Congress Bends to the President

VETERANS in the congressional press gallery could scarcely remember when the House of Representatives had ever acquiesced so easily and completely to a far-ranging piece of legislation. Last week President Nixon's proposal to reduce federal taxes for both corporations and individuals--the other major part of his domestic economic program besides Phase II--slid through the lower house without even a roll-call vote. Its quick passage was evidence of just how commandingly the President has seized the economic issue, and how willing Congress had been to let him have his way.

In part, that is because Nixon has adopted many of the ideas long urged on him by Democrats, including one of the most powerful of them, Ways and Means Chairman Wilbur Mills. Last week Mills acknowledged the President's ability now to get the tax legislation that he wants from Congress. Just before the tax-bill vote, Mills said: "It's all cut and dried."

Certainly the Administration faces harder going in the Senate than in the House. Almost all the Democratic presidential aspirants are Senators, and several are itching to put their personal stamp on the bill. They will likely concentrate on giving more tax breaks to individuals, a job that Finance Committee Chairman Russell Long last week said the upper house is "in the mood" to perform. As passed by the House, the Nixon measure already provides some tax reduction for individuals. A family of four with an income of $15,000 would save about $22 on its income tax bill for this year and $44 next year. Long expects final passage of a more generous tax-relief bill by this month's end.

The bill's progress through the legislative gauntlet, where several of the President's key programs have previously been whipped to the sidelines, has been enormously helped by the Capitol Hill diplomacy of Treasury Secretary John Connally. Last week, while testifying before the Senate Finance Committee, Connally cannily gave his blessing to several "reasonable" changes drafted by the House, including more tax relief for low-income families. He also accepted a House measure raising the standard rate of proposed investment tax credit from 5% to 7%. In order to give the economy a greater initial spurt, however, he asked the Senate to restore a House-cut premium rate of 10% for capital goods bought during the first year covered by the bill.

Whatever level it finally sets, the Senate would be well advised to eliminate right now the provision of the new investment credit that bans foreign-made machinery from qualifying for the tax break. That rule is supposed to be dropped when Nixon removes the 10% surtax on all imported goods. But the protectionist rule, which has the effect of adding to the price of non-American capital goods above and beyond the increases brought about by the surcharge and monetary changes, is already fiercely resented abroad and with good reason. In the past, U.S. trade officials have registered strong opposition when foreign governments adopted similar measures that might impede American exports.

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