FOOTNOTES See the working paper on "Congress and Controls" pages 20 and 21 for a fuller analysis of the law. * Stein_memo to Task Force members (August 18, 1971). The Task Force, however, was not without expertise on control programs; Herb Stein had written a book on previous programs. 'His specific recommendation for wage tiering included prenotification and reporting by employee units of more than 5,000 workers; he did not recommend cut-off levels for Category II or III. On the price side he offered no ready suggestions for tiering. *See Appendix I for an in-depth look at the alternatives. 'In early November it was decided that firms with $100 million or more annual sales had to prenotify all price increases as well as submit quarterly reports. Firms with $50 million to $100 million sales had to submit quarterly reports. Less than $50 million firms did not have to prenotify or report, but were subject to the standards. * C. Jackson Grayson. Confessions of a Price Controller. Dow-Jones Irwin Company, 1974, p. 9. It is well-known that Grayson was disappointed at his lack of resources and staff when he arrived in Washington. To paraphrase one high government official instrumental in his appointment, "That's why we hired him; he could set up and run the agency as well as make the policy." Grayson, et. al., p. 12. 10 See Phase II Appendices for the details of the announcement. "The designation was modelled after the practice of the Troika of referring to subordinate groups as T-1, T-2, etc. However, in the Troika system, the numeral referred to the level of the group; the Troika itself was "T-1." As a result of some confusion about this, the numeral in "C-8" indicated the number of people in the group. "The starting point was a list of 32 Federal policy changes considered to have anti-inflation_potential developed in late 1971 by OMB's Regulations and Purchasing Review Board. Other, more controversial, proposals were drawn from an array of outside economists' public statements. 13 The proposals addressed major structural reform new taxes and institutions, modifications to wage and price controls as they existed, voluntary guideposts and even no vigorous policy. They came from published works of or conversations with Paul McCracken, Henry Wallich, the United Auto Workers, David Slawson, Robert Anthony, Gardner Ackley, Walter Heller, Otto Eckstein, Charles Shultze, Hendrik Houthakker, Paul Samuelson, the Joint Economic Committee, and the Committee on Economic Development. "The Troika consisted of the Chairman of the Council of Economic Advisors, the Secretary of the Treasury, and the Director of the Office of Management and Budget. They are jointly responsible for forecasts of GNP, federal budgets, and other macroeconomic items. The investment tax credit is subtracted from taxes owed the Federal government. It is a percentage of the cost of new investment during any year. In simple terms Section 46 of the U.S. Tax Code contains the detailed regulations about the credit. 1 An interagency group which advised the Director on Freeze policy. 17 See the Decontrol working papers. 18 This appendix reviews the development of policies to control prices in the manufacturing and service and in the food sectors, where the range of alternatives considered was particularly broad. Reference is also made to the petroleum sector, which is addressed more fully in another working paper. 10 Carl Bell, June 29 Option paper. "Food Advisory Committee memo of July 13. Tables and computer printouts. CONGRESS AND By: T. Wendell Butler Frederick W. Allen Assisted by: Charles Berry Stockdale The Economic Stabilization Program was based upon the authority vested in the President by the Economic Stabilization Act of 1970. This paper, in reviewing the legislative history of the Act, describes the interaction between the Program and the Congress, and traces the evolving Congressional attitude toward wage and price controls during the period 1970 to 1974. Mr. Butler was Assistant Executive Secretary for Industry and Interagency Liaison during Phase IV of the Program. Mr. Butler, a 1964 graduate of Howard University in the sciences, is presently studying at the John F. Kennedy School of Government at Harvard University. Mr. Allen is a 1969 graduate of Yale University, with honors in American Studies, and a 1973 graduate of the Harvard University Graduate School of Business Administration. 1973. He served as a program analyst in the Office of the Executive Secretary at the Cost of Living Council during Phase IV. Mr. Allen is currently the Executive Assistant to the Director of the Office of Intergovernmental, Regional, and Special Programs of the Federal Energy Administration. Mr. Stockdale is a student at Yale College. Preface This working paper reviews several aspects of the interaction of Congress with the recent Economic Stabilization Program, tracing the evolution of the Program's legislative authority in the context of Executive Legislative relations during the early 1970's. It is not intended to be comprehensive or highly interpretative. Rather, in the manner of a working paper, it is intended to tell a story and suggest a few areas for further exploration. Many people have helped us in our efforts. Our most significant debt is to Barry Stockdale, our chief research assistant, whose output was truly commendable. Also helping us gather materials at various times were Robert Dalton, Judith Epstein and Marcia Vought. A long list of people have generously contributed recollections, files and editorial assistance. These included: David Bagully, Robert Bonatati, Robert Bradford, Jonathan Brock, John Dunlop, Fawn Evenson, John Foltz, Marvin Kosters, Elaine Leapley, Barbara Ludden, Richard Motley, Andrew Munroe, Patricia Pemberton, Henry Perritt, John Read, Ernest Salisbury, Julia Sedky, James Smith, Irma White and Jeffrey Yudin. In the end, however, the responsibility for the contents of this paper is ours. Washington TWB FWA |