Good morning, and welcome to another in our series of Legacy Forums about the Nixon Administration’s ideas and innovations. I’m Geoff Shepard, and I’m here on behalf of the Richard Nixon Foundation, which co-sponsors these Legacy Forums. What makes the Nixon Administration so interesting is that it marks the beginning of the foundation of the modern Presidency. What happened in the course of the Nixon administration is that policy making, actual governance, was drawn from the cabinet into the Nixon White House itself. So before the Nixon administration, the cabinet departments really ran their own areas, except on giant issues. But beginning with the administration and in truth today the policy is made in the White House itself, and while the cabinet departments have input into policy, they mainly execute the decisions made within the White House. How did that come about, has to do with pre-organizations. First, the revitalization of the National Security Council with Dr. Henry Kissinger, where foreign policy was really made within the White House. Second, the creation of the Domestic Council, the counterpart to the National Security Council under John Ehrlichman, which did the same thing on major domestic issues. And finally the transition of the old Bureau of the Budget to the Office of Management and Budget, which not only counted the money, but held departments to objectives and to accomplishments. That was under George Shultz. George Shultz is the first Director of the Office of Management and Budget. But before George Schultz was director, he was Secretary of Labor. And what we’re going to find, the topic today, he was well neigh an ideal cabinet member. And the discussion today on labor and employment issues in the Nixon administration largely stems from the innovation and leadership of George Schultz. We co-sponsor these forums with the National Archives, and we’re thrilled to be here in McGowan Theater to talk about this and to co-sponser with the National Archives. And my job really is to introduce the Archivist of the United States, David Ferriero. David, as you may know, is a librarian. He was head of the New York Public Library before taking over the Archives and before that was a librarian at both MIT and Duke University. He’s a scholar, he’s a man of great integrity, and it’s a genuine pleasure to be co-sponsoring these events with him. David? Good to see you. Thank you Geoff. I want to add my welcomes to all of you here, to the McGowan theatre at the National Archives. We’re delighted for the second time in less than a month to welcome the Nixon Legacy Forum here to the National Archives. Over the past two years the National Archives and the Nixon Foundation have co-sponsored 15 of these forums, bringing together Nixon administration alumni and alumnae to examine, explore and analyse particular aspects of the thirty-seventh president’s domestic and foreign policies. Legacy forums are now planned throughout 2012, which will mark First Lady Pat Nixon’s 100th birthday on March 16th, and through 2013, which will see President Nixon’s centenary on January 8th. For many today the Nixon years, the late ’60s and early ’70s, are so near and yet so far. But as these forums have demonstrated, many, if not most, of the problems we are grappling with in 2011, including the environment, energy independence, and health care were first being faced in their modern aspects beginning in the ’60s and ’70s. It is a happy actuarial fact that there are still many men and women who served in the White House agencies and departments during those critical years, from 1969 to 1974. The Archives has the papers, some 45, 44 million of them for the Nixon administration, not including tape recordings and other historic materials, and those are available, now and forever, to citizens and scholars. But the Foundation has an equally unique historical resource. The men and women who actually created those papers. And that is what these forums do, reunite the papers with the people who wrote them. The richness of the insight and analysis that results will also be available here, and will increasingly become a central part of the Nixon administration’s archival record. Today’s forum on the administration’s labor and employment policy includes three very distinguished participants and a no less distinguished moderator. It would be my pleasure to introduce her and she in turn will introduce them. Ann Mclaughlin Korologos served President Reagan as our nation’s 19th Secretary of Labor before then she had been Undersecretary of the Interior and Assistant Secretary of the Treasury. Mrs. Korologos first came to Washington during the Nixon administration, in which she served as Director of the Office of Public Administration at the Environmental Protection Agency. Since leaving government services in 1989, Mrs. Korologos has been President of the Federal City Council here in Washington, Chairman of the Aspen Institute, and Chairman of the Rand Corporation Board of Trustees. Among the several boards on which she now serves is the Ronald Reagan Presidential Foundation. It ‘s my pleasure to welcome Ann Korologos. Thank you David, and good morning all. We’re going to be talking thinking this morning about the Nixon administration’s labor and employment policies, a topic that might at first sound rather esoteric or even unrepossessing or perhaps as a Republican president could be a short topic. But I think you’ll find, especially through the eyes of today’s panelists, who were there at the time, who were actually present at the creation, so to speak. It is a surprisingly interesting and lively topic, and also surprisingly relevant to many of the same issues we are dealing with today and the same problems we’re also facing today. It’s remarkably timely, though our emphasis is on President Nixon’s administration, one’s thoughts may travel to yesterday or today’s newspaper. With labor and employment issues, as with so many other domestic issues in the late 1960s and early 1970s, the Nixon administration was dealing, for the first time, with the modern aspects of the issues that have remained true, and in many cases remained intractable over the last four decades. As earlier forums have shown, and as the Archivist has indicated, this is true with environmental concerns, energy independence, healthcare, welfare reform, and many other domestic issues. The 1960s and 70s witnessed cataclysmic changes: economic changes, technological changes and no less, but entirely unique to that time, counter-cultural changes that gave the new and modern face to many of America’s very old problems. By the time Richard Nixon was elected in 1968, he had already been a major player in American politics for going on a quarter of a century. He served as congressman, senator, Vice President, was candidate for Governor, and served of course as a prominent public citizen. He was no stranger to labor concerns or labor issues. His first assignment in the House of Representatives in 1947 was to the Education and Labor Committee. As he later said, he and another newly elected Democratic congressman, John F. Kennedy of Massachusetts, sat like book ends at the far end of their respective sides of the education and labor dais. The Committee and the House were immediately involved in the controversial Taft-Hartley Act, which is still in effect today and still the center of controversy. During his Vice-Presidency, Nixon had the opportunity to observe and work with Eisenhower’s respected and successful Secretary of Labor James Mitchell. Mitchell, from New Jersey, my own home state, was a Democrat who had been Director of Industrial Personnel at the Pentagon during World War II. He also had been an industrial relations specialist at Macy’s and Bloomingdale’s and he was seen by labor as the management side of the table. Labor didn’t really trust him. He was an opponent of discrimination in employment, he believed in labor-management cooperation, and he was concerned about the plight of the migrant workers. He’s often been referred to as the social conscience of the administration. An aside, in 1987 when I was becoming Secretary of Labor under President Reagan, I carefully scheduled a meeting with Lane Kirkland, who was the head of AFL-CIO. And in our conversation I asked him, “Okay, who was the best Secretary of Labor ever?” And he said, “Anne, you’ll be surprised.” Not knowing at the time, I suppose, he said, “He was a Republican: Jim Mitchell, Labor Secretary under President Eisenhower.” And I said, “Why?” And he said, “Well, one, he had the President’s ear, and two, when we were at Bell Harbor for those annual meetings, he wouldn’t mind coming down the hall with a bottle of scotch, joining us.” I should add, maybe if you can put this off the record, “I can do both,” I told Lane Kirkland. Dick Nixon and Jim Mitchell became close friends. In fact, Nixon seriously considered the labor secretary as his running mate in 1960, especially after working behind the scenes mediation at the behest of President Eisenhower, with Secretary Mitchell, who played the public role on some of the steel strike issues that were so current at that time, and I’m sure will be touched on today. Nixon’s personal intervention trying to help settle that bitter 1959 steel strike won him considerable, and in some cases reluctant, respect from labor, but with the election of J.F.K. and then L.B.J., with the arrival of the New Frontier and the Great Society, it seemed that the traditional alliance between labor and the Democratic Party was solidly cemented. Union leadership and union money lined up behind the Democratic standard bearers. In 1968, Nixon’s opponent, Senator Hubert Humphrey, launched his presidential campaign with a speech at New York City’s Labor Day Parade. The election was razor thin, and labor’s six million dollars came close to helping push Humphrey into the White House. But the forces that would challenge and replace that traditional labor – Democratic alliance were already at work. And Richard Nixon was there to recognize and encourage them. And in fact, despite labor’s solid financial support for Humphrey, some 30% of union members had actually voted for Nixon. By January 1969 when Nixon was sworn in just down the street from here at the Capitol, the pent-up frustrations of four years of unrestrained spending for guns and butter for the Vietnam War and the Great Society were beginning to surface and the generational disillusion and disaffection caused by the counter-cultural revolution was now in full force all across the country, from living rooms to campuses to union halls. The Nixon Administration enjoyed a brief and deceptive honeymoon in 1969, because most of the collective bargaining contracts would extend until 1970. Sure enough, 1970 saw the most serious epidemic of strikes since the end of the second World War. Postal workers struck for the first time in history and there were hard hat riots in several major cities. During 1970, 41.5 million man days were lost through strikes. An increase of 32% since 1969. As wartime production slowed down, unemployment rose during the Nixon years. In 1968, before Nixon began troop withdrawals from Vietnam, the unemployment rate was 3.3%, the lowest that had been since the Korean War. By 1974 however the unemployment rate was at a worrying 5.6%. All considered, that’s almost half of what it is today, and when I left the Labor Department in 1989, we thought we were well at full employment at 5.5%, down from 11. So as the patterns of employment were also changing, in the decade from 1966 to 1976, the northeast alone lost a million factory jobs, most of them moving to a more friendly climate of the south and the southwest. This period also saw the beginning of outsourcing. An estimated million jobs moved from US factories to foreign subsidiaries between 1966 and 1971. The unions faced a very new dilemma. They could demand and get higher wages, but at the end of the day, what was really gained if the employers started moving jobs overseas or cutting back on investments. This was also a time when union membership became relatively younger while union leadership remained resolutely old. It was observed that under the leadership of 75 year old George Meany, the average age of the AFL-CIO executive council was 63, putting it in the same league as the Vatican Curia and Chinese Politburo. Younger union members were restless. The average weekly wage had risen from $95 in 1965 to a $171 in 1970. The real purchasing power had declined. At the end of 1970, a survey found that half of all industrial workers were worried about their job security. Twenty-five per cent were worried about their safety because there were fourteen thousand fatal on-the-job accidents in 1969, far more than the number of deaths in Vietnam. 28% of workers had no medical coverage, 38% had no life insurance, 39% had no pension besides Social Security. The war in Vietnam, the excesses of the counterculture, and the rise of civil rights movement, had seriously shaken union solidarity. Many union members were fiercely patriotic, and they watched aghast as college students waved Viet Cong flags and rooted for an enemy victory, with the apparent support or at least the acquiescence of much of the Democratic Party’s leadership. And in many areas, and many industries, the threat of competition from minority workers suddenly became an overriding issue. All creating the platform for a most active, most innovative, even compassionate Nixon labor department and union support. In an odd and unique turn of events, the Republican Richard Nixon represented the standards and traditions and values and, yes, seemed to represent the prejudices of many hitherto Democratic union members. The nomination of George McGovern as the Democrats’ standard bearer in 1972 led to the unprecedented situation in which labor, and labor’s money, sat out the election. In his memoirs, President Nixon records a 1972 golf game at the Burning Tree Club in Bethesda. The Presidential foursome included Treasury and former Labor Secretary George Shultz, Secretary of State Bill Rogers, and AFL-CIO President George Meany. At the 19th hole they sat for an hour talking and smoking cigars. As they walked to the waiting cars, Meany told Nixon that he wasn’t going to vote for him or for George McGovern, but you’ll be doing all right with the Meany family, he said, because his wife and two of his three daughters would vote for him, for Nixon. Then crusty, old Meany put his hand on the President’s shoulder and he said, “Just so you don’t get a swelled head about my wife voting for you, I wanna tell you why. She don’t like McGovern.” It was truly a memorable moment in many ways, before there were and before there could be Reagan Democrats, there were indeed Nixon Democrats. So before I introduce today’s panel, allow me to say a brief word about my three Nixon administration predecessors, who served as Secretary of Labor. President Nixon’s first Labor Secretary was George Schultz. As these Legacy Forums have demonstrated, Nixon was a notable spotter of talent. His choice of the Dean of the University of Chicago’s Business School to be his first Secretary of Labor launched one of the most impressive and important careers of public service in the history of the republic. If Richard Nixon had done nothing other than give us George Schultz, he would forever deserve the nation’s gratitude. After only 19 months at Labor, the President named Secretary Shultz as Director of the Office of Management and Budget, and then in 1972 he named him Secretary of Treasury. At Labor, as we will be hearing, Secretary Schultz was involved in the Manpower Training Bill of 1969 and played a vital part in the Philadelphia Plan for non-discrimination in federal construction projects. I served with George Schultz in the Reagan Cabinet and on the Reagan Library Foundation board, today, and briefly on the General Motors board, which is a topic for another discussion. And he is still, you will hear what he was in the days of the Labor Department in the Nixon administration. I talked to him a week ago and told him I’d be moderating this panel and I told him who was on the panel. And he said, “Really?” He said, “All those guys worked for me.” Indeed they did. Secretary Schultz was followed by James Hodgson who served from July 1970 until February 1973. Secretary Hodgson had worked in industrial relations positions before being appointed Undersecretary of Labor in 1969 and then Secretary in 1970. Under his leadership, OSHA became the law of the land and he also played an amazingly strong role in expanding employment and training programs through the Emergency Employment Act of 1971. Union leader Peter J. Brennan served as Secretary of Labor from February 1973 until March 1976. During that time some very significant legislation became the law. CETA, the Comprehensive Employment and Training Act, and the Rehabilitation Act in 1973, and ERISA, the Employee Retirement Income Security Act of 1974. You can see that many of those initiatives respond to the mood of what I described earlier that the Nixon administration faced, but today it is my pleasure to introduce our panelists. You can read their extended biographies in your program as well as in Who’s Who or Wikipedia. And you can sometimes find Judge Silverman and Bill Kilberg in the headlines today. I’ll just remind you of the positions they held during the time we will be discussing. Bill Kilberg has been a White House Fellow, Special Assistant to Labor Secretary Shultz, when Prisident Nixon appointed him as the Solicitor for the Department of Labor in 1973. At the time of that appointment, Bill was the youngest ever to be appointed to a sub-Cabinet position in the United States government. Well, not as well known, I share with you a small story. Bill and his wife Bobby were both White House Fellows in 1969 to 1970, with Bill working for George Shultz at Labor and Bobby working for John Ehrlichman on the Domestic Council in the White House. The two White House fellows had their engagement party at the White House on June 12, 1970. It was Bill’s 24th birthday. Secretary Shultz toasted them with the observation, and I quote, “It might be argued that this is carrying fellowship just a bit too far.” Our next panelist, Michael Moskow, joined the Nixon administration in 1969 as a senior staff economist at the Council on Economic Advisors. He went in 1970 to the Department of Labor to become Assistant Secretary of Policy and Research, and he was appointed Assistant Secretary for Policy Development and Research at the Department of Housing and Urban Development following that, and then of course Undersecretary of Labor in the Ford administration. But what’s not known about him is that as recently as 2008, as a widower, Michael married at the Kohl Children’s Museum in Glenview, Illinois. A woman by the name of Suzanne Kopp, who was a lawyer and counsel at one time to T-Mobile. And finally, but not last or least, Judge Larry Silverman, our third panelist, who joined the Nixon administration in 1969 as Solicitor of Labor Department and was appointed Undersecretary in 1970. After a brief time in private practice, he became Deputy Attorney General in 1974. Now something that is known is that both Mike and Bill worked for Larry so you can anticipate a lively discussion today. But what you might not know is the story of Larry’s…ooh, I could call it a fight with the White House, not the President, but some differences of opinion on occasion, when it caused him to be fired, and there had been an attempt to move him to the 9th Circuit, saying that “He don’t belong in politics, he’s too rigid.” I haven’t found that in my years of knowing Larry. But we’ll see what kind of stories, and more importantly how we might fill out the marvelous record of President Nixon’s administration, and the work at the Department of Labor. We’ll start with Mike, he’ll make some remarks, then Larry, then Bill and then go into some questions and discussions among ourselves. Thank you very much! Thanks Ann. I think the key thing to remember about the beginning of the Nixon administration from the economic standpoint is that it was a completely different environment from today. The major issue, the major concern in the country, as Ann alluded to, was inflation. During the 1960s, we had the Johnson administration and had a very expansionary fiscal policy. Monetary policy was accommodative during that period, and as a result, we had very high inflation coming into the latter part of the 1960s. I joined the administration in the summer of 1969, as Ann says, as a staff economist at the Council of Economic Advisors, and at that point the key driver of inflation was viewed as the construction industry. Again, this is the complete opposite of today. At that point, the unemployment rate in construction was very low. Today, it’s very high. And wage increases in the construction industry were running at 20 percent a year, about twice the average of wage increases in the manufacturing sector of the economy. So, the political pressure on the administration and the Congress to do something about inflation was enormous and actually, at this point, the business round table was formed. Today, the Business Roundtable is a major lobbying group for large multi-national companies, it was actually established as a construction users anti-inflation round table. Chaired by Roger Blough, who was then Chairman of U.S. Steel at that point. And their major purpose was to lobby the administration on reducing costs in the construction industry. The administration took a series of steps in 1969. The Council of Economic Advisors issued what were called inflation alerts, to identify to the American people the importance of inflation and different sectors where inflation was important. In September of ’69, the President established a Cabinet Committee on Construction, chaired by Paul McCracken, the head of the Council of Economic Advisors. This committee took a series of steps, including directing federal agencies to cut back their new spending on construction projects by 75% and they encouraged states and cities to do the same thing, and private sector funds to do the same thing as well to reduce the pressure on resources in the construction industry. Again in September of ’69, the President by Executive Order established the Construction Industry Bargaining Commission, which was a tripartite group that was set up, labor, management, and public, to deal with structural problems in the construction industry. It was John Dunlop, who was then a very well known labor economist at Harvard University, was heavily involved in this and he was one of the public members. It was chaired by George Shultz, and I became the second Executive Director on that Construction Industry Collective Bargaining Commission in 1970 and moved to the Labor Department. But by 1970, inflation was not improving. Wage increases were still very high and Congress passed the Economic Stabilization Act of 1970 which gave the President the authority to impose wage and price controls. No one ever thought that Richard Nixon would impose, use that authority to impose controls. He was strongly opposed to wage and price controls and spoke about that frequently. But this was a political move to make inflation an issue in the next election. The Democratic Congress could say that the President had the authority to do something about inflation and he didn’t do it. Well, at that same time the national leaders of the construction unions were very concerned about inflation, very concerned about these large wage increases in construction, as were the unionized contractors. But the union leaders were in a very difficult political position. They couldn’t agree voluntarily to reduce wage increases, this would be selling out their members, but they knew that over time this was going to lead to an erosion of unionized construction and a growth of the non-union sector in the industry. And that’s exactly what has happened over the years. They knew their self-interest. So we needed, John Dunlop working with the members of the Construction Industry Collective Bargaining Commission came up with a plan to have wage stabilization in the construction industry. But the union leaders needed some type of political cover in order to implement this, they just couldn’t be viewed as selling out their members. So, it was arranged to have a meeting with the President and it took place on January 17, 1971. The union leaders were there, the unionized contractors were there, and Nixon was supposed to take a hard line stance. He was supposed to demand that the parties come up with a voluntary plan to reduce wage pressures and price pressures in the construction industry, and he was supposed to give them an ultimatum as well. So as I sat at that meeting, I kept waiting for the President to get tough to give them the ultimatum. It never happened. He was not tough, at all, in a meeting. He was too easy. He never gave the ultimatum. He did ask for a plan, for them to come back with a plan in 30 days, and we can speculate why he wasn’t tough at that meeting, but he just wasn’t. So there was no political cover for the union leaders they did come, took them more than 30 days, but they did come back with a plan. It was an adequate plan. February 23rd, Nixon surprised them by suspending the Davis-Bacon Act. Now the Davis-Bacon Act is an act that sets prevailing wages on federal construction projects and federally assisted construction projects, and it’s administered by the Labor Department. And it seems that frequently the prevailing wage is the union scale. And this of course gave a great advantage to the unions and the unionized contractors because there was no lower wage coming from the non-union sector on those projects. So, he suspended Davis-Bacon, the Solicitor of Labor Peter Nash, at that point, said that his suspension, the President’s suspension of the federal law actually suspended 38 state Davis-Bacon Acts as well. So, this was obviously, so it’s a bit of a stretch, and in any case, we were clearly at war with the building trades at that point, and it was a war that no one wanted. So, on March 29th, Nixon then imposed wage and price controls on the construction industry, using the 1970 authority that Congress had given him. And he also reinstated Davis-Bacon, the union leaders had the political cover at that point and agreed to cooperate. They set up the Construction Restabilization Committee, John Dunlop chaired this. This was a tri-partide group, labor, management, public members, and it was successful in moderating wage increases in the construction industry. In fact, it was so successful that it gave support to those who wanted to have wage and price controls on the entire economy. So this was March of 1971, and then of course we know that on August 15th of 1971, the President surprised the nation on a Sunday night speech, announcing his new economic policy, which included a freeze on wages and prices for 90 days in the entire economy, to be followed by a Phase II with a price commission and a pay board to again control wages and prices on an ongoing basis. Now the Stabilization Committee in the construction industry was tripartite, as I mentioned, and the pay board was set up to be tripartite, but it was clearly not successful. And it’s interesting to contrast the two, because the pay board, to control wages in the entire country is almost an impossible job, given the dynamics of the American economy and the scope of the American economy. But it was set up tripartite, George Meany served on the pay board initially, along with other union leaders. So, they had, that was one strike against them, it was such an impossible task. The second was they appointed someone, Judge George Bolt, to take responsibility, to head the pay board. He had no experience in the labor area whatsoever. The Labor Department, we had recommended at least a half a dozen people to head the pay board, people who had experience in the labor field and could understand how to deal with unions and management. All those recommendations were rejected. Volcker took charge. It eventually broke off, the union leaders left, and it was no longer going to be a tripartite group. Now, inflation did subside temporarily in 1971 and 1972, and it did probably help Nixon get reelected, as well. But of course it didn’t last. This type of trying to put a control on a pressure cooker just couldn’t possibly last. And I think what we’ve learned from this is that the only real way to control inflation is sound monetary policy and fiscal policy. And it was only when Paul Volcker took responsibility for the Federal Reserve in 1979 that we got inflation under control. I say the other thing we learned is that there’s a whole group of us who will stand at the barricades to prevent wage and price controls from ever happening again in peace time in the United States. As Ann pointed out, when George Schultz came to the Labor Department, he had as a model for Secretary of Labor Mitchell’s performance back under the Eisenhower administration. And under the Eisenhower administration, the building trade’s unions were sympathetic, almost overtly sympathetic to the Republicans in many respects, and the AFL-CIO was not quite as determinedly part of the Democratic Party constituency as it became more and more as time went on. So that his model for Labor Secretary was less hostile to trade unions as was true of some, not all, not and, but some who followed, under other Republican looking presidents, so we had a balanced group of people in the department. One, Bill Usry, came from the machinist unit and the rest of us, none of us were perceived as hostile to trade unions. With respect to labor relations itself, the dealings with unions on collective bargaining, Willard Werks, and before him, Arthur Goldberg in the Democratic administration, had spent an enormous amount of time, effort, and publicity at actually working at settling labor relations disputes, settling strikes. Arthur Goldberg became famous for running around the country settling disputes, and Willard Werks tried to do that as well. George Schultz decided when he came into office, that was a profound mistake. He once said, “As Secretary of Labor, if you hang out your shingle regarding settlement of disputes, you’ll get all the business.” And so he did not do that. The one area were there was enormous pressure to settle disputes was in the transportation industry: airlines, railroads, part covered by the National Labor Relations Act, part covered by the Railway Labor Act. Because those could result in national disputes that would paralyze the country and which would sometimes require the government to go into federal court to get an injunction under a provision of the Taft-Hartley Act. Those were nightmare situations, because if you went to Congress to try to settle a national emergency dispute in the transportation industry, you ended up with 535 arbitrators and it was chaos. Now the trade unions did not mind that so much as alternative approaches because they largely controlled Congress, or at least they had enormous influence. They had a Democratic Senate and a Democratic House. So they didn’t want any particular changes to that, but it was, as it was, a nightmare. We came up, George Schultz directed us to come up with legislation to deal with it. And we came up with legislation, I’ll tell you about the legislation in a moment, and we also had another weapon. The weapon was Bill Usrey, who was the most extraordinary mediator that I think this country ever saw. He was like a miracle. He would go into a room full of management and raise a flag and talk about patriotism. And then go into a room through, full of union members in vicious dispute, use the same speech, then go back and go to sleep. But he would know, after only fifteen or twenty minutes with people, what their bottom line was. So he would miraculously put together a settlement. And he became enormously effective in dealing only in that area, the area of transportation potential emergencies where there was a necessity for the government to play a role. But we came up with legislation, which has its still life today. We couldn’t get it passed. It was called final offer selection. And it was a device whereby, when there was an emergency the government would have the authority, after a quick injunction, to set up a panel which would then have a decision to make between the labor position and the management position. It would not arbitrate. It would not have any authority to split the baby. It had to choose either the most reasonable position, last offer presented by union employers, or the last offer presented by the union. And the theory of it, of that bit of legislation, was that it would force, it would induce people to negotiate beforehand, push them together because the alternative was so horrible. The downside risk if the panel would take only the side of one or the other, the one that was not chosen would be so humiliated, there would be this enormous tendency beforehand to try to reach an agreement. Hopefully, the panel would never have to be used. It didn’t pass in the Congress at the last moment because, although we had almost the votes in the Senate, because the President made a deal to get the support of the teamsters’ union in 1972, and a quid pro quo of that deal was that we would drop support for final offer selection. I remember George Shultz called me to tell me that set deal was made, and I had to call the Republican senators who were carrying our ball, to tell them that we were abandoning the position. It was not a pleasant conversation. The other two bits of legislation which we focused on, and I have to be very brief, were the Occupational Safety and Health Bill, which George Schultz directed us to come up with, because there was enormous pressure in the Congress to come up with legislation to deal with safety, and so it was our effort to compromise with the Democrats. We tried very very hard to get in the legislation a concept of cost-benefit analysis in the setting of safety standards. Ralph Nader was very effective in preventing us from getting that directly in the legislation. We did get some things that were indirect. Finally, I would point out, Anne has mentioned two major manpower bills. I’m particularly proud of the fact that with Mike Moskow’s help, when he came over to the Labor Department, we focused very hard on the evaluation of our manpower programs. For all our legislation and for all the billions of dollars we’ve spent on the manpower programs, the payoff for these training programs was pathetically small. It was a damn shame. Those programs were very expensive, and the longitudinal studies showed sometimes that people would be better off if they didn’t go into programs over time than if they did, which was more than a little discouraging, but the one other initiative I should mention is the affirmative action. It follows to a certain extent from the concern of construction industry wages, but George Schultz also had in mind the notion that we in the Labor Department had a major responsibility to accelerate the opportunities for minorities in employment, and of course construction was an area which had, over the years, tended to discriminate against African Americans. So we came up with affirmative action. That is to say that we came up with an interpretation of affirmative action which was part of an executive order that had been issued a long time before, which focused specifically on forcing employers in the construction industry originally, and then eventually the whole country and all the government contractors, forcing employers to hire and promote minorities in accordance with numerical standards and goals and timetables. That initiative has remained, I think it’s probably the single worst thing we ever did in government, and it has an enormously pernicious impact in generating the acceptance of quotas by another name, goals, throughout our society and education, employment, elsewhere, and as is reflected in a case that’s coming, perhaps is coming to the Supreme Court this year, some economists have concluded that the preference idea for minorities actually has turned out to be terribly injurious to the minorities themselves. Finally, I should talk a little bit about George Schultz and Jim Hodgson. George, as has been mentioned, left the Labor Department to go over to OMB. Before he did that, his prestige was so high in that administration, that the Labor Department was sort of the favorite son or daughter on the domestic side. And George was given such responsibility that he was actually put in charge of the Oil Import Task Force, which was dealing with the import, concerns about the import of oil into the United States. As Labor Secretary of course he had no special expertise about that at all, but his judgement and wisdom was so trusted. What is not sufficiently appreciated was his original Undersecretary, who became Secretary, Jim Hodson, was an enormously capable man too. And Jim did a wonderful job. I had the pleasure of serving as his Undersecretary. Unfortunately, he made a mistake once, a White house instance, he attacked George Meany, which destroyed his effectiveness because George Meany responded, “I don’t pay attention to the janitor as long as I can talk to the owner of the building,” which destroyed Jim’s effectiveness. It’s a shame because he was an enormously capable guy. Any event, finally I would end by saying it was a pleasure to have Mike as my deputy, I recruited him out of the White House as a labor economist. It was he who convinced me that the minimum wage laws were injurious to the country, and we actually proposed a youth differential, partly because of Mike’s instance. Bill Kilberg was a wonderful teenager and he’s still only barely older than that. A wunderkind, and he took over to help destroy the economy on affirmative action and I’ll leave it up to him now Thank you. It’s not clear how to follow that. You know, Ann and Mike and Larry have given you some idea of many of the important domestic initiatives that we’ve had at the Department of Labor in the Nixon years. Because of those programs, and domestic programs generally in the Nixon administration, one might think of that time as merely an extension or completion of the Great Society. It certainly reflected, as Ann indicated, the social consciousness of the time, but it also reflected a reaction to overreaching in the Great Society. Thus, while recognizing a role for government, it sought, and I think some of Larry’s comments underscore this, it sought to limit the reach and intrusion of that role. The administration favored affirmative action, but, just as it favored other Civil Rights measures, it would come to oppose busing for school integration, and it disavowed the use of employment quotas for the hiring and promotion of minorities and women. It supported pension reform, but it warned of the moral hazard of government-provided nonrisk-based insurance for retirement plan terminations. In taking these positions, the Nixon administration would at times strain its relations with organized labor or at least with elements of it, but would maintain or even expand its space among blue collar workers. Let me address two examples in more depth. The origination of the Contract Compliance Program depended on statistical analysis looking towards hypothetical availabilities of minorities and women. Furthermore, it assumed that discrimination, if any had occurred, was societal, not necessarily tied to any individual employer. These characteristics when combined with numerical standards, were what made the legal issues surrounding the constitutionality of the program so difficult and what give rise later to the self-criticism of the OFCC program. The AT&T and steel industry consent cases presented situations where there were defined groups of individuals who had been subjected to discrimination in job assignment and were continuing to suffer from that discrimination. As was common at the time, jobs were often characterized as female jobs or male jobs, black jobs or white jobs. Thus, women applying for employment with the phone company invariably were directed to operator positions or simple line assignments. Blacks looking to work in the steel industry were invariably directed to jobs in the hot end of the industry, in the coke ovens, rather than in the better, well not better paying, but better jobs in the coal end of the industry, the rolling side of the mill. Even after passage of the Civil Rights Act of 1964, women and blacks were locked into their positions because union seniority rules made it impossible for them to use company or plant-wide seniority to compete for jobs that had hitherto been denied to them. With the support of then Solicitor Dick Schubert, Undersecretary Silverman was refused from involvement with the AT&T case and I was then serving as Associate Solicitor for Labor Relations and Civil Rights. I sought to put together a government-wide settlement of all outstanding equal employment matters, first with the entire Bell system and then with the steel industry, that would meet the legal standards that I understood the President wanted us to uphold. Let me put this in context. In 1972, the Equal Employment Opportunity Commission had yet to obtain the right to bring cases in court. It was basically a conciliation agency. It did not have litigation authority until after passage of the 1972 amendments to the Civil Rights Act. It was an agency that had a mission to conciliate, but at the same time it had an aggressive staff that wanted to litigate and favored radical change. In a creative action, the EEOC had brought a complaint with the Federal Communications Commission seeking to deny approval of AT&T’s request for an increase in its long distance rates, on the grounds that AT&T discriminated against women. The EEOC was insisting that AT&T adopt strict employment quotas for the employment of women in craft jobs and the employment of men in telephone operator jobs. The Department of Labor’s Contract Compliance Authority, in which we reviewed AT&T as a government contractor, was somewhat undercut by the reality that we dared not cut off phone service to the entire United States government. I enlisted the Department of Justice to represent the Labor Department and the Office of Federal Contract Compliance in a breach of contract action against the phone company. Our allegation was they had breached their commitment not to discriminate. I also garnered the support of the Department’s Wage Hour Administration, which had authority for the enforcement of the Equal Pay Act. And I approached EEOC Chairman Bill Brown, promising the EEOC lead status on any caption for a nationwide federal consent decree that would be filed in federal court, if they would join us and work with the Department and the Department of Justice on a comprehensive solution. On January 18, 1973, we announced an historic agreement that included support from the IBEW, although not from the Communications Workers of America, and that permitted women to exercise company-wide seniority to bid for higher paying craft jobs and provided them the incentive of a payment, if they were successful, to compensate them for the delay they suffered in being allowed to compete. There were no quotas and numerical goals were based on the availability of existing, qualified women already in the employ of the phone company. A year later, by which time I was solicitor of the department, we replicated the principles of the AT&T agreement in the steel industry consent decree. Nine steel companies and the United Steel Workers of America agreed to replace department-wide seniority with plant-wide seniority for most promotion, transfer, layoff, and recall decisions. This allowed hundreds of black workers who were in the dirtiest, hottest jobs in the industry to successfully compete for jobs in the cleaner, cold end of steel manufacturing. These workers were red circled to protect their rates of pay when the transfer required moving to a lower-rated position. This, plus back pay and the use of aspirational goals targeted at the victims of discrimination, but no quotas, transformed the gender and racial make-up of two major industries, while trampling on the rights of no innocent employees. Talk a little bit about ERISA, the Employee Retirement Income Security Act of 1974. In January 1971, there was a committee headed by Peter Flanigan, some debate among Larry and Mike and I as to its characterization, but I remember it being referred to as the Committee on the Blue Collar Worker, and it included representatives of the Labor Department, Commerce, and Treasury. This committee turned its attention to pension reform. This is a subject that prior administrations, most notably both the Kennedy and Johnson administrations, had worked on, and it had garnered the long term attention of Senator Jacob Javits, who had first introduced a bill in 1967. The auto and steel workers’ unions wanted a government termination insurance program to provide assistance to current and future retirees in the event companies could no longer fund their retirement plans. They opposed any private, risk-based system because, they argued, the weakest companies would pay the most in premiums and that might tip them over the edge of solvency. The building trades and the teamsters’ union generally opposed any regulation of the private pension system because their members participated in collectively bargained plans for the most part and they feared that any increase in the cost of the administration of those plans would result in the diminution of benefits. Also since union officers were involved in the administration of those plans, they opposed any fiduciary standards that might apply to those individuals. Employer groups generally supported standards of conduct and disclosure rules. Some employer groups also endorsed enhanced vesting and funding rules. But terminations insurance was seen as a costly, unnecessary complement to funding rules. On December 8th of 1971, the Nixon administration proposed legislation that included fiduciary standards of conduct and a very clever vesting rule that focused on older workers who were most threatened by benefit forfeiture. More important, the administration favored individual retirement accounts, which would permit employees without pensions to contribute up to $1500 a year, or 20% of earnings, whichever was less, to an account in their own names, deduct a contribution from their federal taxes, and pay no taxes on earnings until withdrawal at retirement. Thus, the administration came down on the side of individual responsibility for retirement savings, much to the chagrin of organized labor. Two years later in 1973, the administration’s recommendations were in the hands of a newly created National Economic Policy Council, chaired by former Secretary of Labor and then Secretary of the Treasury George Schultz, and vice chaired by Assistant OMB Director Ken Dam. The Department of Labor was represented by my office, the Office of the Solicitor. Treasury and Labor agreed that pension participants be allowed to withdraw their vested pension benefits and roll them over into an individual retirement account upon termination of employment. This would was a new aspect of the IRA proposal. We also agreed that the bill would include both a funding and a termination insurance provision. We disagreed because the Treasury wanted the termination insurance provision housed at Treasury. We wanted it housed at the Labor Department. The President had to make the decision. The President decided that the administration would oppose termination insurance. It would be housed in neither agency, because we would not support that provision. And he did so expressing concern regarding the moral hazard of having a termination insurance program, arguing that it would be an incentive to aggressive increases in benefits without providing adequate funding. George Shultz and I would brief the press on the administration’s position on April 11, 1973. By 1974, organized labor had gotten most of its way. It was forced to accept fiduciary standards, but got most of the rest of what it wanted, including a termination insurance program, the creation of the pension benefit guarantee corporation, which would be housed in the Labor Department for administrative purposes, but independent of the department. Time has proven the President correct in his concerns with regard to termination insurance. In fact, the Congress has over the last 35 years been forced to shore up the termination insurance program numerous times, revising the premium formula, tightening funding rules, limiting the ability to terminate plans and increasing employer liability upon plan termination. At the same time, the number of defined benefit plans protected by termination insurance has nevertheless decreased dramatically, and employees have found that more of their retirement savings has been put at the risk of the market. At the same time, individual retirement accounts have proven to be a winning concept, providing employees with increased security and enhanced portability when the increase in employee mobility has made it most important. A few general thoughts on those years. President Nixon had promised in the 1968 campaign that he would reach out to working people. He fulfilled that pledge with a host of initiatives to improve the lot of working people and to make the work place a safer place. Not everything that was done was wise. For example, wage and price controls. But the larger picture reflects well on the effort, I think. It was an open relationship with organized labor, which represented, of course, a much more substantial part of the private workforce then than it does now, but it was not always a friendly one. Nevertheless, the AF L-CIO officially remained neutral in the 1972 race, and Nixon garnered significant blue collar support. Indeed, the so-called Reagan Democrats were originally a creation of Richard Nixon. An irony of our success, maybe something we should discuss, is its contribution to the demise of organized labor in the private economy. As government regulation expanded, workers have seen less and less of a need for the protections provided by union representation. Thank you. Well, thank you all. I think we’ve got the afternoon planned for here, there is so much to follow up on and cover, but let me start with something a little bit on the a lighter side, but to your last point Bill, about the relationship generally with labor before we get into the why. It has been said that Nixon liked labor individually and McGovern and the Democrats liked them as a mass. With that in mind, and a little unknown story is that in 1970, although it’s very much a matter of record, President Nixon, probably the first time and last time, invited labor on Labor Day, members of the AFL-CIO, the presidents of various unions, to honor the labor leaders. Never before in the White House had that happened. George Meany, of course, was there and at that time there were 20 million members of organized labor in the country. The President toasted Meany and he toasted him for his patriotism, his character, his family, his country, freedom, because he also toasted him as he believed in a strong free labor movement. Larry, you were there, do you wanna address that a little and talk about it in the context, one, of 1970, and two, ultimately much of what the Nixon administration and you all worked on and put in place, to Bill’s point, started to diminish a need for organized labor because of federal regulation. So it was a social event that had great moment, but…
It was a black-tie dinner honoring the labor movement, and it was a precursor, of course, to the efforts to gain labor’s acceptance, and ultimately, neutrality, in the ’72 election – a neutrality which was in no small part aided by the selection of George McGovern, who George, meeting with Lane Kirkland and the leadership of the AFL-CIO, formed a major distaste for. They disliked him intensely, as much for his national security views as anything else. It was part of my job to try to gain the support the AFL-CIO in ’72. What we did gain is active support from the building trades unions, many of the building trades unions, specifically certain doors and exits. Seafarers did as well, I was reading, is that right? Yes, and the changes, as I said earlier, that a quid pro quo for the teamsters’ support was the dropping of the final offer selection legislation, but the AFL-CIO was just intensely distrustful of the McGovern wing of the Democratic party. They were appalled at what had happened when the Scoop Jackson wing of the Democratic party seemed to dissolve before their eyes. They were very troubled. It’s quite astonishing amongst, when you compare the labor movement of the sixties and seventies with today, not only as Mike said, you have such an enormous decline in the portion of the labor represented by organized labor and of course the bill made it through. The labor movement has shifted even within those limited bounds far to the left as you have a much higher percentage of public employee unions. Their political views are much to the left of where the old building trades were or even the industrial union. As a result of which you see quite a shift in the politics of the Democratic party and certainly on national security matters. The AFL-CIO back in the ’60s and ’70s was anti-detente, it was to the right of Nixon and Kissinger. Now, it’s far to the left of not only the Republicans but many of the Democrats. Amazing shift. Michael, maybe comment on the growth and efforts for public sector job creation, which also built a constituency for labor over these many years coming out of even all the wonderful initiatives we made. Well, there are a couple things. Let me just first comment on this decline in union membership in the private sector of the economy. I think it’s primarily due to the changing structure of the economy, the reduction of manufacturing jobs in the economy and the growth of service jobs in the economy. This is a long-term trend that I think is one of the major drivers for the reduction in the percentage of our workforce that’s unionized. Of course, the growth in the unionized portion has been in the public sector as you say, primarily at the city level and the state level, public school teachers and so forth, and many many states now have laws providing for collective bargaining rights for public sector employees. So that’s been the growth portion of the unionized, of the members of the AFL-CIO. I think what you’re referring to is there was, when the Nixon administration was trying to increase employment and reduce unemployment, there was one initiative that in retrospect was a mistake. I think it was creating what we called public service jobs, where we would directly fund unemployed people to work in government jobs at city and state level. It was a temporary program, fortunately, and it hasn’t been repeated since then. Well, shovel ready and stimulus might be a close cousin, but I’m not going to say that, but it didn’t work. How big was it, Mike? I don’t recall, but there was enormous pressure to spend the money quickly and get people on the payrolls very quickly before the ’72 election. Well and CEDA feed that later. It was of the same cloth, although not the same program exactly. I would also point out in terms of the decrease in private sector density of unionization of the private sector is increasing competition in areas where you have seen deregulation that resulted in increasing competition, for example, trucking. The world has changed dramatically. In our time, the trucking industry was largely unionized, predominately teamsters. Today, there are two large trucking companies that are unionized, the majority of the industry is non-union. Even in manufacturing, we’ve lost 4.5 million from 1977 to the present time, we’ve lost 4.5 million unionized jobs. The nonunion sector in manufacturing has actually increased by a million and a half since 1977. So what you’ve seen is an increase in competition and where there’s been increasing competition, often unionized companies have lost out to nonunion companies, and the shift in construction is equally dramatic, much of that helped, frankly, by the civil rights laws. It wasn’t just the Philadelphia Plan. As Larry indicated that wasn’t George Schultz’s primary focus, but the reality is that by opening construction jobs to minorities, we also increased the number of construction workers and put pressure on their ability to monopolize the control of labor. I think you also have to add more sophisticated management. Yes. Yes, yes. Management got much better at sort of managing the workforce and giving employees the right to participate, even when they weren’t unionized. So I think there’s a much more higher degree of sophistication now and people just feel they don’t need a union to represent them. No, that’s true. I think you’re both right about the reasons for the decline, both structural and the global competition, but what puzzles me is that you don’t see the same decline of the unionized portion of the workforce in Europe as you do in the United United States even though they, the European countries, face many of the same structural and competitive factors we do. Yet the portion of their unionized workforce remains pretty much the same as it was in the seventies. Very puzzling, I don’t know why. I can only say anecdotally, when I was at Labor with the Reagan administration, I had a visit from the Italian labor minister, who was coping at that time with a lot of shift of North Africans into Italy, and also not as many jobs, and so we sent them on a tour of our training centers, and I don’t think this is the answer, but he said when he came back, “I know how you’ve created all those jobs.” And I said, “What did you find out?” And he said, “You’re open on Sundays.” The point is our whole structure was so different on taxes and everything else, but that’s a whole other subject, but it’s a good one. Let me come back to something that we haven’t really talked about either at our dinner last night warming up or today, and you’ve mentioned it. Two things. One, yes employers became more sophisticated. I know I used to say to them adapt before Congress adopts, but what about Congress? A couple of the comments you all made had to do with the initiatives of the administration being asked by Congress, send us something. Can you address what Congress was like at that point? Because they really were a, by and large, Democratic Congress with ties to labor. I once gave a speech in which I said there are 4 partys in the Congress that are relevant to the Labor Department. There are the Southern Democrats, there are the Republicans, the AFL-CIO, which largely controlled all the Northern Democrats, and Javits. He was an independent factor and enormously brilliant, exasperating in some respects on matters that he thought were too conservative, but occasionally very helpful. But that’s sort of the way things worked. The Southern Democrats of course were in many respects more conservative than many of the Republicans. The structure of Congress and the parties was quite different in those days than it is today. Well, I’ve often felt like in more recent times, and I said this to Lane Kirkland, they’ve abdicated their leadership to Congress. They? They, the labor, AFL-CIO, because they’ve given to them all these rules and protections and initiatives, rather than fighting for it or bargaining for it from, today childcare and family leave items, but certainly discrimination and jobs for women and appropriate training and all of that is important. That’s a sensitive subject in the labor board, you know the people utterly forget, except for the few historians, that the old AF of L, before it merged into CIO, opposed unemployment insurance, opposed the minimum wage law, opposed all sorts of legislation for precisely that reason. They didn’t want the government to take those over because they would reduce the purpose and need for unions. Right. But just a word on the era. I mean, the Occupational Safety and Health Act was the William Steiger Act. There was Bill Steiger from Wisconsin in the House. John Erlimbourne from Illinois was a key player in ERISA, Al Quie from Minnesota. These were people that we worked with on a regular basis. Now Javits clearly was a dominant figure, certainly in the Senate, even though he was in the minority. He had enormous influence over what the Senate Labor Committee would do and what the direction of legislative initiatives would be, but there were leaders in the House as well, and they were bipartisan. In fact, it was the Republicans, I would argue, who were certainly the more creative and the more aggressive because so often the Democrats were waiting for their guidance from the AFL-CIO. Yeah, the truth of the matter, the Republicans were playing a defensive game. Even Bill Steiger with whom I was really close, took over the sponsorship of that bill because we begged him to do so, in order to reduce the power of the Democrats and the AFL-CIO. We wanted more of a compromise. So it’s not quite true that the Republicans were pressing those issues. I mean, but the environment in the Congress was completely different than it is today. Yes. I mean, it was much more bipartisanship, people working together. That’s true, because as I said earlier, the Southern Democrats were to the right of many of the Republicans and there are all sorts of really liberal Republicans like Schweiker and Javits and Case who were to the left of many Democrats, but I have to tell one wonderful story about this. I went up with George Shultz to meet with Senator Yarborough, who was Chairman of the Labor Committee from Texas. He was not a rocket scientist. He said nice things about you, but go ahead. He’s no longer alive. But any event, we were talking with him about labor legislation dealing with farm workers because he had wanted an initiative on that, and George was explaining what the problems were and he was going on for about a half hour, and I could see that Yarborough was getting a little bored. And a phone call came in. You know, George was such an important Labor Secretary, a phone call comes in and Senator Yarborough said, “I can’t interrupt now. I am in an important meeting. I am in an important meeting with the Secretary of Agriculture.” So George and I went back in the car together. George said, “What did you think about it?” And I said, “Well, I think he’s a dummy.” And George said, “That can’t be true. He’s been elected to the Senate a number of times. He’s got to be competent. You should be more charitable about it.” I said, “I still think he’s a dummy.” Well, the history will tell you. But, back to George Schultz then, if there were a, was a Congress that was more bipartisan and therefore more encouraging to the compassion and the initiatives of the Nixon administration’s labor activities…
And more creative at coming up with alternative ways of getting things done. Well that’s a fair point and certainly true. Well, and with that in mind, George Schultz, I think we know was a supporter of Cabinet Government because it worked well. He was a phenomenal cabinet officer. Well, what of this idea of bringing more of the policy making into the White House, stronger domestic policy, organization, Cabinet departments execute the policies that might come out. That was probably the first of really strong domestic policy, strong White House on policy initiatives, and yet the labor agenda was huge and the labor initiative out of the Labor Department, huge. Can you talk a little bit about that time with the White House organization and the growth of, if you will, a more centralized economic set of agencies, as I understood it. It was consolidation, I guess you would call it. Well, I think the President had enormous confidence in George Shultz. And George really took, to a certain extent, the labor portfolio in some part with him when he went over to OMB. But Jim Hodgson had George’s confidence. So I think therefore the President was inclined to allow the Labor Department to run as it wished because he trusted George. I don’t think he had anywhere near that kind of confidence in other domestic cabinet secretaries. Certainly not the State Department. Michael, you were in the White House at one point and then outside. What’s your take on the role of the White White House in those days and the efficacy of some kind of super cabinet structure? Well, I was at Council of Economic Advisors, then the Labor Department, and then HUD. And when I was at HUD, in Nixon’s second term, of course, he set up the super cabinet officers, and Jim Lind, who was then Secretary of HUD, was in charge of one group of cabinet agencies, I think it was something like Community Development, Community Urban Development. He had an office in the White House, or at OMB, the old Executive Office building. And of course, as the Secretary of HUD, he was back and forth between the two. He had a person working for him at OM, at the old Executive Office building who would handle these broader responsibilities. And, of course I think this lasted less than a year, this structure, I mean to have one cabinet officer overseeing other cabinet officers, I think was doomed to failure. Now, of course Watergate was going on too and a lot of other things were happening, but I don’t think that structure would have been viable on a long term basis. Well Mike, from the White House point of view, do you think I was right about George Schlutz having a dominant role in the domestic area that no other domestic cabinet officer had that, well, perhaps Butz did, as Secretary of Agriculture, but nobody else had that role. Yeah. No, I think you’re right. I was as a member of the CEA staff, we were, I was the labor economist there so I was always dealing with labor issues and I think there’s no question that the President had a lot of confidence in George Schultz and his area of responsibility just kept growing as evidenced with OMB, Secretary of Treasury, and so forth. No, he will go down in history as one of the outstanding Secretaries of Labor. Bill, comment on the relationship with the White House? Well, I had a relationship with the White House at the time. Well, we know, but nothing personal, please. Much of my understanding of it really came from Bobbie, and she would often tell me that “You don’t really appreciate how things work because you’re at the Labor Department, you’re working for George Schultz, and it’s quite a bit different at other agencies.” So my sense certainly was the same during those early years, and I think it carried through. Now, things changed after 1972, 1973 when Peter Brennan came in. And that was a different attempt, a different view of governing. And Pete, you know, came out of the building trades in New York, and I think his appointment was a political outreach. But he was, certainly didn’t have the knowledge of government or of the programs of the department he was responsible for in the same way that Schultz and Hodgson had. That lasted about two years and then of course we were into the Ford administration and John Dunlop and Bill Usery and things return to the model that we had gotten, that we had known earlier. I can tell one sort of anecdote about the White House and labor. I was a CEA staff member for a year and then Larry offered me the job at heading the Construction’s Collective Bargaining Commission. It was a compromise, I’d work half time. For six months I worked half-time at CEA and half-time at Labor. And at CEA we were very worried about the Davis-Bacon Act, so we, and an old saying in government, you never sign anything you write, you never write anything you sign. We drafted a memo for Paul McCracken to send to the Secretary of Labor, outlining sort of a different way to administer with the Davis-Bacon Act, with some specific suggestions. And McCraken sends it over to Hodgson. And I then take this job at the Labor Department in the afternoon. I go to the Labor Department, and Hodgson sends this down to me to draft a response from him to go back to McCraken. Answering yourself. Right. Speaking of Davis-Bacon, just to loop back to your comment. It struck me that suspending the Davis-Bacon act was clearly an amazing action at that time and Nixon wasn’t strong. Do you think he had that in his back pocket at that point and that was a more important strategy for him? Actually, I was a little bit involved in that. Really, how do you know? That was designed to hit them in the head to get their attention. Right.
We knew that we were going to back off that. But is that why he wasn’t tough in the meeting is what I’m getting back to. But yes. He was not. He was not. He knew he wanted to do that. No, we were talking about that earlier. He just didn’t like confrontations. He didn’t like confrontation, okay. And also, I mean these were some of the people in the room supporting him in the Cambodia invasion and the Vietnam policy and that may have led him to not be as tough as he was supposed to be in that meeting. Interestingly, Davis-Bacon has been suspended twice since then, of course, after Hurricane Andrew. It was Katrina, George Bush. And after Katrina, twice it was suspended since then, on national emergency grounds. Bill, ERISA, when I was Labor Secretary, my Walter Mitty fantasy was to understand ERISA. But having said that, I never got there. I’m curious. I think there’s a difference of opinion. Larry, you never liked PBGC, you didn’t want any part of it. Bill, you were at the creation, in part, and an expert in the area. Well, under the first Nixon term, we didn’t want any substantive standards for pensions. We wanted to put in legislation that would simply develop a federal fiduciary standard and we did not want to, partly because as you described the moral hazard, partly because we were afraid if we put in, I argued strongly if we put in any regulation, we would reduce employers incentive to create new pension programs, which of course happened. So we thought it was a foolish…I thought it was a foolish initiative, except for the fiduciary standards, which were… different state laws were very confusing about what fiduciary standards applied to trustees with pensions. But when I left, then these left wing types like Bill got involved and they push through this pension legislation. Actually, the first term Nixon proposal in 1971, Larry is partially right, you did have fiduciary standards, you also had a vesting standard. We did actually. That’s true. And that was perhaps a little bit of a sop towards organized labor and the individual retirement account came about. That was an idea in the first term and it was one of the great ideas. There was a study done, under Ken Dam, about termination insurance, and it was as a result of that study, that Ken and I decided that it made sense to support a termination insurance proposal. And we did, but the President reversed us. As I say, the issue that went to the President was where should it be located, and the answer that came back was “It shouldn’t be had.” And that’s the position, that was the administration position that we took. Could I ask Bill one quick question? Please do. Did Brennan ever get involved in any of these policy discussions and issues. Interestingly enough, he got deeply involved in minimum wage and the youth differential proposal and that, of course, that set Meany off. Brennan then had a serious problem because he had no communication with the AFL-CIO and that was one of the major raisons d’etre for him, that was one of the reasons that he was appointed. So, he did get involved in that issue and selective other issues where he felt he had some knowledge and something to contribute. We could go on all afternoon, but the hour draws nigh. We promised ourselves we’d stop after 90 minutes. I do want to make one point in closing because I think this is a very unique panel. This is our 15th or 16th panel. You have before you a group of people who were leaders 40 years ago in the area of the Department of Labor. And today, these people are still leaders. Ann was one of the first successful recruitments of women to high-level positions. She is a huge leader today, in private enterprise and in public charities. Michael is a prominent economist and has served for a long time on the Chicago section of the Federal Reserve Board. Larry, just a fantastic individual, holder of the Medal of Freedom. 19 years a judge on the circuit court for the DC circuit, and even as a senior judge, within the last month or two, authored the opinion of the DC circuit on the challenge to the Affordable Care Act, which is on its way to the Supreme Court. And Bill, youngest of them all, my classmate from Harvard Law School, my classmate as a White House Fellow, assigned to the Department of Labor, as I was at Treasury, goes back to the Department of Labor, stays there, becomes Solicitor. Today, he runs the Washington office of a hugely prominent national law firm and he’s Boeing’s counsel in fighting the NLRB decision to unjustly prevent the plant in South Carolina. But what’s phenomenal is 40 years then of leadership and today of leadership. And it really a tribute to the recruitment and the people that were brought into the Nixon administration. We try to do these forums monthly, the next one is out at the Nixon Library on the All-Volunteer Army. You needn’t travel out there, we hope to have it filmed, and we thank you for coming today. Good day to you.