The Law Nixon Used

WHEN he announced the wage-price freeze, President Nixon based his action on the Economic Stabilization Act of 1970. The law gives stand-by powers to the President to "issue such orders as he may deem appropriate to stabilize prices, rents, wages and salaries." The irony is that Nixon vigorously opposed the bill when it was debated in Congress and said he would not use it.

It was passed as part of the continuing cat-and-mouse game between Congress and the President. In August 1970 inflation was climbing and job rolls were shrinking. Anxious about the economy, Wright Patman, the aged and wily chairman of the House Banking and Currency Committee, decided to put the President on the spot. He maneuvered to attach the Economic Stabilization Act with its wage and price controls as an amendment to a bill extending the life of the Defense Production Act, which was about to expire. The provision was approved by both Democrat-controlled houses of Congress.

Nixon was forced to sign the bill because it provides for the procurement of basic resources needed for national defense. But he was quick to express his disapproval of the move. If Congress believes that controls are needed, he said, it should "face up to its own responsibilities and make such controls mandatory." Congress preferred to let Nixon take the responsibility. In March it voted to extend the Economic Stabilization Act, and Nixon once more protested, although this time the Administration softened its position somewhat; it was growing less confident about its own economic policies. Treasury Secretary Connally told the Patman committee that the White House would "accept" the bill rather than fight it. And last week Nixon enthusiastically assumed the powers that he had once brusquely turned down.

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