The Price of Prudence

The great mahogany doors of the House Ways and Means Committee flew open, and a dozen Senators and Representatives shouldered their way through the newsmen outside. None of them would say what had transpired. That was up to the potentate whose name Mr. Mills is affixed in gold block lettering on the chamber's entrance.

One of the last of the legislators to emerge was Chairman Wilbur Mills. "The House conferees have concurred," he said, "in the Senate amendment on the 10% surcharge." Mills walked toward the elevator, the reporters trailing in an expectant pack behind him. "The ceiling," he added, tossing off billions, "has been fixed at $180.1." Thus one of the most important legislative battles of recent years neared its climax. In the process, Lyndon Johnson, once the master of Congress, suffered the most decisive and humiliating rebuff of his presidency from his former colleagues on Capitol Hill.

The Price. Most congressional conservatives, who now hold power in the House, have said all along that Johnson could have his long-sought tax rise --provided, of course, that he reduced spending. The President, mindful of the needs of the cities and Viet Nam, was loath to do this. Finally, a fortnight ago, he agreed to a cut of $4 billion, enough to bring the 1968-69 budget down to $182.1 billion. More, he said, would create "chaos in government."

House Republicans wanted a slice of $6 billion, but appeared ready to compromise at $5 billion. With that amount, Mills was sure that he could muster 90 to 100 Republican votes for the tax rise, more than enough to offset the defection of liberal Democrats, who agreed with the President that the budget needed more, not less money.

At this point, the President attacked the bill's opponents in his now-famous "bite the bullet" press conference. While his leaden language irritated many, it did make clear that a tax rise is the key to continued prosperity and the stability of the dollar. The Senate and House conferees eventually agreed, but --largely as a result of their annoyance at the President's blunt words--only at the $6 billion price the conservatives had demanded. With the stability of the economy at stake, Johnson can hardly refuse to go along, but he cannot take much pleasure in a package that promises to gut some of his fondest domestic programs.

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