Nixon Turns from Chile to Chicago

IN his first two years as President, Richard Nixon's overriding interest was foreign policy. By one knowledgeable estimate, he spent four out of every five working hours on international affairs. Says an adviser who recently left the White House: "He knows more about Chile than Chicago." Now the President intends to remedy that, and with good political reason. While he has successfully neutralized Viet Nam as an issue, domestic difficulties--notably the state of the economy--damaged the Republican showing in the 1970 elections. Nixon's own chances for re-election are at hazard in 1972, so it is no surprise that he has now turned about to tend to the nation's needs at home.

It is none too soon, for by Nixon's own measure the premier problem of unemployment has reached the peril point. Because unemployment rates ranged over 5% in the Democratic years of 1961 through 1964, Nixon regards that as "the critical number." During his televised "conversation" last week with four TV journalists, which he handled advantageously (see THE PRESS), Nixon carefully stayed within his own defensive perimeter by observing that the average unemployment for 1970 was "approximately 4.9%"--a figure that he conceded was "too high." In fact, the monthly figure has already gone considerably higher: the Labor Department announced last week that the unemployment rate reached 6% in December, the highest level since 1961.

The President has clearly got the message that the economy badly needs a dose of stimulation if unemployment is to be cut substantially by 1972. Politically, Nixon has little choice but to accept deficit spending as an economic pump primer, however offensive the notion of unbalanced budgets is to orthodox Republican economics. "I am now a Keynesian," he confessed shyly after the TV conversation --which led ABC's Howard K. Smith, one of his interlocutors, to observe later: "That is a little like a Christian Crusader saying, 'All things considered, I think Mohammed was right.' "

No Grand Design. As Nixon left for an eight-to ten-day working vacation in San Clemente, his financial experts--led by George Shultz, director of the Office of Management and Budget--were wrestling with a budget for the coming fiscal year that will likely run between $230 billion and $232 billion. That is a big jump up from the $213 billion in federal spending expected for the year ending June 30. Since Nixon last week ruled out any new federal taxes, he will probably find himself with at least the $15 billion deficit for fiscal 1972 that he needs to make a dent in unemployment. The budget figures have not yet been fixed, however. Draft chapters circulating in the OMB had blank spaces where some numbers should have been. In one, a wag wrote: " 'A few honest men are better than numbers'--Oliver Cromwell."

Nixon's overall switch in concern from international problems to difficulties at home is based on a conviction that the Administration has established a good record in foreign affairs. The Nixon men feel that they are now moving into the matters that concern most of the country a great deal more than disputes between the Indians and the Pakistanis --problems of the American poor, the aged, housing, the cities. The President believes that he can build a legislative record to run on in 1972, but there is no grand design for a New Deal or a Great Society. Instead, the feeling in the Administration is that most of the work has been done; what remains is to fill in the gaps and consolidate or reform existing programs.

Two of the keystone Nixon proposals to the 92nd Congress will be warm-overs of ideas that the 91st Congress never agreed to. The Administration expects to have the Family Assistance Plan, overhauling what Nixon called a "chaotic and costly welfare system," enacted within the first six months. Nixon told James Farmer, a black HEW Assistant Secretary who resigned in December, that he would go all out for it; there would be "blood all over the floor."

Carrying the Can. Also high on Nixon's priority list is his plan to share federal revenues with state and local governments, which are starved for new sources of money as their costs rise almost exponentially and founts of new income become exhausted (TIME, Jan. 11). The current talk is that Nixon will try turning $6 billion to $7 billion back to the states each year, though there is less to that than meets the eye. Only $2 billion to $2.5 billion would be new money; the rest would be realized by relabeling funds from existing aid programs, a transparent device that he may not get away with politically. New York's Governor Nelson Rockefeller has been bruiting about a $10 billion figure. Politicos in Albany calculated that New York's share of a $10 billion national pie would come to some $1 billion--much more than enough to make up the state's prospective deficit.

One new measure that has yet to take public shape is a health-insurance package, a counter to the comprehensive plan that congressional Democrats are already proposing. The Administration's program will be less dramatic than the $40 billion-a-year scheme backed by labor leaders and Senator Edward Kennedy, but the White House hopes to score some political points with it nonetheless. Shultz's OMB has been wrestling with the plan for months.

As Nixon moves more and more into domestic issues, Shultz's prominence at the White House may well supplant that of Henry Kissinger, Nixon's foreign policy adviser. Hard-nosed John Connally, who takes over as Treasury Secretary next month, has already been sitting in on the budget sessions, since he will have to carry the can for much of Nixon's program on Capitol Hill. Nixon is also counting on ex-Representative Clark MacGregor, his new chief congressional liaison man, to come up with a better approach to the men on the Hill than the President has found to date.

Truman Style. Nixon will need the skilled help of Connally and MacGregor, since what he wants from a Democratic Congress are programs with his own Republican chop on them. He has one advantage over his antagonists: if they balk, he can hang on the Democratic majorities the "do-nothing" label that Harry Truman stuck the Republican 80th Congress with in his 1948 campaign.

In fact, Nixon could not resist a Truman-style slap at the outgoing 91st Congress last week, remarking that it will be remembered "not for what it did, but for what it failed to do." That may have been a tactical error: a full 467 of the 535 members of the new Congress are veterans of the old. It is problematical, too, whether the 92nd Congress will be any more receptive to Nixon's welfare-reform and revenue-sharing plans--or anything else he comes up with--than was its predecessor. The House will have a new, scrappier speaker in Carl Albert of Oklahoma, and the Senate fairly bristles with 1972 presidential possibilities: Kennedy, Edmund Muskie of Maine, Harold Hughes of Iowa, George Mc-Govern of South Dakota, Birch Bayh of Indiana. Outwardly, at least, Nixon is confident. "I think I know better how to deal with the Congress," he said during the televised conversation last week. "I have great hopes for the next two years, because I think I know better how to do the job."

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