THE RECESSION: Ford's Risky Plan Against Slumpflation

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Exporting Countries is acquiring over Western economies. Those goals are exactly what the Democrats themselves have called for in innumerable speeches. Now that Ford has proposed specific programs to accomplish those ends, the burden is on the Democrats to come up with something better. Ford made the challenge as pointed as possible by calling on Congress to enact his tax cuts by April 1 and by announcing that he will impose new tariffs on imported oil on his own authority starting Feb. 1. Senate Democratic Leader Mike Mansfield conceded: "He stepped forward, showed some initiative." A high White House aide added, startlingly: "We know he is not home free, but we think he has taken a long step away from Bozo the Clown."

In order to take the initiative, Ford had to take the "180-degree turn" from traditional Republican philosophy —and his own past positions—that he had told businessmen last month he was ruling out. In his October WIN (Whip Inflation Now) program, Ford had insisted that energy consumption should be curtailed only by voluntary measures —and called for a tax increase of 5% on upper-income individuals. In his fireside chat last week, he noted that he had spent all of his political life fighting deficit financing—yet now he projects record peacetime budget deficits of $34 billion in the fiscal year ending June 30, and $46 billion in fiscal 1976.

Enemy No. 3. The President's program has even produced the strange spectacle of liberal Democrats expressing shock at the inflationary potential of energy proposals made by a conservative Midwestern Republican who entered the White House denouncing inflation as "public enemy No. 1." On

Ford's list, inflation now seems to have been demoted to public enemy No. 3, behind the recession and dependence on OPEC oil.

Politically and economically, the circumstances left Ford no choice but to move. The startling plunge of the economy since last fall has done even more than the pardon of Richard Nixon to destroy the trust that most Americans reposed in Ford when he took office. The White House was stunned by a Harris Poll published two weeks ago showing that 86% of those questioned rated the job Ford has been doing on keeping the economy healthy as "only fair" or "poor." The State of the Union speech offered the President just about his last chance to turn those judgments around.

If the recession continues through 1975, and 1976 brings only a halting recovery, Ford's chances of being elected to a term of his own would just about vanish. Some Republican conservatives —who dislike his turn toward big deficits but for the moment are keeping quiet—even grumble privately that if the President enters 1976 with the polls still against him he could not get his own party's nomination. In that case, the Republican Party could split. Some of the conservatives are so determined to block the election of Vice President Nelson Rockefeller that they would follow Ronald Reagan into a third party.

Deepening Slide. Right now, the recession is deepening day by day. Last week the Commerce Department reported that real gross national product fell 2.2% during 1974, the sharpest annual drop in 28 years. During the fourth quarter, real GNP plummeted at an annual rate of 9.1%. Industrial production in December dropped 2.8%.