Before the Storm (59 page)

The latter was better remembered; the tax cut was more historic. From time immemorial politicians had been constrained by the assumption that there was only so much wealth to go around. Now economists believed the government could grow wealth as easily as turning on a spigot. It was called the “New Economics,” and it heralded, said Walter Lippmann, a “post-Marxian age” where helping the poor no longer meant divisively “taxing money away from the haves and turning it over to the have-nots.” With it, LBJ could fulfill his fondest dream: the corporate Pauls and the labor union Peters smiling across the bargaining table as they amicably divided a nation's bounty, with nobody taking from anyone else and no one left out. He could build, he promised to his eightieth burst of State of the Union applause, “a nation that is free from want and a world that is free from hate, a world of peace and justice, and freedom and abundance, for our time and for all time to come.” Without an increase in spending—by cutting taxes.

The man responsible for this apparent miracle was John Maynard Keynes, whose
General Theory of Employment, Interest, and Money
(1935) explained that in times of economic slowdown, when people keep too much money squirreled away instead of spending it, businesses would respond to the ensuing drop in revenue by curtailing expansion. The whole economy would slow. In good times, the opposite would happen—superheating the economy, then starting the downward trend once again—dooming the economy to endless, unpredictable cyclic flutter. Unless, that is, government were to step in, as the only economic actor not obliged to respond to the laws of supply and demand, by spending more than it took in, washing consumers in cash, moving business sales into higher gear, and completing a virtuous circle of continual economic growth—so long as a wise captain was at the helm to set the process into motion when the economy looked to be braking.

Presidents were exceedingly slow to accept this wisdom. A balanced budget was judged as the symbol and substance of a sound economy; this was why Barry Goldwater stood up in the Senate in 1957 and said that Eisenhower's skyrocketing budget “not only shocks me, but weakens my faith.” Even FDR was aghast, at the height of the Great Depression, at his advisers' stern counsel that he deliberately spend more than taxes took in. But slowly the economists wore the politicians down. Keynesianism answered to the spirit of an age in which liberalism, riding high, relished the opportunity to master forces formerly believed to be intractable. (Surely it was not exactly a coincidence that the same month Johnson passed his tax cut also saw teams of scientists, their bills paid by the National Science Foundation, begin a research project aimed at controlling the weather itself.) Lord Keynes's own preferred pump-prime was for the government to build massive tracts of cheap worker housing—not politic in the United States. But behind their hands, American economists suggested that massive defense expenditures served the same purpose—and that Keynesian interventions need not be disruptive at all, just a bit of innovative accounting: setting the numbers on the left side of the ledger just a little higher than those on the right. By the mid-1950s the chairman of Eisenhower's Council of Economic Advisors called it “no longer a matter of serious controversy whether the government shall play a positive role in helping to maintain a high level of economic activity”; by FY 1959 his sober boss quietly allowed a deficit of $12 billion to enter the books, the largest in peacetime history.

Tax cuts were an even more politic option.

Walter Heller urged a deficit via tax cut on President Kennedy after a dive in the stock market in the spring of 1962. JFK considered the idea and rejected it at first; even his most liberal adviser, Galbraith, said it “stretches our education
in modern economics” (he preferred those tracts of worker housing) and reminded the President of the political realities: even to be labeled a tax raiser was preferable to “the worst tag of all—that of irresponsibility.” Kennedy had run promising a balanced budget—a surplus, if possible. It was just after his showdown with U.S. Steel; he was eager to mend fences with businessmen, who traditionally considered deficits a bond-deflating recipe for inflation.

He overestimated the opposition. Big business, just then, was more conservative than ever, but in an entirely different sense than Barry Goldwater was: they were eager for government management as a road to the most conflictless, stable economic climate possible. If he planned a deficit, Arthur Schlesinger told Kennedy, “a large and influential part of the business community would give you enthusiastic support”—especially if it came in the palatable form of tax cuts. The Committee on Economic Development, the liberal parallel of the National Association of Manufacturers (Scranton's patron Tom McCabe was a founder), a redoubt of giant firms whereas NAM was the refuge of the medium to small (and, warned H. L. Hunt disciple Dan Smoot, was a key component of the “invisible government”), printed a Sunday supplement in the New York Times urging presidential authority to “make temporary countercyclical adjustments in the first-bracket rate of the personal income tax.”

Soon the United States Chamber of Commerce signed on to the idea—then the National Association of Manufacturers. Only President Kennedy seemed lukewarm when he introduced his $11 billion tax-cut bill in early 1963. Conservatives bottlenecked it for over ten months—until the new President was inaugurated. Passing the tax cut, Johnson's economists informed him, would bring $3o billion in expansion to the GNP in 1964, as opposed to $12 billion if the bill wasn't passed. And by creating more wealth to be taxed, it would halve the deficit in the long run. Walter Heller only needed to explain how Eisenhower's refusal to stimulate the economy in 1959 cost Richard Nixon the election to clinch the matter.
“Business tycoons, left-wing laborites, corporation lawyers, New Dealers, anti-New Dealers, etc.”:
he would be a President for all of them. He steered the tax cut through the Senate 77 to 21 in February. Federal budget deficits were now, officially, a good thing.

Then there was that other quintessential LBJ answer to the confident spirit of his age. A week earlier, Peace Corps chief Sargent Shriver had arrived back from a monthlong trip to the news that he was to direct a “war on poverty.” The confidence that growth could cure all ills was secure enough for the Democrats' 1960 platform drafters to declare “the final eradication” of poverty “within reach.” Wary of turning off middle-class voters in 1964, Kennedy had let Heller toil away at such a plan so long as he made sure they also did something for the suburbs, where all agreed the 1964 election would be decided.
That wasn't how Heller presented the situation when he put the memo he had prepared for Kennedy on Lyndon Johnson's desk on November 23, 1963. He implied that a poverty crusade was the martyr's last political wish. It was a rare Johnson moment, unbeclouded by political calculation. He bleated: “Push ahead full-tilt. That's my kind of program! It will help people!” The Economic Opportunity Act, coordinated by a new Office of Economic Opportunity and capitalized at $962.5 million, was presented to Congress on March 16 via a special message from the President. (The riposte from Barry Goldwater was immediate: “Under the enterprise system,” America was already winning the War on Poverty, he said; federal welfare was leading to rates of fraud of 50 percent or more; the idea that people cannot find jobs because of insufficient education is “like saying that people have big feet because they wear big shoes. The fact is that most people have no skills, have no education for the same reason—low intelligence or low ambition.”)

But Johnson's most precious baby was Kennedy's civil rights bill, which insiders would have no more anticipated than they would the 184,300 troops that would be stationed in Vietnam by the end of 1965. The black magazine Jet reported that when Johnson was sworn in, “a wave of pessimism and dejection began to build across Negro America.” Would Lyndon Johnson show them!

Since Gilded Age, Supreme Court rulings had denied that the Fourteenth Amendment guaranteed equal access to public accommodations, Republicans had introduced hundreds of civil rights bills to restore its original intent—and Southern Democrats, with the tacit acquiescence of Democratic Presidents, had used every means at their disposal to annihilate them. And for most of his congressional career, Lyndon Baines Johnson had been right there with them. He dismissed President Truman's civil rights program while campaigning for Senate in 1948 as “a farce and a sham—an effort to set up a police state in the guise of liberty.” But he had also seen the first civil rights bill since Reconstruction through to passage. Columnists Evans and Novak called his handiwork “The Miracle of '57”—sold to Northerners as a tiger, to Southerners and conservatives as a pussycat, and passed thanks to an amendment stipulating that all cases that fell under the bill's provisions were to be tried by local juries, cutting the bill off at the knees. He did it again in 1960—shepherding a law Pennsylvania liberal Joe Clark called “a pale ghost of our hopes.”

But the price of political success in the South taxed Johnson's conscience. “The Negro fought in the war,” he had been heard to admit in the 1940s. “He's not gonna keep taking the shit we're dishing out. We're in a race with time. If we don't act, we're going to have blood in the streets.” Perhaps for this pragmatic reason, he was one of the few Dixie congressmen who didn't sign the 1956 “Southern Manifesto” decrying
Brown v. Board of Education,
and
eventually calculation became conviction: weeks before Kennedy spoke out on the unfolding violence in Birmingham, Johnson delivered a brave speech echoing Martin Luther King's “Letter from a Birmingham Jail”—which rather annoyed Kennedy, who had hoped to deploy his vice president to hold the South in 1964.

Johnson had hardly returned from the Kennedy funeral when he surveyed the former Administration's legislative calendar and made civil rights his strategic priority—the South in 1964 be damned. He called Martin Luther King and told him, “I'm going to try to be all of your hopes.” King's head spun; the only times that Kennedy called him were to work him over to fire his one Communist-associated deputy. “Let this session of Congress be known as the session which did more for civil rights than the last hundred sessions combined,” he said at the State of the Union; congressmen exchanged knowing glances. They knew the bottom line. Of the bill's seven titles, five would likely pass as is: stiffened enforcement of voting rights and school integration, a community relations service for localities suffering racial tensions, an extension of the U.S. Commission on Civil Rights, and the withholding of federal funds from discriminatory state and local programs. Two proposals would be shaved off as they were every time to win the swing votes of conservative Republicans like Goldwater and Carl Curtis: Titles II and VII, guaranteeing equality in public accommodations and employment.

Then Johnson told his best friend, Georgia senator Richard Russell, “I'm not going to cavil and I'm not going to compromise. I'm going to pass it just as it is, Dick, and if you get in my way I'm going to run you down. I just want you to know that, because I care about you.” When black leaders spoke with the President, they steeled themselves for the inevitable request for this or that compromise. It never came. He told them it would pass “without a word or a comma changed.”

The proof was in the pudding. On January 30 Johnson won a petition to discharge the bill from Judge Smith's Rules Committee. His success was dismissed as a function of the eighty-year-old Smith's senility. Then, on February 10, the President won over the House, 290 to 130. That victory could be dismissed as a function of conservative House Republicans achieving morality on the cheap—the assumption being that by the time for final passage, the bill would have been watered down in the Senate under filibuster threat.

That, too, Johnson was determined would never come to pass. To pass the bill as is, he would need not just fifty-one senators, but sixty-seven—the two-thirds necessary to end Senate debate, which, under that body's infamous Rule 22, could extend indefinitely. Such “cloture” votes never succeeded. But then, the Senate had never seen a lobbyist as obstinate as Lyndon Baines Johnson.
Getting two-thirds of the senators meant getting four-fifths of the Republicans. “You're either for civil rights or you're not, you're either for the party of Lincoln or not,” he would tell them; if that didn't work, there other methods. “I hope that satisfies those two goddamned bishops that called me last night,” Karl Mundt exclaimed after voting the President's way on one early test vote.

Conservative Republicans like Mundt were Johnson's swing vote. Everett McKinley Dirksen, the minority leader swept to the Senate in 1950 in the front ranks of Joe McCarthy's antisubversive crusade, was the key to winning their hearts. The key to winning Dirksen's, LBJ knew, was his ego, outsized even for a senator—and since his vote for the test-ban treaty was apprized the most magnanimous act of legislating since isolationist Arthur Vandenberg voted for NATO in 1949, he had become a hungry bidder for immortality. “You drink with Dirksen,” LBJ commanded his field captain, Hubert Humphrey. “You talk to Dirksen. You listen to Dirksen.”

From the other side the lobbying came just as hard. The National Association of Manufacturers spooked its members with a brief on the bill's equal employment provisions: “It can be expected that the number of charges and suits under Title VII would be many times that under the National Labor Relations Act.” Richard Russell proposed an amendment calling for massive resettlement of Negroes to areas where they were “underrepresented”—“inflicting on New York City, the City of Chicago, and other cities the same conditions proposed to be inflicted by this bill on the people of the community of Winder, Georgia, where I live.” Citizens wrote letters to the editor—and a lawyer an article in the
American Bar Association Journal
—comparing the legislation to another noble but doomed experiment: prohibition. Southerners claimed Titles II and VII violated the Thirteenth Amendment by “enslaving” white people. A “Coordinating Committee for Fundamental American Freedoms” was financed out of the treasuries of the states of Mississippi, Alabama, and Louisiana, led by two past ABA presidents, John C. Satterfield and Loyd Wright, and two newspaper editors, James J. Kilpatrick of the
Richmond News Leader
and William Loeb of New Hampshire's
Manchester Union Leader.
One of their ads, which went out to 225 newspapers in states where senators were wavering, pictured the “socialists' omnibus bill” as a “$100 Billion Blackjack.”