Word: defaulting
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Dates: during 1970-1979
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Gallows Humor. Though Ford's promised veto probably means that Congress will not pass legislation to avoid default, some liberals insisted on trying anyway. The Senate Banking Committee voted 8 to 5 in favor of a bill that would guarantee $4 billion in loans to New York and put the city, until it balances its budget, under the control of a three-member federal board headed by conservative Treasury Secretary William Simon. More to the point, the House and Senate are expected to act quickly to amend federal bankruptcy laws along the lines suggested by Ford...
Desperately, New York officials considered last-ditch, long-shot proposals to escape default. They debated radical reductions in spending even to the point of cutting all salaries by as much as 25%. They weighed asking the city's 14,000 suppliers to accept 800 on the dollar for unpaid bills. Among them: $7.5 million for electricity in October and $604,000 for meat served at the city's prisons, hospitals and other institutions. The officials even opened negotiations with trustees of the five city employee pension funds to use their $8.5 billion in assets as collateral...
...news of the talks outraged many members of Congress because city and state officials had testified that without federal help, default was inevitable. Fumed Republican Senator Bob Packwood of Oregon: "Those guys sat here and lied to us. I don't think we should bail those liars out." Governor Hugh Carey told congressional leaders that the plan had virtually no hope of succeeding because of legal snarls; indeed, Big Mac Chairman Felix Rohatyn called it a "20-to-l shot." Even so, the dustup further damaged New York's already bankrupt credibility...
...painful limits of power have never been felt more keenly by Vice President Nelson Rockefeller and his youngest brother David, chairman of New York's Chase Manhattan Bank. For weeks they had been pleading for federal help to prevent a default by New York City. The personable, thoughtful banker had often traveled to Washington to meet with Ford and to testify before the Senate Banking Committee. His message: the reverberations of default could badly damage the U.S. and world economies. It was David Rockefeller, in fact, who persuaded Brother Nelson to change his mind on aid to New York...
Rocky's aides say that unlike many earlier Veeps, he does not have to clear his speeches with the White House, and did not clear those he made on the subject of New York. Nonetheless, when he told Washington Post Reporter Hobart Rowen last month that default would be a "catastrophe," Ford phoned Rockefeller to protest that this tough language was too much. After the reprimand, Rockefeller did not use that no-no word again, but he continued to make the same points. Reminded last week that Ford had denounced as "scare talk" predictions that default would bring economic...