September 18, 1975

Dem Pres candidates and potential candidates predict that NYC fiscal crisis will be major issue in '76 Pres campaign; foresee contest pitting Pres Ford's traditional, laissez-faire, middle-Amer Republicanism against city-oriented Dems, who favor more liberal spending and greater Fed intervention; Sens Kennedy, Jackson, Bayh and Repr Morris Udall comment; Kennedy says goals of pending legis, co-authofed with Sen Bentsen, would provide lower interest rates, enhance marketability and promote sound local govt finance without Fed intervention; legis would provide for creation of fair finance ins bd, which would reinsure munic bonds for up to 75% (M)

Reddy and Glover served in 9th Precinct on Lower E Side of Manhattan with Ptl Gregory Foster and Rocco Laurie, killed in Jan '72 (M)

prospective upsurge in Fed spending for next fiscal yr is complicating element in decision facing Pres Ford on whether to extend 'temporary' anti-recession tax cuts for another yr; main argument for extension of tax cuts is that it would support recovery of econ; Dr Arthur M Okun backs extension, int; Cong, controlled by Dems, is expected to vote for extension of cuts, and possibly to increase them, regardless of Ford's recommendations; Mgt and Budget Office dir James T Lynn, in int, says Fed spending is almost certain to soar above $400-million in fiscal '77, but avoids saying what he will recommend to Pres on tax cut issue (M)

US State Dept inspector gen of foreign assitance Webster B Todd Jr, in memo to Sec of State Kissinger, has critized AID reprs of Tanzania for not warning 'in clear, tough language' that US will withdraw from beef production project if Tanzanian Govt insists on introducting 'socialistic' element (S)

rd through Mitla Pass in Sinai is nearly deserted on Sept 12 as visitors drive through on tour of territories that Israel is due to give up under new disengagement accord with Egypt; in between pass and Abu Rudeis oilfield is town of Sudr; while Mitla and Gidi passes are to be within UN buffer zone, Sudr, where Israeli mil installations remain intact, is to revert, along with coastal strip to oilfield, to Egyptian civilian adm under UN observation; Sudr, consisting of low houses, is deserted; Bedouins, who work at oil installations, are only local inhabitants who move about freely in area of Abu Rudeis; express high regard for Egyptians and Israeli authorities alike and carefully decline to state any preference; express satisfaction over econ status under Israeli occupation; say they fight with nobody and display their traditional lack of concern for all govts that control their territory; 500 Israeli petroleum workers at Abu Rudeis are bitter or sad at having to leave soon; concern over possibility that anger over loss of these jobs and loss of what many had come to consider natl asset might lead to acts of sabotage has been expressed at highest level; planes have begun to evacuate workers; illus of Israeli soldier at Mitla Pass (M)