U. S. FOREIGN POLICY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00957A000100070043-6
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 4
• Document Creation Date: December 20, 2016
• Document Release Date: January 11, 2006
• Sequence Number: 43
• Publication Date: September 26, 1974
• Content Type: OPEN

Approved For Release 20071021Z4 : CIA- RDP79-00957A000.1 00070043-6
September 26, 1974 CONGRESSIONAL RECORD -SENATE
S17585
the way to the conference table, TO -a, confidence o,- the `;meri':aa consumer speak-a political eon a+go I chose to title
great extent, the paramount concern_be has apparently gone amiss, and that my remarks: The Future Price of Neglect."
came that of, fighting a recession. In bodes ill. No effort can be successful Now we have a new Administration, open-
Ing up new possibilities for foreign policy
,,, ,S and CO.
comefs; t h at is understandabl e The without the backin, initiatives. And I want to make a few sug-
ecisno is indicators of the past .,few, operation of the American uppQit people, It is gestions as to how this Administration's
weekS_ evidence a detcrlora l0fi ?;n ,.,the, certainly true. that the Federal Govern- foreign policy agenda might be re-ordered.
ward. But, just as these, indicators, are
real, so is inflation. It has. not disap-
peared, and recent increases in the
wholesale price index, as well as recent
wage increases, suggest that it is_ not
likely to do so.
So distinguished an economist as John
Kenneth Galbraith has Warned us
against this pitfall. And, as an article in
the Monday Wall Street Journal noted:
It's not hard to understand why the sum-
mit focus is shifting from inflation., to reces-
sion. For one thing, the economy as shown
signs of weakness in the past month or so,
suggesting that recession may rival inflation
as an economic problem in 1975. But perhaps
more 'basic is Professor Galbrath's point:
Fighting recession is more familiar-and
more fun-than fighting inflation.
Certainly, no one should overlook the
signs of downturn. That would be to
overlook problems of far-reaching di-
mensions which impact hardest on the,
less fortunate in our society. But, at the
same time, neither should we overlook
the ubiquitous inflation Monster, which
stalks each of us in, each of .our shop-
ping `trips and which imposes an addi-
tional burden upon those already suffer-
ing as a result of the other weaknesses
irl the economy.
.Second, when the five original cospon-
sors of the summit conference ,resplution
Introduced our legislation, we, all stated
our belief that there would have to be
compromise, negotiations, and.. even sac-
rifice, If we were to come to grips with
the economic problems facing our
During, a whole series of presumm
ferences,,sector after sector of the
lean economy indicated not what
willing to do to pull us out of the c
Government.
It is, of course, true that Christ
not always the right one for the s
and there was a, great deal more
In this Nation and perhaps the id
belt-tightening does not t have very
appeal.; flue, there are few observer
nomic ' difficulties, without making ome
hard decisions relative to prioriti in-
come distribution andallotmertt qi arce
resources, whether the latter .be pital
or material,
Finally, several recent surveys suggest
that the American people are less than
impressed with the pre-summits and the It is a privilege to meet with you today
upcoming conference. Thus, again a to discuss our mutual concern with American
funny thing happened on the way to the foreign policy,
conference table. A.move to restore the
willingness to make )id execute the res-
olute policy needed to come to meet our
problems. But, the A;ierican people must
also demonstrate not only that they will
cooperate, but. also that they will demand
of their elected repre,entatives that there
be moves in the right direction.
Time is running out. But, the final
second is not yet here, and there is still
time for those participating in the con-
ference to put aside r, arrow self-interest,
to seek to address the broad scope of cur-
rent economic problems and to demon-
strate to the American people that all
sectors are ready and willing to move
forward together.
Without that, we will be left with a col-
lection.of information which may be
valuable, but we wilt have lost a more
valuable opportunity to define, explain,
discuss and negotiate a treaty among the
American people--a treaty among Gov-
ernment, business, laaor and consumers,
containing terms necessary to thwart the
frictions which can tear us apart over
the food we eat, the clothes we wear, the
houses we live in, the heat against the
winter cold, and a host of lesser things,
and a commitment to abide by those
As a nation whicl' remains the last
best hope for a way of life and a system
of government, we bear a grave respon-
sibility-and we face a challenge which
must be met. Failure to do so may hold
consequences far be,7ond our personal
U.S. FOREIGN POLICY
Mr. MUSKIE. Mr. President, last week,
our colleague from Texas (Mr. BENrsEN)
addressed a meeting of the Foreign Pol-
icy Association of New York. In his re-
marks, entitled "American Foreign. Pol-
icy: The Future Price of Neglect," Sena-
tor BENTSEN discussed the price this
country is paying--a:id will continue to
pay-for neglecting several aspects of our
foreign relations. Spe;ifically, he percep-
tively analyzes how the present adminis-
tration, despite c, trtain ? diplomatic
achievements of the last 51/2 years, has
badly neglected our European and Japa-
nese allies, our Latin American and Ca-
nadian neighbors, a broad range of inter-
national economic issues, and our histor-
ical role of moral leadership.
Mr. President, I urge all Senators to
read this thoughtful address, and I ask
unanimous consent that it be printed in
the RECORD.
There being no objection, the address
was ordered to be printed in the RECORD,
as follows:
AMERICAN FOREIGN POLICY: THE FU'.,uRE
The President said, this week fat1; ..will
ask Members of Congress whether we should
change the procedures for reviewing the
Work of the "40 Committee"-an organiza-
tion so secret that millions of Americans are
only now learning of its existence.
We must make some changes. The revela-
tion, well after the fact, of C.LA involve-
ment .in the domestic affairs of Chile, points
up the urgent need for a new way of doing
business.
Perhaps it was, as President Ford said,
in our national interest to step in and pro-
tect opposition news media and opposition
political parties from the Allende regime.
But who made that determination? Who
is responsible for deciding what is in our
national interest? And to whom are they
accountable?
Every two years, across the land, we debate
the issues confronting our country. Every
two years, the people of the United States
elect spokesmen who answer to them, to
chart our nation's course, to decide what is
in our national interest.
The C.I.A., the 40 Committee and other
intelligence organizations are instruments
for implementing foreign policy . . not
shaping it. They are responsible for carry-
ing out activities and programs in our na-
tional interest; but after elected officials-
accountable to the people-determine where
our interest lies.
The proper arm of Congress must not be
kept in the dark about the covert activities-
'
of any agency or bureau of this government.
It is important that Congress and the Presi-
dent, working together, devise_ a workable,
effective Congressional review prcess to help
insure that those activities are, indeed, in
our national interest, that the C.I.A. imple-
ments, but does not make our foreign policy.
When President Ford declared inflation
our Public Enemy No. 1, he created the ini-
tial impression that his Administration will
emphasize domestic policy, which most peo-
ple agree was neglected by the Nixon Ad-
ministration in its hot pursuit of foreign
policy.
It is almost heretical to suggest that the
Nixon Administration neglected foreign pol-
icy-the one area of performance in which
it is generally given high marks.
But that is a judgment I made some
months ago, and a judgment I make today.
I do not intend to castigate a President
who is no longer in office to defend himself.
I do not want to detract from his real
accomplishments abroad, for which we can
be truly grateful.
But i do want us to take a realistic view
of where we stand in the world arena-and
of the price we are paying, and will continue
to pay, for neglect in our foreign policy.
And there has been neglect-dating back
to the Nixon Administration and beyond.
There has been neglect of our European
friends in the Atlantic Alliance.
There has been neglect of our hemispheric
neighbors in Latin America and our friend
to the north, Canada.
There has been neglect of our relationship
with Japan as a friend, ally, and major trad-
ing partner.
There has been neglect of the emerging
Third World nations-such as Nigeria and
Indonesia-that are destined to play a vital
role in world politics.
There has been neglect of a whole broad
range of economic issues that are having an
increasingly serious impact on international
peace and stability.
And there has been neglect of our histori-
cal role of moral leadership and spokesman
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 S 17586.
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CONGRESSIONAL ItkWIW---SLNATE September 26, 131'
for humanitarian values In the corners of the
World where we have closed our eyes to official
oppression.
On the positive side, we have seen the
withdrawal of our military presence from
Vietnam. We have seen tensions eased with
China and the Soviet Union and Eastern Eu-
rope. We have seen some Impressive personal
diplomacy over the past few years, and some
her_,ic peace-keeping efforts in one trouble
spot after another.
But we have NOT seen the emergence of
a coherent, global foreign policy. Instead we
have seen a foreign policy dominated by a
triangular relationship with on.tr former
adversaries.
An easing of reiatons with China and
Russia is well and good, but the world is a
sphere, not a triangle.
A policy based on the concept of three
major power bases leaves out too much.
In the process of furthering amicable rela-
tionships with China on the one hand anti
the Soviet Union on the other. we have
neglected too many other important facets
of our foreign policy-in particular, our tre-
dittonal allies.
That neglect has been deeply felt.
A measure of the depth of Injured pride
can be seen in the fact that French President
Olscard d'Estaing was quick to observe that
President Ford made absolutely ro mention
of Europe In his address to the joint sesmstoll
of Congress. So President Giseard-and
others-have suggested that It is time for
Europe to "go It alone
It is easy to don the armor of isolation as
a protection against wounded pride. But
isolation Is not the answer--for Europe or
for us.
it is not only unwise--it Is impcosible_ Our
fortunes are so inextricably bound together
that we could not sever the bonds If we
tried.
In spite of occasional geopolitical differ-
ences, we cannot ignore the ancient emo-
tional and cultural ties that bind the Misr-
tic nations together, any more than we can
ignore our political and economic ties.
The European Alliance remains the most
basic element of our foreign policy--and the
basis for our national ,security. At the same
time, the United States remains the guar-
antor of European security.
It is in our own best Interests to sup-
port the Atlantic Alliance as an essential
force to maintaining a safe international
system. We must also recognize that strains
on that Alliance pose threats to the sta-
bili.y of the Western Hemisphere We can-
not afford to permit the Alliance to be
weakened.
But it has been weakened-by our pre-
occupation with Russia and Chi-us; by di:--
agreement over trade and monetary issues;
and by our serious failure to consult ade-
quately with our long-time European allies
on a wide range of pressing i-tuex
So It Is not surprising that Europeans
have lost faith In the U.S. commitment to
Europe's defense, or that some among them
even question the continuing viability of the
Atlantic relationship.
The Europeans, who are far more depend-
ent on Arab oil than we are. are vitally con-
cerned with the Middle East. But when war
erupted there, our Secretary of State new
directly to Moscow without stopping at even
one of the capitals of Western Europe.
It is small wonder that our allies suspect
us of empty rhetoric when we call for
greater coordination In policy formulation--
and then bypass them in vital considers-.
tions. Their suspicion Is reinforced when we
give lip service to European Integration, and
then react in a hostile manner when Euro-
peans try to speak withone voice.
National interest and the determination of
where that national Interest Iles may not
'carry the United States and Europe in the
same direction at all times--as we saw dur-
ing the diddle East crisis. But this is all
the more reason to maintain a framework
for consultation in cider to avoid future
problems,
We need to strengthen that framework--
and we need to make use of it.
We have too much invested In NATO to
permit it to come unraveled. But a series of
conditions makes this all too passible:
The fear of nuclear holocaust and Soviet
agire&,ion has faded to the extent that con-
scription has been a iminated In most of
Western Europa, as it has in the United
:jtftteri.
The energy crisis ha; hastened a review of
turvpean attitudes to`sard the Arab world.
economic inatabiilt% has resulted in pres-
:cures for reduced defense budgets.
Given these conditicru;. it Is clear that the
parties to NATO will have to exercise great
care and restraint to Inure the intergtty, co-
hesion, and effectiveness of the Alliance.
Now, turning to Asia, it Is reasonable to
ask what we have actually gained from our
new relationship with China-which still
rests on a rather shaky foundation. The old
order is passing in Comniunlst China, and
we cannot predict now what direction new
leadership will take, or how the "cultural
revolution" will affect our policy there.
In pursuing that policy -which the Nixon
kdmtnistration obvios=sly saw as one of the
keys w the Vietnam solution-we again
neglected our traditional allies.
Japan-our most important Asian ally and
trading partner--was not even forewarned
of this shift In polic which could vitally
affect its interacts. Not were any of our other
friends who had loyally supported our policy
of Communist eontfinment through the
Cold War Era.
Among those friend:., none has given more
loyal support than the Latin countries, who
for more than two decades followed our lead
in isolating Cofnmuns-t China. In spite of
crowing misgivings, they consistently cast
their bloc of 20 votes to exclude Communist
China from the United Nations.
Likewise, and with even greater mnisgiv-
ings..hey backed our policy of boycotting
Cuba and denying 1; membership in the
OATS.
But our sudden reversal of policy in
China-without the courtesy of consultation
or advice-left the Latin countries out on a
limb, and understandably ambivalent about
continuing support of our Cuba policy. Now
we are seeing an erosion of our position on
Cuba--and our leadership In Latin Amer-
lea--as more and more Latin American
countries move toward establishing closer
ties with Cuba.
This Is just one example of the price we
pay for a piecemeal and fragmented approach
to foreign policy In a dynamic world situa-
tion.
Foreign polity canr_nt be conducted on a
one-to-one basis. Nor can it be conducted
as an exercise in crisis--hopping.
I don't want to downplay the importance
of our initiative toward China, which I
heartily approved at the time and continue
to approve. I would welcome similar initla-
tiams to other nations from whom we have
been estranged-but NOT at the expense of
our traditional friends and allies; NOT as
unilateral actions, bypassing the alliances
to which we are committed. If we continue
to ignore them, we may lose more than we
gain.
If we learned anyth:rig Irom our experience
with Communist Mina. we learned that
20 years of noncommssnication and isolation
handicapped us as intneh as it did the
Chinese.
We learned that we cannot afford to live
in. Ignorance of any other nation in this
shrinking world.
rest year. I called on the Nixon Ad aln-
istration to normalize relations with Cuba.
It now appears that the Ford Administra-
tine is moving In. that direction. The signals
are encouraging, and we can hope for an
end to a period of Isolation that is in-
ecnsistent with our policy toward other
communist regimes and detrimental to our
relations with Latin America.
ironically, our closest neighbors have been
the most neglected. In our concentration on
Big Power diplomacy, we have overlooked
their growing importance in international
trade and hemispheric stability. Our own
national security is deeply involved with the
development of Latin America. -
I feel an Instinctive reluctance to use the
term "national t;ecurity" because it was so
blatantly misused and abused by an Admin-
istration that was distinguished by its cor-
ruption of the language. But that is past-
and it is time to revive the term In its
ptoper meaning and to examine the concept
in a broader context.
National security implies not only mili-
tary strength and an adequate defense
budget. It includes the goodwill and trust
of our global neighbors. It includes the
careful cultivating of attitudes that make
military solutions unattractive. It Includes
economic well-being-for no nation is more
insecure than one that is haunted by eco-
nomic Instability.
President Ford Is correct in placing Infla-
tion at the top of the national agenda and
lit should place It at the top of his foreign
policy agenda as well. No reasonable person
can question that inflation is a major threat
to any nation's security. Including our own,
But In declaring war on Inflation, we have
to be careful to avoid two great mistakes.
One is the mistake of turning inward-
of treating inflation as only a local phe-
ne'menon when it is also a global problem,
seared by industrialized and emerging na-
tions alike. Indeed, our own rate of inflation
is considerably behind that of Japan, Brit-
ain, Fence and Italy. In Italy and Great
Britain, national bankruptcy is a real pos-
sloillty.
The other mistake is to concentrate on
Inflation to the neglect of a whole range
of increasingly complex economic issues
that have been neglected too long. These
Dues, too, are global in scope, and de-
serve a higher priority on our foreign policy
agenda, World-wide food shortages and
scarcities of raw materials; the growing
threat of trade wars; limitations on access
to supplies and access to markets; the stock-
piling of petrodollar reserves that jeopardizes
the international monetary system-all these
are world-wide economic problems that have
an impact on our national welfare and must
be given consideration in our total national
policy.
We must also be aware that inflation and
economic instability pose a serious threat
to our national defense posture.
Arms control is an Important element in
maintaining the balance of peace-and I
support continued efforts to reduce strate-
gic armaments. But an equally important
element is the control of economic prob-
lems, at home and abroad.
Right now, cutbacks in NATO commit-
ments appear Inevitable, as Europe strug-
gles with unbalanced budgets. The Dutch
and the British are considering troop re-
ductions, and Western Europe is natuxally
apprehensive about troop reductions the
United States might make in view of our
own economic problems.
Chancellor Helmut Schmidt gave voice to
this apprehension when he asked President
Ford to advise him of any policy changes
that could affect Germany and urged that
no remedial measures be taken without con-
sideration of the impact on the European
economy.
This Is a real and valid concern. The pre-
carious balance of the world economy could
easily be upset by unilateral action in any
4uarter. If we doubt that for a moment, we
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Se -
'ember 26, 1974 CONGRESSIONAL RECORD - S~NA l 1 / JO 1.
have only to recall the shattertnf'effects of through their polio' cs on-population con- er health personnel to underserved areas.
the Arab oil embargo and its cositribution to trol, industrial devel,isment and trade ex- There is probably not a single State that
double-digit inflation in a` growing number pansion, through their control of vital raw does not have medically underserved
of nation& materials, they have the power to disrupt areas in them, and few, if any, can point
?(IOvgrnments that fail to cope with prob- our economy and retard our economic any improvement in the last decade.
loins of ,runaway inflation and massive un- 'growth.
employment lose popular support. aiid people The notion of a Third World which, is poor In New Mexico, we have the problem
IYiay turn-'to leaders who offer simplistic so- and unimportant no onger makes sense. In also, and the shortage has gotten worse.
ltltioxis to complex, interlocking problems. Asia, in Africa, and i!, Latin America, there All of us are aware of the scarcity of
We must not forget the economic unrest 'are many poor count-ies-but they are not primary care doctors. The geographical
and loss of faith in democratic institutions unimportant. and specialty distribution problems are
that were the prelude to the rise of fiitler They are critical to our own welfare-be- related, because specialists have to prat-
and Mussolini. cause of their resources; because of their in population centers in order to earn
So as we hold our summit meetings on the population pressures; because of their in- t ice lice i in Family practitioners o the
economy, We should be aware that they are creased demand for f-)od and fertiliser; be- a g y p
not truly a 'domestic sunimi't, but another cause of their needs for development; and- other hand, can earn a good living serv-
aspect of foreign policy=and possibly the in some instances--because of their strategic ing far fewer people because they handle.
most neglected aspect. So neglected, in fact, locations. 80 to 90 percent of all the families' prob-
that the Administration has left the top We cannot afford to neglect them. lems. The family or general practitioner
economic job at the State Department vacant A foreign policy h,caed on the or.tmoded is trained to handle most of the family
since March. concept of Big Power! -in neglects too much. problems, referring the most difficult
The Nixon-Kissinger approach never gave True detente must address itself' to all praoes m the specialist.
sufficient weight to the economic issues that sources of conflict in a, complex and interde-
are at the forefront of international politics. pendent world. It 501St not be compart- All of us are aware, too, of the stag-
That is a dangerously misguided approach to mentalized or limited to certain countries, goring increase in the number of foreign
foreign policy. or to specific ideologi.al disagreements. medical graduates coming into this coun-
The tapes of the former President betray Our national security is at stake. And our try to practice in recent years. When
his atitude toward the economic problems national security depends on far more than a one-half of the newly licensed physicians
of our allies. "I don't give a--expletive de- lessening of tension with the U.S.C.R. and in this country are foreign medical grad-
leted-about the lira," Mr. Nixon said. But, China, as important is that might be. uates, as was the case in 1972, and when
it's time somebody started giving an "ex- It also depends oil the strength of the questions are raised about the
pletive deleted" because, in a real sense, NATO alliance; on our relationships with serious
when the lira has problems, the dollar suf- Japan, with Canada, with our neighbors in quality of these physicians, it is time to
fers too. Latin America and _ ,aiith other developing do something about the problem.
We have a tendency to try to divide that countries. It it obvious that we need to do some-'
which`is indivisible: politics from. economics, Our national security also depends on our thing about the. entire matter now. While
domestic policy from foreign policy. Unfor- response to the potentially dangerous pres- action is required, we must be sensitive
tunately, it is not that simple. sures of world-wide Inflation; food, energy to the rights of the physicians, and other
I am concerned that inflation and fear of and raw material shortages; the population health fights of the p who are and expect-
drift at, home may prompt a dangerous explosion and havoc in the international
drift into isolationism. There is a widespread monetary system. ing to serve, in underserved areas. A doc-
feeling that we should concentrate on our Finally, we need to reassert our moral tor draft is not the answer. Based an the
own problems for a change and let the rest leadership and bunra.nitarian concerns in available evidence of student receptivity
of the world look out for itself. our 'dealings abroad: to scholarship programs, and other in-
It will take strong leadership to counter- I agree with Secretary Kissinger that we centives for medical schools proposed in
act that impulse and to convince the people cannot interfere with the internal policies we sbe able to
that isolation is impossible. of other nations wherever they dlve:rge from the substitute problems bill, , we should
geographical
We live in one world. And whether we like ours. We must be sufficiently mature polit-
'It or not, we cannot withdraw from our re- Icany to maintain 4,-n lines of comrnunica- maldistribution and speciality maldistri-
lationships with other countries in that tions with countries whose policies and sys- bution. As Senator BEALL has pointed out,
hr
f
It is reasonable and constructive to hold
a summit to deal with our economy-so long
as we don't narrow the scope of the' problem
to one of purely national interest.
For, to be realistic about it, there Is no
longer a distinction to be made between na-
tional interest and global problems.
The problems of war and peace, of politi-
cal oppression and exploitation, of popula-
tion growth and food supply, of energy and
Industrial' development, of international
trade and access to raw materials, of trans-
portation and pollution-all these are global
problems-as is the problem of economic
stability which preoccupies us now.
And so I call on our policy-makers to take
a global view of the economy-,a global view
'and a long-range view, mindful of our obli-
gatiorns to our allies and to the developing
nations of the world.
or sC O -
terns of government: differ from our own. medical students have applied
We should refrain from forcing our values arships in return for service in rxl:edi-
on others. tally unders ved areas in surprisingly
But we should not be apologetic about large numb
particularly
those values., And we should not hold them encouragin n view of the very short
in silence. . Thisrams fact have is been in effect
og
When we neglect cur traditional ideals in time these
t
th
li
it
a
y
c
the name of "realism,," we pay the price in and the in t amounts of pub
cynicism and loss of self-respect. apparent ave been given to these pro-
This is a price we need not pay. Realism
and idealism can co-exist; both are essential
to a global foreign policy.
We need to forges foreign policy that is
consistent with our domestic policy-and
to make both consit-cent with our national
character at its best
HEALTH .PROFESSIONS ED
And again I urge a global approach to Mr. DOMENICI.. ent, I would
foreign policy. Big Power politics is an in- like to take this opportunity to express
creasingly obsolete concept. my reasons for supporting the substitute
Naturally, we should seek to Improve rela- health manpower measure cosponsored
tions with both Russia and China, reject-
ing the temptation`-to take sides in any con- 'by Senators BEALL, Dox NICK, and TAFT
filet between them, or to play off one side to S. 3585, the Heath Professions Edu-
against the other. cational Assistance Act of 1974.
But we cannot expect to build a structure While the sponsnrs of S. 3585 and the
of world peace on a special relationship with Labor and Public Welfare Committee are
either China or Russia while neglecting our to be commended fir their. thorough doc-
traditional'allies and `our potntialalleles. d1Ilientation of the problems of doctor iP. Th; -care bcse rollees a are ctors becoming the world shortages, the shortage of primary care
scen4 today whose roles major. physicians, and our overreliance on for-
the neglect them at our own risk. sign medical graduates, I believe they
in v past while small countries could recommended soi.u cons which are not in
Invol .affect Ye the great welffareera powers do war, the economic y oe well--rlbbeing not the best interests of the Nation.
r
of the great; powers. I agree with tie premise that ways
Now they can.. have to be found to get doctors and oth-
ality Act. In addition, this approach al-
lows the Federal Government to act in an
area where it clearly has jurisdiction..
Foreign medical graduates have served
to disguise some of the weaknesses in our
health system- by providing care in our
emergency rooms, our mental institu-
tions, and our inner-city hospitals. It is
time we dealt with these problems by
training U.S. citizens to assume these
responsibilities.
In addition, the substitute bill will
leave the licensure of physicians and
dentists where it belongs-with the
States. Above the legal questions raised
concerning Federal involvement in licen-
sure, the evidence doesn't support the ac-
tion proposed by S. 3585 as reported b3
the committee. States have made im-
pressive strides in devel,-ring uniform
standards for licensure for all States,
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 .1 CONGRESSIONAL RECORD-SENATE September 26, 19'74
With all but two States adopting the so- best be achieved only if income and received "great press." I urge that equal
called Federal licensing exannintstion-- wealth are more fairly distributed. attention be given to the possibility of
PLAmore uitabin li
t b
i
ti
i
e
tion, I think the fact that the issue has
been raised by task forces, commissions,
and others over the last 50 years reflects
a legitimate concern that physicians and
other health professionals continue to
provide high quality care for as long as
Ing recertification,
rural and underserved areas. Through
the Implementation of this provision, I
such an area In New Mexico for his own
health even working only part-time, MS'
amendment will permit States to develop
come a reality.
the Labor and Public Welfare Commit-
tee deals with the right problems, but
tends to exaggerate them. it proposed
-solutions which are not in the best inter-
ests of this Nation. The substitute pro-
manpower In proper perspective and pro-
poses solutions which fit the oroblemg.
TAX REFORM
Mr. MOSS. Mr. President, ,omorra
Its search for answers to our ecoi
crisis. I hope that a clear-cut an
emerge. Time for economic sun
running out.
men t of
should be high on this list of major doubles in value is really no better off in
legislation. terms of purchasing power. In the name
Tax reform came unexpectedly to the of tax equity, so the argument goes, ad-
foreground as a political issue during ju~tment of this inflation should be by
the 1972 Presidential campaign, However, the tax system. This argument sounds
it was soon elbowed aside by the prospect good, but I fail to see how reducing
of peace in Vietnam and charges of po- capital gain by 1 percent a year for each
litical corruption. The need for tax re- yeitr an asset is held in an equitable
form has not diminished. In fact the re- solution, This will result in lavish ben-
cent inflation has increased the urgency efts to the wealthy and in most cases
for meaningful reform. Tax reform pro- more than compensate them for the ef-
vides an opportunity for the Congress to feet of inflation on their assets.
not Drily minimize the effects of infra- The easiest and most efficient way to
lion. but an opportunity to fight infra- elkninate the effect of inflation in the
tion. measurement of long-term capital gains
Many experts believe that inflation is is to express both the original cost of
a natural result of large budget deficits tht asset and the sale price of the asset
inequality;Nvill Increase as will the reali-
zation that economic expectations can
s
q r
u
on of
n- n;ducing our deficits by increasing our
come can be accomplished in several revenues throw' tax reform. In my view,
ways; by Got ernmeut programs and sub- the budget p e in the years ahead
sidles that go to the less affluent but are will not'only a inue to be a tight one
paid for by the more affluent, such as but expen es will outstrip built-in
welfare benefits; by tax-funded Govern- revenue wth. Legislation for addi-
meut programs such as national health Banal t revenue will most likely be
insurance, which would replace expen- nireeded, ax reform should be a key part
live commercial health insurance plans; of any ch legislation. There are specific
through educational programs that en- refog~s for both corporation and indi-
able people to obtain better jobs; or vid income tax systems that will not
through tax reform improve the "fairness" of the tax
The Federal izit Dine tax has long been tern but will also raise revenues to
considered the logical device to Suaran- set any budget deficits.
tee a fair or equitable Income distributed -- One of the largest tax loopholes is the
but it has not functioned this way tax treatment of capital gains. Any capf-
cause It is riddled with loopholes tal gain on the sale of an asset at a
preferences for the rich and powe 1. profit above its original cost is more
f b
to ti
n
a' ~
" '
e
++C of there is no capital gains tax at all if the
the most effective weapons in sling asset is held until death and then trans-
with the inequities of our econo . How- ferred to th
h
i
e
e
rs. The great bulk of
ever, without tax reform th Is little all capital gains benefit goes to the
hope that these ine
uiti
li
be
and that if. inflation is to be halted a in, comparable terms and thereby de-
balanced budget Is required. I agree that termine the real gain. Once this real
we must move toward a balanced budget. gain Is determined, then ordinary in-
Certainly an elimination. of wasteful cotne tax rates should be applied to
Government spending is a necessary first cofnpute the tax liability. Equity requires
.step. But we should move with care. To thist we make some adjustments for in-
recommend a cut in spending Is easy. fia}tion in taxing capital gains. I share
To evaluate the results of such a out is the view that the inflation component
difficult. Nevertheless, cutting expendi- of capital gains should not be taxed
lure= to achieve a balanced budget has with the tax applying only to real gains;
q
es
e
m- wealthy few. In 1972, taxpayers with in-
Inated. comes of $100,000 or more saved an aver-
The administration is ting of tax age of $39,000 each in capital gains tax
relief for the lower in
e
k
-.A
ers to breaks. Those in the $20,000 and under
help them cope with lion. This rep- group--90 percent of all taxpayers-
resents a significant age In direction
sav
v
an a
erage of $14 each. In light
and one that nrnLSt
go unnoticed by of these facts, it seems incredible that
this Congress. We st capitalize on this th H f
a
Dose rs o scussing proposals that
change in directio ow and enact legis-
will reduce even further the tax rate
nation that will ve meaningful relief on capital gains.
for those hit 1 est by inflation. The essence of the proposal is to re-
DOnemdirfor oc ratic em e12, 1974, the rencce e adopted Senate duce the proportion of capital gain in-
agenda an eluded in taxable income from its pres-re- ragenda for anti-inflation counter level of 50 percent. After the first
ession p m, Part 4 of this s agenda agendda a
reads as aVs 5 years capital gains tax will be reduced
; _
captor excessive proStss during the present means that a taxpayer holding an asset
per ecoa.unic: hardship and recognizes for 25 years or longer will be able to
that eclal relief must be a4Corded to there exclude 70 percent of the capital gain
lift ardent by indatkui-those in lour and from his taxable income
Those favoring
.
ra crate lneome categories and those on this legislation argue that current infla-
Congress has made it clear to the Presi- of any capital gain is simply due to in-
dent that. they stand ready to reconvene flation. For example, an individual who
in November to act on major legislation owns an asset that doubles in value at
to meet our economic crisis. Tax reform the same time the consumer price index
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post-
is are
e achievement of
As the average
re of the growing gap
and the rest of the
ows that many indi-