Friday, June 4, 1971 - 8:56pm - 9:02pm
Richard Nixon, John Ehrlichman
White House Telephone

President Nixon: Yeah.
White House Operator: [Chief Domestic Policy Adviser]Mr. [John D.] Ehrlichman, Mr. President.
John D. Ehrlichman: Hello.
President Nixon: How'd you get along with [Treasury Secretary John B.] Connally?
Ehrlichman: Oh, fine. We had about an hour and 45 minutes. [Office of Management and Budget Director] George [Shultz] is out of town, but [International Economic Policy Adviser] Pete Peterson went over.
President Nixon: Yeah.
Ehrlichman: [with Nixon acknowledging] And we talked all around short-term problems and then long-term problems. And I thought it was very helpful.
President Nixon: Does he have any ideas about the short-term problems?
Ehrlichman: He . . .
President Nixon: That's the main thing now.
Ehrlichman: He was skeptical of any short-term reaction. We have come up with one idea . . .
President Nixon: Yeah.
Ehrlichman: . . . that I've got my people working on for a response to the veto problem on public service jobs.
President Nixon: Right.
Ehrlichman: And that is to lift the public service jobs section right out of HR 1, which is something that we've already approved and advocated, and put it in a separate bill and send it up to the Hill with a message the same day that you veto the other one.
President Nixon: What does that provide?
Ehrlichman: [with Nixon acknowledging] Well, it actually provides more jobs. It provides something like 400,000 was the estimate. Now statistically, that's not going to make a whole lot of difference.
President Nixon: You mean in the . . .
Ehrlichman: Rate.
President Nixon: . . . unemployment rate. Yeah.
Ehrlichman: In the rate.
President Nixon: But it shows action and concern.
Ehrlichman: It shows action, and it shows commitment to the concept.
President Nixon: And also the fact that we're trying to do more than they . . .
Ehrlichman: That's right.
President Nixon: That's what I want to do is to say this provides not enough, and we want more.
Ehrlichman: Well . . .
President Nixon: That we need to act specifically on this problem.
Ehrlichman: This you could do and still be faithful to everything that you've done up until now.
President Nixon: Yeah.
Ehrlichman: Because it would simply be [House Ways and Means Committee Chairman] Wilbur Mills' [D-Arkansas] own . . . the language that he and the committee have already approved on which they've already had hearings.
President Nixon: Right.
Ehrlichman: So we could get speedy action.
President Nixon: Yeah.
Ehrlichman: [with Nixon acknowledging] And it has the advantage, then, of going into effect sooner than the provisions of HR 1, which would be a year delayed. Now, our budget friends are going to have trouble with that, because it means we'll be spending some of the money in fiscal '72 instead of '73.
President Nixon: [Chuckles.] Doesn't matter in '73.
Ehrlichman: We'll find the money someplace else.
President Nixon: Doesn't matter in '73.
Ehrlichman: Right.
President Nixon: '72 is the time to spend it. '73 will be too late.
Ehrlichman: [with Nixon acknowledging] Well, I have them working on this. I don't know what technical problems there might be in it, but I think it's in concept the best thing that we're able to come up with so far. And both Peterson and Connally seemed to think that it was good. Now, we talked quite a lot about goals, about problems of tax increase.
President Nixon: Right.
Ehrlichman: About picking a villain.
President Nixon: Right.
Ehrlichman: Looks to us--”
President Nixon: Like labor.
Ehrlichman: --”on very short consideration, like maybe the unions are the target. [Nixon acknowledges.] And it was quite a ramble [laughs].
President Nixon: I understand.
Ehrlichman: [Unclear.] all over the map.
President Nixon: That's all right. We'll do a little thinking about it, and then we can . . .
Ehrlichman: Some of it will be reflected in the presentation that we make to the Domestic Council on Tuesday.
President Nixon: Right.
Ehrlichman: But it'll be veiled and cut quite a bit.
President Nixon: Right.
Ehrlichman: I'm going to try and . . .
President Nixon: OK.
Ehrlichman: . . . give them a pretty . . . give quite a bit of time for just free discussion.
President Nixon: Yeah, yeah. Well, actually, in terms of the economic thing generally, while it is on sort of a plateau--”the unemployment thing--”it is really not a significant thing as of this point. You know what I mean?
Ehrlichman: That's true, that's true.
President Nixon: You can't . . . you can't take a tenth of a percent and say well, that's a lot, of course. And they say it's the highest in nine years. Well, the way you should say the highest since [John F.] Kennedy.
Ehrlichman: He's . . . Connally's feeling is that we ought to simply drumfire home the highest employment figures. A lot of people were employed, a lot of new people were employed, nobody was laid off . . .
President Nixon: Yeah.
Ehrlichman: . . . and that it was a matter of simply . . . unprecedented numbers coming into the market.
President Nixon: Mm-hmm.
Ehrlichman: And just keep pounding on that. He said really, apart from public service jobs, your alternatives are all very profound in terms of controls and so on.
President Nixon: And very bad. Yeah.
Ehrlichman: And he just . . .
President Nixon: Yeah.
Ehrlichman: . . . he just felt strongly that we shouldn't be stampeded at this point.
President Nixon: Not at this point. OK, fine.
Ehrlichman: There is one question that came up this afternoon with regard to Pete's presentation to the Congress. [Nixon acknowledges.] When he puts that show on for the Congress, that is going to pretty much cast the die in terms of . . .
President Nixon: Quotas?
Ehrlichman: Well, something. You know, economic war of some kind or other. Because the congressmen are only going to read the black bold type.
President Nixon: Yeah.
Ehrlichman: And I just raised the question without knowing the answer as to whether we're really satisfied that we've got to take that jump right now and that we're ready to take it.
President Nixon: You mean you wonder whether we ought to do it to the congressmen.
Ehrlichman: I just wonder whether Pete has really had a chance to think through . . . he's got an excellent statement of the problem.
President Nixon: Did you raise that with him?
Ehrlichman: Well, I will tomorrow.
President Nixon: I think you'd better--”
Ehrlichman: All right.
President Nixon: --”but we haven't invited him yet, have we?
Ehrlichman: I think so, but it isn't irretrievable.
President Nixon: Mm-hmm. We could postpone it, yeah.
Ehrlichman: Oh, sure. Sure.
President Nixon: I think we might.
Ehrlichman: I just have a little concern about whether we aren't taking the first step of a long journey without knowing where we're going.
President Nixon: Yeah . . . yeah. And what we're going to do about it.
Ehrlichman: Right.
President Nixon: Yeah. Well . . .
Ehrlichman: I'm going to have lunch with him tomorrow, and I'll talk to him about it.
President Nixon: Fine, fine. OK, John.
Ehrlichman: All right.
President Nixon: Thank you.

Original tape courtesy of the Nixon Library. This transcript is a working draft. Please let us know if you find important errors.