Banner Graphic, Volume 13, Number 114, Greencastle, Putnam County, 20 January 1983 — Page 2
A2
The Putnam County Banner-Graphic, January 20,1983
Ex-Treasury aides say increase taxes
c. 1983 N.Y. Times News Service WASHINGTON A bipartisan group led by five former Treasury secretaries urged Wednesday that Congress and the Reagan administration make severe cuts in government spending and enact large tax increases to bring federal budget deficits to less than half their current level. The group, called the Bipartisan Appeal on the Budget Crisis, said it was concerned that the current fiscal course is “senseless” and threatens to lock the economy in stagnation i f° r the remainder of this century.” Membership of the group includes 500 government, business and academic leaders, along with the five former Treasury secretaries: C. Douglas Dillion, of the Kennedy and Johnson administrations; Henry H. Fowler, of the Johnson administrator John B. Connally, of the Nixon administration; William E. Simon, of the Ford administration, and W. Michael Blumen--thal, of the Carter administration. It was organized by Peter G. Peterson, chairman of Lehman Brothers Kuhn Loeb Inc., and a secretary of commerce in the Nixon administration. ‘ In a news conference Wednesday, the group • called for spending cuts and new tax revenue ; which to reduce the projectedl9Bs deficits by <sl7s billion to $75 billion. To do so, the group called for greater cuts in scheduled spending • increases than President Reagan’s budget ‘-writers are currently contemplating for the ♦fiscal 1984 budget that the president is ♦scheduled to announce on Jan. 31. ■ According to the group’s calculations, the •federal deficit, if unchecked, would rise to $250 billion in fiscal 1985, representing an unprecedented, sustained level of more than 6 percent of the gross national product. The deficit fiscal 1982, which ended in October, was $110.7 billion, and it is expected to be about $l9O billion, in the current fiscal year. The president’s 1984 budget proposal is expected show a deficit of about the same level. The group proposed reductions in future defense spending by $25 billion, cutting the nondefense budget by S6O billion and tax increases, mostly on consumption, by an additional S6O billion. Peterson called the projected budget deficits “unprecedented, unending, growing and grotesque” and stressed that the coalition was not “pointing fingers or assigning blame” and said that the current budget crisis has “deep roots in every administration and Congress which has served over the last 20 years.”
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The proposed $175 billion in spending cuts and tax increases would include: programs, as federal benefits are called, and other non-defense programs. These would include a one-year freeze on cost-of-living raises for Social Security, veterans benefits and civil service and military retirement. After the first year, the proposal would put a limit on cost-of-living increases (such as a 4 percent gap, or adjusting only for the amount of inflation in excess of 3 percent a year.) “real” rate of growth of defense programs after adjusting for inflation from 9 percent, as proposed by the president, to 7 percent. The group said this would still allow for about an 11 percent increase in hardware purchases. —s6o billion in ii.creased "consumptionbased” taxes and user’s fees. Raising individual or corporate income taxes would impede savings and investment. The proposed tax increases would be in sales or other taxes. John B. Connally, in particular, suggested moving towards a “value added tax” on consumption, a form of sales tax widely used in Europe. —ls the prior steps are undertaken now, it would cut fiscal 1985 deficit by about $145 billion. This in turn, could lead, through less federal borrowing, to a further deficit reduction of about S3O billion in lower interest payments. In addition to immediate action to slash the budget deficits, the group calls for Congress and the administration to examine the impact of the “overvalued dollar,” and its “enormous negative effects on jobs and exports.” Blumenthal said that “our overvalued dollar undermines the international trade picture and breeds protectionism worldwide, it undermines and destroys our competitiveness in world markets.” Last year, when the group made its first call for deep spending cuts and large tax increases, Reagan said he was in “general agreement,” on the need to reduce government spending. But he added that the group is not “in a position now where they have access for example, in discussing defense budgets to all the information that is necessary to make the decisions.” Asked Wednesday what new steps the group would'take to get its program implemented, Peterson said, “we’re under no illusions about the immense difficulty of what we've proposed.”
JOHN CONNALLY 'Value added tax'
MICHAEL BLUMENTHAL 'Breeds protectionism'
ITJ
WILLIAM E. SIMON In Ford Administration
At midpoint of his term, Reagan sees recovery
WASHINGTON (API - With the nation suffering its hardest economic times since World War 11, Ronald Reagan today reached the halfway point of his presidency, saying, “America is now coming through a painful period of adjustment and recovery.” As Reagan begins his third year in the White House today, the second anniversary of his inauguration, aides say his biggest disappointment is unemployment, now at its highest level in 42 years. Twelve million Americans are looking for jobs. “The millions of unemployed now form a sea of unused minds, talent, and energy,” Reagan said in a speech Wednesday night in Chicago. “We must not turn our backs on their pain, nor waste their mighty resource. “We will need the strength of every back and power of every will to lift us to recovery,” Reagan said, “and we’re not going to rest until every American who wants a job can find one.” The president, who came into office promising to balance the
Opponents vow fight
Final Social Security plan ready
WASHINGTON (AP) - The Social Security reform commission’s final report on a plan to save the retirement system is arriving at the White House and the Capitol with opponents vowing to fight recommended payroll tax hikes and levies on benefits. Also included in the final report due today is a strong recommendation from nine of the panel's 15 members to gradually raise the retirement age from 65 to 66 in the early years of the next century, meaning those born in 1949 or later would have to wait an extra year to begin collecting full retirement benefits. Sen. William L. Armstrong. R-Colo., said Wednesday the proposals of the National Commission on Social Security Reform, once they are un-
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federal budget by 1983, now is struggling to keep the deficit below S2OO billion for fiscal 1984. Without referring to his earlier deadline for eliminating deficits, he told the Chicago audience: “I also have a personal dream that I will see the day we not only balance the budget, but begin to make payments on the national debt.” Speaking at a fund-raising dinner for Republican Sen. Charles Percy’s re-election campaign, Reagan said, “A high priority must be to get a hammerlock on this monster known as the federal budget. “Deficits continue to loom in the future, clouding the confidence we must have for
derstood by “middle America, on Main Street and all over the country," will prompt “howls of outrage and in my judgment encourage Congress to make some significant changes." The commission's plan, unveiled Saturday, would generate $169 billion in new revenues or reduced expenses between now and the end of 1989. in part by higher payroll taxes and a six-month delay in this July’s cost-of-living increase, expected to be about 5 percent. The plan won a 12-3 commission vote and the endorsement of President Reagan and congressional leaders. Armstrong, chairman of the Senate Finance Committee's subcommittee on Social Security and one of the three who voted against the rescue plan, said in a written dissent
Indians calling for Watt's scalp after his latest remarks -
WASHINGTON (AP) - Interior Secretary James Watt says his remarks describing the “terrible socialism” on Indian reservations are being misinterpreted and he is not advocating the abolition of the reservations. But New Mexico Gov. Toney Anaya, a Democrat, said Wednesday that Watt should be fired, and an Indian leader said Watt’s statements were the greatest threat to the Indians’ “God-given culture since smallpox." On an interview program broadcast by the Satellite Program Network, Watt said, “If you want an example of the failures of socialism, don’t go to Russia. Come to America and see the Indian reservations.” Watt said government policy toward the 735,000 Indians living on reservations had led to
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world
recovery,” Reagan said. “We must not allow gaping deficits to block the economic growth that alone can bring lasting recovery. He passed up a chance to give a preview of the new budget he will send to Congress on Jan. 31, but said the budget “must be fair to all our people” and the nation at the same time, “must meet our defense needs. ” Although the nation is in its worst recession since World War II and economists are predicting only a weak recovery this year, Reagan said, “America is now coming through a painful period of adjustment and recovery.” The Commerce Department
included with the panel’s final report that it relies too heavily on taxes. “Including revenue from expanded coverage, higher taxes account for 75 percent of the proposed deficit reduction between now and 1990 billion out of the $169 billion total," Armstrong said “In the long run, the balance is even more lopsided. Tax increases constitute 91 percent of the commission's total recommendation." Armstrong also attacked a provision of the pact which would tax benefits going to retirees with an income of $20,000 or more. The other commission dissenters were Rep. Bill Archer, RTexas, and former Rep. Joe Waggoner, D-La
the “highest divorce rate, highest drug rate, highest alcoholism rate, highest unemployment rate, highest social diseases" in the country. The interior secretary called for the Indians to be given their freedom instead of being treated as “incompetent wards” of the state. He used the phrase “terrible socialism” to describe the reservations. Many Indian leaders saw Watt’s comments as a veiled threat to renew attempts to abolish the reservations and sell off the 50 million acres of reservation lands. “All of this is part of a pattern going on for the last year and a half calling for termination of the Indian tribes,” said Elmer Savilla, former chairman of the Quechan tribe of California and executive director of the National Tribal Chairmen's
released figures Wednesday showing the U.S. economy as measured by real, or inflationadjusted, gross national product fell 1.8 percent last year. “We are suffering the structural problems of an industrial society being transformed into more of a service and information society, as well as paying the price for years and years of big spending, big taxing, and over-regulating in Washington,” Reagan said. “In the long run,” he said, “economic growth will put our unemployed back to work, revive idle factories, and open new doors of opportunity.”
Even before the final report was released, commission sources who asked not to be quoted by name said a majority was recommending that the retirement age of 65 be gradually pushed up one month a year soon after the turn of the century until it reached 66 in the year 2015. The aim would be to wipe out the remaining third of Social Security’s long-term deficit that would remain even if all of the panel’s recommendations become law. Meanwhile, former Social Security commissioner Robert M. Ball had said he and several other Democrats on the panel would suggest a payroll tax increase of about 0.45 percentage points in the year 2010 as.an alternative to wipe out the rest of the long-term shortfall.
Association. Savilla said his organization, which represents 154 Indian tribes, would hold an emergency meeting Monday to vote on whether to seek Watt’s ouster. He predicted the majority of the tribal representatives would support such a resolution. Anaya asked President Reagan to fire Watt because of his “ignorance and insensitivity to the environment and cultures ’ of our country. His idea of Indian rights is to integrate them' into the American society ...' and open them up to exploiters.” Watt, interviewed in Miami after a speech, said, “I have; had people calling for my resignation for a long time.; That’s nothing new.” But he said his remarks arebeing misinterpreted.
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