carved
from the Louisiana Purchase. We should end those negot-
iations (on the Panama Canal) and tell the General; We
bought it, we paid for it, we built it and we intend to
keep it."
Page 15, paragraph 3
The Ford Record
It is not certain whether the Reagan rhetoric on the Panama Canal
Zone best displays his ignorance--or his frequent distortion
of the facts for political gain. What is certain is that Mr. Reagan
view that the Canal Zone is "sovereign U.S. territory every bit
the same as Alaska and all the states that were carved from the
Louisiana Purchase" is absolutely incorrect.
The United States did not buy the Canal Zone from Panama for $10
million in 1903. Instead, this country bought certain rights
which Panama then granted--rights to run the Canal Zone as if it
were U.S. territory, subjecting Panamanians to U.S. law and
police in a strip of land through the middle of their country.
Neither is the Canal Zone sovereign U.S. territory. The original
treaty does not give sovereignty to the U.S. but only rights
the U.S. would exercise as "if it were sovereign." The 1936
treaty refers to the Canal Zone as Panamanian territory under U.S.
jurisdiction. Legal scholars have been clear on this for three-
quarters of an century. Unlike children born in the United States,
for example, children born in the Canal Zone are not automatically
citizens of the United States.
Candidate Reagan's rhetoric aggravates an already difficult
situation. In 1964, anti-American riots in the Canal area took 26
lives. Since that time, negotiations between the United States and
Panama on the Canal have been pursued by three successive American
Presidents. The purpose of these negotiations is to protect our
national security, not diminish it.
(18)
FOREIGN AFFAIRS
THE U.S. ROLE
The Reagan Rhetoric
"Now we must ask if someone is giving away our own
freedóm. Dr. Kissinger is quoted as saying that he thinks
of the U.S. as Athens and the Soviet Union as Sparta.
"The day of the U.S. is past and today is the day of the
Soviet Union." And he added, My job as Secretary of
State is to negotiate the most acceptable second-best
position available."
Page 16, paragraph 3
The Ford Record
Candidate Reagan's so-called quotes from Secretary Kissinger are
a total and irresponsible fabrication. He has never said the
Mr. Reagan attributes to him, or anything like ic.
In a March 23, 1975 press conference in Dollar, Security Kissinger
said: "I do not believe that the United States VIA be definited.
I do not believe that the United States i.c on the declare."
"I believe that the United States is essential to preserve the
security of the free world and for any progress in the world that
exists.
"In a period of great national difficulty, of the Viet-Nom war,
of Watergate, of endless investigations, we have tried to preserve
the role of the United States as that major actor. And I believe
that to explain to the American people that the policy is complex,
that our involvement is permanent, and that our problems are
nevertheless soluble, is a sign of optimism and of confidence in
the American people rather than the opposite."
(19)
GOVERNMENT GROWTH & FEDERAL TAXES
The Reagan Rhetoric
"Then came a White House proposal for a $28 billion
tax cut, to be matched by a $28 billion cut in the
proposed spending -- not in the present spending, but
in the proposed spending in the new budget. Well, my
question then and my question now is, if there was $28
billion in the new budget that could be cut, what
was it doing there in the first place?"
Page 3, paragraph 3
"They could ... correct a great unfairness that now
exists in our tax system. Today, when you get a
cost-of-living pay raise-- one that just keeps you
even with purchasing power-- it often moves you up
into a higher tax bracket. This means you pay a
higher percentage in tax but you reduce your purchasing
power. Last year, because of this inequity, the
government took in $7 billion in undeserved pro-
fit in the income tax alone, and this year they 11
do even better."
Page 4, paragraph 2
The Ford Record
President Foud has submitted 2 budget for FY '77 which will
curb the growth in Federal expenditures -- proposing a $28
billion cut in existing programs, not a reduction in the
proposed Ludget 00 candidate Reagan would have the public
believe. The President has called for this spending cut to
be tied to a tax cut which would return to a family of
four earning $15,000 a year approximately $227 more in
take-home pay -- and which would give businesses more in-
centive to create jobs
The President's tax proposals for individuals have several
key features:
-- an increase in the personal exemption from
$750 to $1000.
-- substitution of a single standard deduction--
$2,500 for married couples filing jointly and
$1, 800 for single taxpayers -- for the existing
low income allowance and percentage standard
deduction.
-- a reduction in individual income tax rates.
(20)
President Ford's proposals to increase the inheritance tax exemption
trom 400, 000 to $150, 000, and his proposal to stretch out the
Mideral estate tax payment period for farms and small businesses,
1 help io keep farms and small business in the family after years
hard work.
and, to help businessmen create jobs, the President has proposed:
-- permanent reductions in corporate income taxes;
-- a permanent increase in the investment tax credit;
-- accelerated depreciation for construction of plants
and equipment in high unemployment areas;
-- broadured incontives to encourage stock ownership
by low and middle income working Americans.
The President's budget and tax measures have already meant more jobs
American workers, the slashing of inflation, and the growth of
take-home pay. His effort to curb the growth of government --
is return control to the individual -- has already, and will con-
time to geturn dollars to the American worker.
(21)
NATIONAL DEFENSE
The Reagan Rhetoric
"The Soviet Army outnumbers ours more than two-to-one
and in reserves four-to-one. They out-spend us on wea-
pons by 50%. Their Navy outnumbers ours in surface ships
and submarines two-to-one. We are outgunned in artillary
three-to-one and their tanks outnumber ours four-to-one.
Their strategic nuclear missiles are larger, more power-
ful and more numerous than ours. The evidence mounts
that we are Number Two in a world where it is dangerous,
if not fatal, to be second best."
Page 16, paragraph 1
The Ford Record
In January of this year, President Ford submitted to Congress
the largest peacetime budget for the Department of Defense in
the history of the United States--$112 billion, $700 million.
He has assured the American people that "the United States is
going to be number one, as it is, in our national security"
as long as he is President.
Candidate Reagan conveniently neglects to mention that our
strategic forces are superior to the Soviets'. The United
States holds numerous advantages over the Soviet Union, including
the following:
--Our missile warheads have tripled and we lead the
Soviets in missile warheads by more than two-to-one.
--Our missiles are twice as accurate and more survivable.
--We have a three-to-one lead in the number of strategic
bombers.
--We are proceeding with the development and production of
the world's most modern strategic bomber, the B-1.
--We are developing the world's most modern and lethal missile
launching submarine, the Trident.
--We are developing a new large ICBM.
National defense is more than a numbers game, and candidate Reagan's
rhetoric indicates a disturbingly shallow grasp of what true balance
is all about. It is absolutely meaningless to say the Soviet Army
is twice the size of the U.S. Army when one considers that one million
of their troops are deployed on the Chinese border.
Candidate Reagan also ignores that we are at the head of a great
Alliance system in Europe, and we are firmly tied to the strongest
economic power in Asia.
(22)
President Ford is the one responsible for reversing the recent
trend of shrinking defense budgets in which a Democratic Congress
has made $37 billion in cuts during the past seven years.
Mr. Reagan's short-sighted, politically motivated statements that
proclaim that our nation is in danger" are both factually
irresponsible and potentially damaging to this country. They
alarm our people, confuse our allies, and invite our adversaries
to seek new foreign adventures.
SOCIAL SECURITY
The Reagan Rhetoric
"Now, let's look at Social Security. Mr. Ford says he
wants to 'preserve the integrity of Social Security.
Well, I differ with him on one word. I would like to
restore the integrity of Social Security. Those who
depend on it see a continual reduction in their standards
of living. Inflation strips the increase in their benefits.
The maximum benefit today buys 80 fewer loaves of bread
than it did when that maximum payment was only $85 a
month. In the meantime, the Social Security payroll
tax has become the most unfair tax any worker pays.
Women are discriminated against. Particularly, working
wives. And, people who reach Social Security age and
want to continue working, should be allowed to do so and
without losing their benefits. I believe a Presidential
commission of experts should be appointed to study and
present a plan to strengthen and improve Social Security
while there's still time--so that no person who has
contributed to Social Security will ever lose a dime."
Page 4, paragraph 3
The Ford Record
The statement that the "maximum benefit today buys 80 fewer
loaves than it did when the maximum benefit was only $85 a
month" implies that the purchasing power of Social Security
payments has declined substantially. In fact, the average benefit
has almost tripled in terms of the amount it can buy from that
time in 1940 when the benefit was $85.
It was President Ford who first recognized inflation as the single
greatest threat to the quality of life for older Americans. As a
result, his budget request to Congress for fiscal year 1977 inclu-
ded a full cost-of-living increase in Social Security benefits in
order to maintain the purchasing power of 32 million older Americans.
Rather than add to government bureaucracy a "Presidential commission
of experts" to re-study the complex problem, as candidate Reagan
suggests, the President has taken immediate action by requesting
legislation to maintain the fiscal integrity of the Social Security
Trust Fund. President Ford has proposed an increase in payroll taxes
of three tenths of one per cent for both employers and employees so
that future Social Security payments will not exceed revenues.
And, beyond merely strengthening the Social Security system, and fight
ing inflation, President Ford has proposed coverage of catastrophic
illness-with a ceiling of $750 on medical expenditures.
Reprinted from the February issue of the President Ford Committee newsletter
Reagan Rhetoric,
Record Conflict
One of the biggest myths in American politics is the image of
Ronald Reagan as a tight-fisted fiscal conservative.
In reality, Reagan was the biggest taxer and spender of any
governor in California's history.
Lou Cannon, a political writer for the Washington Post and
author of a Reagan biography, wrote in a recent article:
"At times Reagan seems to be the various things his advocates
and his adversaries say about him. What Reagan says and what
Reagan does are frequently contradictory. And he left a conflict-
ing legacy after two four-year terms in the governorship."
Nowhere are the Reagan rhetoric and the Reagan record in more
conflict than in the field of fiscal policy.
Let's compare the rhetoric and the record.
A letter from Sen. Paul Laxalt, R-Nevada, who is chairman of
Citizens for Reagan, set the theme of the campaign.
The senator said Reagan would tell the American people "that
as governor of California he was successful in:
-creating and returning an $850 million surplus to the Cali-
fornia taxpayers.
-keeping the size of the California state government constant.
-originating and signing a massive tax relief bill which re-
sulted in a $378 million saving to California's property owners
and a $110 million saving to renters."
That's the rhetoric. In detail, let's look at the record.
Q. What about the Reagan campaign claim that as governor,
he created and returned an $850 million surplus to the Califor-
nia taxpayers?"
A. The $850 million surplus was not the result of any savings
in state government. Rather, it was a serious miscalculation. In
1967, Reagan, in effect, 'overtaxed' Californians through an enor-
mous $943 million tax increase. While the tax increase was per-
manent, the rebate was a one-shot temporary form of relief in
1969-the year preceding his bid for reelection.
Q. And the claim of a "massive tax relief bill which resulted
in a $378 million saving to property owners and a $110 million
saving to renters?"
A. This was in no way the result of sound management of the
state. The property tax relief was achieved by other federal and
state revenues. Specifically, they were a federal revenue sharing
surplus, a major increase in the state sales tax and a strong busi-
ness climate.
Q. What about the Reagan campaign boast that he kept "the
size of California state government constant?"
A. Under Reagan, the state budget more than doubled in eight
years from $4.6 billion to $10.2 billion. The number of state
employees increased from 113,779 in 1967 to 127,929 in 1975.
Q. Yes, but don't inflation and the growth of California's
population contribute to that budget increase?
A. Doubtless they do. But it is significant to note that under
Reagan the state budget increased an average of 12.2% yearly.
Under his successor, Edmund G. Brown, Jr., the increase has
been 6%. And while California's population grew 1% a year
during Reagan's eight-year administration, it grew 3% a year
during the 14 preceding years under Governors Edmund G.
Brown, Sr. and Goodwin J. Knight.
Q. How did Reagan balance the state budget during those
years that it more than doubled? By practicing fiscal economies?
A. By no means. Under Reagan, there were three huge tax
increases totalling more than $2 billion. In 1967, there was an
increase of $967 million-the largest state tax hike in the nation's
history. Of this, $280 million went for a one-time deficit pay-
ment and future property tax relief. In 1971, the increase was
$488 million with $150 million for property tax relief. In 1972,
the increase was $682 million with $650 milllion for property
tax relief. Much of this property tax relief was short term. But
the overall tax increases were permanent.
(OVER)
Q. How was this money raised?
A. By all sorts of taxes. State personal income tax revenues
went from $500 million to $2.5 billion, a 500% increase. Top
bracket levies were increased from 7% to 11%. The size of the
brackets was reduced so that taxpayers reached the highest
bracket more quickly. And personal exemptions were reduced.
Finally, after adamantly denying he would ever do so, the gov-
ernor agreed to a system of withholding state income taxes.
Bank and corporation taxes went up 100%. The state sales
tax rose from 4% to 6%. The tax on cigarettes went up 7 cents
a pack and the liquor tax rose 50 cents per gallon. Inheritance
tax rates also were increased and collections more than doubled.
Q. But didn't taxpayers benefit from local property tax relief?
A. Hardly. Under Reagan, the average tax rate for each $100
of assessed valuation rose from $8.84 to $11.15. Under predeces-
sor Pat Brown the increase was much less in dollars and percent-
age-from $6.96 to $8.84. And in the six years of Republican
Knight's administration it was still less-from $5.94 to $6.96.
One reason for the big increase under Reagan-from $3.7 billion
to $8.3 billion-is that the state paid a steadily smaller percent-
age of school costs-one of the biggest reasons for local property
taxes.
Despite periodic efforts to provide relief, there has been a sub-
stantial increase in the burden carried by most property owners.
Inflation and higher assessments have helped wipe out any sav-
ings. Only $855 million of the record $10.2 billion budget in
Reagan's final year was for tax relief for homeowners and renters.
Q. What did Reagan have to say about all this spending?
A. Nothing very consistent. In his first inaugural message on
January 5, 1967, he said, "we are going to squeeze and cut and
trim until we reduce the cost of government."
On July 9, 1967, he said in a televised speech that as long as
California grows in population and as long as the country is in
an inflationary spiral "we will have a record breaking budget
every year
and that is roughly 8%."
On Oct. 2, 1967, Reagan was asked in Milwaukee about his
comment that he balanced the budget without new taxes. He
replied: "We raised the old ones about $1 billion."
Q. Many of Reagan's supporters claim that the reason for
the huge budget increases in his administration was because of
increases in assistance to local governments?
A. That's true. And under the same logic, we could eliminate
about $60 billion from the federal budget spent for assistance to
the states. Extending that bookkeeping system to foreign aid and
assistance to individuals, nearly three-fourths of the federal
budget could be disregarded. If Reagan is going to continue to
criticize the growth of the federal budget, he has to accept similar
criticism on the growth of California's budget while he was gov-
ernor. He can't have it both ways.
LIBRARY
GERALD
FORD
Editorial comment following Ronald Reagan's nationally televised address--reprinted from
The President Ford News
Reagan Speech
Called Misleading,
Simple, Divisive
Old Prop, Old Script (From The Philadelphia Inquirer)
To get to the White House, Reagan will have to describe not
how he would reduce government, but how he would enhance
America's spirit and self-confidence.
He won't do it with the simplistic, misleading and divisive
rhetoric he unloaded in our living rooms last week.
Desperate Candidate (From The Los Angeles Times)
Ronald Reagan is a desperate man in his quest of the Presi-
dency. He paraded his desperation before a nationwide television
audience (March 31) in a 28-minute address ringing with over-
simplifications that evoked unhappy memories of the troubled
years immediately after World War II.
He then quoted Kissinger as allegedly having said: "The day
of the U.S. is past, and today is the day of the Soviet Union.
My job as secretary of state is to negotiate the most acceptable
second-best position available."
A Kissinger aide denies that the remark was ever made. Cer-
tainly nothing in the actions and statements of the secretary of
state lend credibility to the accusation that he would settle for
secondary status for America.
As a political contender, Reagan has the privilege, and indeed
the duty, to point out what he considers the shortcomings of his
opponents; that is part of the democratic process. But he also has
the duty to do so with responsibility, and that was as lacking in
his telecast as were constructive alternatives to the policies he
abhors.
The Reagan Show (From The Detroit Free Press)
If Ronald Reagan has convincing evidence that Henry Kissinger
now believes the U.S. to be a second-rate power and is formulating
foreign policy on such a basis, he should have documented that
assertion in his national television speech Wednesday night.
What the former California governor apparently did, in an ad-
dress that threw every possible punch at President Ford, was mere-
ly to repeat convenient hear-say in what was billed as a responsible
political appearance. And if that is the case, then Reagan owes
somebody an apology-not least of whom is the American voter he
has been trying to persuade.
The speech did accomplish some important things, however. It
gave the country a fairly vivid indication of the kind of president
Reagan would make. It showed he is clearly running a third-party
campaign for the presidency, in tone, at least, if not in fact. And it
almost certainly foreclosed any chance that President Ford might
pick Reagan as his Republican running mate.
Reagan on the Issues (From The Sacramento Bee)
Ronald Reagan's penchant for glossing over the facts to score
a political point was exemplified in his nationwide television ad-
dress.
Primary election campaigns should bring a full and frank dis-
cussion of the issues and Reagan did devote his $100,000 half-
hour to some of the leading questions in the presidential race. But
in the process he again displayed his knack for oversimplifying
problems and solutions.
Reagan cited his welfare cuts while governor and rescuing the
state government from fiscal ruin. There was no mention of the
sizeable tax increases he required and the doubling of the state
budget during his eight-year administration.
Reagan is in his element before the television cameras, but
weighing what he said rather than how he said it raises doubts
that he really has solutions to the problems facing the nation.
(OVER)
sheeer
(pnibseleiM bells)
Reagan's avisivia The Chicago Daily News)
If the world were the kind of place perceived by Ronald Rea-
gan, it would be a terrific place to live. Despite his victory in North
Carolina, Reagan is on the ropes as a candidate for GOP presiden-
tial nomination. He is desperate, especially for money, and his TV
appeal may bring in enough money to continue his quest for a
while. But his message, the politics of fright, offers nothing the
American people should buy.
Reagan's Easy Answers (From The Rocky Mountain News)
Without a crystal ball, it is difficult to know if Ronald Reagan's
nationwide television address the other night will help in his uphill
fight to wrest the GOP nomination from President Ford.
But what is quite clear is that Reagan was neither fair, accurate
nor intellectually honest in his sharp attacks on the administra-
tion's foreign and domestic policies.
It must be comfortable to go through life with easy answers for
difficult dilemmas. Somebody ought to remind Reagan of one of
H. L. Mencken's laws: "For every human problem, there is a neat,
plain solution-and it is always wrong."
E
President Ford Committee
1828 L STREET, N.W., SUITE 250, WASHINGTON, D.C. 20036 (202) 457-6400
April 12, 1976
MEMORANDUM FOR:
FROM:
PFC LEADERSHIP 7WA
FRED SLIGHT
Director of Research
SUBJECT:
Ronald Reagan's National
Television Address
Ronald Reagan presented, via the NBC network, a 30-minute
political speech on the evening of March 31.
It is of note that his performance was worthy of his long
career in the acting profession; however, it is discon-
certing that such factual inaccuracies and simplistic con-
clusions could have been offered by someone who is seeking
the Presidency of the United States.
In order to provide you with a more balanced understanding
of the critical national and international issues which were
discussed, I attach an analysis of Mr. Reagan's speech which
contrasts the fact and fiction of his politically motivated
remarks.
I trust that you will find this material to be of interest
and use.
Attachment
FORD & LIBRAK GERALD
The the Federal President Ford Committee, Rogers C.B. Morton, Chairman, Robert C. Moot, Treasurer. A copy of our Report is filed
Election Commission and is available for purchase from the Federal Election Commission, Washington, D.C. 20463. with
(1)
BUSING
The Reagan Rhetoric
"Nothing has created more bitterness for example than
forced busing to achieve racial balance. It was born
of a hope that we could increase understanding and
reduce prejudice and antagonism. I'm sure we all
approved of that goal. ii But busing has failed to
achieve the goal.
Page 11, paragraph 3
The Ford Record
Candidate Reagan's statement implies that neither the President
nor his Administration is either aware of this problem or
concerned enough to do something about it. On the President's
12th day in office, he signed an education bill with the
following provisions:
--Prohibits the use of all Federal funds (except Impact
Aid) for busing activities.
--Allows the courts to terminate busing orders on a
finding that the school district has and will
continue to comply with the fifth and fourteenth
amendments.
--Prohibits any new order to bus past the next
nearest school.
--Prohibits orders to bus except at the start of an
academic year.
--Prohibits busing across district lines or altering
district lines unless, as a result of discriminatory
actions in both school districts, the lines caused
segregation.
--Provides school districts a reasonable time to
develop voluntary plans before a court order can be
executed.
The President has also directed the Secretary of Health, Education,
and Welfare, the Attorney General, and members of the White House
staff to review the ramifications of busing and to develop better
methods to achieve quality education within an integrated environ-
ment for all school children.
(2)
CALIFORNIA GOVERNMENT GROWTH
The Reagan Rhetoric
"When I became Governor, I inherited a state government
that was in almost the same situation as New York City.
The state payroll had been growing for a dozen years at
a rate of from 5 to 7,000 new employees each year. State
government was spending from a million to a million and
a half dollars more each day than it was taking in."
Page 7, paragraph 2
The Reagan Record
The California state budget under then Governor Reagan more than
doubled, increasing from $4.6 billion in 1967 to $10.2 billion
in 1973.
In addition, the state payroll continued to increase, from a
total of 113,779 persons in 1967 to 127,929 persons in 1973.
As for the $4 billion bonded indebtedness of California, there is
little basis for comparison of the state with the current multitude
of problems facing the City of New York.
(3)
CALIFORNIA STATE TAXES
The Reagan Rhetoric
"California was faced with insolvency and on the verge
of bankruptcy. We had to increase taxes. Well, this
came very hard for me becaue I felt taxes were already
too great a burden. I told the people the increase, in
my mind, was temporary and that, as soon as we could,
we'd return their money to them."
Page 7, paragraph 3
The Reagan Record
Under Ronald Reagan, there were three huge state tax increases
which totaled more than $2 billion.
In 1967, there was an increase of $967 million, the largest state
tax hike in the nation's history. Of this, $280 million went for
a one-time deficit payment and state property tax relief. In 1971
the increase was $488 million, with $150 million going to property
tax relief. In 1972, there was a final increase of $682 million,
with $650 million going for property tax relief. While much of the
property tax relief was short-term, the huge tax increases were
permanent.
State personal income tax revenues went from $500 million to $2.5
billion, a 500% increase. Taxable bracket levies were increased from
7% to 11%. The range of the brackets was reduced so that taxpayers
reached the highest taxable bracket more quickly and personal
exemptions were reduced. Finally, after he adamantly denied that he
would ever do so, then Governor Reagan agreed to a system of withholding
state income taxes.
Bank and corporation taxes went up 100%. The state sales tax rose
from 4% to 6%. The tax on cigarettes increased 7 cents a pack and
the liquor tax rose 50 cents per gallon. Inheritance tax rates were
increased and collections more than doubled.
Under Governor Reagan, the average tax rate for each $100 of assessed
valuation rose from $8.84 to $11.15. Under his predecessor, Pat
Brown, the increase was much less in dollars and percentage--from $6.96
to $8.84. And in the six years of Republican Governor Knight's admin-
istration, it was still less--from $5.94 to $6.96. One reason for the
big increase under Mr. Reagan--from $3.7 billion to $8.3 billion--is
that the state paid a steadily smaller percentage of the school costs--
one of the biggest reasons for local property taxes.
Despite periodic efforts to provide relief, there has been a substantial
increase in the burden carried by most property owners. Inflation
and high assessments have helped wipe out any savings. Only $855 millio
of the record $10.2 billion budget in Reagan's final year was for tax
relief for homeowners and renters.
(4)
CALIFORNIA WELFARE REFORM
The Reagan Rhetoric
"After a few years of trying to control this runaway program
(welfare) and being frustrated by bureaucrats here in
California and in Washington, we turned again to a citizens'
task force. The result was the most comprehensive welfare
reform ever attempted.
And in less than three years we reduced the rolls by more
than 300,000 people. Saved the taxpayers $2 billion".
Page 10, paragraph 2-3
"And, increased the grants to the truly deserving needy by
an average of 43%. We also carried out a successful experi-
ment which I believe is an answer to much of the welfare
problem in the nation. We put able-bodied welfare recipients
to work at useful community projects in return for their
welfare grants."
Page 11, paragraph 1
The Reagan Record
One reduction of 20,000 persons was due to a correction in ac-
counting procedures in the state's largest county, Los Angeles.
Candidate Reagan also has taken credit for a drop of 110,000 cases
which in fact, had occurred before his program had gone into effect.
Moreover, a reduction in unemployment in California from 7.4%
in April, 1971 to 5.9% in September, 1972 had as large an effect
on checking the rise of welfare cases as any other single factor.
In addition, the migratory rate of unemployed persons into California
declined from 233,000 in 1967 to 44,000 in 1971, reducing potential
welfare roll increases.
Rolls for welfare families increased in the eight years of Mr.
Reagan's governorship from 729,357 to 1,384,400, and the cost of
the program went from $32.3 million to $104.4 million.
With regard to increasing grants to the deserving and putting
"Able-bodied welfare recipients" to work, the Reagan program never
touched more than 6/10th of 1% of welfare recipients. Although
the program was designed to have 59,000 participants in its first
year in 35 counties, it managed only 1,100 participants in 10
counties, mostly rural farm areas.
(5)
ECONOMIC RECOVERY
The Reagan Rhetoric
"In this election season the White House is telling
us a solid economic recovery is taking place. It
claims a slight drop in unemployment. It says that
prices aren't going up as fast, but they are still
going up, and that the stock market has shown some
gains. But, in fact, things seem just about as they
were back in the 1972 election year. Remember, we
were also coming out of a recession then. Inflation
has been running at around 6%. Unemployment about
7. Remember, too, the upsurge and the optimism
lasted through the election year and into 1973. And
then, the roof fell in. Once again we had unemploy-
ment. Only this time not 7%, more than 10. And
inflation--wasn't 6%, it was 12%."
Page 1, paragraph 3
"Now, in this election year 1976, we're told we're
coming out of this recession. Just because inflation
and unemployment rates have fallen to what they were
at the worst of the previous recession. If history
repeats itself we will be talking recovery four years
from now merely because we've reduced inflation from
25% to 12%."
Page 2, paragraph 2
The Ford Record
There are now 2.6 million more people at work today than there
were just a year ago. Total employment is at its highest point
in history.
Unemployment reached its peak in May, 1975 at 8.9%--not "more than
10%". March, 1976 figures show that this rate has been reduced to
7.5%, and that it continues to decline.
Prices are not going up as fast. In 1974, inflation stood at an
annualizedrate of 12.2%. Inflation today is down to 6.3%--cut
nearly in half.
This recovery has taken place on a broad and lasting front. In
addition to a decrease in both unemployment and inflation, major
gains have been posted in retail sales, GNP, durable goods, housing
and personal income. This Administration's statements are based on
more than just the unemployment and cost-of-living statistics that
candidate Reagan implies.
(6)
EDUCATION
The Reagan Rhetoric
"Schools. In America, we created at the local level and
administered at the local level for many years the greatest
public school system in the world. Now through something
called federal aid to education, we have something called
federal interference and education has been the loser.
Quality has declined as federal intervention has increased."
Page 11, paragraph 2
The Ford Record
The Federal government supports only 7% of the total cost of
elementary and secondary education. The bulk of this support is
distributed through the states to local governments to meet the
specific educational needs of each community.
President Ford has recognized that "since Abraham Lincoln signed
the Act creating the land grant colleges, Federal encouragement
and assistance to education has been an essential part of the
American system. To abandon it now would be to ignore the past
throaten the future."
The very first major piece of legislation the President signed
was an ornibus education bill, It improved the distribution of
Federal education funds and the administration of Federal programs.
On March 1. of this year, President Ford sent an education message
to Congress which combined 24 categorical grant programs into one
grant program of $3.3 billion so that state and local school systems
would have far greater flexibility in the use of these funds.
This action insured continuing, appropriate Federal support for
education, while minimizing the intensive rules and regulations
which are unrelated to the development of quality education.
(7)
ENERGY
The Reagan Rhetoric
"Only a short time ago we were lined up at the gas
station. We turned our thermostats down as Washington
announced 'Project Independence.' We were going to
become self-sufficient, able to provide for our own
energy needs.
At the time we were only importing a small percentage
of our oil. Yet, the Arab boycott caused half a mil-
lion Americans to lose their jobs when plants closed
down for lack of fuel. Today, it's almost three years
later and 'Project Independence' has become 'Project
Dependence.' Congress has adopted an energy bill so
bad we were led to believe Mr. Ford would veto it.
Instead he signed it. And, almost instantly, drilling
rigs all over our land started shutting down. Now, for
the first time in our history, we are importing more oil
than we produce. How many Americans will be laid off
if there is another boycott? The energy bill is a
disaster that never should have been signed."
Page 6, paragraphs 1-2
The Ford Record
Candidate Reagan seems to have missed the whole point of having a
national energy policy. Two years ago (not the three that he
claims), at the time of the March, 1974 announcement of Project
Independence, the United States was importing 35% of its oil--
not the "insignificant" amount that Mr. Reagan seems to recall.
It was for this reason that President Ford called for a comprehen-
sive national energy policy to achieve, by 1985, national energy
independence. Oil rigs did not begin shutting down after the
passage of the EPCA. There were an average of 1,662 drilling rigs
operating last year, the highest number in a decade. Figures for
January 1976--just this week released--show that 1,710 rotary
rigs were in operation one full month after passage of EPCA.
And, preliminary estimates indicate that 1976 investments by the
petroleum industry in production and development activities will
exceed those of 1975.
The Energy Policy and Conservation Act passed by the Congress and
signed by President Ford in December ended a difficult, year-long
debate between the Congress and the Administration on oil pricing
policy, opening the way to an orderly phasing out of controls on
domestic oil over forty months, thereby stimulating our own oil
production.
(8)
By removing controls, this legislation should give
industry sufficient incentive over a period of time to
explore, develop and produce new fields in the outer
continental shelf, Alaska, and potential new reserves
in the lower forty-eight states. Removal of these
controls at the end of forty months should increase
domestic production by more than one million barrels
per day by 1985 and reduce imports by about three million
barrels per day.
More importantly, this bill enables the United States to
meet a substantial portion of the mid-term goals for energy
independence set forth over a year ago. Incorporated in
this are authorities for:
-- a strategic storage syštem
-- conversion of oil and gas-fired utility and in-
dustrial plants to coal
-- energy efficiency labeling
-- emergency authorities for use in the event of
another embargo
-- and the authority we need to fulfill our inter-
national agreements with other oil consuming nations.
These provisions will directly reduce the nation's
dependence on foreign oil by almost two million barrels
per day by 1985. The strategic storage system and the
stand-by authority will enable the United States to
withstand a future embargo of about four million barrels
per day.
The EPCA didn't give President Ford everything that he
wanted, but it was a step in the right direction.
Most importantly, it recognized the need and provided
the means for gradual decontrol of oil.
President Ford has already put these authorities to good use--
his Administration recently announced the decontrol of heavy fuel
oil, and will shortly follow suit with decontrol of other products
as provided under the law.
Finally, candidate Reagan seems to have conveniently forgotten that
President Ford long ago called for the decontrol of natural gas,
production from national petroleum reserves, measures to stimulate
more effective conservation, the development of new energy scurces,
and the development of more and cleaner energy from our vast coal
resources.
Perhaps the question which should be asked is, "Does Mr. Reagan even
have a policy?"
(9)
FEDERAL SPENDING
The Reagan Rhetoric
"The fact is, we'll never build a lasting economic
recovery by going deeper into debt at a faster rate
than we ever have before. It took this nation 166
years--until the middle of World War II--to finally
accumulate a debt of $95 billion. It took this
administration just the last 12 months to add $95
billion to the debt. And this administration has
run up almost one-fourth of our total national
debt in just these short nineteen months."
"Inflation is the cause of recession and unemployment.
And we're not going to have real prosperity or recovery
until we stop fighting the symptoms and start fighting
the disease. There's only one cause for inflation--
government spending more than government takes in. The
cure is a balanced budget. Ah, but they tell us, 80%
of the budget is uncontrollable. It's fixed by laws
passed by Congress."
Page 2, paragraphs 3-4
"But laws passed by Congress can be repealed by
Congress. And, if Congress. is unwilling to do this,
then isn't it time we elect a Congress that will?"
"Soon after he took office, Mr. Ford promised he would
end inflation. Indeed, he declared war on inflation.
And, we all donned those WIN buttons to "Whip Inflation
Now.". Unfortunately, the war--if it ever really started--
was soon over. Mr. Ford, without WIN button, appeared
on TV, and promised he absolutely would not allow the
Federal deficit to exceed $60 billion (which incidentally
was $5 billion more than the biggest previous deficit
we'd ever had). Later he told us it might be as much
as $70 billion. New we learn it's $80 billion or more."
Page 3, paragraphs 1-2
The Ford Record
The national debt reached $72 billion in 1942. The estimated
deficit for FY '76 is $76.9 billion. The gross Federal debt up
through FY '76 is estimated at $634 billion. Thus, the Adminis-
tration's share of the national debt is 15.6%, not the 25%
declared by candidate Reagan.
President Ford's economic policy has been designed to:
1. Create sustained economic recovery and growth without
inflation;
2. Reach a balanced Federal budget by 1979; and,
3. Provide jobs for all who seek work.
(10)
President Ford has offered specific plans for achieving a balanced
budget; but, a large part of the cause of the current recession is
the result of past fiscal policies, especially rapid increases in
Federal expenditures. There is no quick remedy for the problems
created a decade ago.
A precipitous return to a balanced budget, as candidate Reagan
would like, would fuel inflation, halt the recovery, and mean a
sustained period of high unemployment.
Some 77.1% of the federal budget for FY '77 is in "uncontrollable"
or "open-ended" expenditures. Approximately $236.8 billion of
this is allocated to payments to individuals. In order to achieve
candidate Reagan's "balanced" budget as quickly as he suggests,
we would have to terminate all of some, or part of several, of
the following expenditures:
$108.0 billion
Social Security and Railroad Retirement
38.4 billion
Medicare and Medicaid
26.0 billion
Public Assistance Programs
22.9 billion
Federal Retirement Funds
16.3 billion
Veterans Benefits
About 26 cents out of every Federal tax dollar in 1977 will go to 2
defense ($101. 2 billion). Revenue sharing and grants to states
and localities- funds returned for use at the local level take up
another 15 cents out of every Federal dollar spent. This too,
leaves little room for immediate, massive Federal cuts.
In March, 1975, President Ford literally "drew the line" at a deficit
of $60 billion. To meet that goal, the President vetoed some 47 bills
sent to him by the Congress--at an attempted cost savings to the
American taxpayer of $26 billion. The Congress overrode only 7 of
these vetoes, but at a cost to the taxpayer of another $13 billion
added to the Federal deficit.
Thus, the estimated deficit for FY 76 will be $76.9 billion. The
largest previous yearly deficit occurred in 1943--$54.8 billion.
Gross national debt for FY 76 is estimated to be $634 billion--of
which $76.9 billion, or 15.6% occurred during a year in which a
Ford budget was in effect.
The President proposed budget for FY 1977 cuts the rate of growth
of Federal spending in half, down to 5.5% The estimated deficit
for FY 77 is $43 billion or $33 billion less than the previous year
and some $26 billion less than projected expenditures had government
continued to grow at the same pace as it had during the last decade.
President Ford has set a balanced budget as his goal for 1979.
FOREIGN AFFAIRS
(11)
ANGOLA
The Reagan Rhetoric
"We gave just enough support to one side of Angola to
encourage it to fight and die but too little to give it
a chance of winning.'
Page 13, paragraph 2
The Ford Record
The U.S. objective in supporting the FNLA/UNITA forces in Angola
was to assist them, and through them all of black Africa, to
defend against a minority faction supported by Soviet arms and
Cuban intervention. Despite massive Soviet aid and the presence of
Cuban troops, we were on the road to success in Angola until December
19 when Congress adopted the Tunney Amendment cutting off further
U.S. aid to the FNLA and UNITA. President Ford severely rebuked
the Congress for that action.
CHINA
The Reagan Rhetoric
"In Asia our new relationship with mainland China can have
practical benefits with both sides. But that doesn't mean
it should include yielding to demands by them as the
Administration has to reduce our military presence on Taiwan
where we have a long-time friend and ally, the Republic
of China."
Page 13, paragraph 3
The Ford Record
We have not reduced our forces on Taiwan as a result of Peking's
demands. Our reductions stem from our own assessment of U.S.
political and security interests. The ending of the Vietnam conflic
and the lessening of tension in the area brought about by our new
relationship with the People's Republic of China has made this
drawdown possible.
(12)
FOREIGN AFFAIRS
ISRAEL
The Reagan Rhetoric
"Mr. Ford's new Ambassador to the United Nations attacks
our long time ally Israel."
Page 13, paragraph 3
The Ford Record
Candidate Reagan has grossly distorted the facts. William Scranton
did not attack Israel. His veto blocked an unbalanced Security
Council Resolution critical of Israel-- resolution that every
other member of the Security Council voted for. In a March 23
speech in the United Nations Security Council, Ambassador Scranton
reiterated long-standing U.S. policy--a policy articulated by
every Administration--and every U.S. Representative to the United
Nations since 1967 on Israel's obligations as an occupying power
under international law with regard to the territories under its
occupation.
Far from attacking our long-time ally, Israel, President Ford's
Administration seized an historic opportunity to help the area
move towards a secure, just and comprehensive peace settlement.
During the Spring of 1975, the President held an extensive series
of meetings with important leaders in the area. A second, in-
terim agreement was reached shortly thereafter between Israel
and Egypt.
This agreement reaffirmed and strengthened the ceasefire, widened
the buffer zone, and committed both sides to settle the Middle
East conflict by peaceful means, refraining from use of force.
For the first time in years, the Suez Canal was opened to Israel for
non-military shipping.
VIETNAM
The Reagan Rhetoric
"And, it is also revealed now that we seek to establish
friendly relations with Hanoi. To make it more palatable,
FOREIGN AFFAIRS
(13)
we are told this might help us learn the fate of the men
still listed as Missing in Action."
Page 13-14, paragraph 3
The Ford Record
Neither President Ford nor his Administration spokesman have said
we "seek to establish friendly relations with Hanoi.' Such an
assertion is totally false.
The Congress, reflecting the views of the American people and
the Ford Administration, has called for an accounting of our Mis-
sing in Action and the return of the bodies of dead servicemen
still held by Hanoi.
The Ford Administration, in keeping with this Congressional man-
date, has offered to discuss with Hanoi the significant outstand-
ing issues between us.
CUBA
The Reagan Rhetoric
"In the last few days, Mr. Ford and Dr. Kissinger have
taken us from hinting at invasion of Cuba to laughing it
off as a ridiculous idea. Except, that it was their
ridiculous idea. No one else suggested it. Once again --
what is their policy? During this last year, they carried
on a campaign to befriend Castro. They persuaded the
Organization of American States to lift its trade embargo,
lifted some U.S. trade restrictions, they engaged in culture
exchanges. And then on the eve of the Florida primary
election, Mr. Ford went to Florida, called Castro an outlaw
and said he'd never recognize him. But he hasn't asked our
Latin American neighbors to reimpose a single sanction, nor
has he taken any action himself. Meanwhile, Castro continues
to export revolution to Puerto Rico, to Angola, and who
knows where else?
Page 14, paragraph 2
FOREIGN AFFAIRS
(14)
The Ford Record
Neither President Ford nor his representative stated -- or hinted--
at an "invasion of Cuba." Nor did the United States persuade
the OAS to lift the sanctions against Cuba.
At San Jose last summer, the U.S. voted in favor of an OAS resolution
which left to each country freedom of action with regard to the
sanctions. The U.S. did so because a majority of the OAS members
had already unilaterally lifted their sanctions against Cuba,
and because the resolution was supported by a majority of the
organization members. Since that resolution passed. no additional
Latin American country has established relations with Cuba.
The U.S. has not lifted its own sanctions against Cuba. It
did not enter into any agreements with Cuba. and did not trade
with Cuba. We did not engage in cultural exchanges.
The U.S. did validate a number of passports for U.S. Congressmen
and their staffs, for some scholars and for some religious leaders
to visit Cuba. And the U.S. issued a few select visas to Cubans
to visit the U.S.
These minimal steps were taken to test whether there was a mutual
interest in ending the hostile nature of our relations. This
policy was consistent with the traditional American interest in
supporting the free flow of ideas and people. Since the Cuban
adventure in Angola, the Ford Administration has concluded that the
Cubans are not interested in changing their ways. The U.S. has
resumed it's highly restrictive policies toward Cuban travel.
With regard to Cuban efforts to interfere in Puerto Rican affairs,
the U.S. has made it emphatically clear in the UN and bilaterally
to the Cubans and other nations that the U.S. will not tolerate
any interference in its internal affairs.
Mr. Reagan's criticism is particularly interesting when compared
to the following comment he made last August in a release for his
weekly editorial column.
"Recent conciliatory gestures by Castro, including
the return of $2 million ransom money he had impounded
in connection with a U.S. airliner hijacking, indicates
that he is ready to talk turkey with the United States.
Since we can accomplish both humanitarian and national
objectives in the process, it's time for the Washington
establishment to lift its Cuban dialogue above the
level of that advertising slogan, 'Since we're neighbors,
let's be friends.
FORD & LIBRARY 9ERALD
(15)
FOREIGN AFFAIRS
EASTERN EUROPE
The Reagan Rhetoric
"Now we learn that another high official of the State
Department, Helmut Sonnenfeldt, whom Dr. Kissinger refers
to as his "Kissinger", has expressed the belief that, in
effect, the captive nations should give up any claim of
national sovereignty and simply become a part of the
Soviet Union. He says, 'Their desire to break out of the
Soviet straightjacket' threatens us with World War III.
In other words, slaves should accept their fate."
Page 17, paragraph 2
The Ford Record
The Reagan statement is wholly inaccurate. It is a gross distortion
of fact, to ascribe such views to Mr. Sonnenfeldt or to the Ford
Administration. Not a single person in the Ford Administration has
ever expressed any such belief.
The U.S. does not accept a sphere of influence of any country,
anywhere, and emphatically rejects a Soviet sphere of influence
in Eastern Europe.
Two Presidents have visited in Eastern Europe; there have been
two visits to Poland and Romania and Yugoslavia, by Presidents.
Administration officials have made repeated visits to Eastern
Europe, on every trip to symbolize and to make clear to these
countries that the U.S. is interested in working with them and
that it does not accept or act upon the exclusive dominance of
any one country in that area.
At the same time, the U.S. does not want to give encouragement
to an uprising that might lead to enormous suffering. The United
States does not accept the dominance of any one country anywhere.
Yugoslavia was mentioned, for example. The Ford Administration
would emphatically consider it a very grave matter if outside
forces were to attempt to intervene in the domestic affairs of
Yugoslavia. The U.S. welcomes Eastern European countries
developing more in accordance with their national traditions,
and we will cooperate with them. This is the policy of the United
States, and there is no "Sonnenfeldt" doctrine.
(16)
FOREIGN AFFAIRS
THE HELSINKI PACT
The Reagan Rhetoric
"Why did the President travel halfway 'round the world to
sign the Helsinki Pact, putting our stamp of approval on
Russia's enslavement of the captive nations?
We gave away the freedom of millions of people -- freedom
that was not ours to give."
Page 16, paragraph 2
The Ford Record
Again, undicate Reagan has distorted the facts for emotional
impact. Ford stated clearly on July 25 that "the United
States has never ICE. -1sed the Soviet incorporation of Lithuania,
Latvia and Estonia and is not Joing so now. Our offical policy of
non-recognition is not affected by the results of the European
Security Conference."
******** Ford went to Helsinki along with the Chiefs of State or
heads or government of all our Western allies and, among others,
a Papal Representative, to sign a document which contains Soviet
commitments to greater respect for human rights, self-determination
of peoples, and expended exchanges and communication throughout
Europe. Basket three of the Act calls for a freer flow of people
and ideas among all the European nations.
The Helsinki Act, for the first time, specifically provides for the
nossibility of peaceful change of borders when that would correspond
to the wishes of the peoples concerned.
And the Helsinki document itself states that no occupation or
acquisition of territory by force will be recognized as legal.
(17)
FOREIGN AFFAIRS
PANAMA CANAL
The Reagan Rhetoric
"The Canal Zone is not a colonial possession. It is not
a long-term lease. It is sovereign U.S. territory every
bit the same as Alaska and all the states that were carved
from the Louisiana Purchase. We should end those negot-
iations (on the Panama Canal) and tell the General; We
bought it, we paid for it, we built it and we intend to
keep it."
Page 15, paragraph 3
The Ford Record
It is not certain whether the Reagan rhetoric on the Panama Canal
Zone best displays his ignorance--or his frequent distortion
of the facts for political gain. What is certain is that Mr. Reagan
view that the Canal Zone is "sovereign U.S. territory every bit
the same as Alaska and all the states that were carved from the
Louisiana Purchase" is absolutely incorrect.
The United States did not buy the Canal Zone from Panama for $10
million in 1903. Instead, this country bought certain rights
which Panama then granted--rights to run the Canal Zone as if it
were U.S. territory, subjecting Panamanians to U.S. law and
police in a strip of land through the middle of their country.
Neither is the Canal Zone sovereign U.S. territory. The original
treaty does not give sovereignty to the U.S. but only rights
the U.S. would exercise as "if it were sovereign." The 1936
treaty refers to the Canal Zone as Panamanian territory under U.S.
jurisdiction. Legal scholars have been clear on this for three-
quarters of an century. Unlike children born in the United States,
for example, children born in the Canal Zone are not automatically
citizens of the United States.
Candidate Reagan's rhetoric aggravates an already difficult
situation. In 1964, anti-American riots in the Canal area took 26
lives. Since that time, negotiations between the United States and
Panama on the Canal have been pursued by three successive American
Presidents. The purpose of these negotiations is to protect our
national security, not diminish it.
(18)
FOREIGN AFFAIRS
THE U.S. ROLE
The Reagan Rhetoric
"Now we must ask if someone is giving away our own
freedom. Dr. Kissinger is quoted as saying that he thinks
of the U.S. as Athens and the Soviet Union as Sparta.
"The day of the U.S. is past and today is the day of the
Soviet Union." And he added, " My job as Secretary of
State is to negotiate the most acceptable second-best
position available."
Page 16, paragraph 3
The Ford Record
Candidate Reagan's so-called quotes from Secretary Kissinger are
a total and irresponsible fabrication. He has never said what
Mr. Reagan attributes to him, or anything like it.
In a March 23, 1975 press conference in Dellas, Secretary Kissinger
said: "I do not believe that the United States will be defeated.
I do not believe that the United States is on the decline."
"I believe that the United States is essential to preserve the
security of the free world and for any progress in the world that
exists.
"In a period of great national difficulty, of the Viet-Nam war,
of Watergate, of endless investigations, we have tried to preserve
the role of the United States as that major actor. And I believe
that to explain to the American people that the policy is complex,
that our involvement is permanent, and that our problems are
nevertheless soluble, is a sign of optimism and of confidence in
the American people rather than the opposite."
(19)
GOVERNMENT GROWTH & FEDERAL TAXES
The Reagan Rhetoric
"Then came a White House proposal for a $28 billion
tax cut, to be matched by a $28 billion cut in the
proposed spending -- not in the present spending, but
in the proposed spending in the new budget. Well, my
question then and my question now is, if there was $28
billion in the new budget that could be cut, what
was it doing there in the first place?"
Page 3, paragraph 3
"They could ... correct a great unfairness that now
exists in our tax system. Today, when you get a
cost-of-living pay raise-- one that just keeps you
even with purchasing power-- it often moves you up
into a higher tax bracket. This means you pay a
higher percentage in tax but you reduce your purchasing
power. Last year, because of this inequity, the
government took in $7 billion in undeserved pro-
fit in the income tax alone, and this year they' 11
do even better."
Page 4, paragraph 2
The Ford Record
President Ford has submitted a budget for FY '77 which will
curb the growth in Federal expenditures -- proposing a $28
billion cut in existing programs, not a reduction in the
proposed budget as candidate Reagan would have the public
believe. The President has called for this spending cut to
be tied to a tax cut which would return to a family of
four earning $15,000 a year approximately $227 more in
take-home pay -- and which would give businesses more in-
centive to create jobs.
The President's tax proposals for individuals have several
key features:
-- an increase in the personal exemption from
$750 to $1000.
-- substitution of a single standard deduction--
$2,500 for married couples filing jointly and
$1, 800 for single taxpayers -- for the existing
low income allowance and percentage standard
deduction.
-- a reduction in individual income tax rates.
(20)
President Ford's proposals to increase the inheritance tax exemption
from $60,000 to $150,000, and his proposal to stretch out the
Federal estate tax payment period for farms and small businesses,
will help to keep farms and small business in the family after years
of hard work.
And, to help businessmen create jobs, the President has proposed:
-- permanent reductions in corporate income taxes;
-- a permanent increase in the investment tax credit;
-- accelerated depreciation for construction of plants
and equipment in high unemployment areas;
-- broadened incentives to encourage stock ownership
by low and middle income working Americans.
The President's budget and tax measures have already meant more jobs
for American workers, the slashing of inflation, and the growth of
real take-home pay. His effort to curb the growth of government --
and to return control to the individual -- has already, and will con-
tinue to return dollars to the American worker.
(21)
NATIONAL DEFENSE
The Reagan Rhetoric
"The Soviet Army outnumbers ours more than two-to-one
and in reserves four-to-one. They out-spend us on wea-
pons by 50%. Their Navy outnumbers ours in surface ships
and submarines two-to-one. We are outgunned in artillary
three-to-one and their tanks outnumber ours four-to-one.
Their strategic nuclear missiles are larger, more power-
ful and more numerous than ours. The evidence mounts
that we are Number Two in a world where it is dangerous,
if not fatal, to be second best."
Page 16, paragraph 1
The Ford Record
In January of this year, President Ford submitted to Congress
the largest peacetime budget for the Department of Defense in
the history of the United States--$112 billion, $700 million.
He has assured the American people that "the United States is
going to be number one, as it is, in our national security"
as long as he is President.
Candidate Reagan conveniently neglects to mention that our
strategic forces are superior to the Soviets'. The United
States holds numerous advantages over the Soviet Union, including
the following:
--Our missile warheads have tripled and we lead the
Soviets in missile warheads by more than two-to-one.
--Our missiles are twice as accurate and more survivable.
--We have a three-to-one lead in the number of strategic
bombers.
--We are proceeding with the development and production of
the world's most modern strategic bomber, the B-1.
--We are developing the world's most modern and lethal missile
launching submarine, the Trident.
--We are developing a new large ICBM.
National defense is more than a numbers game, and candidate Reagan's
rhetoric indicates a disturbingly shallow grasp of what true balance
is all about. It is absolutely meaningless to say the Soviet Army
is twice the size of the U.S. Army when one considers that one million
of their troops are deployed on the Chinese border.
Candidate Reagan also ignores that we are at the head of a great
Alliance system in Europe, and we are firmly tied to the strongest
economic power in Asia.
(22)
President Ford is the one responsible for reversing the recent
trend of shrinking defense budgets in which a Democratic Congress
has made $37 billion in cuts during the past seven years.
Mr. Reagan's short-sighted, politically motivated statements that
proclaim that our nation is 'in danger" are both factually
irresponsible and potentially damaging to this country. They
alarm our people, confuse our allies, and invite our adversaries
to seek new foreign adventures.
FORD is LIBRARY GERALD
(23)
SOCIAL SECURITY
The Reagan Rhetoric
"Now, let's look at Social Security. Mr. Ford says he
wants to 'preserve the integrity of Social Security.
Well, I differ with him on one word. I would like to
restore the integrity of Social Security. Those who
depend on it see a continual reduction in their standards
of living. Inflation strips the increase in their benefits.
The maximum benefit today buys 80 fewer loaves of bread
than it did when that maximum payment was only $85 a
month. In the meantime, the Social Security payroll
tax has become the most unfair tax any worker pays.
Women are discriminated against. Particularly, working
wives. And, people who reach Social Security age and
want to continue working, should be allowed to do so and
without losing their benefits. I believe a Presidential
commission of experts should be appointed to study and
present a plan to strengthen and improve Social Security
while there's still time--so that no person who has
contributed to Social Security will ever lose a dime."
Page 4, paragraph 3
The Ford Record
The statement that the "maximum benefit today buys 80 fewer
loaves than it did when the maximum benefit was only $85 a
month" implies that the purchasing power of Social Security
payments has declined substantially. In fact, the average benefit
has almost tripled in terms of the amount it can buy from that
time in 1940 when the benefit was $85.
It was President Ford who first recognized inflation as the single
greatest threat to the quality of life for older Americans. As a
result, his budget request to Congress for fiscal year 1977 inclu-
ded a full cost-of-living increase in Social Security benefits in
order to maintain the purchasing power of 32 million older Americans.
Rather than add to government bureaucracy a "Presidential commission
of experts" to re-study the complex problem, as candidate Reagan
suggests, the President has taken immediate action by requesting
legislation to maintain the fiscal integrity of the Social Security
Trust Fund. President Ford has proposed an increase in payroll taxes
of three tenths of one per cent for both employers and employees so
that future Social Security payments will not exceed revenues.
And, beyond merely strengthening the Social Security system, and fight
ing inflation, President Ford has proposed coverage of catastrophic
illness--with a ceiling of $750 on medical expenditures.