Nation: We're Taking Control

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In the President's new Camp David state of confidence, he was emboldened to strike out more vigorously against the No. 1 domestic issue, inflation. He told a press conference last Thursday that "the time for wasteful spending is over" and pledged to cut as much as possible from the fiscal 1980 federal budget, which will be introduced in January. Especially vulnerable are some of the programs Carter has pushed to combat unemployment. One example: the Comprehensive Employment and Training Act, which will cost $11.3 billion in fiscal 1979, will probably be trimmed, partly because it has fallen short of its goal of finding jobs for the hard-core unemployed.

As part of his anti-inflation campaign, the President threatened to veto two major bills: the tax and the public works measures. Both may soon involve him in major conflicts. Taxes. With his impeccable sense of timing, Senate Finance Committee Chairman Russell Long finally released his committee's version of the tax bill. Since Congress is trying to adjourn by October 14, Senators had little time to digest the fine print in the complicated act, and Long would just as soon they did not. As he once told a Senator fretting over the meaning of a provision in a tax bill: "If we waited for you to understand this bill, it would never be passed."

Long's version of the bill cuts taxes generously, particularly the capital gains tax. While the House trimmed the top capital gains tax from 49% to 35%, the Senate committee cut it to 25%. Treasury Secretary Michael Blumenthal warned Long to reduce the capital gains tax cut to avoid a veto, but the Senator paid no heed. The Senate followed the House in reducing the corporate income tax rate from 48% to 46% and in raising the personal exemption from $750 to $1,000. Altogether, the House voted a $16.3 billion tax reduction; the Senate bill upped the figure to $23 billion.