Transcripts For CSPAN2 The 20240704

Good morning. Welcome back for day two of coolidge and the american project Coolidge Foundations centennial conference in honor of president Calvin Coolidge, were pleased to be cohosted with the library of congress and grateful to all of you who are here. Were going to get underway with our panels here in just one moment. But weve been how many other more than 100 students. Weve often been saying there are coolidge senators. And, of course, many of are coolidge senators. But were joined by a number of other student groups. I wanted to be sure that we recognize the first of our 1890 Society Members are part of the Honor Society of the coolidge program. We have maybe a dozen or more joining. So welcome to the 1890 society. From Ashland University, the Ashford Center is here with our ashford scholars. Were so pleased to have you here from ohio. Thank you. Weve had students from bases, d. C. High School Students here at our conference. Welcome to basis. And weve some archer fellows from the university of texas system joining us as well so welcome to our archer fellows. We have a terrific day with the number of sessions and a wonderful celebration this evening, which will be in that gorgeous, majestic, great hall, the library of congress tonight. But plenty of of of material to cover today. Important related to coolidges presidency. Yesterday, we covered his upbringing his influences. And today well talk about his achievements as president. So to introduce our moderator for the first session, please welcome skyler hornback. So good morning, everyone. Welcome to data of coolidge, the american project. My name is skyler hornback. I am a coolidge senator from the class of 2017 and a current graduate student at Vanderbilt University studying chemical engineering. We will kick things off morning with session for the conference and the title of this session is holding the line. Harding coolidge budgeting and regulation. Moderating panel will be the honorable art pope. Mr. Pope is chairman of the john Polk Foundation and chairman of variety wholesalers, a private held business that employs more than 7000 people across its more than 270 retail store locations. Mr. Pope served four terms in the North Carolina house representatives and was appointed state budget director by North Carolina governor pat mccrory in 2013. Please me in welcoming mr. Pope and our panelists to the stage. Good morning. I am mark cote and its my great pleasure to be here and ive just really enjoyed yesterdays session and meeting all the students as well as some quarters and scholars of president Calvin Coolidge. And i want to thank our cspan artist for being here as well for the centennial. When Calvin Coolidge became president. Executor how coolidges policies and values may guide us today. So what we can learn about the 1920s applies directly. The 2020s. Im pleased to have joining us to guest dr. Warren harding a third and as you may guest from the nine there is a relationship there. Dr. Harding. Is the grandnephew of president. He is a successful orthopedic surgeon. Has served our country both of being the third physician for the growing usa rowing team usa Swimming Team but also about being a lieutenant commander, the medical corps for the United States during the 1970s. So thank you always for your service. And dr. Harding is, not just a relative, a descendant. He is a scholar of president harding. One of his books is our common country in practical idealism. The important speeches of president warren g. Harding so we will get wonderful insights from dr. Harding. We also have with us dr. William beach bill beech. Hes not a medical doctor. He an economist. Bill is the current 13th commissioner of the bureau of labor statistics. He is a past chief economist for the republican staff of the United States Senate Budget committee. He has served in policy as the Vice President policy for the Mercatus Center at George Mason University. He was a founder of the center for data as a data analysis, including on Economic Policy at the heritage foundation. Now, ive had the pleasure knowing bill personally since he served the president of the institute for maine studies, George Mason University. So we really appreciate your taking the time to be with us today and your insight over years since the bureau of labor statistics. Now our topic today is budgeting. We all know budgeting we budget ourselves intuitively and with planning. You know how much money you have to spend this trip to washington, d. C. . You know how much you have have to pay your bills at the end of the month. And if youre a student and you have student, you made a careful decision. A very careful decision on what was the value of, your investment in your education thats going to give you a return, wont pay you enough, earn you enough money in the future as well, fulfillment in life to back that debt. But what about many peoples money . Thats easy and if youre government you have the power spend other peoples money both through taxation and debt. Calvin coolidge third one. Nothing is than spending the public money. It does not appear to belong to anybody. The temptation is to bestow it on and need president coolidge and his philosophy to anticipate it. What later became doles public Choice Theory. Dr. Buchanan at the university of virginia. And later, George Mason University won the nobel prize in economics 1986 for a theory of public choice and it is an important dynamic that explains why budgets tend to grow, taxation tends to grow, and debt tend to grow. And the core of it is that when you have a concentrated benefit that the government can give you through direct appropriations subsidies, favorable tax policies and regulations and then at the cost of widely spread among taxpayers and the consumer. The public use individuals, then the parties that we see that contract benefit will pursue it and spend the time on lobbyist lawyers political campaigns. Nor do we see benefits. And how do you prevent government always growing by that pressure to always spend more. And to be perfectly direct, i serve in the legislature. Its very true of congress. One cant say i will support you on that appropriation for your military base. If you will support me in getting that bridge bill, i need a modest. You never say hey in the good of the country. Im not fond of bridge. If you dont find your military. So when hasnt coolidge came into office . It was asked, succeeding course as Vice President from that . From president harding and. President harding and president coolidge. They counter that dynamics of public choice pressure to always spend more from congress and the public is of course spread out far behind the leadership and determination and decisive win in the before 1921, there was no central process in the United States. It was almost shocking. So one of the major acts that president wilson had vetoed before harding, once the budget in, the county act of 1921 that established the first time the central budget bureau, which we now know is the office of management and budget, it required all the departments and agencies to submit their budget, god forbid, to the president first and the president about, the true needs of the people and then submit the budget to the congress. It also set up two independent general accounting office, the gao, that started in 1921 as well. So the departments werent just responsible for their own budgeting and accounting, but they had an independent arm looking at them, reporting back to the press and reporting back to the congress. It was through this centralized budgeting process that we had discipline and looked at the competing of all agencies and looking at the broad impact, not just the concentrated benefits. And they were very this process was very successful from 1921, starting with president. Harding through 1929, the end of present coolidges term, they had a Budget Surplus every single year. They reduced by 53 and reduced the debt by one third. Well have more from bill beach, but obviously, its temporary in the news. A debt ceiling challenge, the continuing growth of the National Debt with annual deficits and asked, can we do anything about it . You can. Through the leadership discipline, you can do that. And thats what president coolidge and harding were able to do and indeed, when he dr. President coolidge said, perhaps one of the greatest aspirations of my Administration Lies in the very marked reduction of the National Debt since i have been president. That is a legacy of president coolidge that we need today. Now with control spending actually reducing spending, generating surpluses. You can then address the taxation side and as in taxation is directly related to budgeting sometimes that people want to keep it separate. But as president said, a government which lays taxes on the people not urgent public necessity in sound Public Policy is, not a protector of liberty, but an instrument of tyranny. It condemned to citizens. To servitude. Again, the starting point taxes. People not required for urgent public necessity. And that is what was the guiding budgeting was for president harding and president coolidge. And indeed they started a massive tax reduction when they came into office. The maximum tax rate in 1920 was 73 of income. Thats for the wealthiest. But 73 of income, president harding signed into law 1921, along with the budget act when the first tax reduction 73 to 50 , they then intact revenue tax. In 1924, 1926, 1928, they reduced it down to 24 . So you would think rate significant reduction, taxes, more prosperity for the country. But how do get a Budget Surplus and reduce the debt when we reduce taxes . Well, in 1921, when the top rate was, 73 , the Revenue Department revenue 700 million. This 19 21, 700 billion. And the income tax of that amount, 30 , 210 billion came from the wealthiest. And those over 100,000. Again, thats 19 20. By 1929, the rate was down to that 24 . And the department of treasury collected more revenue. One dollars billion on the income tax and higher percentage and more dollars from the wealthiest were those earning over 100,000. 65 of income taxes paid by them for 650 million. So they reduced taxes from 73 to 24 . Yet revenue went up 210 million, 650 million. And one of the key drivers of this tax policy, again, goes back to leadership was president. First, president harding president. Course, having a secretary. Andrew male treasury secretary Andrew Mellon and he observed it may sound contradictory but more revenue be obtained by lowering rates. And this was in the 1920s which is anticipated 6070 years was became the also laffer curve. Now dr. Laffer himself says this was not original idea. But put a succinctly, if you tax at 0 income, at 0 , zero, you tax it 100 . No one has incentive to work to earn money, or at least not report it. And you earn zero. So were on the laffer curve to maximize revenue by a reasonable tax rate. That still gives people the incentive to in four days and in the longer term on supply side economics is that when you have lower taxation that lays more hard earned money in your pockets, in your familys pockets, expand and grow the economy and for the employers to invest and grow the business that will grow the economy. So theres a bigger base upon which to levy the tax at a lower rate and gain more revenue. You get on an upward spiral rather than downward spiral we are in right now with all comes back again to leadership and philosophy and values in order to counter the inherent dynamic to spend more of other money, especially have the power to tax and borrow. So with that, id like to turn it over to dr. Harding. You can provide his insights starting his namesake president harding, and then president coolidge. Dr. Harding thank you. Heart. First, id like to just say its an honor and a privilege to be here at this wonderful event. But id like to open saying that i know this is a meeting to reconsider president coolidge but to complement the story, it is important to reconsider his predecessor, president harding, as well. I would like to thank the foundation for that opportunity. Senator warren and governor Calvin Coolidge camp for the presidency in the summer and of 1920, a time of Global Economic downturn, government instability and, social unrest following the great war. Id also add the spanish flu and other made it even worse situation in that era. Hardings Campaign Slogans a return to normalcy and bank of America First. The word normalcy sound a little odd to our modern, but what normalcy meant was a return to common sense where citizens and businesses could thrive. In short, in 1920, harding and coolidge were seeking a course to help the country find its old course and to recover peace, prosperity and, opportunity for all americans. Harding and coolidge asked the voters for a mandate to pursue this course through several changes, including giving the the authority to propose and manage the budget cutting back the size government in general, reducing taxes which has been previously, he said in 1920, had soared to a top rate of 73 and to implement course of military nonintrusive. Also, it was important to harding that serve as an example to the world. The senator from ohio, a modest man, a newspaper publisher and editor. A man who knew the people. Some of his rhetoric was more than rhetoric. It was an appeal to american soul. Most of us remember president kennedys words. Ask not what your country can do for you. Ask what you can do for your country. 45 years before her and his keynotes, both speech at the 1916 Republican National then senator offered a similar call for civic action when he said america should be a place under which the citizenship seeks what it may do for the government and the country rather than what the country may do for individuals. Ive always like to think that maybe that was a little bit of an inspiration for president kennedys words. But what it really means is it explains hardings use of the term. Think of America First, which has been used by many different president s in many ways. But this was think of America First in 1920. Harding and coolidge won in a landslide with over 60 of the vote once elected. Harding did something he immediately started to implement campaign. He steered through congress the budget and accounting of 1921. That new law gave the President Authority over the budget enabled him to decrease excessive spending. Second, harding appointed good men. Examples in this of the budget. Our Andrew Mellon is secretary of the treasury and somebody whose frequently forgotten that charles gates dawes as director of the budget. The quality of these harding was confirmed by their subsequent tenures. Director dawes was to serve as Vice President under president coolidge and was to serve as treasury secretary through the coolidge administra nation and beyond. Was president hoover. I should also add that harding had good foresight to, for the first time in history make the Vice President a member of the cabinet with with the death of president. That proved to be a very special thing. Third, harding and secretary of state Charles Evans hughes called for and shepherded through the senate the treaties of the washington disarmament conference of 1922. The treaties resulted in a significant reduction of that eras weapons of mass destruction. The battleship. For this, he was nominated for the nobel peace prize. This move also spared the significant expense of an arms race. Coolidge would directly credit the achievements of this conference to harding and say when that treaty was signed marked an epic in history. Fourth the Harding Administration commence paying down the National Debt which had ballooned during the four year the war years. And fifth harding led congress in reducing the tax burden. The revenue act of 1921 cut taxes and. It also settled a lot of uncertainty in the Business Community with how taxes were going to affect them. All of this was accomplished in less than two and a half years. Harding didnt get the finishes voyage, but he set a course so that when president coolidge assumed the office, he could continue the course and he it a complete process much better. A couple of other points. Harding, a man who set out to accomplish his agenda not by fiat and decree, but by and enabling his fellow americans. All human annals. Harding once said, are curable by legislation and quantity of statutory enactments in excess government offer no substitute for quality of citizenship. Like many of his predecessors and successors, harding was not perfect. However, we can see why president spoke of his predecessor the following way. President harding was fit to serve the country in the disturbed and distraught following the war. It would be difficult to find peacetime period of a little over two years when so much that was beneficial was accomplished as during his administration. Well we are gathered here to celebrate president. Let us also remember president harding. Thank you. Bill, as an economist, you studied the prewar and what was then the great war. Now, unfortunately, came war one. And i saw i can hardly mention also a flu that epidemic much as we just gone through the coronavirus, were still having lets hope reserve. So what can share with us about that time and the lessons it applies to today . Thank you. Thank you very much, art. And before i get to sharing, let me join dr. Harding. Thank you for being our moderator. Thanking the Coolidge Foundation for, inviting us. This is a very it is an extraordinary opportunity for the vls director to get out of his office is an extraordinary opportunity and and im im just so, so pleased with the evolution of the coolidge president ial foundation, i cant tell you what a tremendous accomplishment that. So congratulations to amity and the board. So let me start with the question, one that i think is should be on our minds frequently isnt because we dont ask ourselves this question, why do we study history. We know that history doesnt repeat itself. But also henry ford was probably wrong in saying that it was just one thing after another. So why do we study. We probably study it. Its just what im thinking. Because we recognize that were facing many of the same problems, that it really doesnt make sense. 100 years ago was a hundred years ago. But we study we study a lot. You go into a bookstore, you go into any library. It is filled with historical or books that are Political Science and sociology with. A strong historical focus. There is a clear awareness that that is truly unifies us with the most ancient of civilizations that we recognize is the permanency of our approaches to life. And we learn from the past. So we study history for that reason. Now again, does not repeat itself in every moment, different from every previous moment. But there is a continuity of something that draws us to Historical Research and makes us spend time with oftentimes very dry history, looking for something that gives insight into a problem that faces. And so id like to apply that thinking if youll permit me to say this thinking to this, thats before us and to connect it to our time. So we have two periods here that i think significant. And i do believe the parallels them are striking, maybe more striking than we credit. This is the period 1919 to 1922. Just take that little period right there. In 2020 to 2023. I to look at this i my sense that there was there was there were strong parallels there were there was there was enough energy in the parallels for meaning. But i was struck as i began to look at this more closely, the 1919 to 1922 period had a very significant pandemic now, lets not deemphasize importance of that to that period of time they were facing a pandemic that moved from the east coast to the west coast know kind of a steady flow of course that steady flow is the propagating mechanism the channel for that was the Great Railroad system which had developed in the late 19th century. And so it moved didnt in this particular the corona virus it moved like this as the aircraft went across the country but both periods a cataclysmic pandemic and in both periods the economic effect was very significant disruptions to the labor force to the talent pool, to supply chains, to networks, to international flows. You would you would think you were talking about the period were or weve just come through but were talking about 1919 to 1922, a 675,000 people estimate. Its probably died because of the flu. Each one in one pandemic. But that was 6 10 of a percent of the u. S. Population in the coronavirus pandemic, which god save us over through at least im telling people like its over. And when well this tells people something it is definitely right about 1. 12 Million People have died so far from covid 19 and its variants, which is 4 10 of a percent of the population, you can see there the the impact, at least at the death rate, the infection was probably even worse during, the 1919 period. But at the death rates are very parallel parallel. Both periods contained a massive expansion of government budgets publicly held debt. Now were talking about very distinct periods because in the 1919 to 1922 period, most of the expenditures at the government level were at the state level and not the federal level, but the 19, 19 two, 1922 period saw the beginning of it signified. Good increases in federal and in federal debt the u. S. Government outlays at its federal outlays grew. By 2,493 from 1969 to 1919. And why was that . Because we were fighting the great war and we just went from almost very low to extremely outlays overnight. And then a 340 . And the outlays were 340 higher in 2023 than in 1916. So even after the war, outlays higher. So we didnt come back down in outlays once war was finished. This is the ratchet effect of federal outlays ever come back. Was federal outlays go up. They just seem to be going up and up and up. This phenomenon, publicly held debt, grew from 3. 6 billion in 1960. I imagine that our debt was 3. 6 billion. Steve forbes as theyre writing that number down, he. 3. 6 billion in 1916 to 22. 3 billion in end 2023, which is a 519 increase. Now, that again does not include the outlays and the general obligation debt of State Governments, which was also going up. So we had a total Government Debt increase at federal state level, which was historic in its proportions to our own period between 2000, 19 1223 outlays grew from 4. 5 trillion to 6 trillion. Again. From 4. 5 trillion to 6 trillion across a four year period, which was a 33 increase in held debt. Federal debt, excuse me outlays publicly held grew. From 22. 7 trillion to 31 trillion in an increase of 7 . So from the standpoint Public Finance, the parallel is absolutely striking. Just absolutely both periods sharp rarely and sustained inflation that affected nearly every citizen and business. Now we didnt bills existed in the war period that were talking about in the postwar period but we did not produce the modern cpi so we cant use todays and compare that to a cpi produced in that period of time. However, thanks to the Minneapolis Federal reserve, Federal Reserve system is worth every penny when it comes to doing things like this. They have reconstructed a cpi for this period, 1916 to 1920, a cpi thats available at the Minneapolis Federal reserves website for those students who are looking for a term paper and the cumulative price increases across that period, its a basically the fourth four year period of where were running. We ran at 84 . So we had 84 it nearly prices, nearly doubled. In other words, it was a period of stunning inflation, stunning inflation. Again, probably related to supply chains and and monetary expansion. The classic sources of inflation between 2019, 2023 being less than the organization i hit up the cpi. By 19 , which is a striking increase in prices in both periods. Were populated by war external disturbances, regional conflicts that threaten to derail rates of economic expansion expansion. All right. So you so my premise is laid i hope successfully there are striking parallels between these two periods. And so it is, i think as a result of this conference for policymakers here in washington to take another look that period, because why do we study history. We study history in order to things in the historical record which inform the current process of Decision Making. And here we have before us a mine literal diamond mine that should be should be thoroughly worked, if were going to solve some of the problems which are very parallel to the problems had then and. Then another striking parallel, both periods saw major budget debates as. Weve already heard in the first that debate resulted the passage of the epochal budget and accounting act of 1921 and its implementation by president coolidge in 1923. That that is ill mention a moment. Moment is far more important to u. S. History than its given credit for, because it set up a system of classification and accounting which allowed us to see the problem. You know, you dont see a in life unless you have a system to it and identify. You have to have those things in the second. We are still waiting. The reconstruction of the badly broken congressional budget, the budget in the paramount control act of 1974, and all the implementing legislation thereafter, but that is probably in the offing. We need to get that Budget System fixed and why this is a stunning number and this is a number i just think this is great. How many scholars have we had since 1996 . And the reason i dont go earlier than that is because theres a raging debate on the number of hours before that time period. Okay if was i asked this question to students yesterday at Morehouse College in atlanta where i gave a similar speech and the best answer was 40. Weve had 125 continue resolutions since 1996. Over a 27 year period. So divide for those in the audience who are still in school. Divide 125 by 27. Weve had weve had year after year in which the entire year was done under a c. R. And that means that we were not making choices. We were not debating budget priorities. Okay so history doesnt repeat itself. And that said, history is preserved and interpreted precise only because of the lessons it can yield for Decision Makers today. And this period between 1916, in 1923, as ive said, is a rich deposit of lessons that we should mine. Let me give just a few of what i think those lessons are, and then ill conclude. First. Great chris should yield significant changes in Public Policies that enhance individual wellbeing and prospects for econo mic growth. Now why is that a lesson because we are not given too many opportune when the configuration of mess were in is so great as is right now with all of this transition and fervor change, we should embrace it. We should say yes, hallelujah, weve gotten marvelous opportunity for bringing about policy change. I dont recommend policy change to the left or the right. Thats not my job. But is a wonderful to embrace it. So this eight year period starting in 1916 saw those challenges that ive listed, but it also saw the of great political extremes in the end and threats to the democratic process you. Know i dont know where this myth got started that it was boring back then. Oh my gosh, courtney, remember, this is . So many people have said that this. But we had we believed there was there was a there was a lot of people in this country believed that soviet United States was on its way. And it was a serious debate. It was not benign, it was not boring. And it was filled with extremes. It was filled with tensions on the left and, the right. It was filled with acrimonious debate. And thats why theme of the president hardings 1920 Election Campaign returned to. Normalcy is so true, so resonates. So resonates. And yet today here we have the same sort of tensions, the Political Center responded to these crises back then across all fronts, sometimes poorly, as in the immigration legislation which was passed. Think we can generally agree that that was poor little but more often well of which the budget act and efforts to achieve scientific taxations great examples so. We know from the 1920s that faced with all the problems i mentioned before and the problem extremism and and great tension, there was a Political Center that acted in in it acted well. Okay. Second lesson might, in my view, the rapid growth in outlays was not as dangerous as. The absence of processes to manage it. I think in our current debate we get too focused on the numbers and less focused on the processes. We get 125 hours not because of numbers, but because have processes that arent working. So the rapid growth in outlays was not as dangerous as the absence of processes to manage it. Budgeting prior to world war one, as ours pointed out, was so primitive and slipshod that it is virtually impossible to recognize it, given todays elaborate management process. So imagine, however, what would have happened to Public Finance had the Harding Administration failed to secure budget in accounting at without the capacity to set priorities and manage the the spending growth. During this period would have been followed in the 1920s thirties by truly excessive, politically driven spending. The white house would not have had the capacity to tamp it down. So the process really mattered. Coolidge is the greatest budget president in u. S. History for for no other reason. Ill put harding in there. Harding. Coolidge for no other reason than the budget process as he put in place in the practices he established. And i really think that we should have statues to general and Calvin Coolidge president harding. Maybe theyre small standing outside door. The current omb director just just remember remark remind omb director. And finally the sharp decline in inflation after 1920 might seem inevitable. Some economic historians, and ive read a lot who are very casual this oh it was going to come down anyway. I doubt that theres nothing inevitable about change just think about that, steve. Theres nothing inevitable about change. You dont know whats going to happen. And theres no reason inflation to come down. We we saw European Countries at the very same time that our inflation was subsiding after the passage of the budget in accounting and saw rolling runaway rapidly rising sustained inflation across. 1920s and in some of the most countries of europe. Ours was an exceptionally quick recovery. Once inflation was tamed. And the lesson here is that economic and Monetary Policy truly. It matters more in what it signals than in what it does does. For example, new budgetary policy, new budget policy that signals improved order and predictability in public can create favorable grounds for doing long term business with government for commencing long term, private sector r d, for growing and expanding parts of a business with a long term hurdle rates and forth when when the federal government signals that it is seriously controlling through new processes and new laws, its own finances. The signal is more important the act because it says to businesses, entrepreneurs, young and old its going to be okay take risk new policy that enhances the prospects. Investment and savings can have large than predicted results larger than predicted results solely from the serendipitous Economic Activity that more capital in the economy can create. So you might say, well, lowering the tax rate to this 23 or 17 or 15 will have this kind of Economic Activity. You will no doubt be wrong, wrong on the low side, because any time you add capital, you have an unpredictable but usually positive growth in output and in innovation and finally a government that regularly maintains Public Finance, orderly Public Finance practices is seen by investors and businesses as a predictable partner. This means, in part, the government can be priced in more easily. Its really important to price government in if government cant be priced in, then you dont know what your hurdle rates are. You dont know what your risk ratios. If you cant price in the actions of the state, then you dont really have kind of clear vision of the future that allows you to take risk and serious risk needs to be taken. If were to change our economy in a serious way. Okay. So message at this is really simple. The period after world one and specifically the harding years from Vice President to president offered guidance for our own and confusing time is a gift we should gratefully accept. Thank you. Dr. Harding. The role of the Vice President is very narrow interact institution really presiding over the senate and to be their successor and the amount of participate the Vice President has in fact has very tremendously through history. You had Vice President johnsons president kennedy and Lyndon Johnson was not only former senator by Senate Majority leader was able to earlier both kennedy agenda merger it was his own on the other hand you had vice truman who was largely excluded from the roosevelt administration, from the cabinet, and famously then know about the atomic bomb when he became president , had to conclude and lead the country to the conclusion of war to the postwar years. He made the point that president harding not only chose coolidge as, his running mate and Vice President made him part of a camp, part of his cabinet, and they seem to form a true partnership. Can you share any insights on president hardings Decision Making in choosing coolidge and entrusting those responsibilities . Well i think governor coolidge made a big impact on on the country in the Boston Police strike, of course. So he was famous and was a very popular person to be chosen for the vice presidency. But running the the glove, on the other hand president , harding, was very to make sure that he had very, very good people in his cabinet and coolidge had very similar ideas. And that is borne by the fact that the policies really remained intact for the Coolidge Administration. And it worked out very well. Its nice that they had similar views and idea as and were able to work on the same process didnt have to go backwards bent the wheel so i think that was a very smart move on on on hardings part and think he was president harding was very lucky that he had president coolidge with him. And we dont have visual effects for our cspan audience, but in our book we have the chart of the scientific taxation on top rates. You can see starting with the 1921 73 rate that president harding had planned tax reductions all the way through 1925, and president was actually that when he announced they were able to reduce it down to 24 and before 1925. So it was a true partnership. And dr. Beech talked about the process and it the leadership and people to pass that budget that president wilson actually vetoed a prior version, even though it would have empowered his office. Some historians have stated that the modern presidency started with president harding, coolidge, the budget act. Well i suspect thats i suspect thats true. You you might want to backdate that and say its the wilson Harding Coolidge years because part of the modern characteristic is that we are on a vigilant footing in a global setting so that wilson through International Organizations and we have processes and structures that we had to create to maintain that footing but also to expand domestically we we should all always remember that the expansion our economy was principally in the 20th century, not in the 19th century. We think of the 19 century as the as the great period of out the United States states come in. We began some purchase and so forth and so on. But really the growth of capital and the labor force occurred between roughly. 75 and and today. And the fact that the united became the dominant power in the world, taking over Great Britain in terms of per capita incomes and capital structure in oh four, roughly. 1900 evidence is my point. So the presidency of early years of this 20th century was challenged to rise to the the occasion. We needed a different form of state, federal partnership and federal government than we had in order to simply accommodate the many needs this growing population and growing economy. The budget act was was crucial because in the in when i hope all read emilys book and if not you should buy four copies each because emily would like that a lot of the shes shes not even listening me what we learn in there is that congress had endless ideas of how to spend money and and and then they still do i mean thats almost their job, right . Thats job. Its come with endless ideas of how to spend money. And so there needs to be processes both congress and in the administration that regularized the channels in which those ideas get introduced to the debate. That priority rises. The debate moved and that was all established of through processes started by the budget in accounting act 20. I going to have questions from the audience we the Coolidge Foundation assembled more than 100 students who are joining us at this the students we have the first opportunity to ask questions. If you have a question, ask that you please raise your hand. And rob hammer from Coolidge Foundation and bring the microphone to you when the microphone comes to you, please tell us your name where youre and then ask your question. And we welcome questions for the panel, but we have some excellent guests here. Well be speaking later. And so we welcome comments as well as question have a good discussion. And before get started, im just recovering from a cold. Im to ask my breakfast partner who would like to be on cspan anyway to bring that bottle of water which is sitting right there. Thank. Hi, cormac lynch from kerry north. You mentioned the power of empowerment through the budgetary process. Do you if Calvin Coolidge ever use his president ial power of empowerment for. He was famous for using abraham technique for stopping things and that just to put stuff in his pocket and let the let the time run out the pocket. I dont think if and but amadi can correct me on this but i dont think that impoundment employed as you know one of the most famous characteristics the coolidge years was his continuous us pressure on agencies to cut cut cut cut. Why would want that . I think he would want that because he was the outlays were so high debt was so high relative to what had been and that each year he would call all the agencies put the Constitution Hall and nbc would come in and broadcast this berating of heads. Im glad that hes my president , by the way, and just, you know, would just berate them and general lord would walk and down the stage and say, why dont you cut this and im not going to give you another pencil and tell it to them that long thats kind of empowerment in a different way, isnt it . I mean its not empowerment of stopping money from being spent, but it certainly the more direct approach on that. So its not my impression that we had a lot of empowerment during the 1920s, but we had the material equivalent of a bill. Yeah, my experience with this, that state budget director, the state level, what is in and sincere by each Department Secretary that they need additional funding to accomplish their mission. It is just inherent in their and before the 1921 budget act the agencies and federal agencies passed went to their specific committee. So the agriculture went to the Agriculture Committee in congress and they didnt have to consider. What the overall budget impact would be. They just wanted to get as much as they could sincerely thinking thats what they needed for their mission. So president harding and coolidge, my central ideas in the budget process and have a unified budget summit that the congress that preempted the need for pow mia so it was that great again that leadership and to counter again part of the public Choice Theory the agencies more money to do what they think they need to do. Over. Hi. Thank you. My names artist in im from Ashland University is the Ashbrook Center so hamilton and jefferson disagreed what necessary improper amount hamilton thought it meant something convenient or helpful for the country, while jefferson thought absolutely necessary would coolidge agree with hamiltons view or jeffersons view on when when coming to decide when to spend money . Bush caution. Thats one for art. Well, actually, i wont go back to the quote i gave at the beginning. This is president coolidges own a government which taxes on the people not required urgent public necessity and sound Public Policy. Hes not a protector, liberty. So i think he would definitely come down on the side of president jefferson. Now of course, as a constitutional law matter necessary calls got greatly extended beyond recognition. Im certain, as anyone irritation. So. Hamilton one the argument under president coolidges leadership jeffersons policies prevail. During term. My name is Thomas Buckley from colchester, vermont. Dr. Beach, you talked the need to think about the budgetary process more than simply like the headline budget number. So what lessons should the current budgetary bureaucracy learn from the Current Situation about reforming our budgetary process . Good. Great question. So i have some insight on that because for last four years of ive worked with this budgetary process. And let me just start with one thing that may be controversial but i think its true. I dont think either party wants spend this country into ruin. I think theres theres theres too much. I i think theres too much partizanship in understanding of the budget and that they have different approaches. Theres no question different. So if we start from the proposition that there is goodwill and that regular budgets are desired by both and that they want to make sure that government is a predictable partner in enterprise, then i think we i think were in a safe spot. To answer your question the current budget processes extremely detailed, extremely detailed. The normal thing is for me to submit a budget request to the department. Department rakes it over, sends a budget request as a department to the president. The president takes it all over. And its not the line number. Its a very structure going, very detailed. And then all of that detail gets passed on to the house and Senate Budget committees. I was the chief economist of the Senate Budget committee, republican staff. So i got to see all these budgets and the budgets would come in. They were oops, sorry. Maybe they have just broken everything. They were they were very rich. They were they were, you know, huge amounts of documents, extremely detailed and. We would go through we had we had dozen a budget full time budget staff on the on the Senate Budget committee. Then there are the appropriations committees. And theyre just a third or Fourth Branch of government. Theyre so big. So you see my point . My point is that theres huge texture and very detailed work going on here. And still, we have 125 crs over the last seven years. So so theres the it isnt the will it isnt the capacity, the the number of people isnt the the the processes that weve set up to create detailed long term short term check in check out authorizations. The National Defense authorization act is passed regularly in june. It has five year authorize appropriations come in after after that its still the defense departments budget cannot be audited you know it seems to me that theres a copper see break in in in in our law and so it is i think a commission on congress to do what the Harding Coolidge team did and get the law right. It isnt will it isnt the details. It isnt of that. That stuff is there and its working. But its still a broken system. So i think id have go to a much larger point. Its not individuals, its not political actors. You cant blame it on the cat. Yeah, its its the law. Hi, Ethan Benjamin from franklin, vermont. From the latest issue of the economy. Fox news spent about a year, but lets. Okay, how dare you . Im sorry glenn. Its relevant. Thank you. Fox news spent about a quarter much time covering drag queens and transgender people as devoted to ukraine from june 2022 to february 2023. How did Calvin Coolidge break to the culture wars of his day to focus on Good Governance . And how should that inform our Politics Today . Thank you, professor. The short answer is it was not the culture wars were not prevalent in the 1920s as they are today. While federal had grown tenuously, usually as a result of the war and president lincoln as a result, the civil and then at war one that the pentagon far more smaller as the october age pointed out as a percent of budget. It was smaller portion of the State Governments at the time, and there was federal legislation on many of the cultural issues of the day. So it really i dont know what president coolidge would and not that good of a coolidge scholars know what he would have thought on issues of in 1920 that are now raging today on the socalled cultural wars. Was just more limited. So thats the best answer i would welcome else in politics who has any insight on the 1920s culture wars . Well, i did. Ill share one thing with you. When i was in graduate school. I first off, i wanted to be a historian until my wife told me i couldnt make enough money. As a historian to write. So one of the assignments i had as a first Year Graduate student was to read the articles in a popular magazine and then to report on that and to do a paper on it. And it was lots of magazines, lots of newspapers. This was the golden age of magazines and newspapers. And i remember i remember picking a magazine, which i read and i read a lot of it. It was called peoples daily like peoples magazine. Its called peoples daily. You know, go ahead and look at. Okay. I mean, if you like to see robert taft in a tutu doing a ballet. Yeah. That was that was happening back then. And there was seems to me there was an enormous of attention. Attention given to funny things in our culture, strange things in our culture. So in that sense, theres another parallel our two periods. They werent just thinking about budget numbers and economic growth. They were also thinking about present tense in tutu. So, i mean, its just of power in that case, Supreme Court justice taft tutu tutu. Good morning. My name is lauralee godfrey and im portsmouth, new hampshire. My question for dr. Harding, but id love to hear the rest of the panels thoughts on this as well. Dr. Harding, you mentioned the harding. Coolidge administered Foreign Policy prevented a costly arms races. And as, you know, war is very expensive. Our current military budget is, one of the highest in the world. Should our Foreign Policy change to for the sake of a balanced budget budget. Thats a tough question. Very good question. And i think i can speak more for myself. Than i can for them of. But it seems to me. That america has be strong if were going to be in a good example for the of the world and thats what i one of the things that president harding particularly was he emphasized that it was America First think of America First. And thats thats really what he meant was make it strong for americans . And then by doing that, we could be a good example and do things for other people also. I just have a couple of comments on this great question. And one which we should really attend to now. So the defense and the National Defense authorization act passed authorized outlays, but not appropriations, authorized outlays of 828 billion, the largest Defense Budget in u. S. History. Now, many people look at that and they say, well, we should be spending on our roads and bridges and education. And, you know, right. In a perfect world, that that would be spent that way. But to understand the Defense Budget, you really need to look below need over in the world right . 30 of that in manpower costs in salaries, wages and salaries, maybe 40, a little bit less than that is in benefits priming health care costs. So when you at the actual part that would be used for munitions for building new defense platforms. It is much smaller than. The 828, on top of which in 1990 we had 55 major contractors who did defense work, 55. We have five today. The entire Industrial Base has shrunk tremendously. So our capacity even spend the remaining money on and new platforms is significantly reduced. Significantly reduced. And if you at the. What does that mean . Well, our our efforts help the people of ukraine defend, their country, against the invasion from russia has as well known. Right we have spent enormous amounts of nations equipment and platform rooms and platforms like a tank or sent them over there just the munitions to replace the nine millimeter to 122 millimeter munitions. These are the shells the current capacity just to replace what we had to bring us back where we were five years. It was going to take five long years to get to where we were. So part of what of whats in the defense now is an effort to revive within the Industrial Base so that we do have the platforms and we do have the munitions necessary to now to two different theaters. One of which was unexpectedly a landmark. We didnt think wed ever have to do that again. Right. You know, we havent made it we havent made an attempt to abrams for 30 years. We need to start making that. And now we have this great threat coming out of the Asian Pacific area, largely from china. So thats a that is a water based basically a water based theater, two different theaters. So we have great threats with limited and declining to meet those threats. And if you love your education, if you love your economic opportunities, you must have a defensive structure thats sufficient to defend those things. Thats why this particular in the aa was is so important and hopefully breakthrough so that we can restore some of the agency and capacity we had 25 years ago, which dont have today. Its a dangerous moment for us to be, but one in which were courageously Going Forward and supplying stuff to ukraine, but still something you really need to attend to. My name is daniel miller. Im baylor. This is my question is for dr. Beach would you support eliminating the second mandate of the Federal Reserve to pursue price stability only rather than price stability and affordability. Well, i have a i have an extremely easy question. I answered. Im not in my position able to take positions on policy change. So so you have to ask me in a few when my term is over the so maximum what what was what for to here is the dual mandate the Federal Reserve laid out in the humphreyhawkins act and legislation thereafter, especially the full employment act of 1946. That is that the Federal Reserve and other Economic Policy making bodies aim to keep stable prices at the time that they have maximum employment. I dont like the word maximum change that i would say optimum employment. Maximum means youre constantly for extremely levels of unemployment and high levels of employment that may not be appropriate involved times. So a larger problem might be this and that is is the Monetary System the system through which the those particular goals should be. It should be attained or is the Monetary System really a reactive system that accommodates policy changes made elsewhere . I think thats a great question economists are asking that question seriously. Now, who leads what . I had a professor one time in my apologies to the Federal Reserve, but this is a historical reference and a reference to the current funding reserve wave. When i was in college, the my my professor said, well, just think about what is the Federal Reserve. Think about it like this. The Federal Reserve tries to chart a path to the future. But its very much like a speeding going down the holland tunnel in new york, bouncing from one side to another. At the end of which it says, we made through in a straight path. So, so we may be asking too much of Federal Reserve to execute that mission, but but not answering your question. But but i think that theres a larger question behind. Your question. And well go next. Oh, okay. Steve hayward, currently an inmate at, uc berkeley, and, you know, a panel budgeting in the 1921 budget. Control and empowerment. This is seriously wonky stuff. And i love but im sufficiently provoked by bill beachs presentation the story arc i completely agree. But i think things are actually even worse than you laid it out. So i want to make a and then in the following the jeopardy rule make it a question for you at art pope rightly points out we were the last major democracy to adopt an executive budget control system that makes perfect sense in parliamentary governments, which are unified. But in our unique constitution, with the separation of powers and the explicit article one power of the purse assigned to congress, it gets a little more murky. So heres my provocation to build on which has the budget control and empowerment act of 1921 was a progressive dream. Just try a thought experiment. If Woodrow Wilson healthy had had a third term and he wanted to executive dominance over congress and a progressive executive with a compliant congress is going to go crazy. It you dont need to do a thought experiment you just at Franklin Roosevelt Lyndon Johnson or our current president. But then in modern times and you raise some of this well i want to sharpen it a bit we this unusual circumstance where theres a in Public Opinion you have the second term nixon and Ronald Reagan representing a National Majority. The only organ of our government that speaks for National Majority on this side of limited government. And what happens congress then effectively i think the 74 act you mention repeal the budget control act of 1921. And so the best we seem to do, you know, Ronald Reagan wanted a line item veto. And, you know, congress, you point out, has never even completed their own process the way its. So we dont really do budgeting anymore in a sensible. So having cast some slight. Ambivalence about the 21 act, i wonder if we dont need to bring that back, make although make it Even Stronger for when we have responsible president s like and coolidge because that i think why it turned out well you had responsible executives and we havent had a lot of that in the last 50 years. Well, steve, you have lived up to your reputation. Thank you for that. And i thank you for that for that very question. And is at the tip off of a lot of peoples right now about what is what do we do with the empowerment the budget empowerment act, 1974 budget control budget act, power and control act. Because it was it was it was created in a period of tremendous turmoil. 74, of course, as you know, very significant year in the history of the presidency, especially august 9th of that year. And congress was attempting to weaken the presidency i think, of maybe intentionally, because they thought it had become too imperial, too strong, too above the law. Its the favorable look on that. Theres a theres a history that writes a line of literature. The rise. The congress was making a play for power. And i think that theres a credible case be made for that. So the birth of that act was very different than the birth of the budget and the accounting act of 1921, which came out of turmoil. True. But came out of, you know, a lot of interests in the part of andrew say this mainstream progressives to build a presidency was Strong Enough for the 20th century that was wilsons kind of dream it out that wilson didnt have a third term. He didnt have a successor that was like him, in fact, something came in which was much not like him. That was Calvin Coolidge. And so i think for the benefit of the 20th century, we got an interpretation of that act, which was much conservative and, operational then than a progressive vision would. I dont know. I may be wrong on that now back to your point. So do need to take a look at the 74 act. And we have you know the 2011 act with the deficit reduction act, which builds on that and other which is connected to it, to put all of that together and say what, can we do to resurrect a system that orderly budgets and you know, let the politicians decide whether or not were left leaning or right leaning or center country, but at least put regular budgeting back back in place, in which case you must have shared power. The Congress Needs to congress is the is the first body mentioned the constitution for good reasons. Its the control of the person controlled spending at modern presidency has to be Strong Enough to withstand the buffeting of priorities and the tremendous tensions which come come by being such a large country with such Large International control. That act is broken and needs to be fixed. And and if and i, i have many friends who are very active in the reform efforts, they would see the budget in the counting act of 1921 as a good skeleton on to resurrect proper budgeting. So i would endorse that say that that we do have a model out there again my main point here what weak point i was making is that theres a mine of tremendous out there that would lead us today and. One of them is lets go and see why. We shouldnt have Something Like the 21 act brought back. Its the 2025 budget budget control act that that would be a great step forward. I wont give a quick answer to that. And again, max, marys at the state level. Ive been both the budget director on the executive branch side and the legislature on the appropriations side as well. I really do think i understand the concern about the 1921 budget that many parts of aggressive but truly the executive branch needs exercise discipline over own budget bill commented earlier about the stacks of tool they got in congress. But the day to day running of State Government and federal government, it really does need to be delegated down to the agencies to prepare and administer their budget with discipline and got it from above again. President coolidge famously bringing in his Department Secretaries and tell them to cut, cut and cut. Be specific. So is an old joke that the governor president proposes a budget and the congress, the legislature disposes of it. So they do act as a check, but they do also load up the budget like a classic pork barrel. To me, the biggest advantage the State Governments, if theyre on their subject, constitutional limits on they cannot just run an operating desert. They cannot borrow. They can issue long term bonds easily for supermajority provisions, the states, but they just cannot issued debt. So to have a constitutional amendment to limit ability to issue debt i think would be a major reform, be so difficult, get constitutional pass and couple states and North Carolinas not done as a castle tuition provision but its a selfgoverning as we limit spending increases to population and inflation. It was a voluntary spending cap so thats one in North Carolina. We can lower our taxes. In 2011 are regressive sales tax our income tax and actually do increase spending but at a slower rate and generate Budget Surpluses by. Keeping that spending increase the population and taxation in the north has been a very prosperous state. Weve grown tremendously over the last 12 years, so are needed if and that again going back to the present coolidge and president harding revised leadership to impose a process so they can exercise direction to start that dynamic of what has been more of other peoples money when you dont have to pay the bill, the taxpayers and future generations, youre youre going to have to pay for the. I am luke pollack universe of alabama. Were very bad at football. I have a i have a Pretty Simple question. Theres pushes for universal health care, which basically means here government tax should provide health care for anyone who needs it. What do you think a Coolidge Harding approach to that question would be . The government government provision of, health care . I dont think they would have supported it. I mean, again, the simple answer would be no, they would not have supported it. They believe in strength of a private enterprise, the private provision of mental care. And doctor harding, as a doctor, i will defer to him. But there is going to continue on how much beyond a social safety net take or medicare and. We do have medicaid, but that came awfully. The Coalition Party administration. Well, it would be such a tremendous part of the economy and whether well provide better care at a lower cost and compared other nations. I would argue it would not that was not asking me. But i think its very clear from the Coolidge Administration his philosophy he would not want the government undertake that expenditure and that the private sector and private Enterprise Private practice. And thats better care, a better cost. I agree with that. Were were of time for questions. Unfortunately its been a wonderful panel. Mr. Any concluding thought now i just want to say what an honor delight is here to be as guests speakers for the Coolidge Foundation and as bill and dr. Harding said, we read history, learn from history. History doesnt repeat. But yes, if you dont know where youve been, its hard to figure out where youre going to. So and lessons of the Coolidge Administration and starting with president harding are lessons that can be applied today, i think are needed today. And im very encouraged by. The students here today, our other guests and i really appreciate the time and insight. Dr. Harding and dr. Beach, thank you