Wilbur's Full House

"All those men have their price," sneered England's 18th century Prime Minister, Sir Robert Walpole, speaking of his opposition. In Wilbur Mills's case, the price came high: $6 billion sliced from the proposed 1968-69 federal budget of $186 billion. Not a cent less, insists the flinty House Ways and Means Committee chairman, will coax a mulish Congress to stomach a 10% surcharge on personal and corporate income taxes in an election year.

With the graven mien of a frontier gambler who has peeked at his opponent's hole card, the Arkansas Democrat has stood pat against Lyndon Johnson -- himself the master emeritus of Capitol Hill poker -- matching imperturbably the President's wiles, threats and blandishments for 1 6 weary months.

Last week the approaching adjournment of Congress forced a showdown.

Drawing strength from a majority of like-minded congressional conservatives in both parties, Mills coolly turned up a full house. He defeated handily, by 259 to 137 votes, an attempt to make him abide by the cut of only $4 billion that would be acceptable to the White House. Next day, in slow, stressed cadences, the President capitulated on Mills's terms even though the cut will slash into the bone and sinew of Great Society programs he deems essential to assuage America's social ills. Without increased taxes, Johnson warned, "the gates of economic chaos could open."

The new tax, retroactive to January 1 for corporations and to April 1 for individuals, should garner $10 billion in a calendar year to offset a deficit that could run as high as $25 billion -- even after the cutback in expenditures -- and bolster sagging international confidence in the dollar. During the second quar ter of 1968, the U.S. economy is expected to equal the first quarter's $20 billion leap forward in gross national product. With no rein on the economy, Johnson reasoned, inflation could lop 40 off every dollar's purchasing power during the year and help price U.S. exports out of world markets; tight money induced by Government borrowing to meet current bills could squeeze interest rates up to 10%, provoke a slump in new housing, and snap the string of 87 months of economic advance. The President's surrender virtually assures passage of the corrective tax this month.

This file is automatically generated by a robot program, so reader's discretion is required.