good for the country and it's a model leader and a trend setter and it has been an innovator in some areas i would like it to be but more secure in its funding so that we could tour compete much more in a much more muscular and there are way would you guys so i had a funding for
this program has been provided by the station and other public television stations and by grants from exxon corporation the corporation for public broadcasting and at and t and a bell system company right it's b that evening the reagan boom on wall street which yesterday push the dow jones industrial average over a thousand for the first time in four years collapsed a little today the average fell back to nine at nine on news that most leading banks have raised their prime lending rates to seventeen percent that fed growing predictions that economic recovery may be interrupted by another credit crunch and a new period of recession that would be
discouraging news for a reagan administration just about to take office with a promise to get the economy growing again there's already wide speculation widespread speculation by financial journalists that economic realities may prevent <unk> reagan from implementing the program which he was elected tonight will reaganomics ever see the light of day problem or two major points in candidate reagan's approach to curing the ailing economy cut taxes and cut the federal budget the budget cutting would be done in a way that reduced only waste and fraud not federal programs which provided needed services to people the tax cutting would follow the basic camper off approach a ten percent reduction in income taxes a year for three consecutive years now according to some president elect reagan as having some in house problems would in a program together that we'll accomplish those twin goals one of the problems that you believe the various unnamed sources being quoted regulate is a friendly but spirited dispute among two sets of advisors the old guard of economists and others who
served in the nixon and ford administrations people were reportedly are not that sold on camp are often argue for flexibility for going out at slowly and deliberately and the new guard younger tribes who are pushing the go ahead on both fronts fully quickly dramatically as a kind of shock treatment for the economy acknowledged leader of the so called new guard is the camp of camper off congressman jack camp republican of new york cartoon what kind of shock treatment for the economy are you original mystery well very frankly i think that's overstated girl i think we're all looking for both old and new as you put it the oman reagan's advisors and i put myself and alan greenspan among those believe that there has to be a dramatic change in the way we tax and regulate the private sector the economy so we're really talking about dramatic changes as opposed to shock treatment in the end the austerity school that heretofore has been part of so the so called you know balance the budget and fight inflation by slowing down the economy what the
fresno like reagan as said and what alan and i am is the advisors believe is that we need to produce and grow and save our way out of the inflation rather than trying to slow down the economy so they shock treatment as you put it or the dramatic changes that i would talk about would be regulatory reform of a rather dramatic nature but even more importantly restructuring the tax code not only on personal income tax rates but also on capital gains on investments savings as well as the way we would in a way in which we'd appreciate the investment in new plant machinery and equipment plus the type of fiscal restraint that i think most americans including the budget committees of the house and the senate as well as democrats and republicans all think is is is long overdue assad and the combination of fiscal restraint coupled with regulatory reform and restructuring of the tax code to build incentives back into the economy for saving and working and investing again will allow the federal reserve to follow that type of a monetary policy that could help bring down those
long term interest rates that are so discouraging to the investment climate of a great climate in this country one idea of course have been involved in the meetings of the top economic advisers during this transition period and a plant is now gone to fresno lecter reagan my question is this is kemp roth the tempers to be specific is camp brought a ten percent reduction in contacting next three years still in there as a commitment will lead me down well and alan greenspan can speak for himself but all of the advisors they were a los angeles for those three days last weekend are supportive of restructuring the tax rates so all our camp brought now you mentioned isn't as a thirty percent tax cuts and we call it reducing the marginal income tax rates ten percent a year for three years then indexing those brackets to protect the people of this country from being pushed up in the higher brackets that lowers the capital gains rate from twenty eight effectively down to twenty and i don't know whether fresno like reagan absolutely
does it seems to me that intuitively he doesn't when i asked him if he was disappointed that the lame duck congress did not pass a tax cut okay what his answer was he said well no not really that'll give me something to do in the first twenty four hours of my presidency so i think he is committed intellectually and arguably to reducing the tax burden on labor and on capital in order to encourage economic growth no matter what the economic situation may be at any given time other words maybe a situation now year from now maybe different year from land from then it may be different go the tax code word mr walker well again you put in a tax cut from work i put it in a reform of the tax system to rebuild those or repair the damage has been done to the incentives for both workers and sabers and our economy are about ten or twelve years of inflation and tuesday brackett creep your bracket leak we now have labor and capital painted marginal tax brackets they were only at one time reserve for the wealthiest segments of our society and so we need to repair some of that damage in camp brought literally
only repairs about five or six years of that damage and that coupled with the liberalizing the depreciation race we believe should be done whether the budget is in balance or partially out of balance it needs to be done as we include a prevalence rate it's my belief that it does yes how ferocious was a family's meetings between you the new guardian as calories were not narrowly on thursday from my standpoint said there was a total unity of all of the advisors johnny walker bill simon allan greenspan's your shelves so dr arthur burns a we may have different perceptions that we may have different ways of getting there but all of us came to the conclusion the depreciation rates with which america investors new plant machinery needs a liberalizing as well as the bristol tax code which impairs the ability of this nation to produce more goods and services more savings more investment capital are you concerned at all about who approach like reagan might select of his key economic jobs whether the
names and i've seen on the domestic side in on very positive about as well was that scene mentioned ai concern to live with them as a visiting allen would say out there was a great deal of unity among those who are mentioned in some were not speaking or our website robin ft yes that day a group of old guard economic advisors from the nixon ford administrations sometimes unflattering they called retreads includes alan greenspan he was head of the council of economic advisors under gerald ford is frequently mentioned as a strong contender for that or another top economic policy post in the reagan administration without embarrassing you've asked me which one you're going to get is there a real pitched battle going on for the er heart and mind obliterating and what to do when he takes over in january it exists in the press certainly the only people don't seem to be aware of those battle of the so called combat boots i never report it leading which lasted a tutu wrap days
in which there was such a unanimity n harmony jack is absolutely right we all i'm qualified we're recommending to the president elect that he in fact as quickly as possible recommend the implementation of the camper off though and her we would all agree that that he does in the first twenty four hours it's the right time for an hour i think what is happening is that in the very early stages of evaluating all of these various different proposals there were slight differences among says as they will always will be and i hope it will be and i am my view it has been raised to a level of combat tour which doesn't exist so ken wells is still as an army recruiting station i certainly hope so what i'm really saying what we have recommended are these circuit economic circ*mstances come january the
twentieth or twenty first going to be such that you personally would feel good about recommending a tax cut first of all i think what we are falling into as far as economic policy is concerned is to try to react to next week's news next week he's economic statistic and that's precisely the reason why we've gotten into this extraordinary economic marks week got to stop looking at what's going to happen next month or we think is gonna happen next month and cried a parking place finally and irrevocably a set of economic policies which it gives us a fighting chance to work our way out of this extraordinary stagnant economy we turned the question the other way around credit happened that economic circ*mstances are such on gender the twenty first big deal for one would say mr president it is not good to go for kemp roth right now i really should delay that we should cut spending we should begin to balancing the budget first before we go for the tax cut could circ*mstances be that i doubt it very much the
reason i doubt it is at the problem that we're looking at on the problem which is very clear today is one i love excessive inflation expectations in the system is a sense of stagnation and the system and the only way to diffuse that is to do it to run a two pronged economic attack one is to reduce the excess of tax burden which was growing on the american people under existing law and to test the very severely restrain the growth in federal outlays we can't do one or the other we have to do both and it's about time we look at nineteen eighty two eighty three and eighty five and beyond and stop trying to fine tune the next three or four weeks with reform so you believe that something dramatic as congressman camp says is called for something dramatic and different yes now are you as confident as he is that there is going to be a head that really caused dramatic regulatory reform is going to be a productive of a lot of
savings in the economy i should certainly hope so i would put in the i wouldn't necessarily arguing on the basis of saving i would just say that to her we have over regulated it is essential that we toned down the degree of regulation very significantly and the eye can see nothing but good coming from when it'll happen or how an injury is important can i ask your final question on duty are suddenly rising interest rates indicate that we are headed for another the recession before the recovery from this woman just appeared to be coming out of kitchen i don't want a writing for another recession but we're certainly not continue to rise as of this week the recovery still implicitly but i just cannot imagine the continuing much beyond the end of the year and rather than recession i would perhaps best describe it as a stall out just the stagnation taken place mr kersten yeah
they feel on that now either about the recession whether we're whether it so we're not be another place that was over nine out of it was and maybe not well i am not sanguine about the economy the recession certainly is lasting and steel on those housing inner cities of our country there's high unemployment in the northeast we have capital markets that are being squeezed out by the tremendous the requirements of the federal government of finances on budget and our budget borrowing requirements we're going to hear in a few weeks that the automobile manufacturers are losing seventy eight billions of dollars production of steel world is not as efficient as it could be right across lake erie commit candidates to companies putting in a steel mill that it writes often depreciates in the year in which it makes investment but in my district of the steel companies such as republican the clam invest in a blast furnace or a new piece of equipment you can't write it off except over sixteen seventeen years so the disparity between the ability of american enterprise to compete in foreign markets and steel in autos and other heavy
and capital intensive industries has been compromised by the tax code and frankly you can't tell people in the inner cities in this country that are out of work blackened and the minorities that they were out of the recession because we're not we need some rather strong steps to bring growth an expansion of the economy back to united states without inflation i think that's the number one goal of the reagan administration is something that i and alan greenspan totally support ms cuesta nerve cut in the federal budget which is alan greenspan has said there must be done at the same time that the tax cuts are made they're now you know what the phrase tax cuts but for a trailer for i sure am vs let me ask you this group un greenspan and the others who met you must have come up with a list of recommended places where this money can be found in the federal budget give me a feel for the rain to the kind of thing you suggested mr at the cut well first of all there was a broad a number of areas in which said the discussion to blaze casper
weinberger was their old and trusted friend of then the reagans and who has been involved in and looking for places and with restraint and the cuts could be made it raised issues alan greenspan bill simon others that was stan in that there is a broad consensus that the cuts that might be made say two percent of the nineteen eighty one fiscal year budget which the congress has achieved and i would've like the scene of been a little bit more but nonetheless i think it's getting it down from six forty nine a six thirty was helpful with the things we're talking about is restraining the growth of spending on in eighty two and eighty three does is the long term interest rates that are most severely impacted by the tremendous growth in outlays an obligation of party of the federal budget not only in eighty one but in eighty two eighty three and eighty four in fact eighty five budget is projected to be well over nine hundred and seventy five billion dollars almost one trillion dollar so we can take steps the restraint now yes the obligation all authority at
me out here outlays or growth of spending in those years just restrain the growth of the debt to four or five percent we will i think bring some stability to the financial credit markets plus l bring long term interest rates down and hasten the recovery that we all want for this country you are that mr greenspan that if you just if you just opened at a damper on that on the grill are not enough and not even have to go into a lot of cutting and others felt that that will do the job i think for two things that have to be done one is just you any major new federal expenditure programs and the non defense area and to restrain the seemingly endless airlines to existing programs give both of those can be implemented we will slow the growth of spending quite considerably and will be very much on the way to bring the budget under control so you'd you guys and another word that did not present brother like regular the list of programs here but rather a lack of this got this gut that everything's gonna
be hunky dory did not do that and no we didn't we actually have a number of different problematic changes which i would suspect would be desirable to do but it is not an essential ingredient dirt to do a lot of budget cutting our existing entitlements in order to restore the type of ballots and suspect will be needed how did you how if you don't cut the federal budget how then can you take care of the of the era tax cuts the tax cuts in and numerical sense merely keep the ratio of total federal revenues as a percent of the gross national product constant if there are no tax cuts what will occur over the next five years is the rise of nearly five hundred billion dollars annually in tax receipts and if we allow that to even start to happen we'll just choke off any
semblance of economic recovery but obama's nominee of the guy they surely will would give you an appointment here because i agree with allen but i think it's also important to interviews set another concept at this point which is that the great is growth in federal expenditures is a result of the poor performance of our economy the combination of an inflation index in social security and federal pension isn't a tremendous burden it puts on the debt load of the united states caught coupled with the high rates of unemployment and what that does to trigger of food stamps and welfare and unemployment insurance is causing about seventy five percent of this hemorrhage in the growth of the economy and in the growth of the budget so the combination of restraining the runaway spending coupled with amy your fiscal and monetary of regulatory and tax policies towards achieving not inflationary economic growth is a agenda if you will or recipe if you will for reducing through prosperity the
tremendous deficits that are now digging in to the substance of america's capital of savings in and work opportunities for people to run all are adding forces will command a majority in the senate they were not in the house which has the ultimate authority over money those one of those who may be resisting some reagan policies is democratic congressman steven solarz in new york a member of the house budget committee congressman if kemp roth comes to the house of representatives he knew i don't think there is any question but that there's going to be a tax cut next year the american people of spoken out very clearly on this question the house and senate both included in the recently adopted budget resolutions provisions for a tax cut the only question is what kind of tax cut it's going to be in here i think that there will be some a real resistance to the least in the house to the implementation of the camp brought proposal because i think that while democrats to favor of a reduction not only in personal income taxes but also and cooperate in business taxes there would be some real resistance to a tax cut
which would provide a reduction for those earning between ten and fifteen thousand dollars a year of one hundred and forty six dollars in their tax bill but for people earning in excess of two hundred thousand dollars a year a cut of fourteen thousand dollars in taxes i think that the democratic majority in the house would probably prefer a reduction in personal income taxes it was rather more progressive than the kind of regressive tax reductions called for in kemp roth what do you feel about the congressman's a congressman camp's belief that they some dramatic move some different dramatic move is necessary to get this country out of the kind of stagflation happening i'm a dramatic moves are necessary i think we do confront the very serious economic crisis in this country and i think that there's a tremendous need for a bipartisan consensus not only in the congress but in the country not only with respect to foreign policy but domestic policy as well where i perhaps might disagree with jack is in his prescription for dealing with the crisis for example
the advises of to a close the president elect reagan i have indicated in the course of the last week or two that they would favor reductions in federal spending in the next two fiscal years of somewhere in the vicinity of thirty to fifty billion dollars and while i'm all in favor of the elimination of fraud waste extravagance and abuse who isn't i think that when you're talking about reductions of that magnitude you're going way beyond the elimination of waste and fraud and cutting into the real flash in muscle and bone of essential federal programs or to give you an example of what i may if you exclude from these cuts as president elect reagan has said he would fence interest on the debt veterans programs social security and medicare you've excluded eighty percent of the federal budget that we use approximately a hundred and twenty five billion dollars left to cut if you take out thirty to fifty billion dollars of the remaining one hundred and twenty five
billion you're talking about a code of the remaining federal programs of somewhere between thirty and forty percent and i see no way even if you eliminate all of the abuse waste and fraud that exists that you can cut back on programs like mass transit food stamps public works education revenue sharing with out in reductions of that magnitude cutting back on programs on which millions of americans are the pen which your reserves which i think the great majority of them even given the e r off and comment upon new era conservative a relatively conservative mood in the house of representatives despite the democratic i think that mood was reflected in widespread democratic support for the budget resolution that was just adopted which a call for a two percent across the board cuts in spending about seventeen billion dollars during the course of his campaign president elect reagan said that he felt that amount could be squeezed out of the federal budget in the form of waste extravagance and abuse but if you go
beyond the seventeen billion dollar reduction and you begin to talk about thirty to fifty billion dollar reductions you're talking about cutting back very substantially on mass transportation at a time when we're still importing forty percent of our oil from overseas and when everybody acknowledges that mass transit is one very effective response to the energy crisis you're talking about cutting back on food stamps at a time when seven and a half million people are unemployed in this country when you're talking about cutting back on revenue sharing at a time when state and local governments due to the recession are unable to provide that to an inadequate tax base essential services so i think at the point at which you begin to talk of reductions of that magnitude you're going way beyond the elimination of waste and you're talking about cutting into the heart and soul of government programs which constitute the heritage of the last thirty years and i think it would be a serious mistake in terms of the kind of bipartisan consensus we need in this country if president reagan were
to try to implement some of these rather bizarre suggestions congressman camp if the house were to amend your camper off or cut tax reduction proposal as you suggest to make it more progressive would that there would that tactile it until its effectiveness in your view well of course it would because it is it in another selfless steeply progressive nature the steeply graduated nature of the federal income tax system that is allowing income was nominally to be pushed up to keep up with the calls alleging that which is pushing bold labor and capital into higher and higher tax brackets are now at steelworkers in buffalo dr q at the margin that is at some point during the year on the next dollar that they might learn from wages or run from a savings account who find themselves again at the margin in about a fifty percent plus bracket and that is discouraging to the steel worker as it is the entrepreneur and the only way to reduce that bias in the tax codes again in the
tax code against a labor and capital is to reduce the marginal rates such as the president kennedy did in the early nineteen sixties but unfortunately steve is really arguing against a strongman there's no one suggesting that fifty billion dollars big dig out a revenue sharing and a mass transit or that tax rate reductions are going to cause huge dislocations of the social programs of this country i would make a case as president kennedy made the case early nineteen sixties that the major roadblock to us high level of of prosperity to a fact he said a major roadblock to full employment is a heavy burden on taxes on them back to the american people he's its time has come to remove lead well the only difference between them and now is not only the decline in the value of us currency but the fact that we now have people thank you and three times the size of tax burden as alan greenspan pointed out is going higher do nothing is to let the tax burden climate i don't think that steve was to further throw this economy into the recession as it is now when
people aren't worth to fight inflation i'd like to make it very clear that i support tax reductions not only in business taxes but also in personal income taxes but i find it very difficult to support tax proposal which business week which is hardly the most radical journal we're in this country said would touch off an inflationary explosion that would wreck the country and impoverish everyone on a fixed income and while i have great sympathy for the steelworkers in jack's district i doubt that there are too many of them that are earning two hundred thousand dollars a year and i don't see how you can justify they cut in personal income taxes which enable someone with an income of two hundred thousand dollars a year to reduce their taxes by fourteen thousand dollars where someone was earning fifteen thousand dollars a year and gets a cut and taxes of only a hundred and forty six dollars i think that's regret say wow that's a very short and limited view of what they were actually doing actually you're talking about reducing a marginal brackets that right across the board of all the american people and i will tell my friends tease
solari said if he doesn't already know it had a lower rate of taxation would actually bring some of that in combat in iraq since two thousand and five they are solely responsible for its content the funding for this program has been provided by the station and other public television stations and by grants from exxon cooperation the corporation for public broadcasting and at and t and the bell system company in a
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