Business tells Reagan to put economic house in order
Organized business is telling Washington politicians, in effect, to end the deficit era. In what could be a historic protest, 500 prominent citizens, led by six former Cabinet heads, told leaders of both parties that the budget is out of control, that the free world faces a global crisis, and that the United States must put its economic house in order.
Looking down at a press conference here were former Treasury Secretaries John B. Connally (1971-72), Henry H. Fowler (1965-68), and W. Michael Blumenthal ( 1977-79), along with former Commerce Secretary Peter G. Peterson (1972-73), who organized the movement. Over the telephone came stern warnings from two other former Treasury secretaries, C. Douglas Dillon (1961-65) in Florida and William E. Simon (1974-76) in Los Angeles.
Such an array of brass on a nonpartisan basis is virtually unprecedented in Washington. The meeting, like the warnings given and the new nationwide movement itself, indicated a degree of concern over the fiscal situation hardly equaled since the Roosevelt days of the Great Depression.
Mr. Peterson said that his original appeal has been joined ''by about 500 eminent Americans'' from both political parties. Displaying charts he attacked ''unprecedented, unending, grotesque, and continuing deficits'' in which the country is ''mortgaging its future.''
Some saw symbolism in the gathering: Just as 50 years ago, in March 1933, the Roosevelt New Deal took over Washington from alleged dominance by business groups, so now the reverse could be happening - a protest movement from middle- and upper-income interests against unbalanced social spending and other expenditures.
The so-called Peterson group seeks a $175 billion cut in spending and acknowledges that, to balance the budget, higher taxes are needed.
Peterson praised the new administration-Congress compromise over social security, but charged that the savings ''are less than appear'' and do not include skyrocketing medicare.
Other former Treasury heads spoke in turn. Imposing former Secretary John Connally, from the Nixon administration, recommended a $25 billion cut in defense.
Mr. Blumenthal said the problem isn't just the US. The recession is global. He added that Mexico, Argentina, and Brazil have big borrowings from the US and that ''all the major banks of the world are involved.
Former Secretary Fowler, from the Johnson administration, said more taxes are required and these must come from consumption (not income or corporate). He cited the value-added tax system used in Europe, which features a concealed sales tax.