It established standards to serve as a guide for determining levels of wages, prices, etc., which would allow for adjustments, exceptions and variations to prevent inequities, taking into account changes in productivity, cost of living and other pertinent factors.
[4] The Pay Board and the Price Commission were created on October 22, 1971, when President Nixon appointed 22 members between the boards, as agencies to create and administer economic controls in Phase II of the Economic Stabilization Program (ESP),[5] with Donald Rumsfeld newly acting as the executive director of the Cost of Living Council responsible for establishing the overall goals of Phases I and II of the ESP.
[6] Under the authority of the act, as amended, on August 16, 1971 President Nixon declared goals of combating inflation, reducing unemployment and curbing domestic consumption of foreign goods by imposing a 10% surcharge tax on all dutiable imports.
Seeking reelection in the 1972 presidential race, Nixon vowed to fight inflation and acknowledged that it would result in job losses but proposed that it was a temporary solution and promised that more was to come in terms of change, hope and "manpower".
[9]Nixon commented on the futile attempts to contain the economy in the 1960s and promised to bring about change by proposing tax cuts over the course of his term to create new jobs.
[10] In 1971, Nixon proceeded with the tax cuts under the provisions of phase II of the Economic Stabilization Act as it was amended earlier that year.
[9] The Act provided for limitations on the exercise of presidential authority and allowed delegation of the performance of any of the president's functions to appropriate officers, departments and agencies of the United States or to entities composed of members appointed to represent different sectors of the economy and the general public.
The Act provided for disclosure of information, subpoena power, administrative procedure, criminal and civil sanctions, injunctions and suits for damages and other relief.
[12] To lull the anxieties of unemployment and the anxieties about the promises of the Economic Stabilization Act in conjunction with bettering public service, Nixon signed the Emergency Employment Act in 1971, which made specific provision for small businesses and created nearly "150,000 new jobs" in the "public sphere" in such fields as "education, environmental protection, law enforcement, and other 'public works'".
[16] This Act provided people with low income with subsidized rent for affordable housing in privately owned buildings, the "predecessor to the Section 8 rental subsidies".
Phase I was the 90-day price and wage freeze that was authorized by Nixon, who delegated power to the Office of Emergency Preparedness, which acted as the fiduciary agency that monitored business practices.
[22] The president, in his quarterly statements, usually claimed that Rumsfeld and his council were doing a great job in "providing encouraging evidence that the nation continues to make progress in the battle against inflation".