CCEA MINUTES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP84T00109R000100050011-4
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 8
• Document Creation Date: December 20, 2016
• Document Release Date: July 12, 2007
• Sequence Number: 11
• Publication Date: July 27, 1982
• Content Type: MEMO

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EXECUTIVE SECRETARIAT
Routing Slip .
TO:
ACTION
INFO
DATE
INITIAL
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DCI
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EXDIR
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D/ICS
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DDI
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DDA
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DDO
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DDS&T
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Chm/NIC
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GC
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IG
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Compt
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D/EEO
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D/Pers
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D/OEA
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C/PAD/OEA
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SA/IA
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A0/DCI
C/IPD/OIS
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Ex curve cr ary
7/1710?-
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Copied to:
1 - Route:
C/NIC
VC/NIC
AC/NIC
NIO/WE
NIn/AL
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THE WHITE HOUSE
WASHINGTON
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CABINET AFFAIRS STAFFING MEMORANDUM
DATE: 7-27-82
SUBJECT: CCEA Minutes
ALL CABINET MEMBERS
Vice President
State
Treasury
Defense
Attorney General
Interior
Agriculture
Commerce
Labor
HHS
HUD
Transportation
Energy
Education
Counsellor
OMB
USTR
CEA
CEQ
OSTP
NUMBER: ------------ DUE BY:
ACTION
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ACTION
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Baker
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Deaver
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Clark
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Darman (For WH Staffing)
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Harper
13
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Jenkins
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Wheeler
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Kudlow
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CCCT/Gunn
CCEA/Porter
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Cad
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CCFA/Boggs
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CCHR/Carleson
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CCLP/Uhlmann
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CCNREBoggs
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REMARKS: Attached for your information are the minutes of the July 19
and the July 22 meetings of the Cabinet Council on Economic
Affairs.
RETURN TO: ^ Craig L. Fuller
Assistant to the President
/Becky Norton Dunlop
Director, Office of
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MINUTES
CABINET COUNCIL ON ECONOMIC AFFAIRS
July 19, 1982
8:45 a.m.
Roosevelt Room
Attendees: Messrs. Regan, Donovan, Lewis, Harper, Porter, Hovde,
Wright, Egger, Leland, Niskanen, Naylor, Bolton,
McCormack, Kudlow, Steinberg, DeKeiffer, Ernst,
Dederick, Garrett, Cicconi, Robinson, Bledsoe, and
Denend.
1. Federal Debt Collection and Tax Refund Offsets
The Council continued its discussion of the use of tax refund
offsets as a last resort in collecting federal debts.
Mr. Wright summarized two central features of the proposal
for the Council's consideration: (1) the agency or
department, not the IRS, would remain responsible for the
debt; (2) the tax refund offset would only be used after
departments had exhausted all other means. He also noted
that personal income tax over withholding has remained
relatively constant in recent years and that approximately 78
percent of taxpayers over withhold. He added that because of
the strong emotions surrounding the collection of delinquent
child support payments, the federal program to use the tax
refund offset to collect such payments may not be a good test
of the refund offset as a collection instrument.
Mr. Egger summarized IRS objections to using the tax refund
offset, including: (1) much of the debt owed the government
is tax debt and there are measures already in place to
address this problem; (2) Oregon's positive experience with
the tax refund offset may not be a good model for federal
policy; and (3) the tax refund offset would add to the
perception of government intrusion in citizen's lives with
possible serious implications for the voluntary way in which
citizens comply with the tax system now.
The Cabinet Council's discussion centered around the problem
of inadequate agency data on overdue debt, agency responsi-
bility to pursue debt collection by all means available, the
possible consequences of using the tax refund offset for the
tax system, and the magnitude of the task to implement a tax
refund offset program at the IRS.
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Cabinet Council on Economic Affairs
Minutes
Page Two
July 19, 1982
The Council approved the Administration not opposing an
amendment providing for a tax refund offset as part of the
debt collection legislation. However, the Administration
should urge that any tax refund offset program be undertaken
on a pilot program basis. The Administration will continue
to improve the data on debts owed the government and to use
all available tools to collect those debts.
2. Report on the OECD Executive Committee in Special Session
(XCSS)
Mr. Leland reported on the July 12 and 13 meetings of the
OECD Executive Committee Special Session. His presentation
focused on European attitudes toward economic relations with
the Eastern Bloc countries and on the status of Global
Negotiations. The European participants offered a range of
observations on the most recent U.S. decisions concerning the
pipeline; however all thought that the pipeline issue should
not prevent a serious review of other important East-West
economic issues.
The Europeans appeared willing to fully participate in
gathering East-West economic data and recognized the problems
associated with the increasing Eastern debt burden and
nonmarket oriented Eastern trade practices. All agreed that
a great deal of work will be necessary to prepare for the
GATT Ministerial in November.
On Global Negotiations, Mr. Leland reported that the unani-
mity agreement reached at the Summit on the text of the
resolution at the U.N. has already begun to erode among our
Summit partners. The consensus at the meeting was that the
urgency for global negotiations has seemed to pass and that
perhaps other forums might be found in which to discuss
traditional North-South issues.
The Council's discussion centered around the apparent
difference between the generally encouraging report from the
XCSS on European reactions to the pipeline sanctions and
other reports from Europe, the inaccuracy of the view that
most issues involve differences between the U.S. and the
European Community rather than between the U.S. and indivi-
dual European countries, and the importance of not letting
individual issues color the entire agenda affecting the U.S.
and our allies.
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Cabinet Council on Economic Affairs
Minutes
Page Three
July 19, 1982
3. Indian Borrowing from the Asian Development Bank
The Council reviewed a paper prepared by the Department of
the Treasury on India's intention to borrow from the Asian
Development Bank (ADB).
Mr. Leland's presentation focused on the impact Indian
borrowing would have on the basic character of the ADB. He
noted that Prime Minister Ghandi will visit the U.S. at the
end of July and is scheduled to meet with the President. It
is expected that she will raise the issue of ADB borrowing in
the context of efforts by India to move away from the Soviet
Union and return to a more independent course.
Mr. Leland explained that India had been encouraged for some
time that India's resource needs could be accommodated best
from the World Bank Group. If India were now to turn also to
the ADB, the U.S. would have two concerns. First, it might
jeopardize the IDA replenishment bill now before the
Congress. The Administration has supported the bill on the
ground that the World Bank Group is the only multilateral
institution supporting Indian development. Second, Indian
borrowing from the ADB, along with Chinese borrowing which
would surely follow, would change the character of the ADB
and seriously impair its ability to serve its tradititonal
borrowers.
The Council's discussion centered around the lack of U.S.
leverage to prevent Indian borrowing from the ADB, the
potential impact of India's borrowing on the U.S. budget, and
how to approach Prime Minister Ghandi on this issue.
The Council approved preparing a briefing paper for Prime
Minister Ghandi's meeting with the President which would
outline the advantages to India of continuing to limit its
requests for multilateral development resources to the World
Bank.
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40 ?
MINUTES
CABINET COUNCIL ON ECONOMIC AFFAIRS
July 22, 1982
8:45 a.m.
Roosevelt Room
Attendees: Messrs. Regan, Baldrige, Block, Pierce, Stockman,
Weidenbaum, Porter, Williamson, Kudlow, McCormack,
DeKieffer, Cogan, Thompson, Cribb, Cicconi, Baroody,
and Denend; Ms. Dunlop and Ms. Connor.
1. Economic Outlook
The Council reviewed a paper prepared by OMB on the economic
and financial outlook.
Mr. Kudlow's presentation focused on broad trends in the
economy which are supported by the latest economic and
financial statistics. He noted that a major economic
achievement of the Administration has been the sharp
reduction in inflation.. The current economic data are mixed,
indicating a transition from decline to recovery. This
situation presents a challenge for the Administration to
resist policies which would accelerate the recovery and
possibly lead to an unsustainable growth rate. A steady
course should produce even further reductions in inflation.
Referring to June statistics, Mr. Kudlow observed that the
recovery would be led by consumers. Retail sales, inventory
to sales ratios, and improved consumer balance sheets all
show a strong recovery. Production, employment and
investment have not yet shown signs of recovering, but, based
on past experience, they are expected to lag one to two
quarters. The money and financial markets have improved, and
interest rates are expected to moderate further. Finally,
the recent reduced rate of growth in M1 has caused it to move
back within the Federal Reserve Board's target range. This
should allow Ml to grow at close to 6 percent during the
remainder of the year and remain in the target range.
The Council's discussion centered around the timing of the
recovery, its persistence, and the degree of optimism
warranted by the current data.
The Council also discussed the recent revisions in the
savings rate and the historical pattern of plant and
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Cabinet Council on Economic Affairs
Minutes
Page Two
July 22, 1982
equipment investment.
The Council requested that papers be prepared:
1. Describing and analyzing the recent revisions by the
Department of Commerce in the savings statistics;
2. Evaluating the strengths and weaknesses of the
personal savings rate as a measure of saving;
3. Assessing the relevance of the recent revisions in
the savings rate in light of previous administration
statements on the savings rate; and
4. Comparing various U.S. savings rates with those in
other major industrial countries.
The Council also requested the preparation of a paper on
plant and equipment investment in recent years including the
amount of investment required for replacement purposes, the
amount of investment for-environmental, health, and safety
purposes, and the amount of net new productive investment.
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