October 8, 1975

Emergency Financial Control Bd on Oct 7 rejects agreement that ended 5-day teachers strike after Gov Carey tells bd that cost 'gravely violates' city's plans for fiscal recovery (S)

HR Ways and Means Com chmn Al Ullman says Pres Ford's proposal linking Fed tax cuts to Fed spending cuts is 'preposterous'; objects to making Cong commit itself to specific spending ceiling for fiscal yr that begins Oct 1, '76; Treas Sec William E Simon appears before com to discuss Ford proposal; says Ford is determined to veto any tax cut not accompanied by spending ceiling; Ullman begins discussing tax proposal of his own, which, in effect, would keep withholding tax at current levels; backs minimum tax credit of $65 for individuals, $130 for couples, and maximum credit of $360; backs making increases in standard deduction and minimum standard deduction enacted in '75 permanent (M)

Repr Henry S Reuss on Oct 7 proposes legis for $7-billion in Fed loans and loan guarantees to NYS to ease NYC fiscal crisis; says that legis will not go forward unless city and state get 'ironclad' agreement from holders of securities issued by city and Munic Assistance Corp that they will permit deferral of enough interest and principal payments to allow repayment of loans; says that he will have bipartisan support and Adm approval that would permit enactment by Dec 1; $4-billion would be used to help city balance budget, $3-billion would go to pay creditors; state securities would be new kind of govt bond subject to Fed and presumably state and local income taxes; loan would have to be repaid within 5 yrs; Reuss says that he has discussed legis with Fed Reserve Bd Chmn Burns; Dem Natl Chmn Robert Strauss predicts passage of legis to ease crisis; Treas Sec Simon denies Ford Adm shift to support of Fed intervention; other Repub spokesmen comment; Reuss notes that bill can be used to help other states that have exhausted resources in trying to help financially stricken cities; illus (M)

more than 60% of bankers polled at annual meeting of Amer Bankers Assn say that NYC faces certain default on some of outstanding securities; by margin of 2-1, bankers oppose Fed aid in fiscal crisis; 95% think city has not taken adequate steps to put its house in order (M)

NYC Mayor Beame, responding to Emergency Financial Control Bd, now in charge of NYC's finances, plans to meet with his comrs and issue austerity orders that reptdly will mean additional cuts of about 3% in Fire Dept budget (S)