Blowing the Big Issue

...The Nixon people gave controls a bad name I think they did it deliberately," complains one Mondale adviser...

...Nonetheless, Republicans running for office this year feel confident they can fall back upon a time-honored GOP answer: Slash government spending...

...this is probably good politics...

...He would also like to roll back the price of already-discovered domestic oil from the current level of $5.25 a barrel to $4.50, and introduce a system of conditional export controls...

...But that does not rule out all forms of controls for all time...

...As Democratic strategist Ben Watten-berg puts it, "The public perception is that the economy is the Chief Executive's problem to manage...

...Senators Edward Kennedy (D.-Mass...

...If we reduce taxes," he cautions...

...The theory, one of them explains, is that because the present downturn has weakened consumer demand, the country needs a tax cut to pull out of the slump and avoid higher unemployment...

...Our next call was to the office of Samuel L. Devine, an eight-term Republican Congressman from Columbus, Ohio, who recently discovered his name on the AFL-CIO's list of "marginal" House seats...

...And the party leaders who are talking take two entirely different approaches to the nation's economic predicament, both fashioned from the past...

...Six years ago nominee Richard Nixon pledged that, if elected, he would extinguish the flames of inflation, which he said were "burning at the rate of 4.5 per cent a year" under President Johnson...

...Somehow, Nixon's attempts to put out the fire have only added fuel to the blaze...

...where an aide came on the phone, went like this: Q. What seems to be the big issue in Kansas...

...And for the Democrats to maximize their votes this year, all they have to show is that they are in opposition to Nixon...

...The critical difference is that where they point to the spending record of a Democratic Congress as the source of present ills...

...who argues that a tax cut would serve to further accelerate price hikes...

...In any case, it is a safe bet that no Democratic Presidential candidate can get away with merely promising to stop inflation in its tracks...

...Unlike some areas, I just don't have a prescription for inflation...

...An economist who was involved in the 1968 and 1972 campaigns adds, "Next time it may be packaged differently...

...Prices will rise over the next few months whether we have a tax cut or not, it is reasoned, and we would do better to give a few hundred dollars to each taxpayer so he can afford the increased cost of living...

...and (3) provide a refund of part of the Social Security tax to low-paid workers with children...

...Q. What is the solution to inflation...

...A. Inflation...

...But we will hear precious little in the way of solutions, especially from the Democrats...

...A. We are against it...

...Not only are the leading contenders for the party's nomination sadly lacking in this area, however, they are not even getting much help from academia...

...Looking beyond the immediate situation, Wilbur Cohen, the former Secretary of Health, Education and Welfare, raises a practical matter...

...De-vine told us that inflation was the major issue in his district, too...

...we'll have less money for social programs in the next Democratic administration...

...On the other side of the issue is Senator William Proxmire (D.-Wis...

...In the short run...

...President Nixon has handed them the greatest bread-and-butter issue in a generation, and the Democrats don't know how to slice it...

...A recent attempt to attach the entire package to the national debt ceiling bill was defeated in the Senate, however, and the prospects for salvaging even parts of it in the current session appear dim...

...Yet other, equally well-creden-tialed economists like Gardner Ack-ley contend that the economy is picking up steam faster than anyone anticipated, and that the additional stimulus of a tax cut could cause a new explosion in prices...

...Thus this uncharacteristic admission from liberal leader Phillip Burton (D.-Calif...

...But too often they draw a blank when faced with a general problem, like inflation, that afflicts all of the people...

...Wright Patman (D.-Tex...

...In the Senate, meanwhile, the chief assistant to one Democratic contender for the 1976 Presidential nomination confesses, "Nobody up here really knows what to say about inflation...

...At least that is the impression one gets from taking a few readings on the Hill, where before every election politicians are supposed to develop their own form of Over The Horizon Radar to detect the mood of the country west of the Lincoln Memorial...

...Their proposal would: (1) raise the personal exemption for each individual on the Federal return from $750 to $825...

...Although the anti-big-spender line might be more persuasive if a Democrat were occupying the White House, it does agree with the instincts of a vast pool of voters...

...Proxmire points to the latest Nixon budget representing a 13 per cent jump in expenditures in a single year, the highest ever in peacetime As highly inflationary...

...At the moment, then, the Democratic party does not have a discernable policy on inflation, except that it is Nixon's fault...

...If pressed, many Senators would support both the Kennedy-Mondale and the Proxmire viewpoints, without much conviction about either...

...2) give every taxpayer the option of taking a $190 tax credit in lieu of an $825 personal exemption...

...Their list of special tax breaks to be eliminated is headed by the oil depletion allowance and includes select tax subsidies for exports, accelerated depreciation and the minimum tax...

...It also has the advantage of a certain clarity at a time when the Democrats do not seem to know what the government should do to cope with double-digit inflation...

...We are getting conflicting signals from the economists," complains a well-placed Democrat when asked to explain this indecisiveness...

...You would expect the Republicans to be the timid ones...

...have been trying to push through a $6.5 billion tax cut to stimulate the economy and give some relief to those in the lower income brackets...

...After all, that is how Franklin Roosevelt got elected his number one issue was that he was not Herbert Hoover...

...Even some of the normally most assertive and self-confident Democrats in the House are unsure of their ground...

...he will have to give a convincing explanation of how he intends to do so...

...On one side...

...One can well imagine President Jerry Ford taking to the stump to attack the obstructionist Congress in 1976, just as Harry Truman did in 1948...

...The closer they come to the laborite ideal of a veto-proof Congress, the more they will be held accountable for everything that goes wrong...

...The Kennedy-Mondale proposal has the private imprimatur of most of the party's big-name economists, like Walter Heller, Arthur Okun, Charles Shultze, and Joseph Pech-man...

...thus offsetting most of the scheme's fiscal stimulus...

...Instead, he advocates traditional fiscal medicine that has a strong resemblance to the potions proposed by his GOP colleagues...

...The Democrats, it seems, never lack for new ways to use the Federal government to solve the particular problems of small segments of the population the poor, the uneducated, the handicapped, the hungry, the elderly, the sick...

...Twice Proxmire has gotten the Senate to go on record in favor of cutting the Administration's budgetary increase back to 10 per cent, a spending drop of roughly $9 billion...

...Still, the Democrats cannot go on forever simply bemoaning the Republican Administration's inability to manage the economy...

...The reason for the seeming paralysis, several younger observers here contend, is that deep down most of the Presidential hopefuls and their ivory tower strategists are sold on the idea that Phase II-type wage-price controls could be made to work by a Democratic administration...

...To counter criticism that a tax reduction would itself be inflationary, Kennedy and Mondale have added a package of reforms designed to generate $4 billion this year and $7 billion annually by 1978...

...and Walter Mondale (D.-Minn...

...It is the Congress which appropriates the taxpayers' money, and the Democrats have controlled Congress for 38 out of the last 42 years...

...The other day, for example, a call to the office of Senator Robert Dole (R.-Kan...

...who has always considered 7 per cent an outrageously high interest rate, is saying nothing at all, despite the 11.5 per cent currently being charged for loans by many banks...

...When we asked for his position on it, he replied: "The big spenders in Congress ought to quit dipping their hands into the taxpayers' pockets...

...A. The answer is for Congress to quit spending more than it takes in...

...Q. What is your man's position...