Washington

on the World Today

As President Johnson regains his strength after his gallbladder operation, he faces a new time of testing unlike anything he has encountered in the troubled past. He has found that his physical strength is not inexhaustible. Yet now all his skill and endurance must be applied to a new set of challenges and opportunities at home and abroad. In the domestic fild, he faces his greatest budget test as he attempts to meet the costs of the Great Society. At the same time, he must devise a system of administering the new programs in a way to ensure their acceptance in the future. Cost analysis and personnel policies will be of crucial importance in 1966 even though they are undramatic in political appeal.

Overseas, with progress of a kind in Vietnam, with the German and, shortly, the French elections out of the way, new initiatives may be possible. At the very least, more of the President’s attention must be given to the problems of NATO and the Common Market, to the threat of nuclear proliferation, and to the multiplying discouragements of the underdeveloped world.

Johnson has tended to neglect these harsh foreign problems and to concentrate on domestic affairs and the Vietnam war. The result has been enormous success in winning congressional approval of his legislative proposals as well as a substantial beginning in Vietnam. But there has been drift elsewhere in the world. Now the Atlantic alliance and the problems of the relationship of the rich and the poor nations are approaching the crisis stage.

In the President’s defense, it should be said that his general approach in this period to the Soviet Union has been constructive. Despite temptation, he has never resorted to invective, and he has continued to invite Soviet cooperation in a variety of ways. He was most anxious for an exchange of visits with the Soviet leaders, but the Vietnam war made that impossible in 1965. Having been disappointed that he could not travel abroad this year, he is more than ever determined to do so in 1966.

The new budget

The President’s immediate task as the new year approaches is the federal budget, which he must send to Congress in January. He is working on it with a new budget director, Charles Schultze, who earlier in the year succeeded Kermit Gordon. The President and Schultze face two major unknowns: the cost of the war and the cost of the newly enacted Great Society programs.

Johnson clearly recognizes that 1966 will require of him and the budget director increased attention to the details of administration. In this as in so many other matters, his thinking is influenced by his own personal reaction to the New Deal. He remembers that many New Deal programs were wasteful and poorly administered. Now, with so many demands on the tax dollar, he knows that if expenditures are not productive, the programs he has sponsored will be destroyed.

While Gordon was an economist, principally interested in the economic impact of budget policy, Schultze is an expert in administration. His strong point, like Secretary McNamara’s, is cost analysis. Schultze is devising new ways to use computers to tell him how effectively tax dollars are spent. He wants to be able to measure results. In recent months, he and his staff have spent hundreds of man-hours working on new budget methods, on new analyses to show the impact of expenditures, and on ways to use manpower to the best advantage. The results may begin to be seen in 1966.

In Johnson’s first two budgets, he made a great thing of holding them below $100 billion. Now that ceiling is pierced. When he sent the current budget to Congress last January (for the fiscal year ending June 30, 1966), the President estimated expenditures at $99.7 billion. It is already clear that expenditures will go over $100 billion. In the 1967 budget, which will be sent to Congress in January, there will be no way to keep the figure at or near $100 billion. It may be anywhere between $105 and $110 billion, depending on how rapidly Great Society programs are put into effect and on the course of the fighting in Vietnam.

This year Congress appropriated about $12 billion more than last year. At least half of the increase was for the new domestic programs. The figure does not include medicare, which, like other social security programs, is outside the administrative budget, and requires no direct appropriations since it is self-financed through payroll levies. Not all the $12 billion in new appropriations will be used in the current fiscal year, but the figure gives some indication of the magnitude of the Johnson programs.

No official has said exactly what the war in Vietnam is costing, but it is probably more than the $2.4 billion in special appropriations earmarked for Vietnam this fiscal year. Whatever the figure, it is wiping out the sizable savings which Secretary McNamara has made over the last few years in the Defense Department budget.

Rising productivity

While government costs are rising, it should be remembered that the nation’s productive capacity is expanding even faster. Hence, federal revenues also are rising. Tax cuts in the foreseeable future are a distinct possibility, if not in 1966, then almost certainly in 1967. In 1964, America’s gross national product totaled $628.7 billion. The Council of Economic Advisers has estimated GNP for 1965 at $670 billion; some economists think that figure may be exceeded.

“We will overtake you in per capita industrial production by 1970,” Khrushchev said four years ago. It was an idle boast. In this decade, the Soviet growth rate, which was twice ours in the 1950s, has dropped by one third, while ours has increased by one third, according to a State Department analysis. Since Khrushchev’s boast, the Soviets have made no progress in narrowing the gap between their economy and ours; in fact, they have lost ground.

The cost of poverty

In this period of rapid growth, the United States has gradually reduced the total of its aid commitment to the poorer countries. This also is a problem the President is examining as he prepares his new budget. The industrial nations have not yet faced up to the growing menace of trying to live side-by-side with intolerable poverty in more than half the world.

The issue of foreign aid has been a divisive one in American politics for fifteen years. Partly because of the balance of payments problem but more because of the political opposition, the President has permitted the American contribution to be slowly reduced. He cannot alone be blamed, because the other rich nations likewise have grown tired of the effort. Yet, as George D. Woods, the able president of the World Bank, has warned, the richer countries sweep the problem under the rug at their peril.

Woods is a hardheaded investment banker who once sat on the boards of a dozen of the nation’s largest corporations. At one point in his career, he was denounced as a notorious reactionary by certain leading Democrats. For many years, he was chairman of the board of the First Boston Corporation. When President Kennedy wanted to make him head of the foreign aid program, liberal senators screamed that First Boston was too deeply involved in the Dixon-Yates affair of the Eisenhower Administration. Later, however, Kennedy succeeded in having him elected head of the World Bank. There he has carried forward a vigorous effort to obtain more assistance for the poorer nations.

Woods is convinced that in their own interests the industrial countries must understand “the tremendous size of the problem” of the developing countries. If present trends are permitted to continue, he says, “there will be no adequate improvement in living standards in vast areas of the globe for the balance of the century.” To bring about a tolerable level of well-being and progress, “massive and coordinated efforts of both the rich and the poor countries” are required, he maintains.

While the President has not fought for increased aid funds, he has fought for more effective birth control assistance. Many economists think that this is the first requirement of a sensible aid program. Without it almost nothing can be accomplished in many countries. The President likewise surprised many persons in his own Administration by inviting the Soviet Union to provide increased assistance to the developing countries. He previously had invited Russia to take part in the Asian Development Bank. The bank is a significant step. If India and Pakistan could reach a settlement on Kashmir, there is every indication that the President would be willing to make a real effort to provide additional economic aid to both countries.

Men in space

A final major issue of national policy related to the budget is how far and how fast America should expand man’s operation in space beyond the Gemini and Apollo programs. “This nation should commit itself to achieving the goal, before this decade is out, of landing a man on the moon and returning him safely to earth,” President Kennedy said in May, 1961. The moon program, involving the Apollo booster, will cost an estimated $20 billion. Should we now think of sending a man to Mars? Donald F. Hornig, the President’s science adviser, says that would cost $100 billion. Are there not other demands which are more pressing?

Last August, the President approved a Defense Department plan to proceed with the development of a manned orbiting laboratory (MOL) at a cost of $1.5 billion. The goal is to have a fully equipped laboratory in orbit in 1968. It would be followed later in the same year by the first of five flights with two-man crews.

In approving the MOL project, which is to be operated by the Air Force, the President emphasized that the United States would live up to “our agreement not to orbit weapons of mass destruction.” Nevertheless, by giving the Air Force this assignment, the President has in a sense stepped up the arms race. The cost could skyrocket if the Soviets make some challenging breakthroughs. But Johnson, with Vice President Humphrey’s support, concluded that he must protect himself politically against a possible future charge of military negligence should the Russians put an orbiting space station aloft.

The cost to Moscow of the arms and space races is clearly hurting, and this fact has led some persons to believe that the burden is growing so rapidly that both nations will more quickly recognize the need for arms and space control programs. Despite the fact that the Russians turned down the President’s invitation to send an observer to the second Gemini flight, they continue to express what appears to be a genuine interest in more space cooperation.

Mood of the Capital

Washington long has taken a cynical view about the politics of federal judgeship appointments. But the President’s nomination of Francis X. Morrissey of Massachusetts was a misuse of presidential and senatorial power that has not been seen in a long time. It is irrefutable that the Kennedys and Johnson knew of Morrissey’s weaknesses. John Kennedy declined to make the nomination because he was convinced that Morrissey was unqualified. But when Ted and Bobby Kennedy pressed the appointment, Johnson acquiesced. One cynic said that it was a dirty Johnson trick to hang an albatross on the Kennedys’ necks. But it is also an albatross around the President’s. He did not have to make the appointment. Senators can prevent a President from making a good appointment; they cannot force him to make a bad one.

It is also a shameful abuse of senatorial power that a senator can exercise an absolute veto over a federal judicial appointment in his state. When the President in October nominated former Governor John W. Reynolds of Wisconsin to be a federal district judge, White House Press Secretary Bill D. Moyers felt constrained to announce that the nomination “is one of two agreed upon” between the President and Wisconsin Senators William Proxmire and Gaylord Nelson last April. The President’s other nominee was James Doyle.

A President is powerless to do anything but wheel and deal in the appointment of federal district and circuit judges. Under the circumstances, it is amazing that the quality of the appointees is as high as it is.