Gerald Ford: "They Will See Something Is Being Done"

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You have seen all of the speculation. Some people want $20 billion, some $15 billion and some $10 billion. It is our judgment that something roughly in the middle is the right figure.

The next question is, how do you get it back to them, because if you just say you are going to do it and they see nothing in hand, it doesn't do much for public confidence.

So, there are a number of ways of deciding how you get it back, whether it is a credit on their April 15 [returns]; whether you actually turn around and send them a check predicated on their income tax for 1974; whether it is all in one lump; or whether it is two, three or four specific checks.

On that issue we feel we have something in hand pretty concrete, particularly for people. Business is more sophisticated. I think they can understand it a little better, and I don't think it is very wise to send a great big check back to Texaco or U.S. Steel when somebody else gets a relatively minor check.

But anyhow, business would be treated differently. And yet, you have to have some fair division between—you take the figure of, say, $15 billion for illustrative purposes—how do you divide it? Is it 50-50 or 75-25?

Then, of course, in the business field, what is the technique? You have the investment tax credit as a possibility. You have the reduction in rates and then you have the problem—is this a one-year tax cut or is it two years or maybe longer? For psychological reasons, you probably would do more to give it in one year. Two years with a lesser amount per year doesn't give the same immediate psychological impact.

Q. What are the reasons for a credit on 1974 taxes?

A. Well, here is a problem that you have to look at. Supposing you increase the person's personal deduction in 1975. The guy who is not working doesn't get any income except unemployment. He doesn't get a shot in the arm. He may have had a job in 1974. So, if you just do it by the increase of the personal exemption on his income in 1975, he doesn't get any restoration of confidence. We want simplicity and promptness. Those are the two criteria that we are aiming for in the stimulative attack.

Q. Would you propose tax reform as well as tax reduction?

A. I don't think you can mix them if you want prompt action.

Q. Moving to foreign policy, can you tell us more about the idea of using force in the Middle East and under what circumstances ?

A. I stand by the view that Henry Kissinger expressed in the Business Week [interview]. Now, the word strangulation is the key word. If you read his answer to a very hypothetical question, he didn't say that force would be used to bring a price change. His language said he wouldn't rule force out if the free world or the industrialized world would be strangled. I would reaffirm my support of that position as he answered that hypothetical question.

Q. What would your definition of strangle be?

A. Strangulation, if you translate it into the terms of a human being, means that you are just about on your back.

Q. Are you optimistic about an extension of détente to the Middle East? Is the Soviet Union playing a constructive I role in the Middle East now?