I assumed someone would check out my memory, but no one did.

So: I did some research, and here is her exact quote,
"Although my ideas are in the earliest stages of development, they are, in my mind, worth investigating. One of my favorites is in the area of forest conservation which we heavily rely on for oxygen. I propose a limitation be put on how many squares of toilet paper can be used in any one sitting. Now, I don't want to rob any law-abiding American of his or her God-given rights, but I think we are an industrious enough people that we can make it work with only one square per restroom visit, except, of course, on those pesky occasions where 2 to 3 could be required. When presenting this idea to my younger brother, who's judgment I trust implicitly, he proposed taking it one step further. I believe his quote was, "how bout just washing the one square out."
http://newsbusters.org/node/12226

She did come out later to say that she was "just kidding", but that seems to be a stretch.