A viable political consensus rests upon an expectation of benefits by all members of the coalition. Any actual payoff, of course, gives rather more reward to some than to others, but in spite of their inevitable inequities, consensual arrangements often persist, since those whose share is scantiest either assent to the larger share of others, feel powerless to improve their relative situation, or sense that any alternative feasible political commitment would be still less advantageous. There is also a final requirement for a continuing consensus: those who profit the most must be willing to grant at least something to their partners.
Even before the dramatic Republican resurgence in November, it was evident that Lyndon Johnson’s odd coalition of big businessmen, trade unions, liberal intellectuals, white ethnic minorities, and Negroes had begun to disintegrate. What had previously held these strangely assorted groups together was the common belief that progress was being made simultaneously toward all their disparate goals. Some of the sturdiest defenders of the new faith were to be found, for instance, in the business community, whose more enlightened members had at length perceived that the kind of economic expansion generated by conservative, Keynesian-style fiscal policy could really lengthen business booms, increase profits, and even improve the prestige of American business at home and abroad. Slow to learn, these business leaders ultimately embraced the New Economics of tax reduction with the enthusiasm of converts—even when such reduction flagrantly violated older budget-balancing taboos. (That the New Economics also altered income distribution in the direction of the propertied classes was more easily forgiven.)
The trade unions did conspicuously less well with the Johnsonian consensus. Throughout the six-year upsurge, the real incomes of factory workers lagged far behind the improvements in profits signalized by the reports on earnings for each quarter. Worse still, the President failed to deliver on such key legislative pledges as the repeal of Section 14 (b) of Taft-Hartley and the enactment of federal standards for state unemployment compensation programs. Adding insult to these injuries, Mr. Johnson irritated good trade unionists by his reiterated endorsement of the bruised wage-price guideposts. Since labor had no place to go, union leaders took what comfort they could from the decline in unemployment, gratifying quantities of overtime, and the realization that the President’s bark was considerably more fearsome than his bite. In the summer of 1966, airline workers and General Electric employees revised the 3.2 per cent guideposts upward. Their 5 per cent settlements have been tacitly accepted by the President and his advisers as the new ceiling on contract gains.
There was probably never a time when liberal intellectuals precisely admired Lyndon Johnson, although the more politically involved, like J. K. Galbraith and Walter Heller, took some pains to maintain a public manner of respectful comment upon, rather than open criticism of, the administration’s economic and foreign misadventures. The glamor of the Kennedy style and the Kennedy court—no doubt exaggerated in lengthening retrospect—was in itself sufficient to delay any easy transference of personal allegiances; Texas hyperbole will never ring pleasantly in ears accustomed to New England understatement. All the same, so long as the President proposed, and Congress accommodatingly enacted, a flood of education, medical, anti-poverty, and regional-development programs, even carping intellectuals could not entirely withhold the credit that was the due to the Texas prestidigitator.
As for Negroes and their leaders, to their astonishment they found themselves living with the most militant advocate of civil rights ever to occupy the Presidential office. In 1964 and 1965, two major civil-rights acts promised at last to commit the national government to voting rights, effective integration of schools, and fair employment practices. For a while, Martin Luther King was as welcome in the White House as he was in Stockholm, where he received his Nobel Peace Prize.
It is of some historical interest to identify the favorable circumstances which conspired to release this surge of Presidential and congressional activity. To begin with, some important measures were already far advanced in the legislative pipeline at the time of President Kennedy’s assassination. In all probability, the tax cut and the first civil-rights measure would have become law early in 1964 even if Mr. Kennedy had lived. The issue of general aid to education dates back to church-state and federal-local wrangles during the Eisenhower years, and Medicare’s legislative history can be traced back at the least to the Truman administration. Even the War on Poverty, billed as the first original Johnson program, had been prepared in the Kennedy Council of Economic Advisers and the Kennedy Department of Labor. All this is a way of saying that the first session of the 89th Congress looked so impressive for precisely the same reason that a hill in Kansas looms like a mountain: the surrounding terrain was exceedingly flat.
To be sure, even these moderate achievements required for their completion the assistance of Barry Goldwater. His inept campaign presented Mr. Johnson with the first liberal Congress in a generation and quite possibly the last one for another period of similar length. Nor would the President have been able to push his program through Congress were it not for the general climate of prosperity. Between 1960 and 1965, this prosperity—which bestowed its greatest benefits on proprietors, businessmen, and the professional classes—and the policies of two Democratic Presidents cooperated to raise corporate profits 52 per cent before taxes and 67 per cent after taxes. Dividend payments to stockholders rose no less than 43 per cent. By contrast, the take-home pay of factory workers increased only 21 per cent, or in real terms, 13 per cent. The fact is that at present levels of Gross National Product, taxes are running $20 billion lower at the federal level than they were before passage of the Kennedy-Johnson tax measure in February 1964. The appropriate contrast here is with the total cost of the welfare measures enacted in the last three years. These are budgeted at $6.2 billion for the current fiscal year, less than a third of the tax slashes. Medicare—not included in this computation—is financed by highly regressive social-security taxes, the heaviest burdens of which fall upon the neediest prospective recipients of assistance.
As it stands, this comparison is striking evidence of just how much Americans have preferred private disposable income to social improvements. Indeed, this preference is even more striking than the crude figures might imply, particularly if one takes into consideration those whom the tax and welfare measures were meant to assist. No doubt a trifling percentage of the tax-cuts improved the situation of the poor, but it is most certain that the bulk of the “welfare” expenditures flowed to the middle and upper income classes in the form of subsidies to college dormitories, libraries and laboratories, scholarships and fellowships, and relief from a portion of the local tax burdens imposed by the support of public elementary and secondary schools. In a period of economic expansion, the managers of the Great Society found themselves able to finance generous tax reductions and modest increases in social spending out of large annual increases in national output.
This political idyll ended because it proved impossible to accommodate both Vietnam and the race issue within the terms of Johnsonian consensus.
As 1966 began, the President was faced with some unpleasant economic facts. Completing an unprecedented fifth consecutive year of business expansion, the country at length gave signs of incipient inflation. The continuing investment boom was being stimulated by generous tax concessions. Consumers were spending with nearly equal enthusiasm. And above all, there was escalation in Vietnam. Like everything else about the war in Vietnam, its costs are obscure. It is possible that at the start of 1966 they were running at about $1-1.5 billion per month. It is likely that at year’s end they had risen to $2-2.5 billion each month. Yet even if we take the highest of these figures, our expenditures in Vietnam still add up to less than 3 per cent of Gross National Product. Moreover, total defense spending in 1966 turned out to be a mere 8.2 per cent of GNP, less than 1 per cent higher than the mid-1965 figure. A Council of Economic Advisers possessed of this information, assured by the Department of Defense that the Vietnam war would be liquidated by June 30, 1967, faced by a 4 per cent rate of unemployment (still high by European comparisons), and briefed by a President openly uneager to increase taxes, might well conclude that no tax hikes were essential.
Such arguments perhaps seemed plausible last January; by the end of 1966, they had lost all credibility. Prices had indeed bestirred themselves, doubling their general rate of advance and ascending still more rapidly in the politically sensitive food sector. One response—originating in Denver and then spreading East and West—was the militant supermarket boycotts organized by discontented housewives. In Vietnam, the military spoke amiably of a need for 600,000 or 700,000 men, presumably for purposes other than those of witnessing North Vietnam’s signature to a June 30, 1967 treaty of peace and amity. Moreover, defense spending was taking on a critical significance far beyond that indicated by simple numbers and percentages. Thus, in the third quarter of 1966, a rise of $4.2 billion in defense spending amounted to nearly one-third the total increase in GNP. For the year as a whole, defense productivity probably approximated 25 per cent of the rise in durable goods shipped and 29 per cent of the increases in capital investment. In the last twelve months, the armed forces have inducted 40 per cent of the total increase in the labor force. What counts in an expansion is the source of new gains. These gains are more and more substantially traceable to Vietnam.
It is possible that the President did not himself foresee the scale of Vietnam expenditures. Conceivably, he hoped that the peace offensive in the spring would result, if not in a truce, at least in de-escalation. But certainly he would not have welcomed the suggestion that taxes be raised. Indeed, almost any purely fiscal response would have endangered his consensus: tax increases large enough to be effective would inevitably displease prosperous corporations and individuals. Practitioners of the New Economics might argue to their heart’s content that the tax cuts of 1964 and 1965, far from being intended as favors to the unneedy, were designed as technical devices to stimulate a lagging economy; but while they might convince themselves and their students, the economists were unlikely to persuade the ordinary citizen, who had comfortably adjusted to lower taxes, that now was the time to surrender his privileges. Any President contemplating higher taxes could scarcely remain unmindful of the electoral fate of those governors who had raised taxes within their own constituencies. True, the electorate could not retaliate against Mr. Johnson until 1968, but it could certainly decimate the Democratic congressional majority.
The fiscal alternative to higher taxes is reduced public spending, but this too is easier stated than achieved. The fact is that the bulk of public spending at the federal level is set by the requirements of defense and foreign policy, interest service of the national debt, or the needs of politically potent client groups—veterans, farmers, shipowners, and congressmen whose re-election may hinge on the construction of new post offices, bridges, harbors, and the like. After these needs have been met, precious little money remains for all the other programs of social spending. Yet social spending is just about the only convenient candidate for reduction which still remains. Programs in this sphere are the newest and the least protected by bureaucratic and congressional interest. Some portion of the funds disbursed assist social and economic groups whose influence is slight and whose turnout in elections is small. Even so, it is still far from easy to save money. The education programs are dear to the hearts of the middle classes. The poverty programs are the pride and joy of liberal intellectuals and the civil-rights establishment. Their sacrifice could not have been painless to that side of Lyndon Johnson which takes populist pleasure in social improvement.
Even a less expert politician than the President would have sought to blur the issues. Mr. Johnson’s actual budget represented an attempt to temper the financial trend by restricting the expected growth of poverty, education, and housing programs, and by making a series of cuts in more established activities. The Presidential strategy emerged clearly in the course of the testimony offered by the Budget Director, Dr. Charles Schultze, to the House Committee on Appropriations last January. At the request of the Committee Chairman, Congressman Mahon, Dr. Schultze set forth an extensive list of budget reductions. It is a politically illuminating list, worth the trouble of excavation and reproduction:1
- Grants for schools in federal impacted areas: NOA (New Obligational Authority) down from $397 million for 1966 to $206 million for 1967.
- Grants to land-grant colleges: NOA down from $12 million for 1966 to none for 1967.
- Grants for airports: NOA down from $75 million in 1966 to $50 million for 1967.
- REA telephone loan program level in 1967 reduced to $85 million from $101 million in 1966.
- School lunch program: NOA down from $202 million for 1966 to $183 million for 1967.
- Special milk program: NOA down from $103 million for 1966 to $21 million for 1967.
- New construction starts:
- Watershed protection: 80 new construction starts in 1966, 35 in 1967.
- Corps of Engineers: 66 new construction starts in 1966 (41 proposed, 25 added by Congress), 25 in 1967.
- Bureau of Reclamation: 12 new construction starts in 1966 (10 proposed, 2 added by Congress), 4 in 1967.
- Agricultural research cutbacks:
Grants to the agricultural experiment stations are being reduced by $8.5 million for research and $2 million for facilities. Certain pest control and disease programs are being curtailed or eliminated. Research facilities are being closed or cutbacks undertaken in 69 locations.
- Ship construction subsidies: NOA down from $132 million in 1966 to $85 million for 1967.
- Economic development facilities grants: NOA is down from $203 million in 1966 to $175 million for 1967.
- FNMA (Federal National Mortgage Authority): No new commitments are planned to purchase single-family mortgages in urban renewal and armed services housing programs—expenditures down by $47 million in 1967.
- NASA research and development: NOA down from $4,503 million for 1966 to $4,247 million for 1967.
- Weapons program: Operating costs are down $53 million to $639 million in 1967.
- Experimental gas-cooled reactor is being terminated.
- Medium power reactor experiment is being terminated.
- Project Rover: Operating funds are down from $84 million in 1966 to $78 million in 1967.
- VA hospital and domiciliary facilities construction: NOA is down from $91 million for 1966 to $52 million for 1967.
- Military construction and family housing: Expenditures are down by $325 million in 1967 because of deferral of projects not vital to the military effort in Vietnam.
One noteworthy element of this shopping-list was the inclusion of a number of cuts in programs venerated by many congressmen. These included grants for schools in the federally impacted areas, the school lunch program and the special milk program, as well as the porkbarrel items lumped together as New Construction Starts. More than one congressman suspected the President of having cunningly included these economies rather more to enhance his own reputation for fiscal prudence than because he genuinely anticipated that Congress would allow the slashes to pass unchallenged. At any rate, the official administration line became clear when Dr. Schultze informed the Committee that the Bureau of the Budget and the President had between them shaved $9 billion off the amounts requested by the civilian agencies of the national government. The President was simply enacting another episode in the ongoing competition between Presidents and Congress to see which one can cut public spending the more decisively. Altogether, it was a poor atmosphere for the flowering of Great Society programs, especially the more controversial novelties like job camps, rent supplements, and assaults upon urban ghettos.
One supposes, nevertheless, that the outcome could have been still worse. Congress extended the Elementary and Secondary Education Act until 1968, authorized $6.2 billion for fiscal 1967 and fiscal 1968, and, incidentally, substantially expanded the President’s request for assistance to the impacted areas. If anything, Congress was still more enthusiastic in its devotion to higher education. It added a billion dollars to the administration’s National Defense Education Act proposal, approved a student loan program which Mr. Johnson had sought to eliminate, and continued NDEA pretty much in its present form. Slightly older legislation of promise, such as the Community Mental Health Centers Act—enacted during the Kennedy administration—was expanded and adequately funded.
Also on the credit side, Congress approved several regulatory measures which, although rather mild, have at least established the principle of federal responsibility and may some day, in a happier legislative climate, serve as useful precedents for genuinely effective regulation. Aided immeasurably by the stupidity of the automobile industry, which first denied any responsibility for the safety of its products and then set detectives on the trail of Ralph Nader, Congress actually strengthened the weak, discretionary measure that the administration had advocated and passed a statute requiring the Secretary of Commerce to draw up mandatory safety standards for all new motor vehicles by January 31, 1967 and to impose them twelve months later. Congress increased funds for checking water pollution to $3.6 billion over the next five years, and slightly liberalized the grant formulae in favor of the cities. Truth in Packaging—Senator Hart’s administration-backed bill—fared less well. The bill sought clear and accurate labeling of packages, elimination of deceptive practices, and mandatory standards of weights and measures. Congress, responsive to the delicate attentions of food processing and supermarket lobbyists, gutted the labeling and the weights-and-measures provisions and authorized the Secretary of Commerce—at no time a militant defender of the consumer interest—only to seek voluntary weight and size standards. Although Senator Hart courageously professed himself pleased with the new law, few outsiders (least of all members of the food industry) were able to see wherein lay the source of his pleasure.
In short, if the 89th Congress took pains to avoid giving serious offense to any major industry, it did write some legislation which is susceptible of future expansion. That is the best that can be said of this Congress. Its real failures were in the sphere of imagination and innovation.
Despite the inexorable escalation of the Vietnam war, it is possible that Congress might have broken some genuinely new ground in 1966, had it not been for one thing: the race issue. In this regard, the November elections merely registered what liberal and moderate politicians had sensed much earlier. In retrospect, it seems depressingly obvious that middle-class white society was willing to support Negro aspirations just so long as they were gradualist, peaceful, and directly imitative of white, middle-class models. All it took was a few riots, some signs of dissatisfaction with white styles of life, and a slight indication of “overreaching” for the white community to react in fear, rage, and thwarted righteousness. When a Pat Brown in California retreats from an open-occupancy measure (and loses the governorship all the same), when a decent, liberal congressman like Seymour Halpern opposes New York’s civilian review board, when a primitive like Lester Maddox can defeat an Ellis Arnall, and when a Lurleen Wallace becomes the governor of a sovereign state, then clearly the uneasy, tentative, frightened white acceptance of civil-rights legislation and of genuine improvement in the Negro situation has broken down—rather more spectacularly in the morally “superior” North than in the benighted South.
This mood of retreat had predictable effects upon the congressional agenda. Although it did not imperil education measures whose benefits were spread widely throughout society, the racial issue was responsible for such unedifying diversions as the harrying of Henry Howe, the new Commissioner of Education, for. the sole reason that he took seriously the desegregation guidelines which in fact only reflected the intent of Congress at the time the education bills had been passed and which, for that matter, followed the practically prehistoric directive of Brown vs. Board of Education. Again, although the new mood did not interfere with the funding of medical research projects so treasured by elderly congressmen, Congress did its best to soften the enforcement of desegregation in hospitals. One episode in particular was symbolic. Of the many responsibilities lodged in the office of the Secretary of Health, Education and Welfare, one entails the supervision of integration in federally assisted hospitals. The Department’s current regulation “allows persons to be placed in segregated rooms upon certification by their physician that it would be detrimental to the person’s physical or mental health to require placement in integrated quarters.” Presumably, this provision protects the lives of violent segregationists hospitalized with heart ailments. At the same time, however, HEW checked regularly to ascertain whether in fact the certification procedure was being used to mask patterns of consistent segregation. If the Department’s investigators found such patterns, then the Secretary might actually withhold federal funds, pending assurance of compliance. In the last Congress, Senator Stennis all but got his colleagues to prohibit HEW from imposing “any requirement of accountability” on hospitals or medical facilities once certification had been made. HEW was to be prohibited from penetrating beneath the appearances to the realities. The segregationists did not win this battle outright, but they did impose a certain caution upon public officials responsible for health and education programs.
The white backlash had its largest impact upon the poverty program and the new housing proposals. As far as the poverty program is concerned, the figures tell a tale all by themselves. The President initially requested $1.75 billion, much less than the program’s administrators and clients had hoped for. Congress actually appropriated $1.6 billion—a 10 per cent cut in a new program which normally would have received very substantial increments, particularly for such successful programs as Head Start. Possibly the cuts themselves were less damaging than the assorted restrictions which Congress wrote into the law. The net effect of these restrictions was to prevent Sargent Shriver from shifting funds among programs; the specific targets were the community-action and job-training programs—the most controversial and yet the most promising innovations in OEO’s history.
As of now, the future of OEO seems very much up in the air. The old-line agencies which from the first viewed it hungrily now seem ready to gobble up the dismembered fragments. Legal services to the poor may migrate to Justice; Head Start to Health, Education and Welfare; the Job Corps to the Labor Department; and so on. The prospect contains a moral: in an era of backlash, the War on Poverty looks suspiciously like a Negro-aid program, and is therefore ripe for destruction.
Two new departures in housing bills have also been suspected of giving excessive aid to urban Negro populations. The rent-supplement program received a ludicrous $12 million and may expire this coming year. As for the Demonstration Cities program, it very nearly perished before its legislative birth, but it just possibly may turn out—if it, too, is not starved to death in the new session—to have been the most important act of the 89th Congress. As is obvious to everyone by now, the most frequent effect of urban renewal has been to destroy housing accommodation for the poor while providing inadequate substitute housing. Also, urban renewal has visited upon New York such monstrosities as Robert Moses’s Coliseum. It has not even so much as nibbled at the central problem of urban ghettos in New York and other major Northern cities. As the fate of New York’s civilian-dominated police review board and the outcome of the Douglas-Percy, High-Kirk, and Reagan-Brown races demonstrate, there is probably a large white-middle-class majority which opposes any substantial Negro breakout from these ghettos. Hence, it is hardly astonishing that the Demonstration Cities program survived Congress only after the bill’s language was altered to make certain that the measure would not be used to promote housing integration. Fears of this sort explain why Congress reduced what was originally a $2.3 billion authorization for a five-year period to a $1.2 billion authorization for a two-year period, and why a mere $11 million was appropriated for planning purposes. What will come of Demonstration Cities depends upon the shape of urban politics over the next three or four years. Just conceivably, President Johnson may be right, and the new approach may promise the “rebirth of urban America.” If, however, the Act is distorted into familiar porkbarrel shape, it may come much closer to Senator Dirksen’s amiable judgment that “it has all the prospects . . . of becoming one of the greatest boondoggles that this country has ever witnessed.”
In today’s political climate it seems grimly probable that the only urban demonstration projects that stand a chance are those which leave racial housing patterns substantially undisturbed. Are better ghettos preferable to worse ones? Presumably they are. A few improved ghettos are probably the most we can anticipate from Demonstration Cities until white attitudes alter sufficiently to accept the fact that the only meaningful desegregation will take place right next door, all over the country.
How, then, is the Great Society likely to fare in the two years before the next Presidential election? Not very well. Even so unpopular a war as Vietnam diverts resources from peaceful uses and arouses emotions hostile to social improvement. Although we may count ourselves fortunate that none of the more ferocious hawks won contested congressional seats, further escalation may well heat up the atmosphere, and will inevitably intensify the pressure to curtail domestic spending. Inflationary signals and rising war costs are likely to force a choice between really substantial tax increases and severe expenditure limitations. If we are fortunate, such programs as Community Action, Head Start, job camps, rent supplements, and Demonstration Cities will suffer only from malnutrition. If we are less lucky, they will perish.
In the period we are about to enter, those programs which are strongest—because they do most for the prosperous and least for Negroes and the poor generally—will become increasingly consolidated. The education acts will be preserved and their benefits enlarged, for as every member of the middle class knows, in a meritocracy it is the academic degree that counts. Medical programs will also receive generous appropriations. As usual, after some initial resistance the prosperous will come to appreciate just how readily social spending can be converted to the advantage of those who need it least.
Possibly Mr. Johnson went just about as far as a conservative politician in a conservative, racist country could have gone. The Great Society has distributed the nation’s income even less equally than it was distributed before 1960. It has enlarged the prestige and influence of the business community. It has lost its token bouts with racism and poverty. The Great Society, never a giant step beyond the New Deal which was President Johnson’s youthful inspiration, has ground to a halt far short of a massive attack on urban blight, far short of the full integration of Negroes into American society, and far short of a genuine assault upon poverty and deprivation. These are the unfulfilled aims of a true effort to realize a Great Society.
1 Hearings before the Committee on Appropriations, House of Representatives, 89th Congress, Second Session, p. 65.