63. Memorandum From Secretary of the Treasury Blumenthal to President Carter 1

SUBJECT

  • Organizing ourselves on the steel problem

I met this morning with nearly everyone in the government concerned with the steel problem. 2 We unanimously agreed on the following steps. We [Page 213]seek your approval of these plans and suggest that you mention them at your press conference today: 3

1. The Under Secretary of the Treasury, Anthony Solomon, will lead a small and select task force drawn from several agencies, to develop comprehensive policy alternatives, for your consideration, regarding both the domestic and international aspects of the problem. We cannot treat the problem solely or primarily as a matter of import restrictions. We need an integrated approach to the industry’s fundamental problems, involving the cooperation of government, industry, and labor. The EPG Steering Committee and Ambassador Strauss will regularly monitor the progress of the Solomon task force. The Solomon task force should have its proposals ready by late November for full review by interested Cabinet Secretaries and White House units. The Administration must have its policies in order for the return of Congress in January. The task force will need to conduct intensive discussions with steel management and labor. Ambassador Strauss will handle all necessary international contacts and negotiations.

2. Secretary Marshall, Secretary Kreps, and Jack Watson will immediately make personal visits to steel communities hard hit by lay-offs.

3. Within a few days you will receive from Stu Eizenstat proposals to revamp our system for Trade Adjustment Assistance. These proposals deal with all industries hard hit by imports.

4. Ambassador Strauss will immediately organize a White House Conference on steel, at which industry, union, congressional, and Administration representatives will seek to educate each other (without commitments by anyone) on the dimensions and complexities of the problem.4

5. All of us involved will meet with “steel caucus” members to assure the Congress of our concern and of our commitment to take reasonable action quickly. We must work hard to avoid protectionist legislation prior to the congressional adjournment.

6. You should soon meet, separately, with steel industry and union leaders, and with leaders of the congressional “steel caucus.” 5

7. Each agency should designate a high level officer to hear complaints and ideas from the steel industry, unions, and communities and to pass along this information to the Solomon task force. However, no one but Solomon should “sound out” domestic interests concerning the acceptability of possible proposals.

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To assure that we all pull in the same direction, these various efforts will be continuously coordinated by the EPG Steering Committee.

We seek your authorization to proceed with this action program:6

W. Michael Blumenthal 7
  1. Source: Carter Library, Staff Office Files, Council of Economic Advisers, Charles L. Schultze Subject Files, Box 81, [Steel] [7]. No classification marking. A stamped notation reads: “The President has seen,” and Carter wrote at the top of the page” “Mike. J.”
  2. Mike Blumenthal (Treasury), Charlie Schultze (CEA), Jim McIntyre (OMB), Bob Strauss (STR), Ray Marshall (Labor), Sidney Harmon (Commerce), Tony Solomon (Treasury), Dick Cooper (State), Stu Eizenstat (DPS), Jack Watson (Cabinet Secretary), and Henry Owen (NSC). [Footnote in the original.]
  3. For the transcript of Carter’s September 29 press conference, during which he discussed the steel industry, see Public Papers of the Presidents of the United States: Jimmy Carter, 1977, Book II, pp. 1684–1693.
  4. Carter wrote “minimize number” in the margin adjacent to this point.
  5. Carter wrote “combine meetings” in the margin adjacent to this point.
  6. Carter indicated his approved of this option and initialed “JC.”
  7. Blumenthal signed “Mike” above this typed signature.