An Unfinished Life: John F. Kennedy 1917-1963 (98 page)

By late December, it was clear to Kennedy that a tax cut and a bold reform agenda would have little chance of enactment in 1963. Bobby Baker, the secretary to Senate majority leader Mike Mansfield, who kept close tabs on sentiment in the Upper House, predicted that “we are in serious danger of being unable to pass” the tax cut. Nor did Baker see more than a 50-50 chance of creating an Urban Affairs Department, and even if the Senate approved it, it seemed unlikely to pass the House. Likewise, the House would be the problem in passing medical insurance and aid to elementary and secondary education. Any attempt to create a domestic peace corps would “cause considerable strain and possibly affect the present Peace Corps. . . . Temporary Unemployment Compensation will have rough sledding in both Houses.” Baker saw brighter prospects for a mass transportation law, a higher education bill, aid to medical research, and conservation measures, but, overall, it did not seem like a promising year for presidential reform initiatives.

Nevertheless, Kennedy refused to give in to counsels of caution. A failure to present a bold domestic program would make him look timid and resigned to conservative influence. Besides, if Congress rejected his proposals, it would more clearly set him apart from conservative opponents in a 1964 campaign.

Kennedy also hoped that appeals to the national well-being might sway congressional majorities to support a tax cut and other reforms. In his January 1963 State of the Union Message, he announced a program of changes, which he described as essential to the nation’s future. Although the most recent recession was over, with a million more people working than two years before, this was no time to relax: “The mere absence of recession is not growth,” he said. To achieve greater expansion, “one step, above all, is essential—the enactment this year of a substantial reduction and revision in Federal income taxes. . . . It is increasingly clear . . . that our obsolete tax system exerts too heavy a drag on private purchasing power, profits and employment.” He proposed to lower tax liabilities by $13.5 billion, $11 billion on individuals and $2.5 billion on corporations. Individual tax rates were to drop from between 20 and 91 percent “to a more sensible range of 14 to 65 percent.” The corporate rate would drop 5 points from 52 to 47 percent. To combat the temporary deficits anticipated from the cuts, Kennedy proposed phasing them in over three years and holding expenditures, except for defense and space, below current levels.

IN OCTOBER 1962,
when he prepared his 1963 budget, he privately acknowledged that education reforms, which would increase the annual deficit, were “not going to pass.” We should “just . . . start off with that realization,” he told budget director Dave Bell. No one could doubt his eagerness for federal support of elementary, secondary, and higher education. During 1963, he repeatedly quoted Jefferson: “If a nation expects to be ignorant and free, . . . it expects what never was and never will be.” In a seventy-five-hundred-word message to Congress, he described education as “the keystone in the arch of freedom and progress.” He believed that federal monies could improve the “quality of instruction” and reduce “alarming” dropout rates. Federal dollars were also needed to help colleges meet a 100 percent increase in enrollments by 1970, and secondary schools a 50 percent rise in students attending. “Soviet institutions of higher education are graduating 3 times as many engineers and 4 times as many physicians as the United States,” Kennedy said. “While trailing behind this country in aggregate annual numbers of higher education graduates, the Soviets are maintaining an annual flow of scientific and technical professional manpower more than twice as large as our own.” Yet for all his outspokenness on the importance of education, Kennedy made it a lower budget priority in 1963 than defense and space, and continuing political tensions over aid to parochial schools and racial integration discouraged the president from stronger support of congressional action.

Medicare presented similar dilemmas. Although he spoke out forcefully at the beginning of 1963 for health reform legislation and health insurance for seniors in particular, the familiar litany of national needs could not break resistance in the House and the Senate to initiating new and potentially costly welfare programs. Special messages to the Congress in February on improving the nation’s health and the needs of the nation’s senior citizens did no more than put Kennedy back on record as favoring help for America’s seventeen and a half million elderly. There was no shortage of talk and goodwill in Congress toward seniors, including thirty-six bills proposing ways to insure everyone over sixty-five. But a focus on Kennedy’s suggested tax cut and increased deficits pushed health proposals aside. The House Ways and Means Committee did not agree even to hold hearings on health insurance until November.

By the spring of 1963, Kennedy had accepted the political realities working against legislative health reforms. Between April and October, aside from brief remarks in the White House Rose Garden to the National Council of Senior Citizens urging a congressional vote on medical care for the aged under Social Security, he said nothing in public and put no pressure on Congress to act. In May, he told HEW secretary Anthony Celebrezze, “There seems to be some speculation that we have abandoned health insurance for this year. While it may be that events will not permit legislative action in 1963, I believe we should proceed on the assumption that we are attempting to secure it. The failure then will not be ours.” In November, when a reporter asked if he would press Mills to send Medicare to the House floor for a vote, Kennedy replied, “I think we are going to get that bill out of committee—not this year, but next year—and I think we will have a vote on it and I think it will pass.” Believing that congressmen and senators would court the elderly in 1964 by backing health reforms, Kennedy predicted that “this is going to be an 18-month delivery!”

By contrast with education and Medicare, which Kennedy believed would have improved chances of congressional action in the next year, he doubted that a tax cut would gain any legislative momentum in the coming months. There were, granted, some glimmers of hope. The president’s appearances in support of tax reform were paying dividends, Heller advised. He said he saw “a lot of willingness to help put the tax program through. . . . To mobilize this aid and convert it into votes in Congress should be a major part of our tax offensive.” He also reported that a survey of consumers showed 63 percent in favor of a tax cut. Dillon advised Kennedy that concerns about the cut disproportionately favoring the rich were unfounded. But throughout 1963, conventional thinking about the danger of increased deficits from a tax reduction sustained conservative opposition to Kennedy’s tax proposals. We “favor . . . a reduction in both individual and corporate tax rates,” Republican legislators declared. “However, we believe that a tax cut of more than $11 billion, with no hope of a balanced budget for the foreseeable future, is both morally and fiscally wrong.” The prospect of larger deficits so bothered Eisenhower that he joined the chorus of opposition. He declared a tax cut “highly desirable but only if the persistent and frightening increase in Federal expenditures is halted in its tracks.” Mills’s Ways and Means Committee would not budge on the tax bill unless the White House made clear how it intended to reduce federal spending over the next several years.

The strength of the economy in 1963 also worked against prompt action on Kennedy’s tax bill. Steady GNP expansion between 1961 and 1963 and stable unemployment at 5.7 percent had convinced congressional majorities that any additional economic stimulus was unnecessary. Kennedy himself acknowledged that over the last two years the GNP had expanded by 20 percent, industrial production was up 22 percent, and personal income had risen 15 percent. Nevertheless, he believed it shortsighted to assume that strong growth could be sustained without lower taxes. Business cycles in the past decade had produced three recessions, and he expected another downturn by the middle of 1964 unless Congress cut taxes.

In August, when Ways and Means finally voted out of committee a tax bill, Kennedy thanked it for a measure that would “provide much needed jobs for our economy, increase our rate of economic growth, promote balance in our international payments and benefit the individual and corporate tax payer.” The long-range result of their action would be “a balanced budget in a balanced full-employment economy. It is clear that this goal cannot be achieved without a substantial tax reduction and the greater national income it will produce. . . . Let me stress once again that the surest way to alter the pattern of deficits which has characterized seven of the last ten years is to enact at this session an effective tax reduction program.”

Kennedy was no less emphatic in private, telling Congresswoman Martha W. Griffiths of Michigan, “We’ve got the best means of insuring that 1964 isn’t a recession year. That’s why I’m hanging on.” Despite the likelihood that some corporation presidents favored the tax cut in order “to use the money to try to [beat] us,” Kennedy did not “mind that,” he told Griffiths, because he believed the bill would be “a terrific asset to us [the Democrats].” He urged Heller to pressure labor economists to lobby Congress and “get us some votes for Christ sakes.” The oil and gas lobbyists, who were fighting a reduction in their industry’s depletion allowance, which would increase federal revenues and lower the deficit, particularly angered him. “Those robbing bastards,” he told Heller. “The day’s gonna come when we’re gonna have the Congress and the President financed by the government” rather than corporations like the oil companies, Kennedy told Mills. “And it’ll be the best thing that ever happened. God, you know those oil companies. . . . I don’t mind anybody getting away with some, but what they get away with.”

Despite repeated public appeals by Kennedy for prompt action and support from a Business Committee for Tax Reduction organized by the administration and including prominent businessmen like Henry Ford II and David Rockefeller, Kennedy could not get his bill passed. A tax cut won a House vote on September 25, but it had been stripped of the reform features that promised to close loopholes and generate $4.5 billion in additional revenues. The likelihood that the deficit would now be that much higher brought Senate approval into doubt. Albert Gore remained a particular problem. He wanted to slow things down by holding extended hearings, and his opposition enraged Kennedy, who repeatedly called him “a son of a bitch” in a meeting with economic advisers on September 30. “If we get a good recession next summer, it’s not going to do him much good, is it?” Kennedy said. By the third week in November, the Senate Finance Committee had still not concluded its hearings, and prospects for passage of a bill in 1963 seemed dim. In a conversation with Dillon and Fowler, Kennedy lamented: “If we don’t get that tax bill, [the country] will pay a hell of a price for it.”

BY CONTRAST WITH HIS BUOYANT PUSH
for the tax bill, during the first five and a half months of 1963, Kennedy maintained a cautious approach to civil rights. After issuing the limited housing order in November 1962, he refused to initiate a more comprehensive civil rights program, especially a major legislative attack on segregation, which he continued to believe would make passage of his tax, education, and medical reform bills impossible by antagonizing southern Democrats. Though the same earlier strategy had failed to advance these measures, he still assumed that avoiding a head-on congressional clash over civil rights would at least preserve some chance of getting his other reforms approved. Besides, he continued to believe that executive initiatives could be an effective, if temporary, substitute for congressional action on advancing equal rights for blacks.

If he was legislatively passive, he was at least rhetorically aggressive. In his State of the Union Message, Kennedy urged that “the most precious and powerful right in the world, the right to vote . . . not be denied to any citizen on grounds of his race or color. . . . In this centennial year of Emancipation all those who are willing to vote should always be permitted.” In his January economic message to Congress, he tied “an end to racial and religious discrimination” to economic growth. The development and effective use of “our human resources” was vital to the national well-being. In February, after receiving a Civil Rights Commission report on a hundred years of racial discrimination, he praised the courage of black citizens fighting to throw off “legal, economic, and social bonds—bonds which, in holding back part of our Nation, have compromised the conscience and haltered the power of all the Nation. In freeing themselves, the Negroes have enlarged the freedoms of all Americans . . . . [Yet] too many of the bonds of restriction still exist. The distance still to be traveled one hundred years after the signing of the Emancipation Proclamation is at once a reproach and a challenge.” America must not rest “until the promise of equal rights for all has been fulfilled.”

At the end of February, Kennedy called upon Congress to eliminate abuses of black rights. The catalogue of wrongs was transparent: Black children were about half as likely to complete high school as whites and had one-third as much chance of earning a college degree or of becoming a professional. They had about twice as much chance of becoming unemployed, with only half the earning power and seven fewer years of life than whites. Discrimination reduced economic growth, hampered our world leadership by contradicting our message of freedom, marred “the atmosphere of a united and classless society,” and increased “the costs of public welfare, crime, delinquency and disorder.” But “above all,” Kennedy said, “it is wrong. . . . It is not merely because of the Cold War, and not merely because of the economic waste of discrimination, that we are committed to achieving true equality of opportunity. The basic reason is because it is right.”