Times Mirror

DEC 5 - 1988

**Times Mirror**
Times Mirror Square
Los Angeles, CA 90053
213 237-3814

November 28, 1988

**Robert F. Erburu**
Chairman of the Board
and Chief Executive Officer

Dr. Henry A. Kissinger
350 Park Avenue
New York, New York 10022

Dear Henry,

I know you must take great satisfaction in the quality of the report of The American Agenda. The nature and the specificity of its recommendations are such that the report is bound to receive considerable attention within the administration during these next weeks and months.

Its initial reception has certainly been unusually positive; my colleagues at Times Mirror and I are enormously pleased that we have had an opportunity to help you in compiling a report that constitutes a public service of the first order of magnitude. It has been a great pleasure for me personally to be associated with you in this work, and I want to express my appreciation.

I think you will find the attached enclosures to be of interest and I know that the press around the United States has already begun to use The American Agenda as a point of departure for an on-going national dialogue.

RFE:bfm
Enclosures

AL STEPHENSON

Former Presidents Carter and Ford at press conference.

# Ford and Carter Ask Bush to Accept Some Tax Hikes

By DAVID LAUTER, *Times Staff Writer* 11-22-88

WASHINGTON—In a rare bipartisan effort, former Presidents Gerald R. Ford and Jimmy Carter met Monday with President-elect George Bush and recommended that he agree to at least moderate tax increases to reduce the federal budget deficit.

Ford and Carter are among the loudest voices yet in a chorus of major figures and institutions urging Bush to break his campaign promise of “no new taxes.”

During a one-hour meeting at the White House, they presented Bush with a report telling him that “being a candidate for President and being President are two very different things. . . . There is no disgrace in adjusting your course to meet changing realities; but there may be danger in failing to do so.”

At a minimum, they told Bush in the paper, titled, “American Agenda,” he should ask for about $13

billion a year in increased taxes on cigarettes, alcohol and gasoline as part of a package that could defray the deficit, now about $150 billion, by $40 billion a year.

Ford and Carter also suggested spending cuts, including a small reduction in Social Security cost-of-living increases, a controversial item during the campaign.

Although former presidents often have offered their views, solicited and otherwise, to their successors in the past, no recent precedent exists for the sort of bipartisan effort that the American Agenda report represents.

The project, compiling the recommendations of a number of former Ford and Carter Administration officials, was proposed by Ford's domestic policy chief, James Cannon, and Carter's domestic adviser, Stuart E. Eizenstat, to pro-

Please see AGENDA, Page 18

Continued from Page 1

vide independent guidance to the incoming President on major issues he will confront. It was funded by a grant from Times Mirror Co., which owns the Los Angeles Times and other newspapers.

How much influence the advice will have remains to be seen.

Bush “listened very carefully” but gave no indications that he is ready to change his mind on taxes, Ford told reporters after the meeting. Bush's press secretary, Sheila Tate, was more blunt. When asked at an afternoon briefing whether the tax-increase appeal had altered Bush's opposition to tax hikes, she said, simply: “No.”

In addition to suggesting that Bush break his campaign pledge, the two former chief executives called for several major departures from the policies of the Reagan Administration.

Bush, they said, should propose spending increases on children's programs, such as Head Start and childhood immunizations and environmental cleanup efforts, which President Reagan at one point or another has tried to cut. They also urged changes from current Administration policy toward the beleaguered savings and loan industry,

the Third World debt problem and relations with Congress.

The two former presidents took pains not to criticize Reagan directly, Carter told reporters after the two met with Bush. But in some areas, ranging from government management to broad social concerns, the report offered strong, although indirect, rebukes to Reagan policies.

For example, they listed as one priority for the new President a move to “depoliticize” the White House Office of Management and Budget. Under the current Administration, “OMB’s figures and data are . . . viewed with suspicion,” they said.

On social policy, they said, “we see two Americas, one increasingly wealthy, one tragically poor, a land of opportunity for most and of idle hopelessness for too many.”

Although the report ranged over both foreign and domestic policies, urging, among other things, stronger encouragement to Japan to aid less-developed countries, the deficit was the centerpiece of both the report and the meeting between the former presidents and Bush.

Reducing the deficit with no tax increases and without touching either defense or Social Security, as

[c]

Bush advocated during the campaign, "is impossible," Ford and Carter warned Bush in the report.

"We don't see any route" to balancing the budget without some tax increases, Carter said after the meeting. Ford, for his part, called the tax increases they propose "moderate" and "responsible." The proposed tax hikes would increase the cost of a pack of cigarettes by 16 cents, gasoline by 6 to 10 cents a gallon and the cost of a six-pack of beer by about 50 cents.

## 'Flexible Freeze'

Bush, in adamantly rejecting tax increases in many campaign appearances, has said that he believes economic growth and a "flexible freeze" on government spending programs could bring the deficit under control.

On the growing savings and loan crisis, Ford and Carter "stressed very strongly" that Bush should "deal with the problem quickly," said Eizenstat, who sat in on the meeting along with Cannon and three senior Bush aides.

"If we thought the problem was getting better, we'd favor just rid-ing it out, but it's getting worse," said Eizenstat, the report's co-di-rector. Bailing out the depositors in-bankrupt savings and loans will cost somewhere between $50 bil-lion and $100 billion, some of which may have to come out of taxpayer funds, Ford and Carter told Bush.

The two also warned him that the United States risks losing world leadership in handling the Third World debt crisis. Japan already is preparing its own plan for helping Third World nations with their

debts and the U.S. government will find itself playing second fiddle to the Japanese on the issue unless a new U.S. plan is developed before the June economic summit of the major industrial nations, Carter told Bush.

During the campaign, Bush said only that he supported a plan put forward by his campaign chairman, James A. Baker III, while Baker was secretary of the Treasury. The plan by Baker, whom Bush has tapped to be secretary of state, would have provided Third World debtor nations with additional money or voluntary write-offs by banks in return for commitments to reform their domestic economies along free market lines.

But, Ford and Carter told Bush, that plan no longer is enough to handle the growing problem of countries, particularly in Latin America, that cannot afford to pay the interest on their loans.

Ford and Carter also told Bush of a discussion they had had with several leading senators about the problem of congressional "micro-management" of executive branch policy-making. The senators had suggested that Congress would be willing to give the executive branch more latitude if Bush con-sulted with Congress more than Reagan had.

Ford and Carter recommended that Bush invite congressional leaders to an unstructured three-or four-day retreat outside of Washington to begin to build a cooperative relationship, Carter said. The idea "seemed to be of great interest" to Bush, Carter said.

Excerpts: The New World
Force Is Economic Power

11-22-88 LAT

Following are excerpts from the report, "American Agenda," that former Presidents Gerald R. Ford and Jimmy Carter presented to President-elect George Bush on Monday:

**Overview:** The bipolar world of the post-World War II era, with two dominant superpowers and largely subservient allies, is gone. A new world is emerging with multiple centers of power. . . . The U.S.S.R. is on the defensive within its own empire. Nationalism is reasserting itself inside the borders of the Soviet Union, while the Poles, the Czechs and the people of other Soviet Bloc countries are pressing for greater independence. . . . Communism is in political disarray; the old simple and straightforward threat posed by a unified and expansionist Communist world under Soviet command has abated for now. . . .

The new force in the world is neither arms nor political ideology; it is economic power, operating in an increasingly interdependent world economy.

... America designed, engineered and financed this new economic world. The question now is: How do we compete in a world we taught to compete with us?

The answer: Just as the world has changed, so must this nation change, not by retreating into a protectionist and defensive posture against the new reality of worldwide competition, but to show all nations that American skill and technology and enterprise can lead in the future as in the past.

This brings us to [a further] . . . observation, which is about the home front, the United States itself.

We see two Americas, one increasingly wealthy, one tragically poor, a land of opportunity for most

and of idle hopelessness for too many, a nation never so prosperous or so profligate. And in between are middle Americans, many of whom are struggling to hold their own.

The country has experienced an extraordinary period of prosperity—70 straight months of economic improvement. . . . And yet, at the same time, never have so many Americans been trapped in poverty, in slums, in homelessness, in illiteracy, in crime, in an underclass.

**Federal deficit:** We believe it is time to face reality, to remind all Americans that no one—neither a person nor a family nor a business nor a nation—can continue indefinitely to spend more than he has. . . . We believe it is time for Democrats and Republicans to talk economic sense to the American people, to tell them that ever-continuing deficits are unacceptable, that American citizens must pay for federal government services they elect their representatives and senators to provide.

**Children at risk:** The number of poor adults and senior citizens declined in recent years as unemployment went down and as Social Security benefits went up; but the number of poor children increased. Now the nation has 13 million children in poverty and at risk, and the number continues to increase. . . .

There is no easy answer to the problem of ingrained poverty. But early intervention. . . . Head Start, prenatal care, immunization, the Women's Infant and Children feeding program and compensatory education do work and offer one of the best investments the country can make in its own people. . . . Spending public funds for these young Americans is not wasteful; it is wasteful not to invest. . . .

[L]

Agenda for Bush

11-28-88 CAT

No matter where he looks, President-elect George Bush finds the growing national debt warping and blurring his view of America's future. Just to help balance the budget without making a dent in the debt itself, he must cut billions of dollars a year from the planned growth of the Pentagon budget for the next five years. If he wants American business to be competitive, he must increase productivity, and that requires billions of new dollars both for education and for bridges, roads, water supplies and sewage plants—the life-support systems of industrial societies. Bush cannot easily do either, because the federal debt confiscates for interest more than 10% of the best budget that he can devise.

Holding the winner's feet to such fires was clearly intended as a kindness by former Presidents Gerald R. Ford and Jimmy Carter when they undertook a year ago to put together a briefing, called American Agenda, for the next President—a project financed by Times Mirror Co., publisher of The Times.

Drawing not only on their personal experience but also on the work of a cast of dozens of specialists in every field that they discuss, they have produced a unique document. Other Presidents have counseled their successors, but the messages have been passed in private, and until very recently it was considered poor form for a former President even to comment on the way a successor was doing. American Agenda is a public briefing, filled with advice that voters can share with the next President.

Ford and Carter call their document the "short list," which is obviously some sort of in-joke. The global demands on the modern presidency would be a very long list for any other job.

The deficit heads their list of problems of the utmost urgency, partly because it "dominates all other decisions" and partly because "nobody has a credible plan for getting the deficit below $120 billion yearly, much less pay off the national debt." When Ford and Carter met with Bush on Monday to present copies of the report, both made it clear that tax increases—at least on gasoline, alcohol and tobacco—must be part of any deficit-taming package. Other bedrock issues on the "short list" include:

- Bush must make very early decisions on a new mix of missiles that will continue to make the Soviet Union shrink from firing the first nuclear

shots. He also must follow up without delay on arms-control talks, starting with those designed to dismantle intercontinental nuclear missiles.

- The organization that insures savings-and-loan associations is technically insolvent, and Bush must start searching soon for up to $100 billion to prevent millions of Americans from losing their savings when the savings banks inevitably fail.

- For the United States, neighboring Mexico is not just a Latin American country but the Latin American country. Bush must do everything possible to help Mexico recover economically and grow. His meeting on Tuesday with Mexican President Carlos Salinas de Gortari is certainly in keeping with the tone of the report.

- America's trade deficit and the debt of Third World countries are problems too crucial to be left to technicians, and the President must get to work directly on both.

- It is intolerable in "history's richest nation" that one child in five lives in poverty and that the United States can afford to admit only 20% of the children who are eligible for the early school program Head Start. The nation's children demand "first-priority" action, and education in general also needs presidential leadership.

- The next President must give highest priority to both the global warming trend—the Greenhouse Effect—and ozone depletion.

With luck, there will be no surprises in the American Agenda for Bush or his staff. Its real value will lie in the bipartisan approach to problems. Asking specialists from both parties to examine problems together does not, it turns out, necessarily produce Pablum. The best forecast that we have seen of the future of Western Europe emerges, short and lucid, in one paper by Warren Christopher and Lawrence S. Eagleburger. The report mentions several times a consensus that Japan can help the West more by providing financial aid to developing nations than by rearming.

It may be that Ford and Carter are unique in history as the only ex-Presidents temperamentally suited to such a bipartisan endeavor. If so, it would be a shame, because American Agenda should set a precedent for future transitions at the White House. It has value as a checklist for a Republican White House preparing to deal with a Democratic Congress. It also is a guide for Americans who care how closely the new Administration follows advice formulated the hard way—from experience.

William Raspberry

# For Bush, Advice From Previous Tenants

The document former presidents Ford and Carter have prepared for President-elect Bush is about what you would expect it to be—once you accept the novel brilliance of having those who have sat in the Oval Office give practical advice to the one who is about to enter it.

But it also contains an emphasis that you might find surprising.

The report, "American Agenda," lays out a series of priorities, problems and suggested approaches ranging from the budget deficit and national security to the impending savings-and-loan crisis and Third World debt.

The surprise—for me, at any rate—is its emphatic call for a major White House-led assault on the problem of what are called "children at risk." In three different places in the thin volume comprising the heart of the report, the two former presidents make their pitch for moving quickly to reduce the size and the potential social threat of the growing underclass.

"We see two Americas," say the former chief executives, in language reminiscent of the post-riot Kerner Commission, "one increasingly wealthy, one tragically poor, a land of opportunity for most and of idle hopelessness for too many, a nation never so prosperous or so profligate. And in between are middle Americans, many of whom are struggling to hold their own." They urge Bush to pay special attention to that part of the nation that is "poor, forgotten, out of work and out of hope."

Nor is theirs one of those hopelessly general statements. It specifically calls, for instance, for inclusion of all eligibles in such programs as prenatal care, compensatory education, immunization and Head Start (only about a fifth of those eligible are now included). The additional $2 billion would come from reduced outlays for Amtrak, Urban Development Action Grants and farm subsidies and modest increases in cigarette, liquor and gasoline taxes.

"American Agenda" is the brainchild of Stuart Eizenstat, Carter's domestic policy adviser, and James Cameron, who held the same post in the Ford White House. A year ago, the pair persuaded their former chiefs to co-chair a nonprofit organization for the specific purpose of advising the next president.

"The idea behind the proposal," says Eizenstat, "was to make constructive use of former presidents and to create a mechanism for dealing with important issues that don't get

discussed in any useful way during a presidential campaign."

"We had a sense that we would be going through a divisive campaign and that there would be a need to lift these key issues out of the partisan infighting. Our idea was that if we could identify some of the crucial problems and propose some bipartisan solutions, it would help the next president get off to a faster start." Once Carter and Ford agreed to the concept, their erstwhile assistants put together an impressive array of experts to work through the issues and offer specific proposals for dealing with them.

"Each president has his own priorities and his own world view," Ford and Carter told the president-elect. "Our effort here is neither to subvert nor supplant the agenda on which you were elected. Rather, we—as veterans of the Oval Office, who know the exhilaration and challenges of the presidency, who have exercised presidential power and know its reach and its limits, who have been where you will be and who have made the same kinds of decisions you must make—wish to help you get off to a fast and successful start in dealing with the daunting problems and the challenging new world you inherit."

It's a brilliant idea, worthy of being institutionalized—not because former presidents are necessarily smarter than new ones but because it can help new presidents to avoid the false starts, blind alleys and partisan stalemates that are the usual lot of new leaders.

What Ford and Carter are offering their successor is the sort of nonsense advice they wish someone had offered them.

HENRY A. KISSINGER

February 12, 1988

Dear Ahmet,

Enclosed is a demo tape and press kit for
Nancy Hays whom I met at a speaking engagement
in California last May.

You, better than anyone, know that I cannot
possibly judge these things -- nor do I have
any interest in this particular situation.
However, I pass it on in the event her talents
prove of interest to you.

Hope to see you soon,

Mr. Ahmet Ertegun
Executive Chairman of the Board
Atlantic Recording Corporation
75 Rockefeller Plaza
2nd Floor
New York, New York 10019

TWENTY-SIXTH FLOOR · 350 PARK AVENUE · NEW YORK, NEW YORK 10022 · (212) 759-7919

JMP Entertainment Group

Jack Morton Productions, Inc.
666 North Lake Shore Drive
Chicago, Illinois 60611
312 440 9700

January 22, 1988

Dr. Henry Kissinger
c/o Chris Vick
26th Floor
350 Park Avenue
New York, NY 10022

Dear Dr. Kissinger:

Last year, Cindy Bastounes and I had the oppor-
tunity to meet and work with you at the Cadillac
Master Dealer Convention at the Ritz Carlton
Hotel in Laguna Beach, California.

I wanted to follow-up on our conversation
regarding my aspirations as a singer/songwriter
and your close association with a gentleman at
Atlantic Records in New York. Since that time,
I have made several trips to Nashville and I
finally have a tape I am proud enough to send
you!

I do know that Atlantic represents very few
country artists, but even so, I thought that
perhaps they might be able to pass it on to an
appropriate source. I also have a videotape
that has generated some excellent bookings
(opening for Ronnie Milsap, Dan Seals, the
Forrester Sisters, etc.) I can send it along too
if it would be helpful.

No matter what the response, I sincerely
appreciate your generous offer and look forward
to seeing you again very soon.

In all seriousness Dr. Kissinger, meeting you
was an experience of a life time and one that I
will always remember.

Thanks again for that and all your sincere
kindness.

P.S. My parents thank you for the autographed
book. Happy New Year.

New York
Chicago
Washington
Atlanta
Houston
San Francisco
Detroit
Los Angeles

JMP Entertainment Group

MAY 18 1987

May 7, 1987

Dr. Henry A. Kissinger
Twenty-Sixth Floor
350 Park Avenue
New York, NY 10022

Dear Dr. Kissinger:

I cannot begin to tell you what an honor it was for me to work with you in March at the Cadillac Master Dealer meeting. I can honestly say I have never enjoyed working with anyone more (George Burns & Wolfman Jack included)! Not only are you a outstanding speaker, and an intellectual genius, but you are also a great guy with a tremendous sense of humor. Cindy and I have not stopped talking about "our experience with the distinguished Dr. Henry Kissinger". Thank you so much for the personally signed books and countless pictures.

No, I have not forgetten your generous offer to pass on my demo tape to your friend Ertegun at Atlantic Records. I have decided however, that before doing so, I would like to "re-work" a few things in the studio. I will be recording two more songs in early June, and as soon as I complete them, I will send the tape to you. Hopefully, that way, Ertegun will recieve my very best effort.

In the meantime, I have enclosed my press kit and
photograph, so that you don't forget.

Again, Dr. Kissinger, thank you for everything. I'm looking forward to working with you again in the near future.

Best wishes for continued success in your endeavors.

Fondest regards,

Nancy Hays
Manager
Music and Entertainment

NH/jt

[y]

HK:

Apparently you when you met a Ms. Nancy Hays at an event in Laguna Beach you indicated you might be able to forward her "tape" to Ertegun at Atlantic Records to help her with her aspirations to be a singer/songwriter.

Do you really want to do this? If so I'll draft note for your signature to Ertegun -- otherwise it is very easy to get you off the hook.

Just leave it alone ____ Prefer ____

OK send along
It is a big bay

[LC]

Nancy Hays

NANCY HAYS, a native of Champaign, Illinois, is a bundle of talent wrapped in a small but very stunning package. The magic of NANCY unfolds as she sings, dances and gathers a rapport with her audience that is unequaled by any other performer.

For one so young, NANCY has had a wealth of experience in theatre and the performing arts that includes everything from conventions and special events to country music. Her first professional exposure at the age of 15 was as Dorothy in "The Wizard of Oz", produced at The Little Theatre on the Square in Sullivan Illinois. That summer she appeared with many stars including Robert Conrad and Mickey Rooney.

The daughter of a physician and nurse, NANCY made the dean's list every semester in college and worked very hard to maintain a level of excellence in her educational endeavors. Although her major was business, NANCY studied dancing and singing privately. While completing her B.S. at the University of Illinois and her Masters in Advertising at Northwestern University, she found time to perform on television, sing commercials and jingles, and do some modeling and summer stock theatre. NANCY also sang and danced at Opryland USA in Nashville, Tennessee. She was in the movie "The Minnesota Connection" with Rosie Grier and Joseph Campanella and has shared the stage with such notables as David Brenner, Barbara Mandrell, Porter Wagoner, and many others. In 1982, NANCY found time to compete in and become a finalist for Miss America preliminaries and for Miss Illinois. She was a preliminary talent winner.

NANCY'S list of credits are endless and include performances in some of our country's select venues such as the Sands Hotel in Las Vegas and the Sheraton Waikiki in Honolulu. She has entertained for hundreds of corporate clients including IBM, Motorola, General Foods, Amoco Oil, and many others. This year she was the opening act for Danny Thomas at the Las Vegas Hilton.

When she isn't traveling and performing, NANCY lives on Chicago's North side where, believe it or not, she does find time to enjoy her hobbies of teaching aerobics, swimming, tennis, waterskiing, etc. She also has been working on some songwriting had has a new one ready that could very well be one of the next big crossover hits. NANCY is truly a gifted girl who hasn't let success spoil her mid-west, home grown beauty .... she is still a lovely person, and entertainer who puts her audience above all else.

An evening with NANCY HAYS is an experience .... an unforgettable experience.