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September 21, 1979 - Image 4

Resource type:
The Michigan Daily, 1979-09-21

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Page 4-Friday, September 21, 1979-The Michigan Daily
The 1980 budget:Choice between guns and butter

As America heads into the final
stages of the 1970s - a decade of ex-
cesses and abuses - the nation's top
lawmakers are conferring in
Washington to come up with a budget
for the 1980 fiscal year beginning Oct. 1.
. It's perceived as an annual decision,
one fought along partisan battle lines in
which some politicians escape un-
scathed while others suffer permanent
BUT THIS YEAR is different. Not
only will the political careers of some
Congressmen be. hanging on the line,
but so will the future of the republic.
For never in the history of this nation
has there been such a clear choice bet-
ween the alternatives and what each
one represents for America's future.
In short, the politicians must choose

between increased military spending or
higher outlays for social services,
because both cannot live together in the
1980s, in the new era of fiscal restraint.
It is because of that new era - which
has already begun in the latter part of
this decade - that makes this year's
budget outline so crucial.
The choice is not simple,
especially since whichever side wins
will likely remain on the winning team
for some time. And the choice has
become even more complicated with
the distracting issues of the SALT
treaty, Russian troops in Cuba, and
presidential politics clouding the
lawmakers' lenses.
So far, from preliminary reports and
some congressional votes, America's
elite seems to have made ' its' choice;

By Michael Arkush

they have selected guns instead of but-
ter. The Senate approved a $546.3
billion budget Wednesday, alloting a
$3.2 billion rise in military spending,
figures that represent three per cent
real growth over the current year. The
Senate also approved a non-binding
guideline calling for increases in
military spending of an additional five
per cent above inflation in 1981 and
As expected, the House rejected the
Senate figure Wednesday, and will soon
vote on a scaled-down version of that
amount. Whether its final decision will
be significantly different from the
Senate's remains to be seen, but one
thing is for sure - military spending
will be given a high priority.
THE SENATE'S decision to go ahead
with a healthy increase in arms spen-
ding can be directly traced to several
events. First, the SALT treaty with the
Russians convinced many conservative
legislators of the necessity to raise
military spending, while others have
been saying that for a long time.
Some senators, especially Sen. Sam
Nunn (D-Georgia), have linked their
votes on ratification to whether the Car-
ter administration increases its
military budget. In fact, it is highly
likely that the treaty would have no'
chance if those senators weren't
satisfied .with the military outlays for
the 1980 budget.
Nunn seemed pleased with the
Senate's vote.
"I've been saying the same thing on
defense for four years and it only made
the Georgia papers. But the attention of
the public is now focused on defense for
the first time in a long time."
The discovery of Russian troops in
Cuba did little to improve things; if
anything, it persuaded other senators to
jump on the bandwagon and call for
more money to the military.
THE THIRD reason, as always, has
been the most powerful. It's called
politics, and it grows even stronger as
1980 - the year of presidential politics
- inches closer. Many senators face
tough re-election contests, some having
the powerful force of the American

Conservative Union at their throats. To
escape from those critics, many
senators, who had previously urged
fiscal restraint but at the expense of
miltary spending, have switched sides
and now support higher allocations for
nulcear weapons and the rest.
Since they sense that America has
turned to the right, these legislators
fear that if they were to opt for social
spending instead of military needs, the
public outcry would be severe enough to
kick them out of office.
This internal conflict among mem-
bers of Congress assumed some
dramatic overtones during last year's
Democratic mid-term convention in
Memphis. It was during that occasion
when suddenly the conflict emerged
amidst the backdrop of presidential
There were two sides in Memphis.
One group, favoring President Carter's
anti-inflation program, and another
faction, backing a plan to increase
spending on social services for the poor
and unemployed. The latter group's
leader was Senator Edward Kennedy.
It was not a particularly bloody affair,
but it did reveal some underlying ten-
sions among House Democrats. Those
tensions have surfaced again as the
battle lines are being drawn for the
race between Carter and Kennedy for
the White House.
AT THAT conference, Kennedy
repeated his famous plea to the
Democratic Party to "sail against the
wind." Referring to the obvious trend
toward conservatism and fiscal
restraint, the Massachusetts senator
insisted the Democratic party has the
responsibility to aide the poor, unem-
ployed, and minorities. He mentioned
his national health insurance plan, in-
creased social security allocations, and
revised welfare formulas as just some
of the decisions the party has to make in
the upcoming decade.
Whether the youngest Kennedy will
have the opportunity to take control is
still a question mark, but it's safe to say
a Kennedy candidacy would give
citizens a first-hand debate on that very
issue of who should get more money.

During such a debate, it will probably
be brought to everyone's attention how
much Jimmy Carter has slipped from
his campaign promises of cutting the
defense budget and providing services
for the nation's poor and unemployed.
IN 1976, CARTER promised he would
cut the defense budget by $5 billion to $7
billion by cutting waste, getting rid of
surplus officers, and changing some
troop deployments. And after first an-
nouncing he planned to withdraw
American troops from Korea, he
changed his mind when he said North
Korea was increasing its forces on the
southern front.
Also, to secure passage of SALT, the
president has agreedl to increase the fat
to add to an already obese defense
budget. He has played into the hands of

Senator Nunn and company.
In the meantime, the Congress has
displayed its view though some
maneuvering can be expected in the
next few days.
To be sure, the choice has to be
made; there just isn't room for the two
of them. When he unveiled the budget
last January, Jimmy Carter said it the-
"The effects of the tight budget could
mean more unemployment and slower
economic growth, but real sacrifices
must be made if we are to overcome in-

Michael A rkush is
Director of the Daily's

the Co

':.i '

Ninety Years of Editorial Freedom

Vol. XXXX, No. 14

News Phone: 764-0552

Edited and managed by students at the University of Michigan

The wage-price guidelines

AST WEEK'S settlement between
L the United Auto Workers union
and General Motors, made public this
week and made official in ceremonies
Wednesday, has been called a high-
settlement victory for one of the
nation's largest and most influential
unions. But what is most overlooked is
that the proposed three-year contract
is in effect the final blow to President
Carter's already staggering wage-
price guidelines.
The administration is currently in
the process of redrawing the guidelines
- the so-called seven per cent solution
- that have been virtually ignored sin-
ce they were imposed. The guidelines
took a beating from the AFL-CIO, they
took a drubbing from the machinists,
and a federal district judge in
Washington D.C. delivered the coupde
grace when he ruled this summer that
the administration had no legal enfor-
cement powers.
So when U-A W and GM negotiators
sat down across the bargaining table in
Detroit, and when GM, on the opening
day of the talks, proposed an initial of-
fer far in excess of seven per cent, the
guidelines were already dead. By not
even bringing up the subject during the

ensuing negotiations, the bargainers
allowed for a quiet burial.
The now-defunct seven per cent
solution had many faults, although a
post-mortem should not dwell solely on
the flaws of the deceased. It was an
idea never given a fighting chance, but
an idea which hopefully provided a
lesson for an administration still
groping for a way to come to grips with
one of the nation's most pressing
The problem with the seven per cent
figure was that inflation, apparently
not having consulted the ad-
ministration economists, decided to
run at closer to 13 per cent last winter,
thus making the logic behind the seven
per cent figure obsolete at best.
But the key lesson to be learned from
the fate of the guidelines is that they
don't work without a commitment
from the nation's unions and
businesses to cooperate in restraint.
The seven per cent was far too low, and
an unrealistic figure to elicit voluntary
compliance. In the new version, the
administration can correct that
mistake to come up with realistic
guidelines, and then the burden of in-
flation can be fairly tossed on the
shoulders of business and labor.

U ant
To Th7 iiy:
In the good old days, an in-
stitutional investor has to be con-
cerned with only one thing: the
financial performance of its
stockholdings. Universities such
as the University of Michigan
faced only a few proposals from
management and almost always
voted their shares with
During the 1960s, however, the
University as an institutional in-
vestor came under student
scrutiny. Students wanted their
universities to exercise social
responsibility in managing their
portfolios. No longer could the
universities claim neutrality
while holding stocks in cor-
porations operating in South
Africa or manufacturing napalm
to be dropped on Vietnam.
After the publication of Ralph
Nader's Unsafe At Any Speed,
the issue of corporate social
responsibility emerged.
Shareholders began to put for-
ward proposals in their cor-
porations on environmental, con-
sumer, equal' opportunity and
foreign operations issues. The
first proposal was introduced in
1970 in General Motors calling for
GMato form a Committee on Cor-
porate Responsibility and to elect
three "public interest" directors
to the GM Board.
Most students are unaware that
the University of Michigan faces
these types of proposals each
year and casts a vote, ostensibly
in the name of the entire Univer-
sity community. In the interest of
making our administrators more
accountable to the community,
this is the way our University
voted on some major issues of
corporate social responsibility in
NUTRITION: The University
of Michigan voted against a
shareholder proposal calling for
Abbott Laboratories to set up a
committee to review the com-
pany's sales of infant formula in
developing countries. Given the
overwhelming support in the
dormitories for the Nestle
Boycott, it is evident that this
vote does not represent the views
.f a suhtintiil sement of our

I social responsibility

to set up a"committee to'review
its activities in South Africa and
for INA to cease underwriting
securities sold to the South
African government. It also
voted in favor of a proposal
calling on Citicorp to report on its
loans to South Africa but ab-
stained on an identical proposal
in J. P. Morgan. With the excep-
tion of J. P. Morgan, these votes
are in keeping with existing
University policy on South
The University voted against
proposals for corporate with-
drawal from South Africa in
American Express and General
Motors. It voted against a
proposal to end Exxon's expan-
sion into the South African
uranium industry. It voted again-
st proposals aimed at stopping
Texaco (Caltex) and Mobil's
sales of oil to Rhodesia. It voted
against a proposal callingron
Mobil to recognize black trade
unions. It voted againstproposals
in Eastman Kodak, Ford and
General Motors aimed at stop-
ping sales to the South African
military and police, and, in the
case of Easkman Kodak, any
sales of photographic equipment
where the equipment could be
used for violation of human
rights. Revd. Leon Sullivan, a
black member of GM's Board of
Directors and author of the
SullivanPrinciples,voted again-
st the rest of the Board in favor of
this proposal in General Motors.
CHILE: The University of
Michigan voted against a
proposal calling on Citicorp to
report on its loans to the Chilean
The University will undoub-
tedly claim that these votes with
management on issues of
cororate social responsibility
constitute an apolitical stance
whereas a vote against
management would "politicize
the University." To us, however,
a vote with management on any
of these issues is tacit assent to
the persisitance of irresponsible
corporate practices. The Univer-
sity can no longer remain unac-
countable to the community when
it casts its votes in our name.

"For Workers Revolution in
Iran! The Mullahs Left-Wing
Apostles Paved the Way for
Khomeini's Islamic Reaction." It
comes at a crucial time because
people all over the world are
outraged at the wholesale
slaughter of those Iranians
fighting for democratic rights.
Over the 'past month, the at-
tacks mounted by the Khomeini
regime on its left-wing opponents
and the national minorites have
escalated sharply. Demon-
strators are no longer being
beaten up only by the unofficial
thugs of the "Imam's Commit-
tees," but now face the heavy
weapons of the "islamic
Revolutionary Guards" and the
ex-shah's regular armed forces.
In August, following mass'
demonstrations protesting the
suppression of the liberal daily
Ayandegan newspapers and of-
fices of the pro-Moscow Tudeh
Party, the guevarist Fedayeen
and the fake-Trotskyist Socialist
Workers Party of Iran (HKS)
were closed down and sacked.
However, the biggest
mobilization of Khomeini's reac-
tionary repression has been
directed against the Kurdish
national minority, and has in-
cluded armyhtroops and the air
force launching a full-fledged-
reign of teror in Iranian Kur-
Leftists and students here in
Ann Arbor have shown in the past
that they are concerned with
events in Iran. Debate and
discussion now is particularly
important as the intentions of
Ayotollah Khomeini become in-
creasingly clear. We would like to
encourage all those who have
been present at events of ours in
the past to attend the upcoming
forum. However, we would like to
make clear that as in the past, we
seek to have a democratic
discussion in which all views are
allowed to be aired.
Last fall, when hundreds of
thousands of Moslem fanatics
took to the streets in Iran, we
pointed out that Khomeini aimed
to institute a theocratic state
h..a . nn the K.hn isn ai ul

dless. Unfortunately, these
disagreements were not confined.
solely or even principally to the
political plane. Last spring, the
SYL sponsored several forums on
the situation in Iran, including a
tour by Fatima Khalil, a Near
Eastern communist woman of
Moslem origin, entitled "No to
the Veil". The Organization - of
Iranian Moslem students conduc-
ted a vicious physical assault on
one of these forums in Ann Arbor,
and it was only because a number
of burly trade union supporters of
the Spartacus League defended
the speaker that the forumwas
able to be continued. These
Moslem reactionaries wanted to
do to Fatima what Khomeini is
doing to unveiled women, leftists
and national minorites in Iran
today .
In passing, we would like to
bring to your attention an infan-
tile stunt pulled by some slimy
dregs of the New Left. These
political cowards vandalized our
office and left in their wake a
bashed in vent where they tried to
break in throughran adjacent
mens room. They also left cop-
baiting slanders scrawled on our
door. We need not spend any time
here refuting the timeworn
Stalinist slanders accusing Trot-
skyists of being police agents, as
the political content of this attack
is amply clear. The attack came
at a time when the SYL has been
actively fighting for the rights of
all political tendencies on cam-
pus, and has been the only
socialist youth group in the world
that has been consistently anti-
shah and consistently anti-
Islamic reaction. No other ten-
dency has stood up to this test.
All those concerned for
democratic rights for the Iranian.
masses must demand freedom
for theimprisoned Kurdish par-
tisians, Arab oil workers,
Fedayeen guerillas, HKS mem-
bers and other leftists, and all
victims of Khomeini's reac-
tionary terror. Let not anyone
forget those fake leftists who
claimed Khomeini was a
"progessive" alternative to the
shah, who hoped to ride to
popularity or power on the coat-
tails of Islamic reaction. They


Elbe filxcbtgan a at-1u

Sue Warner............................ EDITOR-IN-CHIEF
Richard Berke, Julie Rovner...........MANAGING EDITORS
Michael Arkush, Keith Richburg ..... EDITORIAL DIRECTORS
Brian Blanchard....................UNIVERSITY EDITOR
I.A Po n cv,.-..--- .... ....:. IE DITOaRe

GEOFF LARCOM .............................. sports Editor
BILLY SAHN......................... Executive Sports Editor
BILLY NEFF...................... Managing Sports Editor
DAN PERRIN ........................ Managing Sports Editor

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