A Circus or a Session?

August 8, 1960

The country can look forward to the forthcoming session of Congress only with profound misgiving. Its temper was foreshadowed by the action of Congress on July 1 in passing over the President’s veto a Federal pay increase of $764 million a year, correctly described by Mr. Eisenhower as “indefensible by any light.” A few routine appropriation bills may need to be passed. But the session was planned mainly to push big-spending or statist measures as part of the Democratic campaign.

There are five of these measures: A school-construction bill, a housing bill, the $1.25 minimum wage, a farm bill, and medical care for the aged. Not one of these is urgent. All would do harm. The school-construction bill would pour Federal funds and spread Federal power into an area which has been and ought to be the sole responsibility of the localities. Socialized housing, invading the field of private enterprise, leads directly toward the total welfare state.

As for the minimum wage, if money wages could be raised by government fiat, without loss of real purchasing power and without causing unemployment, there would be no point in stopping at $1.25 an hour. The higher minimum may raise some persons, hitherto receiving less, to that figure. But it is certain to throw others out of employment altogether unless the purchasing power of the dollar is further diluted.

INVERTED PYRAMID

The proposed farm bill will merely make the farm fiasco worse. It will increase the unmanageable farm surpluses that already cost us more than $1,000 a minute just to store. The medical care proposals are being hastily piled on top of a tremendous inverted pyramid of claims with a contemptuous disregard for ultimate costs or a cynical pretense that a nominal increase in tax contributions will “pay for” them. What the Social Security Act desperately needs, before still more unmeasured obligations are blindly assumed, is reexamination by a new advisory council.

The new session will be supercharged with partisan emotion, and create opportunities for infinite political mischief. The Democratic strategy will be to pass measures offering huge handouts to pressure groups. If these are vetoed by the President, the Republicans will be blamed for their defeat. If the measures become law, the Democrats hope to grab the credit. And in the Republican me-too mood, the prospects of defeating the measures are not bright. The country seems likely to take a further plunge into welfare socialism, big spending, and inflation.

And yet, if either party cared to seize it, the new session also provides an opportunity for responsible statesmanship and constructive achievement. I will mention only two items.

TO AVERT PARALYSIS

The President ought to renew his plea for a removal of the 42-year-old legal interest-rate ceiling of 4 percent on bonds running for five years or more. The effect of this ceiling is to compel excessive issues of short term securities. These are taken by the banks, and force an inflationary increase in the supply of money and credit. Repeal of the ceiling would go far to restore confidence in the dollar at home and abroad.

The other item is an amendment to our Presidential succession law to permit an outgoing President to resign in favor of the President-elect on any date that both might agree to after Election Day and before formal Inauguration Day on Jan. 20. The same right to offer an earlier transfer of office, without salary loss for incumbents, should be extended to outgoing House and Senate members. The mere existence of such a provision might forestall an effort on the part of the Communists—Russian, Chinese, Cuban, Congolese, or what not—to exploit what would otherwise be a two-and-a-half-months’ interval of uncertainty and indecision. In May, let us recall, Khrushchev declared he would not attempt to change the existing situation in Germany or West Berlin until after our elections in November but he did not promise to wait until after Jan. 20. The country cannot afford a period of paralysis in domestic or foreign policy simply because legal provisions for the transfer of power are rigid and inflexible.