LBJ Plays the Martyr

AMERICA From DAVID WATT

WASH INGTON

It is likely enough that the maestro of the con- sensus would be buttering up the Republicans in this fashion even if they had not just gained forty- seven seats in the House of Representatives. But an old Capitol Hill denizen remarked to me the other day 'when Lyndon starts to praise you, keep your hand on your wallet'; and the Repub- licans would be wise to assume that the Presi- dent's words are the first moves in a skilful strategic withdrawal designed to expose them as soon as possible to the most awkward predica- ments of their new-found power.

The situation is already full of fascinating possibilities for camouflage and ambuscade. Mr Johnson is reported, for instance, to be putting on one of his most moving displays of high- minded self-pity as he discusses the next two years with his cronies. 'I have so little time!' he cries in the tones of some consumptive Romantic poet struggling to finish his epic before the shades close in on him. But as he very well knows, there is still no real reason to credit himself with less than six years more in the White House—which is a very long time indeed.

Any political science sophomore could tell him of about fifty things that desperately need to be done. But nearly all of them are either things that failed ignominiously in the last Con- gress (like desegregated housing) and would certainly fail again; or else they involve huge expenditures (as in the case of a properly ex- panded urban programme) which could not pos- sibly be undertaken while the Vietnam war is in progress. In other words behind Mr Johnson's pose of gallant martyrdom lies a firm determination to try and turn the new political situation to his own account and to invite the Republicans to share the blame for his failure to do what he could not have done in any case.

This possibility, seen here in the context of new legislation, applies equally to the argument about the financing of existing programmes and provides the political background to the battle over the January budget, which is already in full swing.

It has been the President's contention for months that the US can afford guns and butter, that the social programme need not be cut for the Vietnam war and that unpleasant side-effects like inflation can be painlessly controlled by monetary Policy. The Republican reply has been that there is indeed roaring inflation, thanks as much to the President's spendthrift policies at home as to the war. 'We are far too patriotic,' they say, `to

refuse to finance the war now that the Demo- cratic party has got us into one again, but we believe that a responsible President would bear

most of the burden by cutting government ex- penditure.' In so far as anyone can be said to have got the better of this particular battle of words the Republicans can claim, on the basis of the election results, to have done so. But there are now very great difficulties for both sides about continuing to declaim the same lines.

The President is faced with an extremely diffi- cult economic choice, simply on technical grounds. He will have a budget deficit during the present fiscal year of between $5,000 million and $7,000 million in contrast to the $1,800 million originally budgeted for, last January. The main reason for this deficit will clearly be the war, which has raised defence expenditures by about $10,000 million above the estimates and will con- tinue to raise them by between $3,000 million and $4,000 million in the next two quarters. It is true that there are some signs of slow-down in several parts of the economy, notably cars and housing; but when the probable pressure of defence ex- penditure on capital investment in industry is taken into account, not to mention some large and imminent wage demands, the consensus of the economists is that there is more danger of in- flation than of recession.

The final confirmation of plans for defence and industrial spending will come late this week or next but if they show what they arc expected to show, Mr Johnson will have to retrench in some way. The question is how? The economic technicians suggest that the most elegant method of doing so would be to raise income tax by 5 per cent or so, and then to nearly but not quite counterbalance this increase by easing the present credit squeeze. This course of action would result in a better 'mix' between monetary and fiscal policy and has moreover certain psychological attractions for a man in whom the old Populist- Texan hatred of bankers occasionally stirs.

But what about the politics of it? There are plenty of minor political difficulties about a tax increase-- not least the fact that an across-the- board increase would offend poverty-minded liberals while a selective tax on the rich or on

business would he asking for trouble in the ninetieth Congress as it has just been constituted. But none of these matter in comparison with the question of responsibility.

If the President chooses to cut expenditures or prune his budget, nothing is easier than to present this as old-fashioned thrift or as being the result of Republican pressure. Mr Johnson's afore- mentioned back-slapping ceremony in Texas last week was a good illustration, since it successfully involved the Republican leaders in the respon- sibility for the $3,000 million cuts which he •im- mediately announced he was making in the budget. Again, Mr Sargent Shriver lost no time after the election in calling a press conference to announce the precise cuts in the anti-poverty programme which had been made necessary by the stinginess of the last Congress. He thereby reminded new Congressmen and their con- stituents that thrift can be better in principle than in practice and put the Republicans on notice (if they have cars to hear) that they are likely to be slaughtered if they make the mistake of forcing the Administration to cut popular programmes such as medicare or education.

All this is jam to a politician of Johnson's experience and temperament. But that only makes the alternative seem more poignantly un- attractive. For it is quite impossible to place the responsibility for a tax increase anywhere except upon the war and ultimately upon the Administration which is conducting it.

and if you don't like the taste, bring it back and we'll change the label.'