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Economic Stabilization Act of 1970
The Economic Stabilization Act of 1970 (Title II of Pub. L. 91–379, 84 Stat. 799, enacted August 15, 1970, formerly codified at 12 U.S.C. § 1904) was a United States law that authorized the President to stabilize prices, rents, wages, salaries, interest rates, dividends and similar transfers as part of a general program of price controls within the American domestic goods and labor markets. It established standards to serve as a guide for determining levels of wages, prices, etc., which would allow for adjustments, exceptions and variations to prevent inequities, taking into account changes in productivity, cost of living and other pertinent factors.
The Pay Board and the Price Commission were created on October 22, 1971, when President Nixon appointed 22 members between the boards, as agencies to create and administer economic controls in Phase II of the Economic Stabilization Program (ESP), with Donald Rumsfeld newly acting as the executive director of the Cost of Living Council responsible for establishing the overall goals of Phases I and II of the ESP.
Under the authority of the act, as amended, on August 16, 1971 President Nixon declared goals of combating inflation, reducing unemployment and curbing domestic consumption of foreign goods by imposing a 10% surcharge tax on all dutiable imports.
The nation was in recession, attributed to the Vietnam War combined with workforce shortages and the rise in healthcare cost. Nixon inherited high inflation, but unemployment was low. Seeking reelection in the 1972 presidential race, Nixon vowed to fight inflation and acknowledged that it would result in job losses but proposed that it was a temporary solution and promised that more was to come in terms of change, hope and "manpower".
The Economic Stabilization Act of 1970 was passed, inaugurating a policy of wage and price controls. Nixon wrote to Congress:
"Our tactics for pursuing this objective are twofold: First, to accomplish much needed and long overdue reform of the manpower programs set up under the Manpower Development and Training Act and subsequent legislation and thus increase their effectiveness in enhancing the employability of jobless workers; and, second, to move toward a broader national manpower policy which will be an important adjunct of economic policy in achieving our Nation's economic and social objectives".
Nixon commented on the futile attempts to contain the economy in the 1960s and promised to bring about change by proposing tax cuts over the course of his term to create new jobs. In 1971, Nixon proceeded with the tax cuts under the provisions of phase II of the Economic Stabilization Act as it was amended earlier that year. Nixon believed America needed a comprehensive manpower policy to reinvigorate the economy. Nixon and the proposed Act cited the Manpower Development and Training act of 1962 to use the competence of America's workforce and the Manpower Revenue Sharing Act to make training programs accessible to local governments.
The Act provided for limitations on the exercise of presidential authority and allowed delegation of the performance of any of the president's functions to appropriate officers, departments and agencies of the United States or to entities composed of members appointed to represent different sectors of the economy and the general public.
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Economic Stabilization Act of 1970
The Economic Stabilization Act of 1970 (Title II of Pub. L. 91–379, 84 Stat. 799, enacted August 15, 1970, formerly codified at 12 U.S.C. § 1904) was a United States law that authorized the President to stabilize prices, rents, wages, salaries, interest rates, dividends and similar transfers as part of a general program of price controls within the American domestic goods and labor markets. It established standards to serve as a guide for determining levels of wages, prices, etc., which would allow for adjustments, exceptions and variations to prevent inequities, taking into account changes in productivity, cost of living and other pertinent factors.
The Pay Board and the Price Commission were created on October 22, 1971, when President Nixon appointed 22 members between the boards, as agencies to create and administer economic controls in Phase II of the Economic Stabilization Program (ESP), with Donald Rumsfeld newly acting as the executive director of the Cost of Living Council responsible for establishing the overall goals of Phases I and II of the ESP.
Under the authority of the act, as amended, on August 16, 1971 President Nixon declared goals of combating inflation, reducing unemployment and curbing domestic consumption of foreign goods by imposing a 10% surcharge tax on all dutiable imports.
The nation was in recession, attributed to the Vietnam War combined with workforce shortages and the rise in healthcare cost. Nixon inherited high inflation, but unemployment was low. Seeking reelection in the 1972 presidential race, Nixon vowed to fight inflation and acknowledged that it would result in job losses but proposed that it was a temporary solution and promised that more was to come in terms of change, hope and "manpower".
The Economic Stabilization Act of 1970 was passed, inaugurating a policy of wage and price controls. Nixon wrote to Congress:
"Our tactics for pursuing this objective are twofold: First, to accomplish much needed and long overdue reform of the manpower programs set up under the Manpower Development and Training Act and subsequent legislation and thus increase their effectiveness in enhancing the employability of jobless workers; and, second, to move toward a broader national manpower policy which will be an important adjunct of economic policy in achieving our Nation's economic and social objectives".
Nixon commented on the futile attempts to contain the economy in the 1960s and promised to bring about change by proposing tax cuts over the course of his term to create new jobs. In 1971, Nixon proceeded with the tax cuts under the provisions of phase II of the Economic Stabilization Act as it was amended earlier that year. Nixon believed America needed a comprehensive manpower policy to reinvigorate the economy. Nixon and the proposed Act cited the Manpower Development and Training act of 1962 to use the competence of America's workforce and the Manpower Revenue Sharing Act to make training programs accessible to local governments.
The Act provided for limitations on the exercise of presidential authority and allowed delegation of the performance of any of the president's functions to appropriate officers, departments and agencies of the United States or to entities composed of members appointed to represent different sectors of the economy and the general public.